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Share Name Share Symbol Market Type Share ISIN Share Description
San Leon Energy Plc LSE:SLE London Ordinary Share IE00BWVFTP56 ORD EUR0.01 (CDI)
  Price Change % Change Share Price Shares Traded Last Trade
  0.00 0.0% 39.75 77,647 16:29:45
Bid Price Offer Price High Price Low Price Open Price
39.00 40.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 0.23 -44.59 -7.01 199
Last Trade Time Trade Type Trade Size Trade Price Currency
16:28:00 O 50 40.50 GBX

San Leon Energy (SLE) Latest News (3)

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San Leon Energy Investors    San Leon Energy Takeover Rumours

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Date Time Title Posts
11/4/202115:14San Leon Energy51,356
08/4/202119:51San Leon Energy - The New Positive Thread36,604
23/2/202121:57San Leon Shorters1,145
03/7/202012:12san leon energy52
24/1/202012:57San Leon - all hype & no delivery?122

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DateSubject
11/4/2021
09:20
San Leon Energy Daily Update: San Leon Energy Plc is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker SLE. The last closing price for San Leon Energy was 39.75p.
San Leon Energy Plc has a 4 week average price of 30.90p and a 12 week average price of 21.50p.
The 1 year high share price is 42p while the 1 year low share price is currently 17.10p.
There are currently 500,256,857 shares in issue and the average daily traded volume is 265,766 shares. The market capitalisation of San Leon Energy Plc is £198,852,100.66.
21/3/2021
06:35
alaric7: Poetry in motion? "Buy. ■ investorschronicle.co.uk Priced to hit pay dirt An independent oil and gas development company offers multiple catalysts for share price appreciation'
05/3/2021
18:47
1kempton: A0469514..yes Shell will have to reimburse eroton these barrels as they will the other companies involved by the looks of the article, regarding sle receiving its share, well put it this way, it opens the door for eroton to issue its shareholders dividends which sle are holders and sle has stated returning 50/60% of capital to shareholders.. And when you think sle are owed $80/100m from loan notes which is due to sle by year end, plus contributions from oza and the fso, the dividend or dividends should be very rewarding to shareholders.. And no imo this is defo not in the share price at the mo..
25/2/2021
14:10
1kempton: From Phoenix magazine today on pvr blog.. www.thephoenix.ie/article/providence-shareholders-prepare-for-bond-boost/ Providence shareholders prepare for bond boost IT WAS reported in the Business Post recently that Providence Resources’ farm-out partner, SpotOn Energy, had approached the Irish exploration company about a potential merger. This was not too surprising as Providence’s chairman, Pat Plunkett, and CEO Alan Linn had previously outsourced the job of finding farm-in partners to SpotOn rather than doing it themselves. The good news for investors is that the expected €50m bond placement at the end of next month could set a fire under the shares. This would not be surprising given that the company is currently valued at about 1% of its potential €5bn share of the profit from any successful development of the Barryroe oilfield. SpotOn injected £0.5m into Providence last year courtesy of two placings and, in response to press speculation about a merger, Linn issued something of a nondenial denial earlier this month: “We are not currently involved in any merger discussions with any party.” He went on to add, however, that “we will continue to work closely with SpotOn Energy to deliver the necessary funding to develop the world-class Barryroe asset”. Linn did not say Providence has not been approached by SpotOn, simply that he is not involved in any merger discussions. Reading between the lines, if SpotOn can deliver the “necessary funding” for the agreed early development programme (EDP), then it might see little purpose in having Providence just sitting there as a sleeping partner. Rather, it would make sense to merge with Providence and run the whole show. At that stage, Linn would have no obvious central role to play despite being on a generous salary. Linn finds himself tied into SpotOn, much like Tony O’Reilly Jnr and John O’Sullivan were to Apec three years ago, which was supposed to come up with $200m funding for a five-well drilling programme, instead failing to pay even the initial $5m. Plunkett eventually pulled the plug. Why Plunkett chose Alan Linn as the new CEO remains something of a mystery. He is a chemical engineer by training, rather than a geologist or geophysicist. While he did work for major operators like Exxon, Lasmo and Cairn, it was not at a really senior level. In 2008, Linn joined Roc Oil as COO and rose to CEO in 2010 but in 2014 Roc Oil lost €31m and was subsequently suspended from the Australian Stock Exchange. Linn then opted to jump ship and became CEO of the distressed African oil and gas company, Afren, which went into administration in July 2015 and was delisted from the London Stock Exchange. In 2017, Linn moved to Third Energy as COO but “following a strategic review of the business, the decision was made to divest