Looks like quite a few.
source: https://www.touchstoneexploration.com/wp-content/uploads/2020/09/September-Presentation-FINAL.pdf
Not a geologist, but are we seeing one HUGE gas resource? Coho, Chinook, Cascadura. I’m just reading in between the lines, and trying guess what some of the terms and lines mean.
source: https://twitter.com/MoonXav/status/1304148203764363270?s=20
I actually like FEC’s Guyana prospect a lot. FEC has 81.3% Economic Interest two blocks in Guyana: Corentyne and Demerara! FEC has 72.41% interest in CGX Energy and 33% stake in each block. I believe Guyana is still a hot spot for offshore drilling.
Given that Carapa-1 hit oil, I believe there is a high likelihood that Corentyne will also hit oil; though it will depend on FEC’s execution.
Corentyne’s cretaceous layer may be just like Carapa-1 and contain high quality light oil.
Given that Joe-1 and Jethro-1 from EOG had oil discoveries in the tertiary layers; I’d expect Demerara to have similar results. I’m not particularly interested in high sulphur heavy oil as heavy oil will be more expensive to process than light oil.
source: http://www.fronteraenergy.ca/content/uploads/2020/08/August-2020-Corporate-Presentation.pdf
EOG‘s Joe and Jethro prospect.
FEC currently valued at ~293M CAD and CGX Energy is valued at ~160M CAD today 8/12/20. This means FEC’s equity stake is worth 112M CAD and everything else FEC owns is worth 181M CAD today.
This gets me thinking – is everything else FEC owns worth only 181M CAD?
158 MMBOE
~$25/bbl USD
The savings made by FEC virtually all
flow straight through to cash flow because of the large tax loss position in excess
of US$3bn.
source: Hannam & Partners Equity Research 7/9/2019
Emerged from Bankruptcy
The company is just starting to reap the rewards from intense
restructuring after bankruptcy in 2016.
source: Hannam & Partners Equity Research 7/9/2019
Pacific Rubiales bankruptcy
Pipeline Attacks: numerous attacks on pipelines
BIC appears to be a liability, but is resolved.
Jamaica is a wild cat prospect, definitely high risk but that’s what will take UOG to the next level. I have some notes on the risks and thoughts on what might happen.
I personally think there is higher than 20% chance of success in Jamaica but UOG has a 20% estimate
Final processing of the 2,250km2 3D seismic data that was acquired in 2018 was completed in 2019. A CPR completed on this new data increased the gross unrisked mean-case recoverable Prospective Resources to 229 MMstb, and improved the chance of success to 20%
source: https://www.uogplc.com/wp-content/uploads/2020/05/UOG-Plc-Group-Financial-Statements-2019.pdf
Input from others
Oil analysts say that 100 per cent of Jamaica’s estimated oil and gas reserves are easily recoverable.
source: https://www.oilandgasvisionjobs.com/news-item/norris-mcdonald-tullow-and-jamaica-why-the-silence-over-the-big-oil-and-gas-find
Tullow also outlined that there has been oil or gas shows in 10 of the 11 onshore and offshore wells drilled in Jamaica to date.
source: http://jamaica-gleaner.com/article/business/20200527/united-wants-continue-oil-project-jamaica
“The PCJ can advise that we have been informed by Tullow and United Oil and Gas, that the farm-down process (equity reduction) has been unsuccessful so far; however, the companies have indicated that they are still looking for partners,” the agency told the Financial Gleaner.
“Markets will be aware that the licence operator, Tullow Oil plc, has written down the value of the Walton-Morant licence in their most recent preliminary results schedule,” stated United in its latest filings.
source: http://jamaica-gleaner.com/article/business/20200527/united-wants-continue-oil-project-jamaica
However, due to the uncertainty in respect of the current exploration phase there is an indication of possible future impairment should the extension of the exploration period not be granted.
source: https://www.uogplc.com/wp-content/uploads/2020/05/UOG-Plc-Group-Financial-Statements-2019.pdf
In order to proceed with Jamaica, UOG needs to be diligent on how they should negotiate with the Jamaican government and how they can finance this. I have some speculations on what UOG will do.
This means UOG will take over all of Walton-Morant licence, start drilling while seeking for farm-in partners. In the mean time, UOG can opt to pay the Jamaican government over X years and/or pay when UOG finds a farm-in partner.
Straight forward enough, but this means everything will continue to be delayed.
This is very similar to option 1 except this means UOG will have to pay a hefty interest for loans or share dilution for raise.
This is the worst case scenario which Jamaican government will not negotiate any further and UOG doesn’t have the money to drill. This means UOG have to write off any investments it spent on Jamaica.
I used to be a risk adverse, conservative investor. To be honest, I wouldn’t even call myself an investor. I only put money in random dividend stocks. The only thing I looked at was yield and familiarity with the company.
Oh, the Keg is a great restaurant chain in Canada, and their yield is 6%, let’s invest in that. Jack Astors gives 9% in dividends, totally worth investing in.
No doubt, it felt good to receive some money every month. It felt like a solid investment putting money into dividend stocks. I got money back every month or quarter, so I felt safe.
I was lucky I bought those companies during the 2008 recession, so not only did I get dividends, these companies actually appreciated. Some even got acquired.
In hindsight, it was a wrong decision to invest in these companies. I neglected
I was just lucky. End of story.
My friend, FI Fighter and I had a chat years ago at a local cafe in Cupertino, and he mentioned that dividend stocks were comfort stocks. Essentially, you pay yourself with your own money, and the dividends comfort you. Your net gain is zero. The risks are no less than mining stocks and yet the upside is far less than mining stock.
Initially I didn’t pay too much attention to his thoughts, but the more I thought about it, the more I agreed. In a couple months, I started liquidating all my dividend stocks and entered the mining space. I was glad I did or I would have learned about dividend cuts and its impact on share prices the hard way.
Long story short, dividend cuts started happening a year or so later, and share prices went crashing. These, my readers, are the hidden risks in dividend investing. When you hear people say ‘nom nom nom, thanks for the yummy dividends’ on company forums, stay the F away from those companies.
The focus shouldn’t be on the dividends itself; dividends should be the outcome of a well operated company.
I hope I’m better than that now.