Sterling Energy Share Discussion Threads

[septimus quaid] 28/7/2017 17:51

One last golden hurray from Chinguetti before they start knocking the nails in the coffin: Average net Group entitlement to production of 320 barrels of oil per day ('bopd') (1H 2016: 214 bopd). Http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SEY/13310697.html

[septimus quaid] 28/7/2017 09:56

As alluded to by Irish, are the monies intended to pay for decommissioning not "embedded" somewhere else in the accounts, hence the cash already sits net? Otherwise there would be a risk of not having enough to pay for decommissioning which must be an absolute no-no.

[ohisay] 28/7/2017 07:26

Statement of financial position At 30 June 2017, Sterling held $83.5 million cash and cash equivalents available for its own use (30 June 2016: $92.4 million). Group net assets at 30 June 2017 were $76.1 million (30 June 2016: $78.6 million). Non-current assets totalled $22.5 million (30 June 2016: $18.8 million) with net current assets reducing to $78.1 million (30 June 2016: $92.3 million). The Group's Chinguetti decommissioning provision (current and non-current) at 30 June 2017 was $31.6 million (30 June 2016: $32.4 million) reflecting the Group's current estimate of gross abandonment and decommissioning cost. so 40m£ net cash cf £32m market cap

[septimus quaid] 23/7/2017 12:51

Irish, thanks for your comprehensive article. Once these small AIM stocks run into trouble then small PIs can quickly say goodbye to their money. Although SEY aren't actually "in trouble" (yet), any MBO would require the majority of shares being wrested from the following (09/03/17): Waterford Finance and Investment 64,815,517 29.45% Finance Limited 36,611,361 16.64% Limited 34,467,790 15.66% O'Brien 15,750,000 7.16% Heritage 14,930,358 6.78% Unless they go for some form of share dilution but that will require money. Alternatively, they could run the company into the ground and buy the assets on the cheap.

[irish 2003] 22/7/2017 09:29

Re Cash required to decommission existing activities, in particular the Chinguetti Field: I have never seen a PSA in the last 25 years that does not require the Operator and JV partners to establish a Sinking Fund for decommissioning, financed from cash from every barrel sold over the life time of the field. This Sinking Fund is not just to protect the host country from the Operator doing a runner, its also there to protect the Operator form the junior JV partners from also do a runner (or in bankruptcy). So the cash for the decommissioning should already be in the SPV Co set up by the operator for Chinguetti Field. Thus no cash should be required from Sterling. In deed Sterling might get cash from the SPV if decommissioning costs are lower (which they are these days). Maybe if there was a disaster in the Chinguetti Field, then probably the cash in the Sinking Fund would not be enough, but that should be covered by insurance. This is why I am sure the management are going to do an MBO. Shareholders who are so frustrated with this management, might be inclined to think the management are just stupid. Believe you me, nobody in the Oil industry is stupid, especially when the see an easy opportunity. They are not communicating any of this information to the market, hoping the shares will drift lower, say 12p, and then launch the MBO (very easy money). So sit tight if you don’t need to sell. I still say free cash is 28p and Somaliland maybe 16p now that they have done the Seismic (without any trouble). And remember Genel also pay for ALL COSTS including the 1st well, so it’s a completely free ride for Sterling (no cash required). If the hit c 50m barrel in the 1st well, at $5 a barrel that’s is worth another c. 30p a share to Sterling. Genel are targeting 1,000 barrels in the block so the share price will go crazy. So that is 44p a share now, and if they hit oil in Somaliland 75p to blue sky. A MBO will make millions and millions (at no cost, its all there in cash).

[septimus quaid] 21/7/2017 04:54

Should be due the half year results in the next week or so

[baner] 10/7/2017 13:45

Irish2003 Whilst i share your view "something is cooking" - i believe your valuation is far, far too high. Sterling will have to separate itself from a very large chunk of cash when they abandon the producing field in which they have a stake. Maybe they will be 20p of net cash left, but not even that is certain in any ways. Add Somaliland to that and shareholders should be happy to get 25p for their shares, probably less.

[irish 2003] 06/7/2017 12:38

Just to follow up This is a very good site for updates on Somaliland hxxp://www.oilnewskenya.com/tag/somaliland/ Interesting Seismic in Somaliland started on the 7th April ? Yet Sterling only announced it on the 9th June, election results day! This is why I am sure the management are up to something, and that can only be an MBO. So hold if you can, cash per share is 28p and add another 12p for Somaliland, should be 40p per share. Good luck

[irish 2003] 21/6/2017 11:14

Sterling Energy are closing down all operations, except for Somaliland, which they will probably sell. They have passed a resolution to free up reserves to pay out £40m And they have $80m in cash = 28p a share For all holders (who have suffered with this management), it might be a bit crazy to sell if you don’t have to. MBO ? I think the management are deliberately driving the share price south … why?? MBO, great, we will get our cash back, should be 22p to 25p a share

[septimus quaid] 09/6/2017 15:48

A little bit of progress re Odewayne (although, according to the RNS, it will be Sept 17 before initial results): Http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/SEY/13255728.html

[optomistic] 27/4/2017 19:39

Perhaps some of this knowledgeably could be adapted to SEY's ventures...or would it be too expensive getting the oil out? Date: 27 April 2017 Using new technique, BP finds significant additional resources in the Gulf of Mexico HOUSTON - BP today announced a major breakthrough in seismic imaging that has identified more than 200 million barrels of additional resources at BP’s Atlantis field in the deepwater Gulf of Mexico. As a result of this early success, BP now is deploying this technique to fields elsewhere in the Gulf of Mexico as well as in Azerbaijan, Angola, and Trinidad and Tobago. The innovation has enabled BP to enhance the clarity of images that it collects during seismic surveys, particularly areas below the earth’s surface that complex salt structures previously obscured or distorted. The sharper seismic images mean that BP can drill new development wells in deepwater reservoirs with higher confidence and accuracy. “This technological breakthrough has essentially allowed our team to find a new oil field within our existing Atlantis field,” said Bernard Looney, chief executive of BP’s global upstream business. “Given the overwhelming success of this project, we are now deploying this technology across BP’s global operations.” Proprietary algorithms developed by BP’s Subsurface Technical Center were applied on seismic data run at BP’s Center for High Performance Computing, one of the largest supercomputers in the world dedicated to commercial research. The algorithms allowed data that would normally take a year to be analyzed to be processed in only a few weeks, accelerating BP’s development decisions for the field. The algorithms enhance a technique known as Full Waveform Inversion (FWI), which matches seismic simulations with existing seismic data to produce high quality subsurface images. “This innovation again shows that BP remains at the forefront of advanced seismic imaging and digital technologies,” said Ahmed Hashmi, BP’s head of upstream technology. “The new technique has produced the best images of this reservoir that we have ever seen.”

[ohisay] 27/4/2017 06:08

I very much doubt they'll do anything substantive - those 3 neds resigning last year just about sums SEY up. https://uk.advfn.com/stock-market/london/sterling-energy-SEY/share-news/Sterling-Energy-PLC-Board-Changes/72659971

[septimus quaid] 27/4/2017 04:08

These type of small, Wild West style, oil exploration companies are purely binary. Unlike other small caps, there will be no gradual emergence into profitability. Instead, they either discover a producer/exporter well (joy but with 10% probability) or fail (virtual loss of your investment and 90% probability). No amount of charismatic management is going to change the geology, oil, water, gas or governmental risks associated with a given explorer well. They (the management) might influence the profit/expenditure sharing arrangements with other parties and they might have the experience/background necessary to optimise the test drill cost/efficiency/choice of location. ...but geology not. The unusual situation with SEY at the moment is that the share price is low compared to its cash reserves. So, with the exception of the Chinguetti decommissioning costs (and heaven knows how long that hand wringing exercise is going to go drag on for), anyone buying in now is getting their roll of the 10 sided dice on the relative cheap.

[bushman1] 26/4/2017 12:27

In that case I would think there's no reason for you to post any further on this board unless you are still an investor and anticipating an increase in price under the new BoD direction ..