the offshore business and focus on the onshore”. Linn ended up as CEO of the offshore business in July 2019 but exited six months later to join Providence in January 2020. Providence has one significant asset – its now 40% stake in the Barryroe oilfield, which has 350 million barrels recoverable and has flowed on oil on test the five times that it was drilled, most recently in 2012. While Linn is right to focus on Barryroe, it is hard to justify the dumping of all Providence’s deep water Atlantic margin licences simply in order to save money. Linn has no experience or background in the Irish offshore resource sector and as a chemical engineer does not have the academic training to fully understand the rather complex Barryroe field. This helps explain the decision to farm out the development of this field to a third party with more knowledge and experience. It was, of course, Plunkett who was in situ as chairman when Providence raised €70m in a share placing back in June 2016 at a price of 16c and then signed off on the disastrous farm-out agreement with the Chinese Apec consortium. A more obvious choice for Plunkett to have picked as CEO is Steve Boldy, the current CEO of Lansdowne Oil & Gas, Providence’s 10% minority partner in the Barryroe consortium. Boldy worked as a petroleum geologist in the Department of Energy and then spent 19 years with Amerada Hess (now Hess Corporation) as its UK and international explorations manager. In 2013 Boldy joined Ramco, which developed the Seven Heads gas field off Co Cork, just above Barryroe, before moving to Lansdowne in 2006 where, for the last 14 years, he has been studying the Barryroe oilfield. Presumably he could have been poached from Lansdowne, where he is on a salary of only €70,000. SpotOn’s own website asks if you are “looking to sell or farmout your off-shore oil and gas field for development?”. The Norwegian entity claims to have “a new approach to cost-effective offshore oil and gas field development”, whatever that means. CONSORTIUM SpotOn boasts of working with “a consortium of world leading service providers”. One of them we now know to be Schlumberger, an American oil service company that works with an array of operators so the tie-in is far from interesting. SpotOn also claims to be working with the Norwegian oil services investment company, Akastor. OTHER PLAYERS SpotOn does have interests in providing well design and drilling project management, reservoir and field management services, as well as having an interest in the Odfjell Drilling company and Awilco Drilling, which owns some semisubmersible rigs. These are all minority investments . SpotOn also notes an association with the Norwegian engineering firm, Aker Solutions, which specialises in low-carbon emission designs, but again works with a lot of other players. The agreement Linn drew up with SpotOn in April last year offered it “exclusivity until October 31, 2020” to assess the potential of the Barryroe field and agree farm-out terms. The key to this, obviously, was funding, which would make it easy to find a service company and drillers to do the job. By the end of October, however, SpotOn had failed to deliver so Linn allowed a further one-month extension but even by then thegoods had not been delivered. Despite this, Linn went ahead and agreed a 50% farm-out deal with SpotOn, which presumably provided evidence that it was close to securing funding. This reduces Providence’s stake in the field from 80% to 40%. What is understood is that Pareto Securities, a Norwegian investment bank, has agreed to lead but not underwrite the raising of a $50m 10-year bond to partfund the project. On foot of this, the big French bank, Société Générale, is considering a $35m 10-year loan and the Norwegian government will provide a $45m export credit guarantee on the basis of using Norwegian drilling and service companies. DEFERRED FEES On top of this, SpotOn says that its consortium partners will defer part of their fees to the tune of $35m. This appears to bring the total inferred funding to the $165m that SpotOn signed up to. What investors need to ensure is that the key initial $50m bond is in place at the end of next month. With oil prices recovering to $60 a barrel, prompted by the rollout of vaccines worldwide and the predicted economic recovery expected to follow, the odds of this bond being put in place have decreased. What is exciting about this is that according to SpotOn’s feasibility study, the estimated breakeven point for Barryroe is $25 a barrel. This means that with 350 million barrels recoverable, the profit on the field could be of the order of $12bn, leaving the value of Providence’s potential profit share here at close to $5bn. Providence shares are currently trading at 7c, which is 99% off the €7 they traded at back in 2012 when the exploration company had just completed its last successful drilling. The current price values Providence at €50m, which is about 1% of its potential profit share from a successful development on Barryroe. This makes Providence shares look like the most underrated share on the market and they are likely to fly on the back of any confirmation that the $50m bond is actually in place.
