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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Granby Oil | GOIL | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
|
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|---|---|---|---|---|
| 0.00 | 0.00% | 62.25 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 62.25 | 62.25 |
| Top Posts |
|---|
Posted at 10/4/2008 23:31 by deswalker chelsea ... I hear what you're saying about position sizeing. With hindsight I owned a few too many of these but everything looked rosy until pretty recently and one has to bet big to win big. I'm not going to be quite as aggressive with similar companies going forward though.I've always been biased against EO. for some reason. I looked at it time and time again before the Gas Storage story emerged when it was 18p but always came to the conclusion that GOIL was much more undervalued as an E&P company. I completely missed the Gas Storage angle and still don't understand it, I must have been on holiday or something. Hopefully it will work out for holders but I feel like I've missed that train and I don't assign much value to the E&P prospects as a back-up, though I'm probably wrong. HAWK is one that I've looked at a bit and quite like but it's gas and the returns just aren't the same as oil. I've decided to pass again for now. Its the same reason that I can't get excited about AEX, so much of it is gas :-) Made a nice profit on VPC last year. Picked up some cheap Wham after the takeover was announced which legged me into VPC at a very good level which I then sold for a nice profit. But I've gone off the N Sea and especially gas so I doubt I'll revisit. I've got a few DNX but I'm close to the exit there. sranmal, I don't like MTA and know nothing about EEN and even less about LDP. Will check them out. Thks. My three small cap oilcos were GOIL, GED and WTE in that order. Since GOIL is no more I've added a fair few more funds to GED. To be honest I think it's much cheaper than GOIL ever was but I've decided to not bet quite so big this time. WTE is a low-risk wind-up play. It's simply made up of cash, shares in SEY, DES and an unquoted company called Eclipse. With Eclipse valued at the Book Value of the last private equity funding round a couple of years ago, WTE trades at over a 20% discount to its NAV. However Eclipse looks set to come to market within twelve months and ought to be worth a multiple (2-3 times) its current book value. This implies WTE trades 40-50% below NAV. They have also stated that they're going to wind everything up (cash plus three quoted companies) and return everything to shareholders. No new investments to worry about so hopefully cash out within 18 months. DYOR. I'm also spending more time looking at traditional small-cap value investments. Some are looking much more attractive than many small AIM-listed oilcos/miners IMO. Many of these are getting found out, that their projects are actually getting more marginal at $100 oil, $900 gold, and not more profitable. This shows just how much costs have increased. The charts of companies such as SRB & MCR tell a story IMO. Right, back to the golf... |
Posted at 26/3/2008 23:02 by chelseapaul Thanks Guys, one suspects the GOIL board will want this pre April 5th, so heres hoping for Des. (GOIL for the taper on the options?) |
Posted at 17/3/2008 12:12 by normannumpty It's all becoming clear now:As predicted £7mm at the end of March. Didn't spot the Mosaic 'default' and the extra £2mm. Concerned that if this is such a good project that Mosiac could't raise £2mm to stay in the game. But I suppose an investment of £2mm for a return of £2.7mm (NPV) on an unrisked basis is a pretty poor deal. Also noticed the comment that significant cashflow to Granby isn't likely until 2009. This means that most of the revenue is going to Mitsubishi until the loan is repaid. The key to success here is that there is sufficient gas remaining to repay Goils £10mm sunk costs and provide a return on our investment. Can't see how they can avoid a placing or a 'consolidation'. Other than Burton management have always been distinctly wary at putting their hands in their pockets to participate. Indeed some of them sold shares recently. Can't see a placing being well received in this market, so I think 'consolidation' is likely favourite option (used to be called being acquired or a 'merger' in the old days). Trouble is who would want the assets?. My own analysis is that the ideal acquirer would need to look like this: 1: UK Production/cashflow 2: North Sea focus 3: Looking to add exploration and development/producti 4: Small enough that Granbys assets would be meaningful addition. i.e a market cap of £100-250mm. I was was looking at another company as a potential investment and their recent presentation makes interesting reading, see page 69. Conspiracy Theory number 1: ...why use GOIL as a comparative? there is no obvious basis for comparison? One is a well funded producer and the other isn't. Unless of course they are introducing a 'name' for the investors to remember. Norm |
