12 customers signed up with another possible 2 or 3 in Dec.
Electrical gen could easily outshine thermal sales. He used an example of a company that consumes 7mw/day. A gas generator, again if I heard right, will need 1.6mmcf/d to power that. He ventured approx 50mmcf of the 100mmcf demand could be in supplying thermal and electrical demand. I think electrical demand will eventually be priced at $3 or $4 less than thermal but that is still a huge income stream despite all the royalties and takes
Confirmed KF had high level contact with Chinese and Korean firms re their investing in a 250MW power plants and being supplied with Vog gas. This may impact on the last sentence though I think this is nowhere near enough to keep the lights shining in Douala and by the time its been approved and built consumption will have again increased. The $gas price will not be as high but a 250mw power plant could consume 50mmcf/d. ( The more knowledgeable, feel free to correct me if this is wrong)
As mentioned, Logbaba Capex is $70million, so Vog will be receiving RSMs 40% share for a while in addition to capex being tax deductable. Otherwys may be able to shed more light on the financials.
General
Logbaba.
Talk of an automatic PL after a set amount of time from the application is not correct.
Manpower required to work two shifts on the processing plant, security ect. Pipeline to be walked daily.
Vog aren't expecting the anomaly to be oil, its as they have said in their RNS most likely gas, but until the drill bit goes down nobody knows if its anything. SM mentioned that there were some interesting results from the seismic report other than the anomaly, but that much more data needed to be gathered before any conclusions could be made so don’t get any hopes up of yet more gas or an oil find though neither have been ruled out.
Phase two of the pipeline costs approx $4 or $5million (can't remember exactly) and will take up to 12 weeks to install after phase1 complete. Pay-back time is months not years. Permits for this expected at the same time as phase one.
There probably will be a multi-well campaign next in Logbaba and they will most likely twin drill the other two Elf wells plus the anomaly.
All long lead items ordered and waiting to be shipped/used once the licence is granted
Other companies can use Vogs gas network if there's spare capacity and they will have to pay Vog for the service. Vog don’t anticipate this as a likely to happen and they think Bowleven may be more focused off-shore after recent events. Also as Vog are tying up 20 year deals there won’t be much left of the market to target by the time an alternative might be available.
Kemerkol.
It looks like the Kemerkol decision date is being put back and could be up to 6 months before we have a final out-come, though I think this is to give plenty of wriggle room as I got the impression it will be much sooner. The out-come is uncertain but as has been discussed previously there is hope for a successful resolution. Also KF said he'd never lost so far, so we will just have to see and the where about of her assets might become irrelevant. It was of interest that Noor Petroleum had been in touch with the Khazak government and were not happy, also it seems much western and middle eastern investment in the country has stalled for whatever reason lately. If we get it back Vog definitely seem to want to dispose of Kem, though they may put some work in there before putting it up for sale to increase its value.
Vog has about 4 staff employed on the Kem site keeping an eye on the place and nothing is happening at the site.
West Med:
They may apply for permission to put back the drills till 2013, its been put back before and don't believe it will be an issue if they want to put it back again.
WM seismic data is still being processed to try and marry up old and existing data. Sorry I lost concentration at this point so didn't catch the full meaning. No fixed date to release the report but could be a month or so.
Cost to drill two wells in WM, approx $20m for basic well, ie straight down not sidetracking (if I understood that right). A farm out looks preferred though, depending on Logbaba they may use some of that money to fund WM. If they do farm out they need to do more work so they can present it’s potential to a JV partner.
WM Well 103 has hydrocarbons but it doesn't make enough economic sense develop that well until they have a lot more to sell.
Falcon
is being priced up by year end but less likely to be the $12.5million, though this might suggest that it’s not so good a prospect as we had been thinking. This wasn't talked about in depth as time was getting short.
I don't think they are going to do the passive seismic survey now until a price has been agree, though they may do an (aerial ?) magnetic survey? …. See I said KYC should have come along…tch!
Liberia.
Huge potential off shore, KF got to chat to Mrs Big Cheese Liberia straight away with his connections. Would farm out if they win a licence.
Financials. (Otherwys may write more detail on this.)
Vog have no plans to duel list.
Future capex is split upfront 40/60
Vog always try to keep a few $m in the bank
No plans as yet for a consolidation
Summery
Overall a useful meeting as far as I am concerned and it increased my understanding of the company in a few places. The atmosphere was very good, friendly and I appreciated the time they took to engage with the PI's.
Looking ahead, imo the SP and Vog are closely tied together with obtaining the PL. Once that is in hand, life for management and PI will be less stressful and more prosperous. I don't doubt it will happen but nobody can say when it will happen so this will be the big question for the foreseeable future. I'm a long-termer so will wait it out. Capex is much reduced as there are no expensive projects on the go so together with the recent placing Vog have a the funds to wait it out as well, although obviously it's in the companies interest to get it asap.
Hope that is of help to some of you and sorry if it doesn’t answer all your questions.
Temu
PS There's something for everyone in there but beware the rampers/de-rampers that will pick out the bits they want for their own agendas!
PPS Meldrew throws snowballs like a schoolgirl!
PPS Off the comp now but will try and answer any observations tomorrow if I see them
Cheers