05/2/2021
12:26
1kempton: Here it is plasbryn. Oil price surge since autumn de-risks investment Cash could equate to 60 per cent of market capitalisation by year-end Shares trading 70 per cent below sum-of-the-parts valuation Hidden value in net profit interest in undeveloped Barryroe oil and gas field The oil price has rallied by 55 per cent since early November, but this has yet to be reflected in the share price of San Leon Energy (SLE), a Nigeria focused exploration and production company that indirectly owns a 10.58 per cent interest in the vast 1,035 sq km Niger Delta licence, OML 18, located 500 km from Lagos. Operated by Eroton, the acreage is the size of Bahrain and current deliveries of 25,000 to 30,000 barrels of per day (bopd) could easily double to 50,000 bopd with the benefit of a new export pipeline that comes on stream later this year (see below). Even then output could be maintained for 32 years based on the 2016 Competent Persons Report that estimated 1P and 2P (proven) reserves of 1.1bn barrels of oil equivalent (boe).   OML 18 Reserves estimates OML 18 Gross Reserves 1P 2P 3P Oil Condensate 389 576 777 (mmbbls) Gas 3119 3213 5080 (bcf) Source: San Leon Energy annual accounts.   Eroton led the US$1.1bn equity buyout of OML18 from a Shell operated consortium in 2015 and holds a valuable 27 per cent equity interest. OML 18’s other shareholders are Nigeria state oil company NNPC (55 per cent) and two indigenous companies (18 per cent). San Leon holds its indirect 10.58 per cent interest in Eroton through a 40 per cent stake in Mauritius-acquisition vehicle Midwestern Leon Petroleum Limited (MLPL) which effectively owns a 98 per cent stake in Eroton. San Leon also purchased US$174.5m of loan notes (17 per cent annual coupon) issued by MLPL to enable Eroton to fund its share of the OML18 acquisition. These were financed by a US$221m placing in September 2018. The guarantor of the loan notes is Midwestern Oil and Gas, a company that holds the other 60 per cent of MLPL and which has close links to Eroton and other members of the OML 18 consortium. Midwestern and Eroton have a common chairman and Midwestern is the third largest shareholder in San Leon. It’s proved a successful investment to date. Between 2017 and April 2020, San Leon received principal and interest of US$190.6m and still held loan notes worth US$82.1m at its 30 June 2020 half year-end. Under the loan agreement repayment schedule, San Leon was due a US$10m principal payment in the final quarter of 2020 followed by three US$24m principal payments in July, October and December 2021. The company will also earn a further US$8m in interest to bring the total return to US$281m on its US$174.5m initial investment. Of course, the ability of MLPL to continue to make its loan note repayments to San Leon is partly dependent on the ability of OML 18 to generate sufficient cashflow for its stakeholders.   Bearing this in mind, the surge in the oil price will have done wonders for OML18’s cash flow. Based on a US$50 a barrel Brent price (spot price US$55.50), and after factoring in cash operating costs of US$23 a barrel and a 20 per cent federal government royalty, analysts at joint house broker Allenby Capital estimate that OML 18 is generating US$17 a barrel of cash. At US$60 a barrel, the cash contribution rises to US$25 a barrel. Eroton has an offtake agreement with Shell whereby oil is sold at spot prices. Bonny Light and Brent Crude are the key benchmark grades for pricing purposes. Moreover, there is a plan in place to ramp up deliveries. That’s because OML 18’s 50 fields produce an average 50,000 bopd, but deliveries are running significantly below this level mainly due to downtime and losses to theft and vandalism on the existing Nembe Creek Tunnel line (NCTL) to the Bonny Terminal. That will all change when a new subsea 100,000 bopd capacity Alternative Crude Oil Evacuation System (ACOES) export pipeline becomes operational later this year. It will cut pipeline downtime and allocated losses from 35 per cent to 10 per cent of output, according to Eroton, thus driving up deliveries at a time when the oil price is recovering strong. The ACOES tariff will be US$5 a barrel, in line with the existing NCTL tariff. For good measure, San Leon has acquired a 10 per cent equity stake in Energy Link Infrastructure, the operator of ACOES, and made a US$15m shareholder loan which carries a coupon of 14 per cent and has a four-year maturity.   Significantly undervalued As the OML 18 consortium pays down the remaining US$210m of the US$663m reserve backed loan facility which it took on to fund the US$1.1bn purchase price – the loan matures at the end of 2025 – then it will bring into sharp focus the chronic undervaluation of San Leon’s 10.58 per cent indirect equity stake in OML 18 which is held at US$37.7m (6.2p a share) in the company’s accounts. Based on San Leon’s share of OML 18’s 2P reserves of 117.7m the stake is worth nine times that amount using a modest US$3 a barrel valuation. That’s one reason why San Leon’s NAV of US$156.6m (25.75p a share) materially undervalues the true value of its assets. Another is that San Leon has a hidden gem on its balance sheet, a 4.5 per cent net profit interest in the undeveloped Barryroe oil and gas field in the Celtic Sea Basin which has 2C recoverable resources of 346m boe. San Leon’s stake was held in the interim accounts at US$4.4m. However, the operator Providence Resources (PVR) announced a farm-out with Norway-based SpotOn Energy at the tail end of last year to develop and fund the project in conjunction with a world class oilfield services company. Production could start in the second half of 2023 following an appraisal and development drilling in late 2022. Analysts have placed a value of US$35m (6p a share) on San Leon’s net profit interest, or eight times the carrying value in its accounts. It’s worth noting that analysts are predicting that cash inflows from the loan note repayment will drive up San Leon’s cash from US$35.6m (30 June 2020) to US$93.3m (15.3p a share) by the end of 2021, a sum that covers 60 per cent of San Leon’s current market capitalisation of £113m.   San Leon Energy's cash flow set to rebound   2018 2019 2020E 2021E Cash flow pre-financing $40.1m $27.7m $16.6m $72.9m Net cash (debt) $70.7m $36.7m $20.3m $93.3m Source: San Leon Energy annual report, Allenby Capital forecasts 2020 and 2021     Material discount to sum-of-the-parts valuation By my reckoning, San Leon has a sum-of-the-parts (SOTP) valuation of US$511m (£378m), or more than three times its current market capitalisation of £113m. As the company’s cash pile builds this year the shares should start to narrow the unwarranted 70 per cent share price discount as investors cotton on to the value in the company’s other assets.   San Leon Energy investment portfolio Investment  Valuation Value per share Cash balance (mid-September 2020) $15.8m 2.6p OML 18 loan note balance $82.0m 13.5p Energy Link Infrastructure loan note receivable $10.0m 1.6p Total cash and cash equivalents $107.8m 17.7p OML 18 working interest (10.58 per cent) $353.1m 58.1p Energy Link Infrastructure working interest (10 per cent) $15.0m 2.5p Barryroe net profit interest (4.5 per cent) $35.1m 5.8p PORTFOLIO VALUE $511.0m 84.0p Source: San Leon Energy accounts, London Stock Exchange RNS, Allenby Capital. Exchange rate £1:US$1.35.   The fact that San Leon’s largest shareholder, Tosca Fund Management, owns 73.4 per cent of the 450m shares in issue means that any good news is likely to lead to accentuated share price moves given the lower than average free float. There is even the possibility of a hefty cash return if the board follow up on last year’s maiden special dividend of £27m (6p a share). Buy.
