anyone got any ideas about the block trades that went through today?

website: http://www.sterlingenergyplc.com/



weather: www.nhc.noaa.gov/refresh/graphics_at4+shtml/084938.shtml?50wind120

I just cant understand the principle with shares fluctuation at the moment....

Do investors realise that at Ching alone, SEY are gaining $6 for every barrel sold (this is based on $40 a barrel) and if the rate of production is an average of 50,000 barrels per day for the year, it does not take much to appreciate how much SEY is making or going to make...in one year there is 10 years worth of oil in this area. With prospects that the production are likely to quadruple in the next 3 years, the income surely is going to be substantial...even good enough to pay well earned dividend for us the shareholders!

Dr Square,

I think it may be a bit early to start considering a possible reduction in reserves personally, as we seem to be at the mercy of Hardman's reports, possibly too bullish pre production, and now (hopefully) a little too bearish, as production is not as they expected.

Hardman rushed out a "full production achieved" statement soon after commencment, although SEY always predicted a run up to full production, which probably takes into account the sort of problems they are encountering now!

r88ave,

Exactly, SEY have said that the (hopefully temporary) drop in production is covered by the increased value of the oil being sold, so is nuetral to SEY with regards to 2006 earnings targets.

If full production is achieved at around the current price of oil, that would increase the targets for 2006.

Andy

Thanks and yes Hardman were drumming a bit hard but it does not escape the fact SEY, If HNR figure of 123 million are taken have a possible 6% reduction in assets . I have been fortunate and sold some of my holding so Negative posting may come across as being for other reasons.

But I would like everyone to consider two more thing. That is the hedge agreement SEY have and the production they have lost. I may have my calculations wrong but it is now very close to only being covered by total production including GOM, If no improvement happens.

The second issue is currency while earnings may be the same in $ profit in will be possible 10% below expected.

Long term this is still a screaming buy and hold ( a no brainer ) short term some little bits need ironed out. IMHO

That is why I only reduced my holding.

Regards to all

What we have in Kurdistan is a situation which favours the brave. The big boys are sitting back and keeping an eye on things allowing the smaller guys to test the water. If this was southern Iraq then it would be warrented, but Kurdistan is completly different. If you follow the news in Kurdistan like I do then you will know that we are seeing a procession of international diplomats wanting to do deals in Kurdistan. Well Sterling are already there. We have a good relationship with the Kurdistan government, we have our MOU and we have a right to negotiate a PSA. Sterling are as we speak, out conducting field studies and if they are happy with their findings then they will be sitting down at the table hammering out a deal. As the report demonstrates, the Kurdistan government are keen to get the oil out of the ground for local demand, so they want a deal as much as we do. If sterling can pull this off then they are either going to be catapulted into the big time or they are going to be taken out by one of the big guns.
But the story does not stop there. As I said before, because they are on an escalating royalty with their production their projected revenue is still intact even though the field has not yet been optimised, and when it is then the revenue is going to be very high indeed if the oil price remains high. This then is going to give them the fire power to do deals at a time when the froth has been knocked off the sector. All in all we should not have long to wait because our chairman has indicated that deals are going to flow within the next six months and I am confident that this step change in the company is going to confirm what an exciting play Sterling is for the months ahead.

Dr Square,

Some good points, and yes you may well be correct re the hedge.

It is my intention to attend the AGM, and I will try and ask some pertinent questions to try and clarify some of the issues or doubts.

Andy

Thank you for that. I value your thoughts and posts

Can I please beg a favour. The issue that I feel is most important going forward (filling the gap between Mauritania & Madagascar / Kurdistan ) has to be the Tie back terms to ching. Can you try and get something on what revenue this would generate or anything at all on terms.

I wish I could attend but the little man keeps me tied.

I have posted on JKX would value your thoughts being a longterm holder

Regards

As I said before, people are paying too much attention to the start up problems in Mauritania and not thinking about the long term potential of the area. In the months and years ahead the present problems will have been forgotten and the present production levels will have been dwarfed as new projects come on line.
Here`s a snippet. Note the possible 350 million barrels of oil at the Tiof oilfiel and a porduction of 150,000 bopd by 2008.

In February 2006, Mauritania began producing its first oil from the Chinguetti oilfield, which is located offshore 56 miles southwest of Nouakchott. The field has estimated proven reserves of 123 million barrels of oil. Currently, the field is producing around 15,000 barrels per day (bbl/d), but output is expected to reach capacity of 75,000 bbl/d by the end of 2006. Woodside Petroleum operates the Chinguetti field with a 47.38 percent interest and is joined with partners Hardman Resources (19.01 percent), Mauritanian-government controlled SociMauritanienne des Hydrocarbures (12 percent), BG Group (10.23 percent), Premier Oil (8.12 percent) and Roc Oil (3.25 percent). The Mauritanian government created the national oil company in 2004.

