Granby Oil & Gas Share Discussion Threads

[chelseapaul] 12/3/2008 22:23

As i understand it GOIL only get a very small percentage until all of the capex is repaid, if thats the case then anyone farming in are going to play hard ball.
Although how much GOIL get until the capex is repaid, is i suppose another question to put to the board?

I find your post very reasonable, but as you say its tight (maybe too tight)

[deswalker] 12/3/2008 20:26

chelsea,

I guess it depends on the order of repayment. I doubt that the additional costs will be subordinate to the original non-recourse loan but I don't know this (now there's a question for someone to ask the company). I would have thought that repayments of the additional costs would either come first or be on a pro-rata basis to the loan. If they come first then all these extra cash costs will be recouped in the first couple of months of production and so there'll be no problem in sticking to the drilling schedule. Even if they are subordinated then they'll be recovered by next summer.

Globe is a free carry and costs should be small on FatCat (shallow well and 12.5% working interest). Hopefully we'll farm Anglesey down further but I'm guessing we'd just about afford Anglesey, Monkwell and FatCat as things stand but it would be very tight.

Then we need to wait till next year for the profits from Tristan in order to fund any development drilling and we really need a couple of free carries on Whalebone and Oakleigh.

All just pure speculation on my part. Does it sound reasonable or garbage ?

Des

[chelseapaul] 12/3/2008 19:57

Des, thanks for the reassurance but i don't think anyone has been panicked out of these shares just take a look at the last few weeks trades!
And no one has been getting a bargain because i haven't seen any buys.

Granby (now please correct me on this figure) only get 5-10% of the revenue until the full cost has been repaid to the partners, this to me is my sticking point.
All the time the project was on time and on budget it was no big deal.

However since the cost overruns are getting out of control and eating away at the £11m in the bank, would the finance for the 2008 drill program be in doubt?

@ Rapier thanks for the links.

[rapier686] 12/3/2008 19:09

"I was told by the company 57p per therm last week"

You can get the data from the horse's mouth.



That's a login page, but registration is free and then you can get last day settlement prices for the various ICE contracts - including UK gas futures.

Scanning the Summer/Winter futures 59-60p seems the right kind of level as we speak. Tomorrow is of course another day.

PS : doesn't lurk behind a login - but only goes out a year.

[dreggspicker] 12/3/2008 18:37

Des,
Thanks for the number crunching;
Yes, I was told by the company 57p per therm last week, and with the demand for gas as it is, I can't see it going back to 40p - at least not in winter months; I would be quite happy if they could just sell in the winter months, if that were possible.

I might be tempted for more, but I really have enough of these !

Regards, dreggs

[deswalker] 12/3/2008 17:06

A few quick points.

1) IF we are liable for the rig costs whilst we wait on weather then we're only liable for 54% of them.

2) Remember these extra costs would then be tax-deductible at 50% when included in an NPV calc so the NPV only drops by half the value of the costs.

3) Assuming 30mmscf/day and 50p a Therm when gas starts flowing in early April then these possible additonal costs (assuming £1.5mill gross for the sake of argument) will be paid off in 10 days (or at most 15 days if one wants to allow for tariffs and opex etc).

4) According to the most recent presentation, £0.75mill net increase in costs would be worth £0.375 mill off the post tax NPV which is the same as a 0.7p/Therm change in the flat gas price which averages the forward curve (57p/Therm in the graph).

Some people really are being panicked out of their shares down here. Not me. Those buying now are getting a steal IMO.

Des

[normannumpty] 12/3/2008 15:33

Hey Guys,
Simple answer: The rig is waiting on weather to continue operations or more likely de-mobilise the rig...you cannot get insurance for this you simply keep paying for it to stay there. (although you can stand down some of the services to save some costs. Every week this would cost us ~£750-£1mm.

Every extra million of costs net to us has to be recovered from revenue. At 40p/therm thats at least half a BCF of gross production just to get this paid back. If this is a month over budget then thats 2BCF of gross production that is not profitable net to our share.

This has to be a project that will be lucky to pay back its initial investment.
I think we will be lucky to have £6mm in cash by the end of March. How do we pay for our share of Anglesey/Monkwell/Burton Agnes Appriasal?/Kerloch?, I can sense a placing or a fire sale in the offing.
Norm

[dreggspicker] 12/3/2008 14:54

well I just hope it's the MM reading this thread that's dropping the price, rather than the cash burn by goil, I am just hoping they took out an insurance against this type of thing, they sometimes do.
Or could they be boring the hole wider to allow more gas to flow if it is a lower pressure?
dreggs

[chelseapaul] 12/3/2008 14:45

Dreggs, i truly have no idea why it is still out there!