[bushman1] 25/4/2017 21:57

Hi Septimus, this was my first SEY AGM. I only recently took a position in the Company. I believe though since the 2016 AGM a number of Directors have left ? SEY have new directors on the board now. New attitudes, new ways of thinking .. Please of course DYOR - as anyone please reading this post : Board of Directors : Ilya Belyaev, Non-Executive Director Ilya (dob 1981) was appointed a Non-Executive Director of Sterling Energy in ..... January 2017. He is a member of the Audit, Nominations and Remuneration Committees. Mr Belyaev has acted as investor in private equity and venture capital projects via Supremum Capital and Concentric VC, having closed over a dozen transactions in Russia and UK with a focus on finance and real estate sectors. Prior to moving into private equity and venture capital, Mr Belyaev spent over 8 years in investment banking at JPMorgan, Barclays Capital and VEB Capital in London and Moscow. Mr Belyaev graduated with distinction from Moscow State University with a MSc in Mathematics. Leo Koot, Senior Independent Non-Executive Director Leo (dob 1963) was appointed the Senior Independent Non-Executive Director of Sterling Energy in ...... January 2017. He chairs the Audit and Remuneration Committees and is a member of the Nominations Committee. Mr Koot has over 28 years' experience in the Energy sector and an MSc in Petroleum Engineering from Delft University, the Netherlands. Following a successful start to his career with Shell International, he has been involved in multiple successful business start-ups of scale including EDP Ltd, TAQA Bratani (UK) Ltd and TAQA Iraq BV. Michael Kroupeev, Non-Executive Chairman Michael (dob 1966), who joined Sterling Energy's Board as a Non-Executive Director in May 2016, was appointed as the Non-Executive Chairman of Sterling Energy .......... in January 2017. He is a member of the Nominations committee. Mr Kroupeev has 21 years’ experience working within the exploration and production sector. After University in both Russia and the United Kingdom, he began his career working for Dana Petroleum plc as a Director in 1994 In 1995, Mr Kroupeev founded Waterford Finance and Investment Limited (“Waterford”). Waterford is an oil and gas focused vehicle, specialising in the financing of oil, gas and other energy related projects in emerging markets. He has been directly involved in the capital raising for natural resource projects and in acquiring, restructuring, developing and divesting such assets. Waterford has a number of substantial shareholdings in oil and gas companies with operations in Europe, Africa, North America and Australasia. Eskil Jersing, Chief Executive Officer. Eskil (dob 1964) joined the Company in March 2015. He holds a BSc in Geophysics from University College Cardiff and an MSc in Petroleum Geology from Imperial College London. He started his career in the oil and gas industry in 1985 as a Field Seismologist with SSL in Papua New Guinea. From 1993 to 2009 he worked for Enterprise Oil (London, Aberdeen, Houston, and Brazil), and following the takeover, Shell International (Houston); initially as a Senior Geophysicist, moving on to be the Gulf of Mexico Exploration Strategy and Planning Manager and finally as the Gulf of Mexico Paleogene Exploration Manager. In 2009 Eskil joined Marathon Oil (Houston) as their Exploration Manager (Conventional New Ventures) Worldwide and subsequently Apache Corporation (Perth) as Director Worldwide Exploration and New Ventures Asia Pacific. Most recently he was Head of New Ventures and Co-Head of Mergers & Acquisitions at Petrobras Oil & Gas BV (Rotterdam). http://www.sterlingenergyuk.com/html/about/directors.html The Chinguetti abandonment situation needs to be closely followed, otherwise, thought a good investment opportunity hence bought an additional 87.5 K.

[septimus quaid] 25/4/2017 20:21

I've been to SEY AGM's on previous occasions and, temperamentally, the executives are naturally bullish. ...but people need to know what they are getting into with this type of company. What they do is raise some dosh (done in SEY's case) usually followed by some form of geotechnical survey work (often in partnership, to defray costs). They then take a punt on some likely spot, hire some very expensive equipment and start drilling (especially expensive if offshore although onshore usually involves some access/accommodation works). Then, by some miracle, if the geology is correct, i.e. oil impervious rock over oil easy porous rock, absence of gas, water, etc, they might discover a "producer". Then, by another miracle, if they manage to get into production (dealing with corrupt, unstable governments), they become an exporter. Then, and only then, will there be a pay off. Probably 10% chance.

[bushman1] 25/4/2017 20:18

I'd hope so. Well pleased that SEY are seriously sourcing M & A opportunities with news being anticipated within the next six months. The new BoD and management are incentivised. Along with the major institutional shareholders the total percentage of shares now held by directors, management and institutions is 64.4 %. Peel Hunt are the SEY brokers.

[farmscan] 25/4/2017 18:31

Thanks for the feedback Bushman, nice to read of something positive happening here, maybe?

[rrr] 25/4/2017 17:28

Thanks Bushman.

[palwing13] 25/4/2017 14:36

Thanks for the update Bushman....

[bushman1] 25/4/2017 14:16

I attended this mornings' AGM, well impressed with Mikhael Kroupeev and the new BoD. The focus is to increase production from existing assets whilst continuing to look for M & A opportunities which does not include Syria. Mikhael Kroupeev I understand has a sizeable investment in SEY. He and the Directors ~ do remember this is a new team ~ want to see good success for SEY. I mentioned SDX and SAVP. When could we as shareholders in SEY expect positive news re : M & A opportunities ? ' Six months approx ' Conclusion : this is a solid BoD with great experience and well motivated for success. If the cost of the abandonment liability is capped / kept firmly under control then I'd suggest that with a net cash figure of $ US 88 mill and zero debt plus a good focus on the correct M & A opportunities, SEY might be seeing some good success. To conclude. I added 87,500 shares to my original holding. Every success to : Mikhael Kroupeev, Leo Koot and Ilya Belyaev.

[bushman1] 19/4/2017 21:22

Notice of the Annual General Meeting of Sterling Energy Plc to be held at The Law Society, 113 Chancery Lane, London, WC2A 1PL on 25 April 2017 at 11 a.m.

[bushman1] 19/4/2017 21:13

The AGM is next week. A good opportunity to register now and then query the BoD directly....