Sirius Petroleum Share Discussion Threads

[vatnabrekk] 21/12/2024 22:29

Here's a copy of the email that I have sent to the BoD:

Thank you for your operational update on Friday 20th December and also for the release of the 2023 Financial Report and Accounts. Having looked through the reports I have several queries which I wonder if you could please clarify for me:

Abura Oil Production: In your email circular dated 6th December 2023 you stated that current production at that time was 13,500 bpd, which was an increase from the baseline production that was inherited by the consortium in December 2022. The update also stated that Baker Hughes was expected to add a further increase of 500 to 1,000 bpd by the end of the year 2023.

In your latest operational update on 20th December you stated that average production during 2023 was 8,000 bopd. This average figure doesn’t tie in with the starting level of 10,000 bpd in December 2022 and the production level of 13,500 bopd 6th December 2023. Surely the average production during 2023 should be somewhere in between those two levels?

For the sake of clarification can you please advise the total production at Abura for the year 2023.

Also, in your latest operational update on 20th December you stated that exit production in November 2024 was at 10,040 bopd. At this level it would seem that all incremental production above the initial baseline has been lost. Can you please confirm if this is the case, and if this is entirely due to the wireline failure that occurred in Q2 2024?

Again for the sake of clarification can you please advise the total production at Abura for the current year, and when are you expecting full production to be resumed from Abura 11L.

[vatnabrekk] 21/12/2024 22:23

"8000, 10,000 or 13,000, Tende's share of the revenue from the field remains the same."

Yes Doc, but that doesn't make any sense, so an explanation is required, and they ought to be pressurised to come with an explanation.

[vatnabrekk] 21/12/2024 22:21

Now I don't wish to cause any alarm, but on page 43 of the 2023 AR under the heading "Segmental Reporting" there is a statement:
"The Company has not adopted IFRS8 – Operating segments for 2023 as it is not a requirement for unlisted companies."

However segmental reporting information was given in the 2022 Accounts, on page 37.

Make what you will of this change in reporting. Could it be that they no longer intend to re-list, or could it be that they intend to produce the IFRS8 information as and when they are ready to re-list in the future?

Who can say what's on their minds.

[dr rosso] 21/12/2024 22:16

Edited 8,000 or 10,000, Tende's share of the revenue from the field remains the same.



........................................ $0 ................................

[vatnabrekk] 21/12/2024 21:55

Doc, ref your post 138694 above, your will see in my reply to HT why I believe that total Abura production for 2023 cannot possibly be as low as 8,000 bopd, when the starting point is 10,000 and the end point is 13,000. So some kind of explanation from the company is required.

[vatnabrekk] 21/12/2024 21:49

HT, I'm afraid I'm unable to rephrase that statement because it doesn't make sense to me.

We were told that production at Abura was running at 10,000 bopd in December 2022 when the consortium took over management of the existing wells. Then in December 2023 we were told that production was running at 13,000 bopd. So I cannot understand how the average throughout 2023 can be 8,000 bopd.

I am sending ir@Tende an email asking for clarification.

[htrocka2] 21/12/2024 19:52

vat.....
I need you to do me a favour....in your own words...re-phrase the following paragraph..


'Following a detailed appraisal of the available data on both the Abura field and the development fields, Owepele and Osioka, it was agreed that there was a requirement to update the dynamic reservoir modelling of all three fields and this work was successfully completed progressively during the year and post year-end, initially identifying the well targets on the Abura field where average daily production was 8,000 bbl during 2023'

[vatnabrekk] 21/12/2024 15:44

"Whoever is responsible for this fiasco needs to be sacked. Buck stops with CEO and FD."

I entirely agree Doc!

[dr rosso] 21/12/2024 14:42

Whoever is responsible for this fiasco needs to be sacked. Buck stops with CEO and FD.
Unique cracking deal it certainly is not. It has undermined the whole Company, with Trafigura flexing its muscles to stop the rot.

The hot air garbage spouted by Hendo at the agm a year ago has been exposed as such by the damning figures in the AR. What were we promised............?

"65, combination of well interventions and drilling campaign expected to push 65 production up to 20,000 bopd or more by end 2024"
"65, earn cash flow from existing production, but incremental production from interventions and new drills will be very profitable in 2024."

Complete twaddle

[vatnabrekk] 21/12/2024 14:19

And yet another question arises: If Tende is getting $15 per barrel for baseline 10,000 bopd, then total revenue should be in the region of $55M for a whole year. And yet the Accounts state total revenue for 2023 was $9M.

More explanation required, I think!

[vatnabrekk] 21/12/2024 14:04

Just to support my previous post where I said that I assumed that Tende (or the consortium) would be receiving payment per barrel for all production including production from the existing wells that were taken over in December 2022, here is an extract from a news update on Tende's web site dated 15 December 2022:

"Sirius has now acquired a 30 per cent interest in COPDC and will immediately begin to accumulate cash flow entitlements related to the assumption of operational responsibility for existing production at the Abura field."

Surely that is fairly clear?

[vatnabrekk] 21/12/2024 13:57

That's right astral, I was following those figures and it certainly raised questions in my mind. I was aware that on 6 December 2023 they reported production running at 13,000 bopd, and expected to increase that to about 15,000. So how can the average for 2023 be only 8,000 bopd? I wonder if they mean the average during 2024, which might make some sense because they also state that production in November 2024 was 10,040.

