TPL potentialThis is what i've been studying and relative to why i've invested here and also JTCods thoughts on a possible 50 bagger and being a buyer - Far fecthed ?, well only with hindsight can we can look back at the 62 bagger on Imperial Energy, GKP rising by over 70 times from it's low (now 40x) and Cove from its low and increasing nearly 16 times - so it's proof that multi baggers do happen under decent management and success with the drill bit.
Those companies above made those returns in 2.5 - 3 years but equally there will be companies who do not perform resulting in dissapointment. All three above started off without any production or income whatsover and i've had the good fortune to benefit from all three to various degrees.
So to cut to the chase it's interesting to see that Thailands PTT and it's location on the world map tucked in below China have apparently won the 240p/share bid for Cove Energy valuing Cove Energy at £1.2b ($1.85b).
The Mozambique gas find is estimated at as much as 30 - 60 TCF recoverable and using an 80% recovery rate may would mean between 37.5 - 75 TCF gas in place.
Cove have 8.5% of that, which is 3.15- 6.37 TCF in place or circa 2.5 - 5 TCF recoverable which Thailands PTT is paying £1.2m for.
On a 100% basis that is placing a value on the 30-60 TCF recoverable field at £14.4b.
One only has to look at the huge gas pipelines where Tethys operates being built to supply China and it should be noted what Chinas neighbour (PTT) paid for Cove Energys gas find over 6,000 miles away.
This is from the May 2012 Central Asian gas pipelines etc that Tethys seeks to get access to next year
https://uk.reuters.com/article/2012/05/17/gas-uzbekistan-china-idUKL5E8GHCR220120517
"In 2010, China became the fourth-largest natural gas user in the world, and its demand for the fuel last year - estimated at 130 bcm - could double by 2020 and even by 2015, he said.
"There's no doubt that China will absorb imports from Central Asia at a level of about 80 bcm to 200 bcm by 2025, even if Russia exports gas to China by 2020," Benterbusch said".
So even with Russian gas going to China - China could be using the equivalent of 7 TCF per year just from Central Asia and paying a very high price for it's gas - so buying fields/companies for energy supply will imo be a priority and cheaper long term option just as Thailands PTT has done - indeed China has also just entered Tajikistan on the exploration front and Tethys have an extremely large footprtint in Tajikistan on 35,000 km2, increasing their stake in the Tajik licence to 85% from 51% by buying out a larger portion of their partner who retains 15% for what looks like an overall cost of $64.4m (Dec 2011).
If you look at the numerous gas fields found on the other side of the border of Tajikistan, in Turkmenistan/Uzbekistan and some up to Tethys exploration licence - some of these vary from 2 - 12 - 25 -33 TCF right up to 60, 176 and 749 TCF fields (Page 12 Tethys presentation) so the potential is there and Tethys have already establsihed a working petroleum system in their drilling in Tajikistan.
Thailands (next to China) PTT has ventured over 6,000 miles to buy undeveloped gas (https://www.worldatlas.com/webimage/countrys/as.htm Asian map) and (African maphttps://shareit.yhgfl.net/eastriding/wilberfoss/wp-content/uploads/african-map-1.gif )
Tajikistan has been very lightly explored and just like Mozambique has an extremely limited oil/gas industry. Infact if you read this re Mozambique -
"Mozambique is a country with no significant history of oil and gas industry, either upstream or downstream., except for one gas producing project that exports to South Africa. There are currently no crude oils being produced, but small volumes of condensate are being produced." source and full storyhttps://abarrelfull.wikidot.com/mozambique-oil-and-gas-profile.
It's only the recent gas discoveries in the last 24 months that have put Mozambique on the map.
"Shell Cedes Victory To Thai Firm In Africa Gas Fight - Interest in Cove, a modestly-sized exploration company listed on London's junior exchange, has been fueled by the company's position in one of the world's most promising new gas resource areas. Cove's main asset, an 8.5% stake in a gas field off Mozambique's coast, operated by Anadarko Petroleum Corp. (APC), would offer energy companies a speedy way to get a foothold in the region.
PTT, which is a fraction of Shell's size, surprised many observers when it entered the bidding and upset the Anglo-Dutch company's ambition to turn Mozambique into a new liquefied natural gas export hub.
***PTT is more concerned with guaranteeing future energy supplies for its domestic market and has put natural gas at the heart of its investment plans***. It aims to produce 900,000 barrels of oil equivalent a day of natural gas and oil by 2020, up from around 300,000 barrels of oil equivalent a day currently".
https://uk.advfn.com/news/DJN/2012/article/53479155
The bottom line imo is that while we do bread and butter oil and gas production now at near 8,000 boepd (over 4,000 bpd being oil), and look to increase that through a hike in Doris production and Dyna exploration, seek to gain access next year to the gas export pipelines and lift the price 5-7 times while also increasing the gas production which Tethys system can handle (4 times current) - any major gas finds could yield significant potential to Tethys.
Imo a find equal to Coves 2 - 5 TCF range could give a valuation uplift to a similar £1.2b paid for Cove and could imply a 400p target range for Tethys. Coves CPR at the time did not envisage the possibility or potential for such extensive gas finds at the time in Mozambique and cited it's extremely limited industry position and limited exploration.
One positive is that we've found both gas and oil through the drill bit and brought discoveries on from nothing and i view this as a significant acheivement.
JTC mentioned the possibility of a 50 bagger (well this would be £20/share range and a valuation of £6 billion - we'd need possibly 10 - 25 TCF of recoverable gas for that. PTT of Thailand in their price for Cove is a pro-rata valuation of £14.4b for the Mozambique field and became the upstart to out do Shell. Mozambique wasn't on the map for an oil and gas industry even 2 years ago. So who knows what potential lies ahead for Tethys but imo it's certainly got underlying growing production and income that Cove, GKP, or Imperial (IEC 2 years in) never had while the potential upside remains equally significant for Tethys at this stage.
As ever DYOR when looking for the next potential multi bagger. They do exist, though finding them early enough is far from easy or guaranteed.