New TPD shareholder here. Bought in on Friday, as couldn’t resist the risk versus reward proposition based on the current share price and low market cap.
Disclosure: I’m also invested in TMK (a number of months ago) and in EXR (a few years ago). The gas thematic in this part of the world is particularly enticing. The South Gobi is shaping up to be a world class CSG basin.
TPD’s investment highlights / credentials for me are numerous:
The latest suite of drilling results from central Narrin Sukhait in the Gurvantes XXXV CSG project were phenomenal. These results are almost unheard of in the CSG industry. It’s not often you see management (TMK) so bullish with their announcements - ‘outstanding, remarkable and incredible’. It appears the results of the drilling have exceeded everyone’s expectations.
TPD’s risked best case prospective resource of 5.96 Tcf (1.97 Tcf net Talon) could be very valuable indeed in this part of the world. IMO we could be on the high side of the prospective resource considering the drilling success. The contingent resource is due in October. Not long now, after drilling the lower part of Snow Leopard 05.
Pilot testing by year’s end will be a catalyst. IMO this won’t disappoint and should prove the commerciality of the project. No mean feat considering Mongolia is new to CSG.
Plenty of upside too across the whole of the 8,500 square kilometre tenement. They are just scratching the surface in central Narrin Sukhait <1%.
Transportation to market is key. There are no LNG and shipping requirements for the gas. The Gurvantes project is close to existing gas infrastructure that feeds one of the world’s largest natural gas consumers, China (the border is only 20km away). China is ever trying to shift their demand away from coal to meet their co2 emission reduction targets.
Of course the project will also bring benefits to the Mongolian people who struggle with air pollution in their capital, Ulaanbaatar. It is after all one of the world’s most polluted cities due to their over reliance on coal.
The PetroChina MOU is fantastic at such an early stage of the game. It speaks volumes to the project’s potential to attract such a high quality partner. PetroChina employs over 500,000 employees and brings in revenues of about US$ 300 billion each year.
The formal election to proceed with stage 2 of the farm in with TMK could drop any day now. IMO ensuring a step change in the share price.
Not to mention all the immediate upside within the Perth basin.
FID recently completed for Walyering with a 2P Reserve of 54.2PJ (24.4PJ is TPD’s share). A Gas Sales Agreement expected in Q4 2022 and first gas in Q1 2023. Meaning imminent cash flows of up to $30m p/a (net) to TPD.
To note the WA spot market gas price alone has almost doubled in the last two years. Energy security is the theme at the moment with gas prices expected to stay high due to the impact of the war in Ukraine and the focus on climate change.
Condor, just north of Perth, is the largest untested Jurassic wet gas structure in the Perth Basin. It has a best case prospective resource of 408 Bcf. It’s a shallow prospect, meaning cheaper drilling costs when the decision to drill is made after executing the binding option agreement.
TPD’s seasoned board and management has a number of success stories under their belt. We are in their good hands to organise any residual funding requirements (debt lender discussions advanced) with the end game of maximising shareholder value.
GLTAH. Looking forward to the next few months as TPD transitions from being an explorer to producer, IMO it’s going to be an exciting ride that I couldn’t miss.
TPD Price at posting:
15.5¢ Sentiment: Buy Disclosure: Held