23/1/2021
15:24
1kempton: hxxps://www.share-talk.com/top-twenty-the-stocks-of-the-year-for-2021-review-2-2/?utm_campaign=Weekly%20Stock%20Market%20News&utm_medium=email&utm_source=Revue%20newsletter#gs.rhayfz San Leon Energy (SLE): Hefty Broker Price Target Of course, 2020 was a tough year for most companies in the oil and gas space. But ironically, we have seen more issues for some of the larger players with regard to production cuts and dividend payouts than at the more nimble and specialist plays such as San Leon. It continues to be a massive dividend payer to its shareholders, most notably the near 25% special dividend paid out early in 2020. The cash for this is the result of the company’s ongoing and successful strategy of acquiring equity stakes and lending to world class assets such as OML 18, offshore Nigeria. The concept of lending to such projects at high coupon rates and then having the benefit of their growth and development means that San Leon has flown very much above the clouds during the time of COVID-19 disruption. While the pandemic is clearly going to be an influence on any company currently, San Leon’s income and quality of assets can help it ride through any delays / bumps in the road. Interestingly, the shares are less than half the 59p Panmure Gordon price target – off the back of the broker’s appreciation of San Leon’s lend-invest strategy – hence de-risking exposure in the present environment. Indeed, the only downside so far of this approach seems to be that the stock market does not yet appreciate the value and income creation at San Leon Energy. Therein lies the opportunity for 2021. This certainly appears to be one of those stock market situations where investors – apart from those who fully understand the momentum San Leon is building, continue to look the income delivering gift horse in the mouth
28/11/2020
11:19
1kempton: Barryroe now worth zero to sle at present, but with a 4.5% interest in production profits on the whole enlarged licence structure, this is going to worth 10s of millions a to sle.. and with no outlay... gas to be produced from as 18 months by what Alan Linn states in a proactive pres, says this is going full steam ahead. Then their is the oza field, which holds 20mboe plus!!!.. large hydrocarbon structures found but never tested by shell, this imo could be more than double the amount of oil to be recovered as mentioned in the fox Davies pdf regarding decklar, sle will be paid first by the recent rns's and once paid will hold 30% of decklar and its production... Then we have oml18, where we hold a 10.58% interest in erotons production, who have already paid sle back 190m through the loan notes scheme so we have that now for free, owed through interest is around 110m which will be repaid by end of next year of which sle have stated half will be returned to shareholders in dividends... plus we have a 10% share in the new fso facility which from day one will increase production from 10kbpd to 50kbpd plus. There are other companies wishing to use this line who like eroton will have to pay in advance for every barrel that flows through the line, and sle receive 10% on every barrel.. With this increase in production eroton who sle have 10.58% will be able to pay dividends out to sle who in turn have stated to return half to us shareholders All in all with cash in the bank and sle already paying a handsome 30% yield in the form of a 6p dividend earlier this year, things are looking really rosy for sle and its shareholders. . More deals and dividends next year and all years as stated by our ceo..
02/10/2020
07:11
alaric7: www.proactiveinvestors.co.uk/companies/news/930230/san-leon-energys-powerful-cash-flow-isnt-properly-valued-in-share-price---broker-930230.html San Leon Energy’s powerful cash flow isn’t properly valued in share price - broker The company’s strategic move into Nigeria has been a great success story, says Allenby, which has initiated its coverage. San Leon Energy PLC’s (LON:SLE) powerful cash flow is a key factor in a valuation drawn up by Allenby Capital which sees some 222% upside to the current share price. The Nigeria-focussed oil and gas investor last week released first half results that illustrate a company with a strong financial position and outlook. It revealed that in 2020 to date, the company with investments in Nigerian oil assets received US$41.5mln from operators, via loan note repayments. Some US$88.7mln of future loan note payments remain under its loan arrangements. San Leon ended the half with US$35.6mln in cash and had US$22.6mln by mid-September following new investments. READ: San Leon interims confirm strong financial position The loan notes were the basis of San Leon’s investment in OML 18 (an operation bought out from Shell in 2015), with the operator paying a material coupon and providing the company with a 10.58% indirect interest in the underlying oil fields. Allenby, in a new note, described San Leon’s strategic move into Nigeria as “a great success story”, whilst noting that the more recent investments similarly focus on the acquisition of cash-flow. “The OML 18 move has been followed by two recent investments