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+--- Thread: MCF prices (/showthread.php?tid=5234)
MCF prices - Putncalls - 11-18-2013
If IOC sold Triceratops gas for 1.65$/MCF; why should another buyer pay less?
RE: MCF prices - ArtM72 - 11-18-2013
$1.65/mcf? What don't I understand in the Morgan Stanley report when they say:
"Successful appraisal [of Triceratops] could provide additional value under the terms of the farm-in agreement with Pacific Rubiales whereby IOC would be owed $3.85/Mcfe for 1C resource and $2.85/Mcfe for 2C resource,based upon final resource assessment."
I must be missing something. What?
RE: MCF prices - Putncalls - 11-18-2013
My memory is that PR paid 1.65$/MCF for 10% of what was found in Tricerotops.
RE: MCF prices - TxPm - 11-18-2013
This is something most ppl missed in the farm in agreement with PRE....depending upon the size of Triceratops IOC is owed a final resource payment. I dont recall now the exact details of the payment but I do remember when I did the calculations it was quite a large amount
RE: MCF prices - Putncalls - 11-18-2013
It was more than 1.2$/MCF!
RE: MCF prices - TxPm - 11-18-2013
Put,
It was quite more actually which is why I dont understand the reasoning behind MS & RJ using these low MCF numbers for their analysis. The only thing I can think of is that they think a SM will be able to negotiate a much better price than PRE was....We shall see soon enough
RE: MCF prices - cybersssss - 11-18-2013
Underpromise- Overdeliever???!
RE: MCF prices - ArtM72 - 11-19-2013
'TxPm' pid='32019' datel Wrote:Put, It was quite more actually which is why I dont understand the reasoning behind MS & RJ using these low MCF numbers for their analysis. The only thing I can think of is that they think a SM will be able to negotiate a much better price than PRE was....We shall see soon enough
Without going into the details of the PRE agreement I'll just assume Morgan Stanley had some basis for the numbers they quoted. At the VERY least those numbers could have been PRE's cost for incremental gas over and above a base volume...but that's a stretch.
One rational explanation for the $1.25 is, even with that number, IOC becomes a screaming buy regardless of condensate, regardless of T-3 results or anything else identified in the three million acres of aero magneto gravimetric (and seismic) surveys. Pushing the figure to $2.50/mcf (my uniformed guess of years back) would have little value in a binary decision to buy or not. On the other hand, just maybe undershooting the $/mcf number allows more clients the ability to enter at a lower cost, at little if any risk to the analyst.
Flush.
RE: MCF prices - Getitrt2 - 11-19-2013
'Putncalls' pid='31999' datel Wrote:My memory is that PR paid 1.65$/MCF for 10% of what was found in Tricerotops.
You don't have to depend on your memory. See the detailed Westlake Securities report as well as MS 's.