This is Mr Lincoln Augustus, first second cousin of Holymagiman.
I am repeating a few of my recent posts on this here fine Sapex site to keep you informed of my thoughts.
It is a fact that LNC have 5 % of the Sapex shares under their belt. It is also a fact that the ESG board are controlling a greater percentage of the SXP shares.
I therefore feel that there could be a bit of a play between LNC, SXP and ESG in the very near future. The volumes of ESG shares trades have increased recently.
Sapex has a very strategic placement of its leases next to Olympic Dam. That is food for thought.
Anyway, here are my relevant postings repeated for you.
On 2nd May 2008, I posted:
Who are top share-holders in Sapex
BARBED WIRE HOLDINGS Director : Patrick Elliott Is with MGK now Was executive of ESG in 2003 Present director Sapex Holds 10,000,000 fully paids Holds 14,250,000 options
BUDSIDE P/L Director Dennis James Morton Is managing director ESG Holds 5,000,000 fully paids Holds 2,5000,000 options
Andrew Joseph Andrejewskis Is director sapex Holds 3,000,000 fully paids Holds 1,500,000 options
Mr Douglas Battersby Director Eastern Star Gas Holds 2,500,000 fully paids Holds 5,875,000 options
VERUSE P/L Associated with Douglas Battersby, director of ESG Holds 1,500,000 shares
SEISTEND P/L Director David James King Director Eastern Star Gas Was director and president of Benchmark Energy Corp which controlled Lowell petroleum which previously owned Molopo's Chinese CBM leases Holds 2,500,000 fully paid shares Holds 5,875,000 options
UPPER MANTLE INVESTMENTS Director Roderick Mcillree Director of The Gold Company GGG Holds 2,000,000 fully paid shares Holds 1,000,000 options
WHITTINGHAM SECURITIES P/L Associated with Brian Marheine Bulk Haulage p/l In top twenty of many companies such as Eastern Star Gas , COE, GOG,COK Holds 2,000,000 fully paids Holds 1,500,000 options
KATHBE P/L DIRECTOR CHRIS RYAN, DIRECTOR OF EASTERN STAR GAS Holds 1,700,000 fully paid shares Holds 1,700,000 options
Bestfield Company Ltd Sue Lee Sangster Company secretary of Heritage gold HTM Holds 1,500,000 fully paid shares
Mr Roger Wilson Director Sapex Holds 1,200,000 options
Mr Paul Young Director Sapex Holds 1,200,000 options
On 7th May, I posted:
This is Sir Lincoln Augustus, first second cousin of Holymagiman
Hello everybody. I see that Holymagiman has been writing a lot of high class stuff on the Sapex site, which a few of you may find hard to understand as it is so high class. That is a shame, and I hope the lot of you improve yourselves so that you may understand him better.
Anyway, why is Holymagiman so excited about Sapex? For a few reasons, which I will try to summarise for those who are a bit slow on the uptake, and especially for those whose understanding of plain English is poor.
Firstly, Sapex has entered into an Underground Coal Gassification programme with Linc Energy. This programme will start later this month. There is an estimated 5.69 billion (yes, billion) tonnes of coal as inferred resources just in the two Els, namely EL 3325 and EL 3326.. If the UCG proves to be a sucess, then there is a lot of money there, buried in Sapex's coffers.
As i said previously, this programme starts this month.
Secondly, Sapex has farmed out 25% of coal bed methane interest in PEL 117, PEL 121 and PEL 122 to Eastern Star Gas The Company entered into a MOU to farmout CSG interests in three PELs. Eastern Star Gas will drill a corehole in each of these PEL at its own cost. So Sapex will retain 75% of the coal bed methane rights and the initial exploration costs will be borne by Eastern Star gas. That seems alright to me and Holymagiman.
And that still leaves Sapex with 100% of all the coal bed methane in the remaining PELs. That sounds even better to us.
This drilling by Eastern Star gas will be in this quarter.
Lastly and a point that I think not enough people understand, is the significance of the Boorthanna 2008 Seismic Survey. This has been a long time coming, and hopefully recording of data has commenced today. I feel that South Australia's Arckaringa Basin has great potential for oil discovery, much like the Cooper Basin.
I did, on a whim, phone and speak to Mr Andrew Andrejewskis some months ago. I asked him about when the petroleum exploration was going to commencet and I felt that he gave me a rather negative answer then because he told me that Sapex was not able to procure any drill rigs in the foreseeable future.
The story has changed somewhat now. Apart from the Seismic Survey, Andrew has told me in a recent phone conversation that Sapex also has plans to drill two petroleum exploration wells by the end of the year. This is detailed in their latest report, and what it means is that sapex has secured the drills. Great news.
That is what has excited Holymagiman and fired up my interest. While the UCG and the Coalbed methane plays have substantial upside, I feel that what will make Sapex into a major company is the petroleum play. The end of the year is less than eight months away.
