Sirius Petroleum Share Discussion Threads

[htrocka2] 07/6/2017 13:45

Nice write up Sher10ck....just one point. I realise that CPR's are not an exact science, even Rockflow have stated that their estimates are based on experience, however, Rockflows gross gas estimates are from 43.1 to 101.66 Bscf, whereas Schlumberger's is 277 to 390 Bscf...It's obvious that both can't be right....with a discrepancy running into nearly 300%?, who do you believe? Rockflow or Schlumberger?

If, as Rockflow pointed out, it's based on experience....then Schlumberger must come out on top.

[aventador] 07/6/2017 13:45

If people like the hitman stopped selling out maybe the price would hold or go up.Why buy and then sell when we know production or sale and multiple assets are potentially coming this could suspend or be sold anytime so get in and hold is advice.

[rugbybloke] 07/6/2017 13:16

Thanks Sherlock, makes a great deal of sense.

[minichris] 07/6/2017 13:05

@Sherl0ck or anyone for that matter....

Have you ever Googled "Graham Lyon" & "LNG" together?

He seems like someone we should have working for us......

[sherl0ck] 07/6/2017 13:00

Part 4:

- I'm contemplating why Sirius and our partners seem to have found favour with regulatory authorities? Why exactly are large multinationals aligned with us? (SLB's other two big projects with Ophir & Sound are both gas-focused). Why do we have renowned gas experts like Havoc, GL & others supporting us? Consider again the following statement that I reckon is more profound than first appears:

"...the Company's focus has been on reviewing the opportunities available to the Company, both in terms of assets in Nigeria and the optimum financing and long-term strategy for developing those assets." (RNS 29/6/16)

- Do you see this in a different light now? IMO the challenge hasn't necessarily been how do we drill Ororo? The challenge might always have been how on earth do we monetise a group of lucrative assets? If gas is indeed a key component it's far from easy and it's certainly not cheap. The answer is you align yourselves with large renowned technical and commercial experts and build a supply chain.

- Sirius is in an enviable position of not already being saddled with large debts, oil production hedged against high POO figures and a difficult to manage cost base. With so much going for us, it would be crazy to just develop a bog-standard Nigerian E&P oil company model.

- Gas is where the key action is right now in an increasing lower carbon future, so if you potentially have plenty of it - combined with access to large funding and innovative companies, then you'd be mad not to make the most of it.

- Naturally the oil isn't just forgotten about since it can help underpin the large investment in associated gas fields, but I see Sirius as primarily a semi-integrated gas supply chain company in the making. We'll either retain a key part within this new future or we're building an all-encompassing, pre-assembled chain for someone else.

- if we're gas-focused and we have a neat 'mobile pipeline' solution then you can start to consider other interesting business development opportunities that could open up when it comes to helping monetise stranded gas fields that we don't even own or operate.

If any of this is even remotely close to reality, it helps make sense of the incredible time, effort and complexity involved in building something of scale. I'm also very minded that none of this is factored into the current share price. This is how I view Sirius, and I suspect it's probably similar to how Bron viewed the company too. We'll see.....

[sherl0ck] 07/6/2017 12:50

Part 3:

- We know there's significant pressure on importing more gas for the Nigerian market, whether it's for local communities, various sized new/existing power plants or gas feed for petrochemical. But, when you move beyond a pipeline solution, you effectively open the door to possible gas export too. Think of MCNG/LNG as a 'moving pipeline'

- In fact it would be very unusual to look at MCNG/LNG without there being an export element, particularly as the former can be shipped up to a couple of thousand km, thus opening the possibility of a wider African supply chain, whilst the latter can be shipped globally (LNG is 1/600 of initial gas volume whilst CNG is around 1/300.....the greater the level of compression, the higher the volume that can be shipped, thus mitigating higher costs of longer journeys)

- Gas export also brings in much needed gov't revenues and I understand that over the past 10 years or so the Nigerian gov't has unsuccessfully tried at least twice to get an FLNG project off the ground.

- Despite the clear success of the onshore NLNG facility, it must be a tad frustrating to see other, smaller African countries now stealing a march when it comes to the latest, innovative and more cost-effective FLNG projects, especially with the stalling on additional trains at NLNG and the well publicised ongoing challenges of getting Brass LNG & OK LNG off the ground.

- In the face of more recent drops in global LNG prices, constructing onshore facilities is looking expensive and would require vast amounts of gas to justify the huge capex. This has meant that even the majors are now embracing FLNG as viable alternatives.

[sherl0ck] 07/6/2017 12:45

Part 2:

- the reference of the potential High Case volumes of gas available leading to other schemes being reviewed is IMO incredibly significant. The high case number on Ororo simply doesn't tally with this, so is there again a hint to a much greater possible supply elsewhere / in total? What exactly are alternate gas monetisation/transportation schemes that could account for larger gas volumes in offshore fields than would fit small-scale MCNG?

- If you move beyond a simple containerised solution (and the use of the word 'simple' makes me smile as these projects are all pretty complex and largely virgin territory for any explorers/MCNG providers, hence there's only one in existence) then the alternatives are a large-scale MCNG solution that probably demands multiple customised vessels & more likely 1 - 2.5 TCF of gas to justify the ROI; or you look at establishing gas pipeline or even the liquefaction of gas, I.e LNG / floating LNG.

- expert confirmed that if you have a gas pipeline infrastructure already in place, you typically use it rather than messing about with expensive new shipping schemes. The CPR Exec summary talks of piping gas from Ororo to Parabe but if this sufficed, why even mention looking at other transportation methods in the RNS? You could potentially build a gas shipping hub into Ororo, but in the longer term I suspect establishing pipeline over these smaller distances would be more cost-effective.