which again focus on near-term cash flow,” Allenby analyst Peter Dupont said. “These are the interests taken in the new ACOES export pipeline linking the core of the OML 18 operations with an offshore FSO and in the Oza field development project in the northern Niger Delta. High yield debt is a feature of both investments.” Dupont highlighted that currently San Leon shares are pricing an enterprise value of just £29mln, substantially less than the £371mln value estimated by Allenby. “We have adopted a hybrid sum-of-the parts approach to valuation,” Dupont said. “In the case of the current cash balance and the financial receivables relating to OML 18 and the ACOES pipeline, we have valued these items dollar for dollar. “Regarding the equity interests in OML 18 and Decklar, our valuation basis is price/boe multiplied by net reserves. We have used $3/boe and $1.5/boe for 2P reserves and 2C resources respectively. Our valuation overall is $482m or £371m, equivalent to 82p/share.” San Leon paid out US$35.3mln to shareholders in the first half of 2020 and in May it announced that a US$33.3mln special dividend would be paid - representing a dividend yield of about 30% at that time - and a US$2mln share repurchase programme was completed early in the reporting period
29/9/2020
15:34
1kempton: From bluerill lse.. www.proactiveinvestors.co.uk/companies/news/930230/san-leon-energys-powerful-cash-flow-isnt-properly-valued-in-share-price---broker-930230.html San Leon Energy’s powerful cash flow isn’t properly valued in share price - broker The company’s strategic move into Nigeria has been a great success story, says Allenby, which has initiated its coverage. San Leon Energy PLC’s (LON:SLE) powerful cash flow is a key factor in a valuation drawn up by Allenby Capital which sees some 222% upside to the current share price. The Nigeria-focussed oil and gas investor last week released first half results that illustrate a company with a strong financial position and outlook. It revealed that in 2020 to date, the company with investments in Nigerian oil assets received US$41.5mln from operators, via loan note repayments. Some US$88.7mln of future loan note payments remain under its loan arrangements. San Leon ended the half with US$35.6mln in cash and had US$22.6mln by mid-September following new investments. READ: San Leon interims confirm strong financial position The loan notes were the basis of San Leon’s investment in OML 18 (an operation bought out from Shell in 2015), with the operator paying a material coupon and providing the company with a 10.58% indirect interest in the underlying oil fields. Allenby, in a new note, described San Leon’s strategic move into Nigeria as “a great success story”, whilst noting that the more recent investments similarly focus on the acquisition of cash-flow. “The OML 18 move has been followed by two recent investments which again focus on near-term cash flow,” Allenby analyst Peter Dupont said. “These are the interests taken in the new ACOES export pipeline linking the core of the OML 18 operations with an offshore FSO and in the Oza field development project in the northern Niger Delta. High yield debt is a feature of both investments.” Dupont highlighted that currently San Leon shares are pricing an enterprise value of just £29mln, substantially less than the £371mln value estimated by Allenby. “We have adopted a hybrid sum-of-the parts approach to valuation,” Dupont said. “In the case of the current cash balance and the financial receivables relating to OML 18 and the ACOES pipeline, we have valued these items dollar for dollar. “Regarding the equity interests in OML 18 and Decklar, our valuation basis is price/boe multiplied by net reserves. We have used $3/boe and $1.5/boe for 2P reserves and 2C resources respectively. Our valuation overall is $482m or £371m, equivalent to 82p/share.” San Leon paid out US$35.3mln to shareholders in the first half of 2020 and in May it announced that a US$33.3mln special dividend would be paid - representing a dividend yield of about 30% at that time - and a US$2mln share repurchase programme was completed early in the reporting period
29/8/2020
15:45
echoridge: So the secret is out.... I hadn't seen that particular article, Alaric, but that's precisely the argument I was referring to in my previous post. The death of shale is a central investment theme of mine but much more importantly, its starting to get some serious professional interest as well. Through the material recovery in the oil price complex since March, there has been a big increase in open short futures and put positions; in other words, pros have been opposing this recovery rally - particularly since Brent breached $40 - and the reason is simple: despite some pockets of recovery in the world economy - particularly in China - there hasn't been anywhere near a sufficient increase in general oil demand (yet) to address what these bears think is the gorilla in the room: the huge oil stockpiles that were built up around the world during the worst of the price crash. In fact, storage capacity - in every form from onshore tanks to tankers - remains surprisingly tight and storage