Posted at 17/3/2008 09:33 by deswalker Paul,The NPV is after all costs. The £14.2 mill includes all costs that need to be repaid by GOIL and so the £2.71 mill includes all the costs that have historically been paid by Mosaic but now will need to be repaid by GOIL. It isn't a lousy deal. Look to see how quickly they'll get their £1.9 mill back and how many reserves they'll need to produce in order to do that. They get all their costs back in about 14 months and then they're sat on an extra 10.3% of the project. Des |
Posted at 17/3/2008 09:12 by ghhghh DesIs the NPV after costs? So GOIL's stake worth £10m costs (to be paid back) plus the £14.4m? So what about the 10.3% stake? Does this include past costs and or the £1.9m. ie GOIL pay out £1.9m and get back £X previous costs, the £1.9m and then the £2.71m? If not, if they pay out £1.9m now accepting all the ongoing development risks and production risks but only get £2.71m, then lousy deal. Cheers Paul |
Posted at 13/3/2008 12:37 by normannumpty What "Tristan Company"?, no such thing. This is a standard joint venture.Payback will be : 1: Mitsubishi loan (£30mm+) 2: GOIL additional costs (£8-9mm) (after payment of ongoing Opex, Tariff and Royalties) 3: Profit, (after payment of ongoing Opex, Tariff and Royalties). 4: Abandonment costs (54% to GOILs account) As far as I am aware no significant cashflow until 2. The key facts we need from GOIL are: How much of the cashflow (if any) do they get in stage 1: 2: Estimated Tariff and Opex costs. 3: Any Royalties to be paid? and if so what type NPI or ORRI and % payable. Anybody know these numbers?, if we can find out we can have a sensible conversation about value. Norm |
Posted at 12/3/2008 22:47 by deswalker chelsea,The three JV partners (GOIL, Mosaic & Mitsubishi) have each given a loan to the Tristan Company to pay for the latest costs but the majority of the costs are covered by the original non-recourse loan given to the Tristan Company by Mitsubishi in return for a 30% share in the project. The question is which of these two loans gets paid first or are they paid back at the same time. You seem to be confusing Profits with Cashflow. GOIL doesn't make any profit until all loans are repaid. However, because they are owed money by the Tristan Company they will receive their loan cash back before they make any profits. Ideally this will be recouped before the non-recourse loan ie by the summer. The only possible place for a farm-in partner playing hardball is with Anglesey but it's hardly a fire-sale type situation. The Normand Mjolne is now on its way to the rig with an ETA of 8am tomorrow morning. It set off a couple of hours ago. Fingers crossed we get it shifted tomorrow. Des |
Posted at 04/3/2008 22:47 by normannumpty "He gave no indication at all that there was a problem"..hardly likely to say otherwise on an email to a PI is he, Nigels too smart for that.How about some hard facts (theirs not mine) rather than 'speculation and presumption'. The P50 reserves (14.7bcf net) were booked before the well was drilled: See RNS 19-Oct-07. And therefore based on pre drill P50 expectations. The P50 Reserves of 27.4bcf were based on a P50 GIIP of 35bcf (Tracs report pg 8) These P50 numbers were based on an estimated 3025psi (Tracs report page 7.) The P90 numbers were based on the lower end of the expected pressure levels: "This has been included in the TRACS evaluation by considering the gas in place at the end of the Tristan Main field life, and that the pressure in the NW area may be in the range of 2145-3025-3679 psia with corresponding gas expansion factors of 130-182-213 scf/rcf." Tracs report page 8. The P90 reserves are 28.9 (GIIP) and 21.9 Recoverable (Tracs page 10). This is a 75% recovery factor. (Simple Maths) However Tracs state (page 9) "The recovery factor was based on the reservoir pressure at the start of the field development, which could result in a recovery factor range from 67 to 85%." Given that we have a reservoir pressure at the bottom of the range the recovery factor will be closer to 70% (ie 20bcf.) All this also assumed the following (Tracs page 9): "A new well in the structure, with a horizontal length of 2000 ft and a skin of zero should be achievable, and could deliver initial rates of 50 to 80 MMscfpd through 5" tubing." Granby have already stated that it flowed at 30mm/day from a 778 ft hole. January 28th. press release. This seems not to be within the Tracs 'anticipated' well delivery parameters. In Summary the well delivered at the bottom end of expectations and at the bottom end of the reserve range. However you could still truthfully say it was within the expected range. Granby have already booked 14.7, so they cannot change this without Tracs reevaluating the field results..something I expect they will be doing now, until then the number is 14.7, they cannot say anything else. So based on Tracs own numbers they have 20-21.9 bcf recoverable, thats 10.8-11.8 bcf net. According to the latest post well presentation: The development costs are estimated at £68mm. And the loan is close enough £30mm. Therefore Granby should have spent(or will have spent) 54% of the difference between the loan and their final cost. Goil cost is 54% of £68mm = £37mm, loan is £30mm. i.e ~£7mm The RNS on 28th Jan stated that GOILS costs were an original 2.5mm plus an additional 3.0mm, and that they would hav £11mm by the end of March. The latest 29th Feb presentation states that this is now expected to be £8mm at end