Iog Share Discussion Threads

[bountyhunter] 11/9/2019 13:07

rocketblast - 'up to' 3 months for CER to excercise their option on Harvey, it may happen tomorrow for all I know so not necessarily the full 3 months to decide

[dunderheed] 11/9/2019 13:07

It will take a certain amount of time to ascertain what I (personally) refer to as producibility.

[rocketblast] 11/9/2019 12:36

The three month wait is a red herring as they NOW have the 49ft gas column within their strategy limits. We should get a brokers clarity and a further RNS this week. Actually there is not much else to say as the find is within target and the 3 months was for the funding to be aligned... looking good for IOG going forward.

[bountyhunter] 11/9/2019 12:26

Cheers Dh, yes we don't want 'Hugh' returns here! I would prefer 'mgt wants to under promise and (hopefully!) over deliver' but they haven't been playing that game for a while. My assessment is that IOG are hedging their bets until determined as commercial (or not!) by CER - we will have to wait up to 3 months to find out the answer to that one. Hence the market 'I don't know what to make of that' reaction!!

[rocketblast] 11/9/2019 12:00

Nice time to top up before brokers update. IOG always downplay expectations so i am very positive especially with the declared 49ft gas column. Wow its 1 hight of Nelson's Column?

[fardels bear] 11/9/2019 11:15

And they should learn to use the word delighted in an RNS. Pleased is not enough these days.

[rocketblast] 11/9/2019 10:39

Brokers news will clarify as the rushed this rns as they were keen with the good news....i agree a bit sloppy...

[rocketblast] 11/9/2019 10:37

Looking well within expectations with a 49ft gas column...they should have stated range between expected 30 and 65 looks great. Well within strategy and looking forward to more positive news.... The Company's Core Project targets a gross 2P peak production rate of 146 MMCF/d (c. 25,000 Boe/d) from gross 2P gas Reserves of 302 BCF(1) + 2C gas Contingent Resources of 108 BCF(2), via an efficient hub strategy.

[shareideas1] 11/9/2019 09:58

Hahah - should have read "high" lol

[dunderheed] 11/9/2019 09:53

Agree - but very concerned with your typo with regard to returns - please do not mention that name on this thread!!

Hugh - well known for the term - "he's done a Hughie again" - I.e. kicking the can down the path - sometimes - down a completely different path.

[shareideas1] 11/9/2019 09:47

The beauty of IOG at this point is that the equity story stacks up even without Harvey... being fully funded to first gas and with Berkshire onboard, they will be active in future licensing rounds too which given the Thames Pipeline infrastructure they will be well positioned to add Hugh return projects (plus potential M&A of other proven, but stranded, assets)...

[dunderheed] 11/9/2019 09:37

Absolutely concur. I "suspect" they will as well!

[shareideas1] 11/9/2019 09:36

I suspect they still will but what I'm trying to say is that a second pair of eyes will need to look over the data before firm conclusions drawn. It would be very embarrassing if IOG declared "success" with lots of fanfare, only for CER to disagree and not take up option...

[dunderheed] 11/9/2019 09:32

Absolutely would not be happy if they decided not to farm in but still would not mean uneconomic.

[shareideas1] 11/9/2019 09:29

Also it's worth noting that with CER now a partner in their SNS assets with an option to farm-in, CER will need to review the well results too as their view will be key to IOG economics too...

[dunderheed] 11/9/2019 08:59

BH shareideas encapsulated my viewpoint as well.
We could still be surprised at upside of this but I think at this time mgt wants to under promise and (hopefully!) over deliver above the expected mid point of producible volumes?
Just a little concerned why they didn't highlight "discovery" more in rns title?

[shareideas1] 11/9/2019 08:46

Fair enough - it's definitely not a slam dunk but strong hint is that it's still commercial and hence additive to IOG story... now we await completion of farmout later this month and then FID

[fardels bear] 11/9/2019 08:44

Market underwhelmed..

[shareideas1] 11/9/2019 08:08

FinnCap comment:Harvey appraisal well updateInitial results from IOG's Harvey appraisal well point to the presence of a 49ft gas column. Further analysis of the extensive data sets taken from the well is now required before management can provide an updated resource estimate and more detailed guidance on the Harvey development options. IOG continues to trade at a surprisingly high 68% discount to our 60p/sh risked-NAV, despite the recent funding success for its Core Project. This project's sanction, expected soon, should help narrow that discount.?Appraisal well encounters 49 ft gas column. IOG's Harvey appraisal well in the UK Southern North Sea has reached TD and initial wireline log analysis points to a 49ft gas column at the top of the Permian Leman Sandstone reservoir. A comprehensive data set was taken from the well, alongside two 90ft cores, which will be analysed and management resource estimates updated. Pre-drill, Harvey had estimated Low/Best/High case prospective resources of 85/129/199 bcf. We value Harvey's Best case prospective resources at 8p within our 60p/sh risked-NAV.?Low-cost tie-back candidate to Core Project infrastructure. Harvey is located close to IOG's Core Project infrastructure and is seen as a low-cost subsea tie-back candidate to the Blythe platform with a low commerciality threshold. As part of the recent farm-out agreement, CalEnergy Resources (CER) has the option to acquire 50% of Harvey within three months. If exercised, CER will pay an additional £20m to IOG and a £0.95/mcf royalty on its share of Harvey production.

[marvelman] 11/9/2019 07:58

My understanding is that they have yet to evaluate fully this CONFIRMED DISCOVERY but it does not need a great deal of materiality to make it viable. I don't think his choice of what was meant to be positive wording came across as it was meant to.

[costax1654x] 11/9/2019 07:54

It wasn't commercial at that time

[shareideas1] 11/9/2019 07:51

Per the May 2019 Investor presentation from IOG, Arco discovered a 30ft gas column in 1984. So today 49ft gas column reads like an improvement which on face of it sounds positive. Will keep an eye out for broker interpretation...

[bountyhunter] 11/9/2019 07:39

Yes get that but they haven't actually said whether it's commercial or not but are we to assume it is? Further details required imho, maybe they will tell us when they have analyzed all the data. Would be interested to hear Dh's view on this.

[mirabeau] 11/9/2019 07:37

'low commerciality threshold'....the margin to generate a profit is far lower than normal indicating solid economics, low cost. It's the key positive statement in today's news. If a discovery isn't commercial you may as well plug and abandon it.

[bountyhunter] 11/9/2019 07:37

Don't get this bit, I thought this was what the appraisal well would determine?

"In the event that Harvey is of a size commensurate with a low-cost subsea development, it lies well within tie-back range to the Blythe platform which is a key part of the Core Project Phase 1 infrastructure."

I guess we will just have to wait for up to 3 months now to see if CER take up their 50% option?!?