Trap Oil Grp Share Discussion Threads

[irnbru2] 25/4/2015 00:19

What are we saying.

TC of PMG bought into this.

Took a pup off their hands, or he thought it was a good deal.

BW Offshore take 50% of Athena off of TRAPs hands.

Drilling at sub $50 oil.

[irnbru2] 25/4/2015 00:06

Interesting situation.

[cyan] 24/4/2015 23:40

The drill cost on NIOBE is about as cheap as you can get in the NS.

Some links to remind us






The Niobe prospect (formerly Kratos), located in the Inner Moray Firth, is a proven play east of the Beatrice field in license P1889. Niobe is a stratigraphic pinch-out trap up-dip of a proven oil discovery and has the potential to hold up to 72 MMboe. An exploration well is likely to be drilled at some point in 2015.

[irnbru2] 24/4/2015 23:29

Very brave.

Everyone was doing the opposite, and cancelling everything.

[cyan] 24/4/2015 23:23

Its worth remembering that the Niobe contract was signed when POO was more than $10 less than todays price.

[irnbru2] 24/4/2015 23:20

BW Offshore ain't thick.

[cyan] 24/4/2015 23:17

Good evening Bones.
The deal with BW offshore needs more detailed explanation . There is a significant upfront cost but with either party having the 60 day cancellation option it must have been a no-brainer deal for TRAP , the partners and BW.

As for Niobe drill. We are covering the same ground as before. The contracts signed and the monies been paid, end of . Its going ahead.

For SUNCOR the Niobe drill is a very good and very cheap shot at a sizable prospect.

[irnbru2] 24/4/2015 23:02

Can someone explain to me, why BW Offshore did the deal with TRAP.

Are they taking 50% of TRAPs loss.

Does not make sense.

[bones698] 24/4/2015 22:53

Cyan if you read the agreement it means traps losses will half only that's about the long and short of it . They also failed to mention if they have paid the upfront cost to start that deal . As ngms says athena will kill off trap very quickly and that's the problem as it has about 14 months left to run . I seriously doubt niobe will be drilled or wether trap will survive long enough to see it given the dire funding situation and any funds raised will be at a discount of 50% imo so buying now is to put it mildly silly at best . Trap looks dead now imo and no real means of escape due to athena . Niobe is a long shot and will it happen is the question

[irnbru2] 24/4/2015 22:47

Natural decline will impact and if we got 2 years I would be amazed and delighted.
PG and TC at PMG were interested in Athena , imo, for its cash generating potential when POO was north of $100.
We have been let down by the work-over which has failed to deliver, and of course, the POO collapse.
------

It does not help when Ithica are the operator of Athena. They are a terrible operator.

The work over was a disaster, and they should go back and get it right this time.

Also, TCs idea for more production drilling, must have some merit.

As I say, the blame for what is happening at Athena is with Ithica management.

[cyan] 24/4/2015 20:43

Good evening ohisay.
If POO keeps climbing ($65.31 as I post) there is a slim chance we could stagger on, but not for 6 or seven years.
Natural decline will impact and if we got 2 years I would be amazed and delighted.
PG and TC at PMG were interested in Athena , imo, for its cash generating potential when POO was north of $100.
We have been let down by the work-over which has failed to deliver, and of course, the POO collapse.
I am sure that TC WAS looking to further drill Athena, extend field life and increase daily output.
PMG did state they were looking at that option.

I do not see that happening now unless there is a massive jump in POO and TRAP secures further finances.

The dream scenario is Niobe being a seriously good sized hit.
Its shallow water and close to the mainland makes any development costs likely to be at the cheaper end of North sea field development's costs, and hence more likely to go ahead.
With such an asset behind it TRAP ought to be able to arrange finance . Alternatively, maybe sell out for a tidy sum.

One in Four chances; do you feel lucky?

[ohisay] 24/4/2015 18:45

NGMS - RBC have Athena at 9m to 10m barrels gross.
Trap have 15% .At current rates of production that's approx 6 to 7 years of output.
Lets be conservative say 4 years.
Are you absolutely sure nobody would be interested - at any price.?

[cyan] 24/4/2015 18:42

Good evening Don .
I am still here; unfortunately lol.

Ohisay did the right thing, and I got it wrong.

I have waited to post so the "i told you so" brigade could have their day.


Its a crazy price now. A real possibility that some investors prepared to take a risk now could multibag. One in four odds; not too bad.


I would like more clarification on the "sharing revenue" agreement and where we stand with the compensation. GLA

Brent now $64.85. Lets hope POO continues its rise. Just a waiting game now for niobe.

[ngms27] 24/4/2015 17:53

Niobe is worth a punt but will Trap exist when it's spudded / being drilled?

The problem is Athena, they cannot sell it and just have to take the losses month after month. The only hope is that IAE throw in the towel but they are hedged so probably won't.

[don777] 24/4/2015 17:43

cyan,
it's good to see you are still here.

I wish trap could sale some assets to meet the liabilities, or get loan from PG , issue warrants to him. it cannot do the RI at this price.

I am not sure why PG bought in at the first place and bought more in feb this year, I wish the reasons for him to buy are not changed.

the Mcap is only £ 0.6M atm.


