So you suggest 11.5 cents on the Canadian assets alone with...

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02/05/21

19:28

Post #: 52880783
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Originally posted by VOGC: ↑

From my analysis I estimate ~11.5 cps for SGC's 1P Canadian Oil & Gas Reserves based on information gleaned from SGC, etc. & obviously the ABC Asset's acquisition being completed. Slides and supporting information below.

The potential upside from 2P, 3P and 3P yet to be defined is the elephant in the room! Obviously, these reserves would be highly profitable with close by infrastructure established and a seasoned operator. From my oil industry experience & IMO the risks for these 2P & 3P resources would be, in an exploration context, in the very low to low range. A lot of well control, seismic and production history obviously materially reduces the risks. Hopefully, we will get some definition and clarity from SGC on these reserves in the near term as they gear-up to increase production from the 1P reserves and apply this cashflow to development of the 2P & 3P reserves.

Reactivation of previously shut in production takes time re: maximising flow rates from testing of production choke sizes, production maintenance issues when infrastructure is placed under pressure (from oil & gas flow) etc, etc. From SGC's updates the reactivation appears to be progressing fairly well (eg. ASX 6/4/21 - Alberta Plains assets: "...gross production up from initial purchase date production of 100 BOEPD, to a current production level of 607 BOEPD,".)

Material cashflow will take time to appear due to the reactivation start-up, delay in payments etc. - as mentioned by other posters. But with a potentially rising oil price (see Goldman article below), hopefully regular updates on increasing production and these asset's potential underlying value & low risk - IMO the share price post the Borba1-7 Kione PT could start to value these in fairly quickly.

GLTAH

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So you suggest 11.5 cents on the Canadian assets alone with potential upside coming from Borba depending on the anouncement tomorrow?

With Borba, IF the annoucement is positive tomorrow, given they can be producing very quickly do you envisage they will look to use the cashflow generation in the business to drill at another location?

From wnat I can see the business model they are working towards is using the cashflow generation from the Canadian oil assets for exploration in the Borba region?

SGC Price at posting: 3.7¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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