First a check on what has been happening in the background with these large trades. Started a couple of weeks ago and is almost certainly a single seller. Total T Trades to date 1,450,000. I would suggest, given that the MMs are still maintaining the current spread that there is more to be filled - probably a round number of 2 million so that leaves 550k to go and it looks as if 300k of that went this morning already. These are sells by someone who needs the money in the short term because in the medium term we have cast iron guaranteed news that will move this SP upwards in Wressle coming on stream and the Holmwood Spud.
2m at 4p is only £80k so not a very significant amount if you were a shareholder with plenty of shares to sell. On the other hand if you had used your many millions of shares to secure a loan facility while the SP was higher then you succumb to margin calls and it is possible that that is what has triggered the necessity to sell some.
Not great news for the shareholder and as far as I know there are only two who have enough shares for this premise of mine - CW Ahlefeldt-Laurvig and Ms Syba/Mr Barratt. CWAL as a director cannot sell without informing the market and Paul and Erika would have no inside knowledge as far as I am aware that a placing is imminent.
It really is bargain basement time for ordinary existing and new shareholders.
But back to fingers in many pies... I am particularly interested in the unbaked ones where we are not operators and where the time to put them in the oven is out of our control...plus they have known hydrocarbons
Tarbes, France - Vermillion won't make a move there in the near future due to capex cut backs but when it does we are fully covered on a well(s) that are known to contain recoverable oil. A nice little earner for the future.
Broughton - Egdon operated and further derisked by the Wressle discovery- previously drilled and flowed oil!
Cloughton - Third Energy are the operator and looking for gas that has flowed in the past. Third have just received the first fracking permission in the UK for years.
Hardstoft - INEOS operated and a confirmed oil field (EOG only interested in Oil here)
And of course we need to add in further field development at Wressle for the WIngfield and Penistone zones.
So 5/6 pretty substantial targets where there are known Hydrocarbons that will surely be drilled in the next few years. Capex on all of these could be covered by farm downs given the derisked nature of the targets. We could easily be looking at 2,000 bpd to EOG if these were all successful.
Exciting enough times ahead for EOG with Ireland and France just magnificent bonuses if they come in.
So UKOG have announced they have raised £4m to fund further acquisitions. Seeing as we are partnering with them on Holmwood and we have already announced a farm out to UJO this week, I'd be thinking UKOG might be looking at some elements of our portfolio.
to raise funds if needed. With Wressle into production, and don;t forget that will be only the first of three zones that can produce, debt financing will be easily obtainable. An outright sale of a portion of producing assets is also a possibility and that could raise significant funds - although we await an update of a CPR for Wressle and I am not sure how one would/could quantify the non producing zones.
The maximum exposure - repeat maximum - to Holmwood looks like £800k - so probably less than that. So I think we are funded for Holmwood. That leaves other projects to consider and there is of course a possibility of potential Farm Ins by EOG to existing near spud projects and/or development of our non operated licences.
The thing is though that if this selling was triggered by knowledge of an imminent placing then the large seller is easily identifiable and could face an investigation (although I know this is AIM! and rarely happens.
OIl price now above $50 and the £ per barrel price is now higher that 1st August last year so nearly into one year high territory. Things are looking really good for EOG particularly now that we are in the home straight so to speak to Wressle production and the Holmwood spud.
Just in writing that makes me realise that a wise MD would be perfectly aware that raising funds by placing at this SP would be ludicrous given that Wressle production should bolster our SP to at least 8 to 10p so best raise funds then if needed.
I would be very disappointed at this stage for a placing to be in the pipeline.With so little information given to us by EOG we can only go on what the last several interviews with Hugh were.Any it doesn't seem that long ago in one of his proactive investor interviews that he was saying how funding was not needed and cost cutting was well underway.Nothing is certain as to what is going on in the oil world and in particular EOG but I hope, fingers crossed that a placement is definitely not on the horizon.We are nearly at the end of May now and was hoping we would have had an update regarding Ireland/second phase.I think we could do with a Hugh interview in next couple of weeks just to keep us all sane and steady the ship.We can't go through June with absolute silence.As always,great board chaps,some good posts.GLA
this drop is to do with a placing but I may be wrong. With Oil Price at $45 we can add £1m in revenue to the £1.8m in the bank to fund admin and known capex for the year. Admin costs have been reduced significantly and the only capex is Wressle to production plus Holmwood pre spud costs which have just been reduced by 15%.
A placing would only be required if a new project was on the cards - maybe one of our new licences but I doubt it.
There is one major seller at the moment bringing the price down - filling T Trades regularly of 500k - so that suggests it is one of our major shareholders and as I proposed yesterday, Paul and his Wife could well be the sellers as they have a lot of funding commitments it seems - particularly in the Northern Hemisphere summer exploration window.
Personally I see anything below 5.5 as bargain basement time so even if they were to raise a placing now the fact is that our SP in the run up to Holmwood spud is going to be way above 5.5p and I am prepared to wait for that.
I think the reason for the drop is that a placing is on the way. If they had 1.8m in January then I assume they are getting close to needed to raise more. If they landed an Ireland farm out with back costs than a placing could be avoided.
Don't you wish our ticker symbol was EDR! My gut feeling is a farmout announcement on Ireland will coincide with the licence awards, but that is currently wishful thinking. It may well have been a better bang for our buck drilling Holmwood at 40%, but HM is totally conservative in approach. If the Kimmeridge really is a basin resource play as indicated by the neighbours, then it is a slam dunk that it has oil in it at Holmwood. Just a matter of how fractured it is and how much it will flow.
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