of March. Thus an additional £3mm has been spent above the £5.5mm, totalling £8.5mm. Goils sunk cost is therefore approx £8mm +/- £1mm. If we assume 30mmscf/day flat and 350 days/year of production at 50p, 45p and 40p /therm. Then it will take 420/470 or 530 days to pay back the loan (assuming its £32mm including interest). This will take 12.7, 14.1 and 15.8 BCF of production. Of course this does not include opex or tariff so these are underestimates. So lets add 10% to these times/volumes to cover those (Thats less than 5p/therm). That gives us 14, 15.4 and 16.4 BCF of gross field production to repay GOILS debt at 50/45/40p per therm before 10% opex and tariff. As we have seen the reserves are now seen by the Tracs evaluation as 20-22BCF (See above), That leaves between 4 BCF worst case and 8BCF best case (2BCF to 4BCF net to GOIL) to repay their £8mm investment. Assuming 50/45/40p per them and 10% Tariff/opex then that would give GOIL a gross revenue of between £3.7 and £4.6mm per BCF. ie a range of £7.4mm (assuming 2bcf) and £18.4 (assuming 4bcf). The bottom end will not even repay the original investment let alone the time value of money. Of course there is the Royalty and we are only guessing at opex/tariff. Burton states the NPV is >£16mm. but at what discount rate, what assumptions on reserves and what assumptions on pricing? and does it include sunk costs or is this 'go forward' economics, without this information it is meaningless. Norm |
Posted at 03/3/2008 20:43 by deswalker chelsea,Suppose Tristan produces 30mmscf per day. That is 308400 Therms. Suppose they get an average of 57p per Therm (current day ahead level), then this gives a gross revenue of £175,788 per day (GOIL gets 54% of this). Now suppose the project has to pay back £68 mill plus 6% interest = £72.1 mill. They achieve this in 72.1/.1758 days = 410 days. This ignores the opex for that year but hopefully you get the drift. A higher flow rate and/or price and they quickly get it down to less than a year. After 410 days they've produced 12.3 bcf (assuming no downtime etc) and so assuming they're still targetting 27.3 bcf gross (which I believe they are) then the next 15 bcf minus the necessary operating and decommisioning costs is taxable profit. At 57p a Therm this is a total undiscounted revenue of £87.9 mill (GOIL gets 54% of this). Ofcourse there's all sorts of costs, taxes and discounting to take into account which would take this £47.47 mill down to an NPV of about £16 mill net to GOIL at this flat 57p per Therm rate. Cash plus Tristan = 66p per share IMO FWIW. Everything else is free including 10% of Kerloch with two discovery wells drilled and paid for, 20% of Monkwell with three discovery wells drilled and paid for and another planned, 25% of Globe/Roebuck for which Valliant paid £3.5 mill for 25% and all the other explo prospects. HTH, Des |
Posted at 06/8/2006 21:04 by deswalker I posted this on TMF earlier today. Might as well put it here too ...Fundamentals Shares in Issue = 25.69 mill with no options outstanding. Mkt Cap at 89p offer price = £ 22.86 mill Net Cash at 31/3/06 = £ 7.254 mill Shareholding in Elixir Petroleum (ASX:EXR or ELP on AIM) = 2.5 mill shares and 4.625 mill options exercisable before 31/12/07 at AUD 0.5 per share (currently 10 cents out-of-the-money). Ignoring the value of the options, the Elixir position is currently worth £ 0.425 mill. So, netting the cash and Elixir position gives a fully diluted EV (ignoring small cash burn since 31/3) = £ 15.18 mill. Director holdings = 46.9% Notifiable Interests (Credit Suisse, RMB Resources, Tudor, Artemis) = 22.91% Tim Guiness has a few in his fund. www.granbyoil.co.uk Formed by the merger of two private companies, Team Oil and Granby Enterprises back in 2004 bringing together five former Enterprise guys with 114 years of oily experience between them. Areas of focus are the North Sea (mainly), Philippines, UK onshore and North Africa (new business unit recently set up). Two Development Projects 1) A 15.69% share in the Galoc Production Company (major shareholder is Vitol) which gives GOIL an effective 9.14% interest in the Galoc oil field development offshore Philippines. A rig has just been contracted to start drilling in July 07 with first oil expected during Nov 07. Details of the rig were announced here: They are currently working on an independent reserve report but the best info released about the Galoc field so far is a presentation by Nido Petroleum who have a 22.279% interest in Galoc. Here it is: Slides 13 thru 27 give a decent flavour of the project. From reading here and also the Philippino news reports over the last few months, I'm expecting total production from the field to be over 25 mill bbls and possibly as high as 35 mill bbls. For people interested in PSC terms, the Philippines is a very favourable environment. Some details can be found on slides 23 thru 27. Worth noting the historical USD 68 mill Cost Pool available on the project in addition to the attractive terms. Galoc may also have some upside in a deeper horizon, often referred to as Galoc Deep. No mention as to whether this will be drilled prior to the horizontal production legs. Note that GOIL remain very tight lipped about their expectations for Galoc but I see no reason not to go with Nido's expectations (and those mentioned by the Philippino Gov) for now (25-35 mill barrels recoverable at very favourable terms). I certainly don't believe that Vitol would be involved if there wasn't decent upside in this project. All will be revealed in due course no doubt. 2) The second development project was only announced this week. Due to the greater availability of North Sea Jackups over Semi-subs they have been pretty active dealmaking in the Southern North Sea over the last year or so. No more info is available at the moment, although I'd bet that financing the partner is either Gas Plus Italiana or (much less likely) Vitol. The former has formed a relationship with GOIL over the last year and they are collaborating on a number of explo wells and on applications for the next North Sea round. The project appears to be 10.5 bcf net to GOIL over 5 years with production starting Autumn 07. So, if all goes to plan, by the end of next year GOIL will be producing over 1300 bpd of oil from Galoc and an unknown amount of gas per day from Tristan. Firm Exploration Wells So far this year they have fully farmed out two of their prospects retaining a 24.375% interest in the Guinea well (15/13b) to be drilled by Nexen sometime in the next few months. P50 estimates are for 92 mill bbls on the block and GOIL are currently risking it at 34%. They have no costs to pay for drilling and testing this prospect. Likewise they are free carried by Centrica on the Watling gas prospect (42/28c) targetting P50 estimates of 154bcf and they retain a 22.222% share of this prospect which they are risking at 41%. This well will likely be drilled H1/07. Finally they have earned a 10% interest in the onshore Fraisthorpe gas explo well (PEDL 071) to be drilled in Yorkshire by year end. Gas Plus Italiana will pay their share of the well costs (operated by Egdon) in return for GOIL's technical expertise prior to drilling. Not quite clear about the P50 estimates for this well but I've got a 56bcf number in my spreadsheet from somewhere. Not clear on the risking either but it's a free carry. Exploration negotiations They recently entered into an farm-out agreement with a Canadian company called Albion Petroleum whereby Albion would partially fund a minimum of three explo wells (up to a maximum of five). Details here: The first well of the (minimum) three is the Guinea well above so there are at least two to go. The next Albion well will almost certainly be the Anglesey prospect (14/14b) on which they appear to be finalising negotiations for a full farm-out as per page 2 of this recent note by Objective Capital about Elixir Petroleum (registration required): The note talks about "final stages" in fully farming out Anglesey (GOIL 50%, ELP 50%) over and above the partial farm-out with Albion. GOIL have a P50 estimate of 119 mill bbls on the block with a 22% risking for the prospect. Other Notes All the P50 estimates and riskings can be found in GOIL's recent Prelims: The riskings for some of the prospects appear to be pretty high but there they are in black and white in the Prelims so I think they're much more robust than those usually produced in analysts notes. I'm going to use them anyway. The Prelims also talk of the creation of a North African business unit. In the past they have done some technical work onshore Morocco so I'm hopeful that they have contacts there to get things started. Worth noting that GOIL owns 8.31% of a fully diluted ELP (assuming that the ELP options move into the money). ELP currently has a whole host of prospects (many in partnership with GOIL), in particular a post farm-out 13.125% share in the Guinea well and a pre farm-out 50% share in the Anglesey well mentioned above. Thus, GOIL actually has a 25.5% share in Guinea (post farm-out) and a 54.15% share in Anglesey (pre expected farm-out). Guinea will be drilled in the next few months and Anglesey sometime next year I guess. Note that they did drill two dusters in the North Sea over the last 14 months. The first, Marquis (21/6b) was drilled last year at no cost to GOIL (a full farm-out once again). The second, Hendrix (9/27a) was a farm-in by GOIL on 2 for 1 basis and cost them about £ 1 mill. This second well is my only tiny gripe with this company. Farming in and then hitting dust is not that great but I guess that's explo. Conclusion An EV of £15 mill looks way too cheap to me for this management team and prospects. A full list of North Sea prospects and riskings can be found in the Prelims. Building a Nav model around these prospects and development projects (using the Nido Presentation to produce an NPV for Galoc) is fairly easy to do and gives me a current Nav of about twice the share price even if I only keep the firm wells (incl Anglesey) to be drilled in the next two years (altho I fully expect them to farm out and drill virtually all their blocks in due course) and a very conservative number for my oil-in-ground price. Plus a premium for a very able and well respected team (one only has to look at the deals they've done in the last year to see this), who themselves have big equity stakes (and have yet to issue themselves any options) makes this company look a good bet to me. Feedback appreciated. DYOR |
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