No Crystal ball just an opinion. The more Oil that is produced the greater the decline volumes. 6.5% is the average decline rate per year on conventional oil (Opec and Non-Opec, Onshore and Offshore). Thus if demand increases and so does production the 6.5% becomes the decline rate of an ever greater quantity. The World needs to find ever greater quantities of Oil and bring it into production every year. Given that investment in future exploration has been kyboshed and ongoing projects have also been delayed or cancelled and given that shale has ben curtailed a shortfall is likely to present itself by 2017. If you are looking at Providence bearing this in mind and target Barryroe Production for 2019/20 then you will likely be selling oil in a very favorable environment.
Also think OPEC Whilst it might not reduce Its ramped up production presently 32.1m barrels will probably signal a willingness to make way for future Iranian supply within this 32.1m barrels. OPEC likely to raise Its oficial production cuota from 30m to this 32m volume. This Would give a Little lift to oil Price which could climb to the 50-60 Range in shirt term. Saudi is producing at near Its capacity now. It cannot ramp up production much more. It has damaged expensive deep sea drilling projects ( ongoing and Future). It has hurr the Frackers. Frackers will bounce back but only with sustained price rise and only If demand warrants. Think Investors will be wary of investing in shale for a while. Barryroe and fields Like it will start to look interesting again.
Sequa: You can buy shsres for 16 pence at moment but You cannot buy 25 percent of shares. Shares That trade are only those held By MM and a few small retail holders. As to why - The Market Is Going to turn in 2017. With natural declines and increasing demand the World needs between 4 and 5 million barrels of New Oil every year. Aquuring 25.6 percent of Company with 55m shares for 90m Will also boost share price on Back of two appraisal drills easily to 1.50 euros. Successful drills at Barryroe and or Spanish Point On back of natural declines and increasing demand leaves Providence a take over target at the Very least for Big players who Will be scrambling to look for new Resources by 2017
Providence have 75m shares that they can issue. Would be agood idea for Providence and Landsdowne to merge i.e. (1:7) i.e. 20m shares to Landsdowne to Give 140m +20m = 160m. Thereafter 55m shares to be issued to Sequa to give a tolat of 215M shares. This would give Sequa a 25.5% holding in the company. If Sequa were to pay 90M in cash to Providence for the shares i.e. 1.63 Euros per share this would leave the company with 70M in cash after having paid back loan to Melody in June. Providence could then use 60M of this to finance appraisal drills on Barryroe and Spainish Point. Good results here would leave us owning 100% of Barryroe (Less 4.5% NPI to San Leaon) plus 58% of Spanish Point, plus Atlantic Licences plus Landsdowne´s licences. This would then be a very valuable takeover target or eels with Sequa on board could seek to advance projects with 3rd party funding and or farm outs
By Ahmed Awad: Kuwait’s Oil Minister Ali Al Omair said the upcoming meeting of OPEC will likely reach ‘positive’ results that will trigger stability in markets.
Speaking on the sideline of a conference held in Kuwait Sunday, the minister added that the current decline in crude price was caused by stronger production and weaker demand.
Al Omair also said a recovery in oil prices would be for the best interest of producers and consumers alike, as improved prices fuel investments in oil sector.
Believe OPEC Will leave Its over all present production level circa 32m barrels unchanged at Its meeting on December 4th but Will announce that Iran Will be part of cuota. Thus other OPEC members Will Have to cut their production to make room for Iran
Providence has 75 million shares that it can issue. If it were to give 20m shares to Landsdowne in a Merger(1 for 7), this would leave 55m shares that it could issue to Sequa (for example). If Sequa were to pay 80m (i.e. for 25% of combined company 55/215m) this would give the company 80m minus 20m due to melody in June 2016. They could use this 60m to drill two appraisal wells one in Barryroe and the other in Spanish Point. If both successful the company would have 100 % of Barryroe (minus NPI 4.5% to San leon) plus 58% of Spanish Point. Thereafter circa 2017/18 both fields could either be farmed out or project finance sought to develop them. Given that Providence also has Drombeg, Newgrange, Dunquin, Dalkey etc this company would likely become a very very attractive takeover target. Watch this space !!!!!!!!. Oil will rebound once all the cancelled capex from Majors etc for 2015 and 2016 starts to kick in coupled with the natural decline on conventional oil (6.75% on average per year) plus high shale decline rates
Jimmy presumes that stockbroking community knows more Than shareholders. Would these be The Stockbrokers that had valuations of 20 Euros + on Providence a few years ago. Does anybody else find Jimmy's endless Bad mouting of Barryroe strange given that he has no shares in company ( admitted By himself).
Jimmy is very selective once again. He is An expert on all The negative aspects of Barryroe not missing any detail but he surprisingly Fails or chooses to ignore the positives. Cost of Barryroe is 30 dollars or below as confirmed by Prvidence at AGM. Drilling costs are down 50 % and production costs have also dropped considerably. Once again Jimmy no shares continues to use his valuable time to paint a negative picture of Providence based on out of date data. Wonder is this just a providence thing or does he write about all the companies in The World in which he has no shares !!!!!
Think this is Well worth reading and probably why The Saudis expect supply to fall and prices to rise. Also makes Barryroe very attractive for 2019/20 production
[link]