Trap Oil Grp Share Discussion Threads

[mount teide] 31/3/2015 11:06

cyan - The Athena Field partners signed up to a 1 year extension to the primary fixed 3 year contract, so the 'existing' contract they were previously committed to ran to June 2016.

Thought it was good of BW the FPSO operator to take a sensible and pragmatic approach to the lower oil price environment by agreeing to this new, more flexible contract with the field partners.

[cyan] 31/3/2015 10:28

"Whilst the amended contract reduces the Athena Consortium's overall loss exposure and currently anticipated total cash outflows going forward to the scheduled expiry of the existing contract's term in June 2016, it does necessitate a larger cash outflow in the near future than under the old contract. Most importantly, at the currently prevailing depressed oil price, Trapoil's ongoing monthly liabilities in respect of Athena will be reduced as a result of this amended contract."

I thought we had moved to a yearly contract , hence why I am confused by the 2016 date. Maybe I am being a bit thick here lol

I think I am going to enter the TRAP rns into the "plain English awards" competition.

Looks like it was prepared in a hurry

[cyan] 31/3/2015 10:24

A bit late with their RNS. I see Paul CURTIS contacted TRAP who were unaware of the new terms; REALLY!
Badly worded RNS. Surely there is a very serious TYPO there ; Shows contract to june 2016; should that not be 2015?

[cyan] 31/3/2015 10:04

The new terms are a relief. With only having to give 60 days notice from June means that if the partners and BW Offshore are not making money we can shut down early.
Why this is good is because we are not forced to use up our remaining capital and bleed to death. Really very good news. We are debt free , so if we decide to wind up early there will be some cash to distribute imo.

[beaujolly] 31/3/2015 08:39

There's this bit aswell:


The Company provides for future losses on long-term contracts where it is considered that the contract costs are likely to exceed revenues in future periods. Onerous contract provisions totalling $21.6 million have therefore been made for the fully written down Beatrice, Jacky and Nigg assets subsequent to their write off in December 2013 as well as Anglia and Athena, both of which have been fully written down in 2014 due to the expectation that 2015 may be the last year of production given costs may well exceed revenues in the current price environment.

[rivaldo] 31/3/2015 08:30

Rogerlin, you missed this from IAE's results - I'm wondering whether TRAP is worth a punt again at these levels:

"For example the Company has notably actioned a significant reduction in the Athena cost base.

Under the terms of the amended contract for the BW Athena FPSO, the Athena co-venturers will make advanced payment of an FPSO demobilisation fee and from the end of the primary contract term in June 2015, the vessel day rate will no longer apply and the co-venturers and BW Offshore will instead share the net cashflow generated from the field. The revised vessel lease is terminable on 60 days notice. Execution of the revised FPSO contract is clearly a positive step for extending the life of the Athena field and is reflective of the pragmatic approach being taken by many North Sea suppliers to realign cost structures to the current low oil price environment. The Athena field accounts for less than 8% of Ithaca's forecast 2015 production and no year-end reserves have been assigned to the field interest."

[zingaro] 31/3/2015 08:27

Ithaca results today state that Athena FPSO costs reduced from June.

[rogerlin] 31/3/2015 08:26

"The reduction in unit costs is being driven by the removal from the portfolio of the Beatrice field, the implementation of a revised Athena FPSO contract in June 2015 and other savings being realised through supply chain cost reductions, contract renegotiations and the removal of overheads".

From Ithaca's statement today. At first look I think that is all they say about Athena.

[cyan] 30/3/2015 19:28

Thank you rogerlin for that excellent link.
Cost per barrel in mid $60 is much as we had thought.
I wonder when will the new terms come in to reduce costs?

[rogerlin] 30/3/2015 17:28

Some further remarks on Athena here.

[rogerlin] 27/3/2015 15:54

"In November 2014, the workover to replace the two Electric Submersible Pumps (ESPs) on the P4 well at the Athena oil field was completed successfully using the Ocean Princess drilling rig. Production at the P4 well came back on stream in late November, and has performed steadily after clean-up operations were completed and the rig left the site. Strong production uptime was maintained during the workover process, and field shut-down time was limited to ten days. The workover reduced the technical risk associated with the Athena field, with stable production now extracted from three fully operational wells instead of two".

PMG's interim statement.

[cashandcard] 27/3/2015 10:45

The key to watch for is a potential fall (or even plateau confirmation) in US unconventional production for March. That will be the first sign that prices may start to gain a solid base going into Summer driving season in the Western world.