- it's my own personal opinion that the 'alternate gas monetisation schemes' wording of the RNS is hinting at a possible LNG based solution. This (& MCNG) also aligns well with the rather odd mention of separating the gas element & the natural gas liquids (NGLs) and selling both, since the two are separated during the midstream processing of gas prior to compression/liquefaction. Look at NLNG, Nigeria's large onshore LNG processing facility - as well as obviously processing the LNG for export, it produces a significant amount of NGLs.

- now it would be pretty ludicrous to even contemplate the cost and effort involved in LNG for a small scale localised import project. I have researched this topic extensively and compared every existing & planned LNG/FLNG scheme and the minimum level of gas required for the very smallest FLNG solution is about 0.5 TCF, but again, you'd normally be anticipating higher levels around the 2 TCF+ mark.

- You also need seriously big $ (and/or large partners with deep pockets) as Ophir's Fortuna FLNG project in Equatorial Guinea, which is one of the most innovative and cost-effective, is coming in at circa $2bn, with $1.2bn of this from foreign backed debt.

[sherl0ck] 07/6/2017 12:40

Part 1:

The following is all IMHO and is based on public domain RNS info and my wider research. I've tried to stick objectively to the known facts and explain my logic, but admittedly one or two things will be speculative, but I hopefully make this clear. It mostly centres around the 22/4/16 operating update RNS and particularly the references to gas.

"The potential to exploit gas in addition to the oil revenue has generated interest from international oil and gas companies to secure and purchase such gas in the form of Compressed Natural Gas ("CNG") and Natural Gas Liquids ("NGLs"), which are produced as a by-product of the crude oil.....With the potential High Case volumes of gas available, alternative gas monetisation schemes are also being reviewed."

- It's curious that the gas element has generated interest from international O&G companies (IOCs) when the figures stated for Ororo alone are ok but certainly aren't off the scale. Would circa 0.1 TCF of gas really spark interest from at least two IOCs? Not in my opinion.

- And why would IOCs request gas in this form? Compressing and shipping it (marine CNG) is an extremely rare solution with only one existing small-scale commercial project in the world right now. From research I understand that the capex can be pretty significant and there needs to be a decent level of gas to make the ROI work.

- I sought out world leading experts on this topic and one I spoke with confirmed my suspicion that even talking about a possible small scale solution doesn't align with a tiny O&G company. He laughed when I suggested that a £20m mcap company (at the time) was potentially considering it. All the other organisations that have bothered to explore this route have either been large national companies or decent mid-sized E&Ps. The largest IOCs have typically gone straight to LNG, which is more tried & tested.

- You simply don't even look at something like this unless you have a large volume of gas (He thought at least 0.4 TCF absolute minimum, but ideally quite a bit more). This far exceeds the stated number for Ororo, so is there a hint that we have access to other gas?

- You also need potential major funding. He estimated it's normally hundred's of $m's for a small to mid-size scheme (he quoted ballpark $0.5- close to $1bn), but Centrica's abandoned Caribbean MCNG project would have been substantially more.

- you could theoretically do a localised MCNG solution and from reading the latest World Bank report on the subject, there are one or two companies out there that could adapt existing vessels to carry customised containers rather than going through the very expensive, fully customised new build vessel route. The required overall volume of gas to justify the lower costs would admittedly be reduced, but even so, the capex would likely still be pretty significant. But it's the mention of alternate schemes that has got me excited.

[sherl0ck] 07/6/2017 11:44

Hitman - may I congratulate you on your trading but express the sincere hope that you miss your desired buy price and remain locked out when news lands!

[htrocka2] 07/6/2017 11:29

Apologies for O/T....but these are having a good day.

[thehitman1] 07/6/2017 11:25

I sold over 1p, will add again at 0.65p.

[handygandhi] 07/6/2017 11:22

I think that's what's happening Doc.
If they can sell it down to 0.70, I'm in for another chunk.

[dr rosso] 07/6/2017 11:12

Certain ppl have no problem selling into a no-news period when they know that news is deliberately being held back

[openfield68] 07/6/2017 11:11

That is unless you are the builder Truth Teller, by which you can build at a fraction of the cost. Let's hope there will be a Sirius mansion at the end of the driveway one day. And as long as the BoD are backed by some of the large investment bodies, which I believe they presently are, Bobo can keep his high vis jacket and hard hat on.

[htrocka2] 07/6/2017 11:07

'...but my spread bet has been under major pressure and I've had to scramble to stop it from closing out..'

Putting on my sceptical hat...is it just a coincidence that no sooner SPREADEX appear on the scene from nowhere.... the price drops through the floor....I wonder if there's a connection?

[aventador] 07/6/2017 11:06

Nows the time for people to be buying not on the spikes buy on the lows next rise you can double your cash.News is coming even if delayed it will still happen to many positive factors here, yes the share price stinks if your a lth but nothing's changed.

[the truth teller] 07/6/2017 11:01

If there was any news due with anything of any substance the share price would not be were it is. All you will get is silence. What's to stop this share free falling to zero. They have no income, apart from the cap in hand to the shareholders but even that is wearing thin now.

Talks cheap money buys houses

[kwizza] 07/6/2017 10:36

Trusting that what is RNS'd is happening and hopefully more good news behind the scenes, then I would say it is a combination of the charts, no news and the general
election that is being used to take the shares down at the moment.. shame topped
up around the 1p mark.

[vatnabrekk] 07/6/2017 10:22

Did anyone have stop-losses that have been triggered today?

[vatnabrekk] 07/6/2017 10:14

I'm looking forward to reading that, Sherl0ck.

[htrocka2] 07/6/2017 08:49

(double post

[htrocka2] 07/6/2017 08:49

Look on the bright side....there's been no retraction from the BOD on missing the H1 date.......yet.