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1.29 - as is yours
DW valued Merlin at 20% of the 88e portfolio. He then sold 50% of it for $5M only 4-5 months ago. He had all the information we don’t and is thought by most to be a good deal maker. So at that point it could be argued the company was worth $50M.
The market then valued it at over $900M at one point. If people didn’t realise that it was overvalued at that point there is no helping them. Well done to Brom and all those who did.
The question now is how much has the Peregrine drill improved things and what value will the market put on it. I do wonder if the US will react the same way again but it could well be worth the risk finding out.
Kagiso, top quality. That was a good post. From now on, just you and garrym are allowed to post.
I concur... especially with the Macallan.
23.57 That makes my points about valuations. But don't assume you know what everyone is thinking or assume you know the investment background or education or experience, knowledge and skills of the person when they make a value judgement. Your view is just as much ''rubbish'' as theirs.
What makes your opinion less rubbish than theirs? Your 'educated' guess?
I wish it just came down to ''education'' but this discussion illustrates how people rarely take into account the emotional aspects of investing and how this critically affects value judgements. And the humans managing companies such as 88E are just as prone to these emotional factors.
The OTC pinks is a very good learning ground about true value vs emotional valuations and how it influences SP.
None of us are immune,
Just better have a well thought investment strategy and stick to your plan.
Time for a Macallans or two and then on to the ASX for another trading day.
23.04 - as I said, uneducated guesses without the experience or information to truest warrant.
And by the way, many make errors with the difference between and under/over valued stock at this point in time and share price changes in the future through development.
In this case, the end product doesn’t change, the use of the end product doesn’t change...the land doesn’t change, the process of drilling doesn’t change...therefore in this case value changes would be generated through drilling data and success. So the extend to which you would know this is under or over valued you would be encompassing all of the data they have already, use of experience in geophysics, petrophysics and seismic interpretation ...to interpret the data and also have an extrapolation for the future oil market in terms of utilisation and what competitors are currently doing and planning for the future plus any additional external factors such as political and financial risk such as royalties and taxation.
What I’m saying is people are buying stock because they think that developments yet to be completed or unknown will create a higher share price...that isn’t under or over valuation, this just a view/hope/expectation things will improve through circumstantial changes...they are different and shouldn’t be touted as the same.
And I’ll be the first to say I don’t know what fair value is...I’ve had a decent history in high level finance and that still doesn’t cut it. I think future events the company undertakes will create me value through and accretive share price, it’s a gamble...it’s that simple. I might be wrong and someone could argue it’ll go down and that’s fine....just don’t dress it up as being grander than that.
19:50 Really? "people posting if a company is under or overvalued is rubbish"
So I.O.W. my posts have been rubbish plus all others who dared give any comment on whether 88E was a worthwhile investment risk or not?
So what technique do you use then, please benefit us all with your distilled wisdom because from these remarks you seem to be saying it is only about inside information.Historical results, geological data, readily available public financial records, managements' backgrounds and history of results, etc, etc etc mean nothing.
I cannot tell you how many times I have seen ''genius'' people who, without ''inside information'' have seen the true worth of a company long before the existing owners and instituted action to gobble up those undervalued assets.
You need more than just inside information. You need to know how to assess the markets they operate in ,or COULD also operate in and determine how they could increase the value of their current assets. Elon Musk is an example of how someone with vision can take existing assets and multiply their value at an almost alarming rate. But, he may be a shooting star so make sure you know when to press the bell to get off at your chosen stop before you also crash and burn.
If it was mere case of just using your abacus and listening to some tipster from ''inside the company'' you may as well invest at the racecourse because that industry seems to fit your investment philosophy.
I have not spent a whole lifetime in mergers and acquisitions spouting rubbish. Sometimes I have made some sense :)
I agree .
General comment ...people posting if a company is under or over valued is rubbish...I'd suggest most people:
1. Don't have the requisite experience in any close discipline so I wouldn't be relying on their (probably uneducated) guess.
2. If they amazingly did satisfy point 1 they'd immediately say they don't have enough information as you can only value assets and companies effectively with inside information, that's why you have a whole industry namely M&A consultancy and everyone signs NDAs once in consultation...can't do it from the outside.
3. You need 1 & 2 plus current industry specific experience and contacts to understand the industry valuation methodologies and current positions.
etc etc etc...anyone have all this?? No you don't...
People spout nonsense based on if they hold, don't hold, want to buy, want to sell or wanting others people admiration to massage their own insecurities...its an abject waste of time with these people...
Look in the mirror...you don't know what you're talking about so unless you can prove it you're just wasting everyones time...including you own
I’d be interested to know what value you would place on 88e if as you say they are way undervalued at present?
Thanks in advance!
I have valued companies (and other assets) for a living for over 40 years and clients have included all the major investing and broking entities over that time.
I compliment you for stating clearly and succinctly, once and for all, the current 88E position re valuing their assets.
The share is way undervalued and past management has given away far too many shares in raising capital. There does not appear to be any clear cut financial strategy to maximise the asset value of the company. The new CEO needs to sort that out quick.
Instead, 88E is now in danger of being in survival mode and may be taken over for well below it's true value.
If that happens then all shareholders lose out.
88E can't keep wildcatting for much longer
yes that is what DW talked about in context, sure quite a few here and in HC thought he had made it up and certainly did not realise the context, but hey what matters the truth when you get a cheap punch in :-)
Would it be this curve StA/Brom?
Phrontist 13:48 - Indeed there are. My point is I'd prefer contracts (plural).
13:43 We can but hope that the ringmaster keeps the clowns in their place. Perhaps even makes them laugh on the other side of their face. But, then again, clowns cry - don't they?
At Ant 13:32
There are many ways to structure a Sale and Pay Contract.
Simple option is cash exchange for Asset like in buy/sell a house.
Another way is Up Front Cash Lump Sum followed by Life Time Royalty (eg US50c/bo)
Or, payment over 5 years with get Out Clause for Buyer in return for Seller keeping payments to date.
13:32 Well that "curve" is the oil industries preferred way, even if some clowns have ridiculed DW for using (in a very correct context).
Thanks Phrontist, personally I'd favour a sale in instalments with the proceeds being (a) shared with SHs (as of right) and (b) used to prove up the remaining assets to a higher value.
Not sure why, but in my mind's eye I'm seeing a curve...
Perhaps promoting our experienced CFO to CEO would be a good move.
88E is nowhere near insolvency.
But we are giving away large chunks of shareholdings for pennies.
Every year shareholders are suffering massive share value dilution.
Because shareholders do not recognise the Asset Value we hold.
Our problem is not just incomplete de-risking across our region.
It is also the incessant bad mouthing of some shareholders.
We need to easily raise US$ 50m+ per Capital Raise once per year, to operate the business properly.
Lease payments, staff, 3D Seismics, Computer Processing, Drill Operations, Lab Analyses, expenses.
This could fund two Drill Programs/year, then 88E gets somewhere.
Not staggering from one Project to another, never finishing any of them.
Our business has low value to the majority of the shareholders.
But to a Big Oil Production Company, this business is worth 15 to 20 times current SP/MC.
Perhaps we should hire a Sales Director with only ONE TASK! To scan the world and sell the business.
That’s what I’m working on to be honest. Although 3-4$ per barrel is more like it especially seen as oil prices are only going one way in my opinion, north! Pandemics have that effect on things. Not putting conspiracies out there or anything but people will and have positioned themselves to make a lot of money. I plan on trying to be there as apposed to missing out as mentioned before!
On the assumption that a deal is consummated this calendar year then 14p would be quite acceptable.
Thank you for sharing your assessment.
11:40, valuing something has many styles and methods.
In the end, it is about being attractive to a potential buyer (s).
We have 600K acres (or so) of leases, in a place where new leases are blocked by Presidential Order.
Our 'little region' is within the wider Prudhoe Bay much bigger region.
There has been volume oil production across the region for over 3 decades.
Major production companies like to buy up oily lease areas (understatement).
Without it they cannot continue, or expand, oil production business.
I am suggesting that our 600K acres could yield at least 6 bbo (billion barrels oil) on a commercial basis.
Over a 30-year program, double it, or more.
Imagine we offer our Lease Holding Subsidiaries for sale at $1 /b x 6bbo = $6 billion.
That is almost US 50c/share.
Assume 88E shareholders get 70% as Capital Refund (AIM Rule on selling Assets)
The each shareholder receives 35c/share = 25p /share
OK, 6 bbo is only partially proven. But we are only asking for $1/b not $3.1 that Oil Search paid to Armstrong.
Should we be waiting for 'the next drill' with another inevitable 88E result?
I’ve mentioned this before as I cannot understand it. In affect this company is worth 200 million or so at 1.5p a share. Just don’t see how that is possible. Dw said last year they have a good idea of where to go now at icewine. Don’t know much about Yukon leases but obviously something there and prospects for the future are good. We obviously have oil at Merlin and harrier. Umiat has oil as well. This must be a case of proofing up as much as possible for a buyer. If not it’ll be next year for another drill but it’ll be sold by then I believe. I hope it does anyway because I can’t keep reading this board for a year, lol.
Great post Phrontist, thanks.
I think once full results are available from project Peregrine, the future path will become clearer.
We need to know LWD details giving each horizons depths and extent , oil viscosity, mobility and some modelling re any identified reservoirs potential extent.
Any interested majors would need that data prior to further developments imo re this particular project - and Umiat potentially. They form one package of assets in my view. The data will make for interesting reading.
PANR results, hopefully this week, if positive will be good for Icewine too.
88E working to complete the reporting on oil prospects at Merlin-1.
Good, maybe a week, maybe a month.
The 88E 'Alaska project' has been running for 7 years now (Q2 2014 to Q1 2021).
The company holds oil flooded leases in 3 regions.
I am suggesting this is a fact.
It is clear that the company struggles financially to manage even one Drill Program a year with only 5 Drill Programs over the 7 years. In part the arctic weather cycle is also a limiting factor.
The BoD have a responsibility to MAKE SOME MONEY and not always rely on Shareholder Funds.
So BoD, please advise - What are 88E plans to monetize an Asset?
What is realistic? Have discussions occurred? Are BoD 'holding out' for better offers?
Clearly the SOI at 12.5b shares is becoming a factor of limitation in raising money (CR).
IF the company sold an Asset the money could reward shareholders AND fund development of the still substantial remaining Assets. Personally I have high confidence in the value of our leases.
But what is the value of an attractive but poorly utilised house?