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TE10 Monday

lse:sou

#1

With much speculation in another place that more wire-logging info and drill through TAGI to TD may produce an RNS on early next week, it could make tomorrow an interesting trading day into the weekend. Much debate about whether it needs to be commercial to prove up the basin model. Hope this gives the LE the defibrillator treatment!!!

MM59


#2

Impressed by the depth of the strike here though porosity seems a bit on the tight side. Still, it’s a discovery which these days is a big plus. More drilling,logging, testing, then on to te-11. :clap::clap:
TP


#3

The RNS seemed a bit earlier than planned to me – I reckon they were nervous that news had leaked. Still a ways to go before declaring this one a “success”, but cautiously optimistic. I think the porosity is similar to previous good wells, and about average for Tendrara (6% - 15%).


#4

Possibly most useful post on LSE yesterday from Exploration . Porosity looks fine at 8%.

MM59

RE: PorosityToday 17:14Joe Creed

Here are previous Tendrara Tagi average porosities and net pay (defined as Tagi porosity ~6%. TE-3 cut-off used 4%. All wells with pay proved gas as shows. Only TE-5 proved sufficient reservoir quality to flow to surface without stimulation in vertical well. Let’s hope there is deeper, clean Tagi reservoir at TE-10.

WellsNet Pay (m) Av Porosity

6% %

TE-1 36 7
TE-2 38 9.5
TE-3 6 4
TE-4 3 6
TE-5 30 5.5
SBK 16 4-6
TE-8 ?0 ?
TE-9 ?0 ?
TE-10 ?10 ?8


#5

Eagerly awaiting news on TE10. I read somewhere that the UK consumes about 3 Tcf gas per year and these retail sales add up to £15bn (£5bn per Tcf).

Assuming a buyer thought they could extract 15-20 Tcf from Tendrara they stand to make £75-100bn minus extraction costs, if above is correct.

Is there a ‘rule of thumb’ from previous buyouts in the gas industry of what percentage of potential value, let’s say £100bn, is a decent purchase price for such an asset? You can see where I’m going with this.

MM59


#6

I doubt you can validly extrapolate from the UK retail price. The number that has been bandied around for the prospective gas sales agreement on the existing Tendrara find is c. $8/mcf (around £6bn per Tcf). But that is presumably for the limited discovery so far. Multi-Tcf volumes would result in pipeline exports for which the wellhead price would be a lot lower. Also, your 15 Tcf is at the top end of the estimate of recoverable gas in Tendrara.

The easiest rule of thumb to use is the one that Sound themselves have done – it takes into account the value of the gas, the cost of development, and the cost of funds over a multi-year development period, plus the number of Sound shares in issue. They say that a Tcf is worth £1.50 on the Sound share price.

If you want to let your imagination run wild, ignoring that the value per Tcf of a large find is probably lower, and taking the high-case estimate of the Tendrara potential … then you’re look at 31 Tcf x 50% recovery rate x 47% owned by Sound x £1.50 = £11 per share. But after the TE-9 panic that gripped private investors over on LSE, I’d say many of them would bite yer arm off for a tenth of that.


#7

Thanks for that PS. If TE10 is good and the basin model is back on track, I couldn’t understand the panic on LSE and the ‘happy with £1’ brigade.

In your best case model, surely only a fraction of 31 Tcf is going to be proven, the rest based on seismics @ ?p per Tcf.

On the other hand, if we drill TE11 into Paleozoic and that shows potential to dwarf Tagi, (31Tcf best case didn’t include Paleo did it?), surely JP’s ‘four figures’ could be realistic? Hence my attempt to look at it from the other end of the telescope and wonder on the basis of previous on-shore buyouts, how much upside would Shell, for example need to be confident of achieving, to pay £10bn for Sound?

Hopefully we’ll have an answer in next 6 months or so!!

ATB
MM59


#8

Further good news in this morning on Te-10. More gas than they originally thought in additional zone. Gas to surface. Well test rig scheduled for February.
Luck all
TP


#9

One word. ‘Delighted’
GLA
MM59


#10

Yep, very positive indeed.


#11

Relieved!!!
ATB to all


#12

Well done to all long term holders. I hope your patience will be well rewarded.


#13

Motoring along nicely now. Who’d have thought it when just a couple of weeks ago we were in danger of single digits sp
Luck all
TP


#14

TP, this is my first post ever, been invested in SOU since 2012 with all the ups and downs along the way and I’d just like to say that your posts (on the various incarnations of this site) have been my inspiration to stay with this extraordinary company and to keep topping up on the dips. Thank you for helping me keep my head when my heart didn’t agree and here’s to paying off the mortgage sometime soon…respect


#15

Why thank you, SN. There’s a lot of back biting, ramping, misleading posts on these bbs ( esp. advn and lse) but I’m a genuine holder who also feels this company has great potential. Just a little longer!
Good luck
TP


#16

Just a mad thought. Do you think the lse board can exert any copyright over the contents of their free board. I mean, it’s completely open to non-members, and not access controlled. 90% of what gets posted is mad ravings, but there’s a few posts worth reading. I trawl through them all anyway for my sins, via a webscrape. Would it be of any value to cross-post anything of interest to here, where it could be read minus the crud? For instance, a cross-post from this evening would look like this:

From: Dracan66
Sent: Today 19:49
Subject: James reply

I asked James about the AVA learnings thus far and whether the results of TE10 would alter the decision on drilling TE11. His email is as follows.
Hello #####
It isn’t correct to suggest that TE9 learning somehow changed the outcome at TE10. They are standalone wells without correlation.

However it is correct that we likely have now, post TE10, more ability to rely on AVA as our work on the seismic continues. It will take some time to unravel this but work in progress.

Our last announcement on TE11 was that it would proceed after the well test at TE10.


#17

I was about to say that there are no permalinks on lse that would let me link back to the posts in context. But I’ve just noticed that there are unique ids for threaded discussions. Perhaps it would be better to provide links to worthwhile threads, which means there is no need to copy and paste actual content and no potential copyright issue. I’m talking about something like this – you have to read the resulting threads from the bottom up:

Thread: TE-7 Timelines

Thread: Re ambitions of onhym translated


#18

Sensible suggestions, ps. Since the reorganisation/decimation of the ii boards there has been a dearth ofcontributions on all but a few (eg FRR, which continues unabated) I think a lot of respected posters moved to lse or gave up altogether which is a pity.
I felt the same and briefly visited lse but gave up, drowned out by all the rubbish floating on the surface in that particular harbour. (To be fair the SOU board is sometimes quite informative, less so, others)
All grist to the mill, I say, as long as it’s polite and civilised.
Regards, TP


#19

Today’s RNS was moderately encouraging. Not a great deal that wasn’t known before, but there is mention of permeability being similar to previous successful wells. We knew the porosity was ok and now it sounds like the gas will flow too. It seems to me that apart from all the useful testing that will be done over the next while, what we really need from TE-10 is confirmation of gas in the stratigraphic trap. The structural closure, even if it flows successfully, is estimated to contain 0.07 Tcf – worth about 5p on the share price. Pre-drill estimates on the stratigraphic trap are 20 to 60 times that volume. If I’m reading it right we have to wait about two weeks for confirmation of which intervals contain gas, and then March for flow tests. The strat trap also relies on additional seismic analysis. With TE-11 not starting until after the March flow testing, a bit more patience is required than can be found over on the LSE board where the current RNS has sparked the usual mixture of mania, depression and rank speculation. :wink: