Report from the AGM:
It all boils down to the LICENCES - 'simples!', there is a whole raft of paperwork that needs to be signed off.
VOG appears to be doing all the project management work necessary to take the gas to market, this includes surveys, designs, procurement of equipment and pipes etc, all they now need is the licences and they can press the button to start the construction phase.
VOG says that if the licences came through today, first gas to market by the end of March '11 (Phase 1) and revenues with Phases 2 and 3 to follow.
VOG says they have the cash to complete the Phase 1, 2 & 3, it would appear that the latter stages would be partly funded by the first phase.
VOG says that relations with the various stakeholders is good and they are making progress with the licences and that a techniocal team is working with the various parties.
FOO says that he had a positive trip in-country last week, meetings took place as expected.
Payback periods for the differnet phases is very quicks, just months in each case;
VOG says it is focusing on Logbaba and getting revenues rolling.
VOG says no further upgrades in the reserves until further drilling commences.
VOG says that the last placing went extremely well, and given they got nearly the sp of the day, they grabbed it, in addition, placing did not impact sp, accepted well by the market.
Compared with previous AGM's attendance up, motley collection of PI's in the main.
All resolutions passed.
BEWARE:
Not impressed with FOO and Board performance today, lacked enthusiasm (Foo answered questions in a slightly wearisome way, the rest of the board lacked gravitas and one board member was attitude seemed a little rude, possibly suffering from foot in mouth syndrome, I personally would not put him in front of a customer or shareholder, you could see PI's bridling and commenting on a couple of his off the cuff comments/attitude); HOWEVER, the technical presentation on Logbaba seemed sound, the project manager in charge seemed sound;
For those that don't know it appears that VOG will receive 53.2% of revenues HOWEVER, VOG costs are taken from initial revenues before royalties are paid;
VOG appears to accept that they will bear all infrastructure costs instead of the 40/60 split, the partner's 40% costs will come from revenues before royalty paid.
Developing other assets are on the backburner until Logbaba is on stream, West Med. appears to have been an unpleasant business, would not be surprised to see farm out eventually to de risk.
Each day, week, month of delay on the licences pushed first revenues past the end of March by the same timescale.
DYOR Summary, if the story pans out, it is really very POSITIVE but I did not get a comfortable feeling from the board, perhaps this is unfair and they were simply tired from their travels and weary of increasing interest/critism i.e. where are the licences or the audience did not ask and push them on the right question. Who knows but that is the feedback received from the footsoldier on the ground - slightly subjective in the absence of signed licences. |
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