Karma Bites - Nigeria Sucks
You can't get away with screwing people...Lundin Group sold its Red Back Mining to Kinross for $7.1 billion in 2011 that the latter company had to write all of it off because the gold wasn't there. Won't it be funny if AOI consortium partners got taken for a ride by Petrobras - in the Land of the Nigerian Scams - for hosting less oil than believed...The Nigerian blocks involved include two productive fields, Agbami and Akpo, and another field, Egina, that is in the final stages of development according to Petrobras. Together, the fields currently produce around 21,000 barrels of oil equivalent per day for the Brazilian firm...By contrast, Sharmaran Petroleum (SNM) had just put on a Dog-and-Pony show in Norway by Pareto Securities and the presentation says oil production from Atrush commenced in July 2017. Installed production facilities have a capacity of over 39,000 barrels of oil per day (bopd). Twelve wells have been drilled to date and seven wells are currently producing. Atrushs production guidance for 2019 is 30,000 to 35,000 bopd, with an expected production of 45,000 to 50,000 bopd at 2019 exit...So, what do you think which is better? 21,000 bbo/day from Nigeria that AOI will own 25% of 50% of the fields or 50,000 bbo/day that SNM owns 27% in Kurdistan in partnership with TAQA of Abu Dhabi Govt...Buy comparison to other assets, SNM has 2P proven reserves of over 100 mmboe vs. EOG's 100 mmboe 10P resource estimates (i.e. unproven). AOI has found oil in Kenya and the damn stock is now trading at pre-discovery level, down from $12.00. One thing is crystal clear - both AOI and SNM are aptly said: dogshit companies.