rates commensurately high. The expectation had been, as short positions began to build up around mid May/June between $35 and $40 - that even as the world economy picked up a bit - for some, ESPECIALLY as the economy recovered - the oil market would necessarily get flooded by all this supply held in relatively expensive storage, by professional investors and not oil experts. Yet despite much of that stockpile being held in relatively weak hands, that hasn't happened (yet), at least to the extent that it has impacted market prices. Instead of course, the price action has been on a slow grind higher (I hate chart analysis, but the 30% rally since end of May has been notable for its unusually slow, steady rise particularly as it followed one of the most volatile periods in the market's history), with the outer forward months into next year for Brent approaching $50, no longer very far from its 5year average, seemingly against all the odds. Now, one reason for this is the massive liquidity-drenched recovery in equities and gold prices as well as the far-less discussed, but far more important for oil prices, simultaneous collapse in the dollar. All 3 of these have, in different ways, brought mainly speculative buyers into oil who are almost entirely buying financial instruments, unlike their peers earlier in the year who got long physical oil, thus pushing the oil forward months into contango and adding to the upward pressure on prices generally. This recent buying will almost certainly reverse - as it always does, often suddenly - since these funds are punting oil bc they've basically run out of other things to buy, and when it does we may see a material correction in Brent, possibly back to the low 40s, though that now seems less likely. However, I am convinced it won't last and the reason is the article you posted, Alaric. In fact, I think this thesis arguing for higher prices in the coming years, regardless of economic conditions, is the final, largely under-explored, almost stealth reason for the stubbornly higher CURRENT prices. What I believe the market is waking up to - and frankly, is causing some even more painful short covering that is undergirding prices - is that the undeniable demand destruction that is coming as the world moves to renewables, etc is (and I know, I have written about this before, but it bears repeating and highlighting) now seen as inevitable, unstoppable. However, as oil bears are learning to their embarrassment, the ultimate irony is that the market crash in March may have had a bigger impact on supply than on demand, and that that impact is not being equally shared across the industry, either product-wise or geographically. In short, if you're a heavily leveraged shale producer or worse, want to become one, and you turn to the credit markets for help, you're kinda foooked, PARTICULARLY in the US. In a year or 2, this fast evolving view may well turn out to be wrong, but for now, shale oil production in the US is toxic, and since the generally accepted macro view is that getting to some 8 million+ bbls/day made the US the world's marginal producer and that that status was built on shale growth, if that growth is about to turn negative, then commodity prices may well remain structurally well bid and may even push materially higher. In other words, there may well be some fundamental method behind the higher price madness. In a final irony, and of course a final blow to yet another 'end of days' scenario jabba or one of his surrogates gleefully present when they get tired of trying to slime sle directly, the ability to exploit this, until now, unforeseen development of relatively buoyant prices and a credit market boycott of shale, and an overall declining investment environment for exploration, is and will open up increasingly to well-funded, conventional legacy producers in the developing world, particularly geographies with critical mass like Nigeria. And that means companies like San Leon Energy. Drop mic
27/8/2020
11:04
echoridge: '...Besides if you wanted to take a punt on Barryroe, you would be a stakeholder in PVR or LOGP. Doubt it will impact SLE in the medium term. Come back in 2-3 years, that is if it makes it into the Irish energy capacity market and hasn’t been displaced by renewables....' Man, if bleating mindless drivel were a religion, you'd be a saint. They start drilling, sle's 4.5% npi doubles in value overnight and it would be eminently sellable - though they probably won't since they don't need the cash and Oisin is on record as loving the project - as I have written several times now. That's how the royalty market works, meaning that financially, the impact on sle will come much, much sooner than for pvr or logp though both those share prices will react more significantly. The point isn't which share to punt if you think Barryroe is a going to be pumping in the immediate future - of course you would buy pvr or logp - but that the return to sle shareholders would also be substantial, immediately monetise-able, and SHORT-term.
San Leon Energy share price data is direct from the London Stock Exchange
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