Cash

[cyan] 27/3/2015 10:26

Good morning RCTurner2.
You may well be right about POO. However, history has shown us examples of rapid movements in both directions.
Unlikely POO will save TRAP. Its really all about Niobe.

[rcturner2] 27/3/2015 10:19

cyan, I notice that you described the oil price as "very distressed". I think that might prove to be a dangerous way of looking at the situation, I can see oil staying at this level for much longer than many people think.

[cyan] 27/3/2015 10:03

Good morning bones698, I unfiltered you last night and with only one exception on the boards am not one to bare grudges long term.
As for sanity, that's for others to judge.
Yes the cancellation of the hedge was a disaster. Am quite outraged by that as it could ensure complete destruction of the shareholders equity.
The critical point of disagreement with you and ngms is about Niobe being cancelled.
Imo , no chance. Suncor are huge (from Buzzard they pump 50,000 )
TRAP have paid up front and contracts signed.
I would be amazed if Noreco have not already paid up . They are not calling the shots; Suncor are. Its quite simple in my mind; if Niobe breach contract they will be sued. They will lose their share of Niobe as they have failed to comply with their commitments. I presume their share would be shared, prorate with the 2 remaining partners who would pay their modest share of the costs.
One must remember this is a very cheap drill.
Traps larger share has only cost them £2 million.
I am sure Suncor would grab all Noreco's share without a second thought.
one in four chances of coming good. For just £2 million in shallow, cheaper to develop waters aiming at a field larger than Athena; its a no brainer and certainly key to TRAPS survival.
Will just have to wait and see what compensation we get. My gut feeling is that its going to be significantly more than the hundreds of thousands that has been suggested on the boards..
Price of oil could surprise us yet; Brent now $58.12.

[bones698] 26/3/2015 20:40

Cyan a contract has lots of small print usually with get out clauses . Niobe isn't visble at these levels and look at athena . Athena costs will be over 80 by now with the reduction in output from natural field decline , see decc figures . Yes total compensation might drag it a touch longer but as you say not long enough to outlast athena draining it dry . All hope on niobe but I agree with ngms it's unlikely to be drilled . The hedge cancellation was a disaster and the final nail imo . Decom costs could also play a part in how much longer trap is around as I think there will be a bit more to pay out of the petty cash yet maybe 1-2m in overruns .

You seem to be returning to sanity finally hope it continues cyan we might yet get to talk sensibly once again lol. Gpx going the same way as this now unfortunately , afren , gkp the while sector is a nightmare

[cyan] 26/3/2015 15:59

Brent now $58.77; keep going please

[cyan] 26/3/2015 15:47

Suncor as operator with 49.5% interest in Niobe seem to have made sure Trap paid up front. I would have thought they would have done the same with Noreco.

[cyan] 26/3/2015 14:57

Licence P.1889, Blocks 12/26b and 12/27 - Niobe prospect

A contract has been signed for a jack-up rig for the drilling of a well to test the Niobe Prospect (formerly named Kratos). The well is planned for 2Q 2015 and will fulfill the outstanding work obligation attached to the licence. For technical information regarding the Niobe Prospect, see Trap Oil's May 2014 AGM Presentation

Good afternoon ngms27

A contract is a contract.
Have you any facts that suggests any partner is not going to honour their commitments.?

[ngms27] 26/3/2015 14:27

Silly me so the fact that Noreco are skint wont have any bearing?

[cyan] 26/3/2015 10:36

I see Brent is now looking a little better at $58.76 .

[cyan] 26/3/2015 10:26

Good morning ngms27.

Niobe IS to be drilled, its paid for and contracted. Its whether it makes a commercial find.

I think it will take longer to go 'bust'. As soon as our contractual obligations are obliged next year ; I suspect that the company will call in the administrators and declare the company no longer a going concern.
This doomsday scenario is conditional on Niobe drill failing and the oil price remaining very distressed.

The reason I suspect it will take a little longer is we are expecting the compensation payment and many expect oil to recover to around $70 in the autumn.

Best case ,in your dreams , scenario is;
1. Oil hits $90 plus in the autumn
2. Niobe drill makes a find larger than the Athena field.
3. Compensation payment is larger than expected.
4. As Athena again starts to produce profitably again ; the partners decide to drill Athena again , increasing production, its field life and profits.
5. I win the Euro millions.

Nice to dream.

[ngms27] 26/3/2015 10:00

I sold out at 4p.

I bought back in around the lows but only a small position. This is purely a speculative punt on niobe getting drilled.

I fear the most likely outcome here is bust within 9 months.

[bones698] 25/3/2015 18:58

Cyan is that reality setting in finally ? Lol only took the so to crash from 13p to o.8p to get it to sink in .