Anyway, that is how Holymagiman and I have interpreted the direction Sapex will take, and we both feel that this is the company with the greatest potential among the CBM crowd. Others may seek to differ, and only time will tell.
Anyway, I hope that I have clarified Holymagiman's thoughts for those who are unable to think on his level.
God bless and may thy table ever be bountiful
Sir Lincoln Augustus MA(ox), MBA (Havard), PhD Phil, LLB, FRCS (Edin), OBE, Knight of the Holy Garter, etc etc
On 13th May, I wrote:
AS ANNOUNCED BY SAPEX IN MARCH QUARTERLY ACTIVITY REPORT:
Linc Energy has finalised a program for drilling holes in the areas encompassed in EL 3325 and 3326 as a first stage in testing the potential for Underground Coal Gasification (UCG). This program is expected to commence late in May 2008. Previous assessment in accordance with JORC principles has estimated 5.69 Billion tonnes of coal as inferred resources and exploration target in the combined two ELs.
THE QUALIFICATION IN THAT REPORT:
Linc Energy developed a drilling program to ascertain the SUITABILITY of the coal for UCG and also to define reserves of coal in accordance with JORC principles.
IMPLICATIONS IF THE COAL IS FOUND TO BE SUITABLE: (The following is copied from Linc roadshow report of 2 days ago):-
UCG- is “very cost effective to roll-out and produce”, with a Ucg field being able to be constructed in 6 to 9 months and $0.60 to $0.80c gigajoule. • UCG-can “access huge stranded and sub-economic coal” reserves, subsequently un-locking significant reserves of energy currently un-available to the world • UCG- can transform a low value asset of stranded coal, into “a highly valuable resource of synthetic liquid fuels” – every tonne of coal equals approximately 1.5 barrels of oil.
The operative words here are 1. UCG field being able to be constructed in 6 to 9 months. So if the Sapex cOAl is suitable, then the UCG field should be up and running in about a year or so.
2. UCG can assess huge stranded and sub-economic coal reserves. This is a very apt description of the brown coal deposits that Sapex holds in its ground. It is uneconomic coal at the moment. However if LNC's UCG succeeded, then there is the potential of every tonne of the coal being equivalent to 1.5 barrels of oil. That is a very big figure, so lets all hold our horses and not start throwing billion dollar figures into the air till it is actually proven to work.
Below is Linc Energy plan for the year. I note that point 4 states that UCG expansion is underway.
1. Complete CTL 5-10 barrel/day demo plant…(commissioning underway) 2. Erect 5Mw Gas Turbine, producing IGCC power, operating on UCG gas at Chinchilla… Plan completion by December 2008. 3. Complete EIS and Engineering design for 20,000 barrel/day commercial UCG to CTL facility – (EIS to be completed by mid 2008…. The 20,000 barrel/day engineering plan to be completed by Nov, 2008. 4.Commence expanding UCG field. (UCG expansion is Underway).
I could only find the following three JVs when I started to look for Linc Energys ventures with other companies, viz:
– MOU and proposed JV with SAPEX – MOU and proposed JV with VINACOMIN – Marubeni and MOU with Shiv-Vani
So the only company that Linc Energy could be referring to in Australia when it talks of UCG expansion is Sapex. If this is correct, and if this is what Linc is referring to when it says that UCG expansion is underway, then I read it that Linc is convinced to a certain degree that Sapex's coal is suitable for CG, and that UCG of Sapex coal will proceed soon
I note that Eastern Star Gas is starting its drilling program for CBM in this quarter. it is a drilling program that has no cost to sapex monetarily, but they relinquish 25% ownership of the PELs to ESG. In my books, 75% of something is definitely better than 100% of nothing. That is something that has an excellent chance of success, considering the volume of underground coal present.
We also have to remember that the ESG board has shown great faith in Sapex, as they have invested their own money in this company and make a large proportion of the top 20 shareholders.
I cannot stress the importance of the Boorthanna trough Seismic survey. Could be nothing, could be everything, but the geology of the area appears to be very interesting.
My only faulting of the Sapex board is that they are not giving us any up to date information. It is always the same tired news in different packages, and I really do not know why the company is so reticent in informing share holders of progress.
well, ho hum
On 4th June I wrote
This is Mr Lincoln Augustus, first second cousin of Holymagiman
I have been reflecting on events in the past few days and I suddenly realized that it is a fact that Sapex has this enormous exploratory territory over massive brown coal deposits and has only got one JV in place, with ESG.
It is also a fact that there are major companies out there who are suddenly reassessing the whole situation, but who are unable to get suitable acreage in the current climate.
It is my humble opinion that it will not be too long before one of the majors enters into a deal with Sapex and announces a JV. It may well be happening now. MLA
SXP Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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