[dreggspicker] 12/3/2008 14:41

Chelsea,
do you recon the rig could be stuck on something, or are they drilling another hole ?!!??

I did email them last night, but haven't heard anything (as yet, if ever) if someone would like to give them a buzz, I would but I did last week about the pressure as you know, and they may recognise my voice.

[chelseapaul] 12/3/2008 14:33

That said, if fate has left a big banana skin in their path, we'd all rather know about it. But know from an authoritative source.
Thats why they would need to notify the market before me, if i called, i'm only informing other posters re information in the public domain.
Looks like another 24 hrs delay until it moves now showing Sunday (another 150k* then)

[rapier686] 12/3/2008 00:13

Well CP, the lack of substantive response over the last few days suggests that none of us know the detail of quite what costs GOIL is or isn't on the hook for whilst rain stops play. If you want to be set straight - or confirmed in your suspicions, then you're just going to have to ask the company.

For myself, skill in choosing the best way forward is exactly why the company has directors and I'm not going to second guess the best way to play their cards from the back seat.

That said, if fate has left a big banana skin in their path, we'd all rather know about it. But know from an authorative source. IMHO a £20m cap allows for far more bad news than still more overrun on Tristan, disappointing as that would be.

[chelseapaul] 11/3/2008 22:15

Sure as i can be, however i'm more than happy to be set straight on the rig rates and why the hell its still out there at our cost.

[triples] 11/3/2008 21:22

That's quite a bill for a company with only so much cash. Are you sure, CP?

[chelseapaul] 11/3/2008 20:35

No Dreggs that's our share of the cost (54%), the rig will become free (from GOILS liability) even if its bad weather, however its on location due to someone not telling us the full story.
The weather comment was more to do with the DSV.

[dreggspicker] 11/3/2008 19:09

But that's if we have to pay full whack; I would hope that due to the poor weather the rig could not be moved even if they wanted to, so it would have to stay there anyway until the storms have passed.

Regards, dreggs

[chelseapaul] 11/3/2008 10:19

Talking to myself the last few days, however more BAD NEWS to report.
The rig according to the spot list update this morning will be there until Sat 15th March.
So thats another cost to us of £1,050,000 this week for the RIG alone.

[chelseapaul] 10/3/2008 20:54

Another day and another £150k spent from GOIL, according to the latest spot information, Ensco 80 will not move until Weds, whys is it still out there! (thats if the weather holds)
Oh and by the way, the weather is due to turn on Weds again!
Regardless of these pressure worries and the BCF's recoverable (as has been so well argued on here)
If GOIL state first gas April (unlikely imho) when are we likely to expect the first revenues from the well, these costs are not cheap the rig has now been out there since late NOVEMBER.
Anyone spoken to the company re the extra cost over runs ?

[chelseapaul] 09/3/2008 19:57

Ok Guys spoke to my man this afternoon, Normand left port this am but returned this afternoon, the DVS is still out by Davy but will be recalled due to the weather.
The low as predicted last week is due to hit tomorrow (as most would have seen on the news).
This rig is COSTING US £150k PER DAY, why is it still out there, why have AGR not taken possession, what is the additional cost !!!, if Normand Numptie is to believed this drill is going to cost us a fortune.
we (GOIL) do not get a penny until the drill cost are recovered!!!! (so we have 54% of f all at the moment)

[deswalker] 07/3/2008 13:49

There's the update on the link I gave. It departed at 13.12, so should be there at 6-7am tomorrow morning.

[beginnersguide] 07/3/2008 13:39

Des
I have been watching it moving about in the harbour it now says destination Davy platform ETA: Mar08 06:00 and underway but its been saying that since you gave me the name

On the site below it shows movement on reloaad

BG

[deswalker] 07/3/2008 13:11

Excellent find BG. Check out this page ...



Under "Ships Currently at Berth" it says the Acergy Osprey is due to leave today at 12.30.

Each report is updated automatically every ten minutes so the "Ships Departing Last 24 hours" report will tell us when it has left. Fingers crossed it's very shortly.

[beginnersguide] 07/3/2008 12:54

Des
the Acergy Osprey is currently moored at Hartlepool Thanks
BG

[deswalker] 07/3/2008 11:58

It's the Acergy Osprey I believe. Stick it into Google and you'll find it.

[beginnersguide] 07/3/2008 11:50

I am trying to trace and track
The Diving Support Vessel 'Osprey' required for the flowline tie-in which is currently scheduled to arrive in early March 2008.
Can anyone confirm the full name of the vessel as the Osprey is in Southampton waters. wear as the Grampian Osprey is another support vessel off the east coast of Scotland
Thanks in advance
BG