In addition to Chinguetti field, Mauritania possesses several other promising offshore oil and gas fields. The Tiof oilfield, which is located 16 miles north of the Chinguetti field, may contain up to 350 million barrels of oil. The Tiof-6 exploration well was drilled successfully in February 2005. Woodside and its partners believe that the field may start producing at 50,000 bbl/d in mid-2007, with production potentially rising to 150,000 bbl/d in 2008. The Banda field, located 12 miles east of Nouakchott, may contain natural gas reserves of 3-5 trillion cubic feet (Tcf), while the Pelican natural gas field is estimated to hold 1 to 1.5 Tcf. UK-based Dana Petroleum is working with LNG operators to determine development options for the Pelican field.

The present problems of shorting the oil companies is short term and will dissapear as quickly as it occured. The real problems are in keeping up with the worlds hunger for oil. That I believe is not going to go away for decades until a new source of energy is found. That is going to keep the price of oil and gas high in the long term. For those seeking to exite the sector maybe they can tell me where else is there where high profits are going to be the norm for decades to come.
Have a read of the following article.

Totals exploration chief believes world cannot meet oil demand
by Carl Mortished

29-04-06 The world lacks the means to produce enough oil to meet rising projections of demand for fuel over the next decade, according to Christophe de Margerie, head of exploration for Total and heir presumptive to the leadership of the French energy multinational.
The world is mistakenly focusing on oil reserves when the problem is capacity to produce oil, de Margerie said. Forecasters, such as the International Energy Agency (IEA), have failed to consider the speed at which new resources can be brought into production, he believes.
Numbers like 120 mm bpd will never be reached, never, he said.

The IEA predicted in its World Energy Outlook that global demand for crude oil would reach 121 mm bpd by 2030, of which more than half would be supplied by OPEC. The agency predicted that more than $ 3 tn ( 1.72 tn) of investment in wells, pipelines and refineries would be needed to raise output to such levels.
However, Totals exploration chief reckons the output rise is impossible, given available resources and geopolitical constraints on gaining access to reserves in OPEC countries.

De Margerie argued that the resources were simply not available. He said: Take Qatar. How many projects can you have at the same time? You have more than 100,000 people working on sites. Its a big city of contractors. Now they have the problem of having to build a new power plant to supply a city of contractors.
The IEA was mistaken in using recovery factors that failed to consider the timing of new resources coming on stream, de Margerie said. The world was confusing the issue of reserves with the scale of the problem in producing those reserves.

He said: The oil reserves are there, that is the good news, but what we can bring on today to meet demand is limited by factors other than what scientists see in a lab or think-tanks.

Fido - who are you working for?

fido gone very quiet.

good dog

Just looked at the price this evening, I cant believe it dropped so much today, I find it absolutely shocking....There is no justification what so ever.... Just how low can it go? I am sure every investors are saying the same..... Personally I think the principles of shares holding is out of the window....

I feel it is way over the top and it is a load of b*llocks all this talk of the economy slowing down blah, blah, blah.....It appears to have worked in what the bank in the USA and Uk have been saying, causing the price of the metal and energy to drop like lead, so they dont have rise the interest to control the inflation due to rising price of the energy commodities? Crafty sods!

Where is the proof of economy slowing down, only if the US raises their interest, which I beleive is a big big gamble. I dont think they ever will.

Surely the demand for oil is still high, we depend on it more than metal. You cant use metal to run cars! So why should oil be badly affected like metal??

Sorry, but I just had have a moan!!!!!

R88AVE - I am afarid markets are not entirely logical, though they do have a nasty habit of guessing med/long term trends quite accurately .... At the moment, babies and bathwater are being thrown to the dogs (had to mix the metaphors; sorry!) without any forethought other than survival

cynic, whats plan then. is it adviseable to hold if you're making losses!

The daft thing about it all this, nothing changed, it is still producing oil, raking in money, even when shares 33p, investors were still piling in then!, So now it must massively cheap, like everything else, but when will investors have the balls to go back in again...thats a big when??? I wonder

I'm gonna take a gamble and say it could fall to 23 then 21 then 18-19m then 15-16. I've not looked at a chart but I remember these levels on the way up. I don't hold it but I've lost on other oil charts. Then again it might be good. dunno

Markets are an educated gamble.

My gamble is that if this hits 20p again, I will start buying and anywhere down from there.


Dont think it will though most likely stay above that.

Saintserf -
So we should use your advice and probably act opposit!

This is more like, come on get back to 33p and start again eh!