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LGO Energy (LGO) has all sorts of problems. It is almost out of cash, it is burning cash, it is drowning in debt and it has a management credibility issue. But its real problem? Its assets in Trinidad are shite. The company has never come clean on how rapidly new wells go into decline but here is the raw data and it is pretty terrifying. It is based on RNS releases for each of its Goudron wells.
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Comments
Investor$
What? You mean these assets aren’t ‘world class’ like Lenigas and Ritson say they are???
Absolute crooks, LGO shareholders have had plenty of warnings yet still hark on about Goudron. Unbelievable that this company was worth over £100m at one point. In a BEST case senario equity holders to get wiped out in my opinion.
Duck and Dive
I’m no fan of LGO but your numbers don’t make much sense. Initial flow rate is never the same as production flows when chokes are brought into play. So comparing initial rates with depleted rates is a pointless exercise. I don’t recall LGO ever reporting more than 2000bopd for group output and the fact that production has fallen is hardly surprising with depletion plus no new wells – and every junior oiler under the sun doing enough only to keep the lights on. And LGO has been making enough cash to honour the terms of its pre-paid swap arrangement with BNP Paribas. But those terms had become too advantageous for LGO so BNP has shifted the goal-posts.
Q3 group production of 896bopd was actually a modest 6% lower than the previous quarter, albeit Q4 will see a further fall of course. Meanwhile, historical production cost has been a mere $10 per barrel and is presumably a lot lower now that development drilling has stopped. So even at 700bopd they could be making enough to meet the revised BNP repayment schedule – albeit they will need either production or the POO to go up if they want to sustain those payments.
Not sure why I’m bothering. Just trying to help the lunatic WR out, I guess.
wildrides
Whiny Froth you really are the limit ………….Your Winni Maths is terrible and you are going to have to issue another apology . The Group production you quote at 895 is for the average BOPD THIRD QUARTER 2015 . Ie June July August 2015 .
You have included wells producing after that date in your Winni maths ………..what are you like .
The conclusions you draw are thus flawed and worthless .
wildrides
As can be seen from this 3/11/15 RNS extract group production actually fell 6% from the previous quarter :-
“Group production in the third-quarter is reported as 896 bopd, 6 percent lower than second-quarter”
wildrides
Wheres the apology to LGO for market abuse Whiney Froth . Your figures are wrong . You need to come clean and and correct this . No doubt the AIM regulation will be very interested in this . Assisting the Global Shorting Conspiracy with false figures are we ?
bob brush
Lololol, on the BB the resident ‘experts’ are saying that the reduction in output is not because the assets are rubbish, its simply because LGO is responsible and is doing its part to reduce the world oversupply. apparently they are the first oil company to deliberately reduce output and the rest of the world should follow their example. The idea that a company this small, in this much financial trouble, would deliberately reduce output to be responsible, that made me properly chuckle.