D

[ohisay] 24/4/2015 17:43

I had to recheck the market cap today just to check what the market thought of TRAP.
So its 0.6m.
With no substantive debt other than the decommissioning charge at some point and the ongoing cash bleed if brent stays at sub 70$/75$.
But on that basis I bought 200k today - its a drop in the ocean I know but I risk losing the lot and I'm not a big investor.
I bought TRAP from 16p down to 12p - Sold at just over 10p when I lost faith in the outlook.For sure its at least 65% management failure.
But at the current price it looks well oversold.I'm surprised others don't see any upside.
Niobe is a reasonable prospect - the kind I was attracted to when I first bought TRAP.


The current buy price seems to discount everything.
Niobe/PMG/PG/Brent increase/Value of other NS assets/Reverse TO.
TBH I don't much see whats changed from a month ago other than TRAP spelling it out.
I'm a good 80% certain I can make money at .28p.

[cyan] 24/4/2015 16:19

Good afternoon Don.
The lack of any comment regarding the 'no drill' compensation is curious.
In our dire state any such monies could be really helpful.

Under the old production cost arrangements in January 2015 with Brent at $58 the company was bleeding cash at the rate of £380,000 per month.

Some rough calculations suggest that, too break even under the old arrangement we would need Brent well north of $90 with our current dismal production rate.

The production rate , imo, suggests to me that the work-over was ineffective.

We have a new agreement over production costs and I am not clear how the sharing revenue has been agreed.

If half of the oil revenue went to 'BW Offshore, with Brent at its current price of $65; then TRAP would have be left with revenue from around 9,500 barrels per month worth approx. $600,000 per month to the company from June when the new contract starts.

That sounds too 'good' to be correct.

Its really all about the Niobe drill result. One in Four chance TRAP will still be in business by the autumn imo.

[bones698] 24/4/2015 13:44

Cash as I found at my expense even backing credible management can go wrong I have seen the companies whipped from under them by institutional investors and seen them removed . Quickly forming the opinion it's just not worth the risk or effort to try investing .

[cashandcard] 24/4/2015 12:49

bones698,

To be honest, I have closed out most my oil positions. One of the remaining few good value oil co's I see is Hawk. Solid baseline of production (circa 2kbopd) and a large (100+) inventory of drill locations being firmed up with 3D for when oil prices turn north again. Its being run by a very credible and successful manager who returned multiples of value on his last oil company through the troubles of the credit crisis(PDC Energy $1bln+).

Elsewhere, XTR is a copper/gold recovery play - producing copper/gold ore and valued the same as most other smallcap miners BUT (unlike them) about to swing into profit. I have a small stake and watch that carefully as this month they should go cash positive and then generate (per RNS) a 'significant profit' by June/July. They are also headed by a very successful boss, formerly turning a smallcap miner into a multi-billion divi-paying cashcow.


In the end, it all about backing credible and successful management - they have done it before, they will find a way of doing it again.


Cash

[don777] 24/4/2015 12:40

icannot find any where in the AR mentioned Total compensation matter, so is it just quietly dropped off?

[bones698] 24/4/2015 11:16

Cheers cash we seem to have similar views on which are dogs , just need to be able to pick the winners although very few are actually exploding into huge profits these days . Gkp looks about best value atm to me but it has its issues too although I still think those huge reserves demand a much higher valuation than they are atm . Someone will get a bargain there but it looks about as good as u will find atm imo

[cashandcard] 24/4/2015 10:15

Shale may have lost some battles, but overall it seems to be winning the technological war:

----------------------------------------------------------------------->>
red rook
23 Apr'15 - 22:35 - 5578 of 5581 0 0


Interesting article in the Telegraph. I've included some snippets from the article below whch caught my eye. Hope its not too selective:



'The US shale industry has failed to crack as expected. North Sea oil drillers and high-cost producers off the coast of Africa are in dire straits, but America's "flexi-frackers" remain largely unruffled.'

'IHS said an astonishing thing is happening as frackers keep discovering cleverer ways to extract oil, and switch tactically to better wells. Costs may plummet by 45pc this year, and by 60pc to 70pc before the end of 2016.'

'Shale bosses have been lining up at this year's "Energy Davos" to proclaim the fracking Gospel. "We have just drilled an 18,000 ft well in 16 days in the Permian Basis. Last year it took 30 days," said Scott Sheffield, head of Pioneer Natural Resources.'

"We've cut spud-to-spud time to 19 days," said Hess Corporation's John Hess, referring to the turnaround time between drilling. This is half the level in 2012. "We've driven down drilling costs by 50pc, and we can see another 30pc ahead," he said.

'The cost of production for the Gulf's Opec core is far lower than anything shale can offer, but what matters for them is the "fiscal" cost needed to balance their budgets and sustain rentier regimes sitting on social and political powder kegs.'

'Mr Hess said global oil producers may indeed face a deficit of $100bn a year to cover dividends and investment, but Opec faces a $500bn deficit to cover social costs and military spending. The risk for the Saudis is that the fight against US shale turns into a destructive stalemate, eroding its foreign reserves and inflicting so much damage on Iraq, Algeria and Libya that its own political neighbourhood spins further out of control.'

----------------------------------------------------------------------

Shale is here to stay and its not going away.


Cash

[cashandcard] 24/4/2015 09:07

bones698,


Well you called this one spot on. I notice the other two you called (logp, pvr) one has now started a strategic review which may lead to sale and the other managed to get a 1year 'stay of execution' before all the debt and liabilities are called in.


Cash

[ngms27] 24/4/2015 08:39

If only millions of years old brine were $250 a barrel, TRAP would be loaded given how much Athena is throwing off. Woof Woof