If the average for 2023 (or even for 2024) is only 8,000 then that is truly disastrous because that is well below the starting baseline of 10,000!

I think we need to try asking them for an explanation, as what they are reporting simply doesn't stack up.

[astralvision] 21/12/2024 13:42

Here's the figures they gave re 65London 26 July 2023* The existing producing field, Abura, has been in production since the 1970s, has been ascribed 16.2 mmbbls remaining 2P reserves1 and is currently producing c.10,500 bopd.Tende Energy plc("Tende Energy" or "Company")Group Operational and Commercial Update London, 6 December 2023: - [ ] Current production at Abura is now running at c.13,000 bopd as a result of the optimisation of production facilities and infrastructure.2023 AR '.....initially identifying the well targets on the Abura field where average daily production was 8,000 bbl during 2023.'

[vatnabrekk] 21/12/2024 13:37

Doc: "Operating losses can be lessened to some extent by the proposal to construct a new flowstation as part of the Abura Development Plan to process oil and gas from Abura and the 2 nearby fields.

The construction of a new flow station at Abura is not new, and fall to NPDC as infrastructure. This intention was reported in Wood Mackenzie's Report in May 2024, but was also stated in their previous report on OML65 a couple of years back:

"There are no processing facilities at Abura, and all oil production is tied back to the nearby Utorogu flow station on OML 34. From here oil is exported to the Forcados oil terminal. The operator, NPDC plans to construct a new oil and gas processing facility at Abura, and has ..."

So it has been known for a long time that using the processing plant at Utorogu (OML34) was not a viable solution for the long term if production from OML65 is to be increased significantly. And it seems that this strategy was accepted by NPDC a long time ago.

I expect this could be covered by the loan of $600M arranged by Law Crest for another Phase.

[dr rosso] 21/12/2024 12:50

Where do we go from here?

a) OML 65 will proceed with a new agreed FDP in place. The Project to date has been managed most inefficiently. In effect, Tende has been reduced to a bystander. Operating losses can be lessened to some extent by the proposal to construct a new flowstation as part of the Abura Development Plan to process oil and gas from Abura and the 2 nearby fields.

b) Angola will finalise very shortly, with a zero debt finance requirement due to a prolongation which has paradoxically worked very much to the advantage of the Tende-Etu-Trafigura consortium.

c) The lucrative commodity trading enterprise has been set up in Dubai and is ready to go.

d) Angola cash cow will allow for further jv stake acquisitions of underperforming underfunded assets throughout West Africa


So all is not lost, by any means.

What is objectionable is to see reward for certain failures, primarily in Nigeria, OML 65 being the supposed bedrock. $6m paid out in salaries, with BoD claiming around half of that as their remuneration. Not only that, added to the 485m 0.5p options awarded for taking ATOG, we see another 160m dished out.

Trafigura hierarchy needs to act quickly and recruit a team of Ds that can properly manage their Tende Energy "front". Better still, following the Angola completion, incorporate it as an operating subsidiary, buy out existing shareholders or list it. Above all, get ppl in who can do the job.

[vatnabrekk] 21/12/2024 12:11

Thanks astral. So if I'm reading this right, it would appear that Tende gets $15 per barrel for all production including the baseline 10,000 barrels /day existing production which comes under the management of the consortium. Then there are additional payments for drilling new wells (Phase 1) and for incremental production.

Well that's my interpretation anyway.

[htrocka2] 21/12/2024 11:54

COPDC ENTITLEMENTS
• 0.25% of gross revenue Field Management fee'

Even IF Tende got their Field Management Fee...COPDC receives 0.25% of 10,000 barrels equals 25 barrels a day...of which Tende could be entitled to about 8 barrels a day...that's what you get for $125m....It's best not to mention such an embarrassing number and poor investment.(it would hardly pay for the tea and biscuits)

[astralvision] 21/12/2024 11:13

VatnaThese are my notes from the agm Jan 2023, ie one before last. I'm sure I've posted them before, it's as much detail as what we're going to get, imo, but doesn't answer every.Taken directly from what they said.Clearly 65 has not turned out as expected. Whether they can turn it around remains to be seen.65 gone through in some detail. We recover all costs and get the benefit from existing production.First stage, drill 9 wells, $75m, will add an additional 11,000 bopd.COPDC is effectively a subsidiary of SRSP, this was said several times.15 year contract, COPDC is the exclusive contractor.In total the plan calls for 45 wells across the block to develop up to 215m barrels.We get $15 for every barrel produced, this was clarified by a questioner, that is $15 to srsp.In addition $16.8m for each well drilled , and 40% of the project net cash flow. Plus 0.25% of gross revenues, small, but a 'thank you' for taking over operations. The right to market 100% of the crude, which will be assigned to Trafigura.Standard bank will administer all the cash inflows/outflows, ensures everyone gets paid correctly. Srsp are top of the waterfall, they get paid first. Innovative, mitigates risk, works for all parties. The material elements within the deal will be continually reviewed. As it stands, $15/barrel for that element, but could be revised upwards.Can keep cash costs down to

[astralvision] 21/12/2024 11:10

TRADOILYes, it is the 2023 AR that has belatedly been published.