Number crunching I love getting my Frack-Land fix: [link] He (James Verdon) also has his own website. He put up a lecture slide: ([link] On page 26 of the lecture he reckons's 150 billion cubic metres reserves (~5.55 tcf) are roughly £50 billion. IGas have ~80tcf GIIP (after the Ineos farm out). Eden reckon they have a recovery factor of ~37% (obviously their geology is different). Would it be presumptuous to assume IGas might have a recovery factor of 20%? That would mean 16 tcf of gas would be recoverable. That would mean a revenue of ~£144 billion (going off Jame's Verdon's figure above) IGas has 296.38 million shares outstanding. That means each share would be £485 per share! But wait. There's tax to be had. Mr Osborne said 30% tax for shale producers. That's ~£340 per share. There's company expenses and costs etc so by all means knock a few quid of this figure. I notice Berghaus has also done a back-of-a-frack calculation and got a figure of £276 per share: [link] This will take some time but I will continue to fill my boots. Thanks Divilike.
Igas Forum Here's the link to Berghaus's new forum where serious discussions can proceed without hindrance
Reaction to EACR
A Guide to Shale Gas from Energy Institute Editor's Note: Thanks Funstar. The Energy Institute is the professional Energy Industry body incorporated by Royal Charter, merged from the old Institute of Petroleum. I have worked with them in their London office together with the HSE when developing risk assessments for the Oil and Gas Industry. Their Safety Standards are adopted internationally and I had no qualms using these on my worldwide projects.
World Class Fracking Research Centre Thanks Joncl
Igas Hedging: Finances ok, stop stressing peeps IGas have hedging arrangements contracted to 30 September 2015 for 517,000 barrels of oil, at a blended rate of US$87.7 per barrel (taken from November interim) Calculation below if for the nine month period 01.01.15 to 30.09.15: The hedged oil will generate revenue of $45.3 million (517,000 barrels x $87.7 per barrel). In 2014, IGas produced 2,766 barrels of oil per day (a very similar quantity in 2013). If they manage a similar production rate in 2015 that amounts to 1 million barrels in 2015. For the nine months to the end of Sept 2015 that’s 750,000 barrels. They have 517,000 hedged to the end of September. That leaves 233,000 subject to the market price (in other words 31% is un-hedged to Sept, not half). These non-hedged barrels, assuming an average oil price of $50 per barrel (over the nine month period) will generate revenue of $11.7 million (233,000 barrels x $50 per barrel). I don't think that assumption is unreasonable. So hedged and un-hedged oil will generate a total revenue of $57 million to the end of September. The cost to IGas of oil transport, storage, well services, operating and administrative costs amount to $52.7 per barrel of oil (figure taken from their November interim). Or put another way it costs them $39.5 million to sell the oil (Jan to Sept). That means a net profit of $17.5 million from oil over the period. Points to note: (i) They don't have only half their oil hedged, more like 69% (up to September) (ii) Even un-hedged, they only make a small loss of $2.7 per barrel. Of course there are other costs e.g. worker’s wages etc but... (iii) IGas have cash of £29.1 million, that’s POUNDS, not dollars (taken from November interim) (iv) IGas are operating an $80 million gross work programme, funded by partners (figure taken from their November interim) They will weather this storm just fine. Divilike.
Velocys Editor's Summary: A link suggested by smartmathguy. Velocys intends to employ small-scale mobile Gas-to-Liquids plants to capitalize on gas sources including from Shale Revolution thereby maximizing the value-chain without the need for expensive gas-transportation or the use of capital-intensive GtL giants like Shell Qatar's Pearl Plant.
US Secret Shale Play Editor's note: This is not a recommendation on US stocks; it merely provides a peek into what's happening in the US; available to individuals on request
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Cornering the World's next $Trillion Business Editor: Again not a stock recommendation; available to individuals on request
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