London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East and have access to Premium Chat. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
What's the full name of ADV??
Adv added to my watch list, looks interesting thank you!
You’ve misread his post. That was in discussion about ADV and not HE1. He did point that out later again to you too.
SeagullsPlan - Are you really implying that people on here are talking about a drill campaign about to start and not the completion/testing of the first drill?
I was referring to this post of BigPlan - i think volumes are picking up as we get closer to the drill. With the chance of success so high and the upside potential, it's worth a small investment
I really didn't have to post anything about that - he probably just typed it wrong.
We are all very focused on the preliminary RESULTS of the drill. We all know it spud June 12 and needed a sidetrack a few weeks into it, and that it has been drilling again for a few more weeks with DM telling us once a week that everything is proceeding nicely. We all just have a lot of anticipation. Especially when DM's words of encouragement soemtimes contains words like "historic".
I've deconstructed those hannam numbers, not because I think they are spot on but because they are a good metric. A conservative one at that.
Doing that can go wrong as we all have experience, you have a decimal place wrong. Or mix bcf & mcf, then it's all rubbish
Tai with derisk value is 69p, depending on a few interpretation of written h&p sentences.
I think Tai is valued at about $4m now. $190m at discovery( or, and ,or not at appriasial)
$300m at value Extraction profit( at 250mcf )
Numbers off the top of my head so ya know....
I welcome corrections and ridicule.
I think that is what everyone is hoping Noob :) Though , if a 'discovery' RNS pops in to the inbox I am assuming it doesn't mean that it is extractable - and that can only be assessed via appraisal (otherwise what is the point of an appraisal) meaning full value won't be gained till then?
Have no idea how often a discovery drill has been made then an appraisal says it is a dud - hopefully very rare.
I am trying to be realistic and that in the hopeful event of a discovery we will get in to the 50-60p mark (He % concentration dependent). Talk of £1+ after this first drill I think is ramping/optimistic
Aimed at no one in particular.
I was thinking I'd assumed much value is gained right on discovery at this drill point.
Commercialisation was ticked at 85% on the h&p report, but think a few intrepations on the term commercial. I think co2, flow and traps etc still belong on geological cos. Just IMO and being pedantic of course, if I'm even right.
Ive thought about this a lot, I'm glad some more people are noticing.
As we know p50 report h+p did puts discovery at Tai as adding 27p + adds about 5p on each other drill site in derisked value.
I'd assumed that (Geological or commercial) the stuff like flow comes ontop of 27p and add value at appraisal stage.
So we see sp hit 27p and a then bit more at a 'good' appraisal stage.
In the unlikely event H + p and p50s are spot on with discovery and volume, do posters think that that 27p on TAI is incremental over exploration and appraisal, or just as I do on this drill at Tai?
Good luck all.
N.b.I know I know analysts reports are estimates only and yes not find yet
No idea how I managed to post on wrong board. Sorry guys...was not intentional.
When I hear of the entire basin being derisked, I think it is because we now know an unknown.
Due to the seeps, we know that Helium is there.
What we don't know is if the helium is being trapped in commercially viable concentrations.
If this turns out to be the case at Tai (we will need to wait until the appraisal is complete to get an idea of flow rate and reservoir size), it shows that similar trap styles in the basin may also hold commercial quantities that we can access. So the risk that the helium may not be getting stored is removed - and this can be factored in to other drill site projections.
Thanks Seagulls, interesting to hear your take on de-risk, you might be more correct in your assumption but therefore the 52p valuation should be higher due to derisking the basin and adding a value for proving the concept works. Exciting times.
@Scott22, sorry I think you're getting mixed up between 2 companies here. ADV is approaching drilling in Oct which is what this thread was originally about. HE1 every knows we are drilling atm and waiting for results.
Just the one beer Dai? ;)
Are you really implying that people on here are talking about a drill campaign about to start and not the completion/testing of the first drill?
Maybe I've misunderstood, but that seem very pedantic, as we're all very aware what's going on out there.
Thanks SGF and of course the others for adding, plenty to ponder over with a beer so it sinks in..
Ready for Monday
Todays price is a combination of the risked sites,some cash and Tai, so we are not really reaching its derisked value..
So roughly, without checking
21p for the other sites and 6/7p for Tai, giving 28p
I did think we were approaching Tai's derisked price until BP explained it, although looking back he was not the first..
We are not getting closer to the drill. Minchin has had mud on his hands for a month. We are getting closer to the drill results.
The derisked values in the prospectus are based on 4.2% HE. So, if we get 8.4%, the de-risked value will be double. However, until the appraisal is done, the size of the reservoir(s) is unknown, and this will also impact the de-risked Tai value.
What makes up the de-risked value of each drill hole is:
2. Number and size of reservoirs.
3. Ratio of 3HE and 4HE.
4. Selling price of HE, as the prospectus price is low/conservative.
This is my take on the use of the term "de-risk".
When it's used to describe a dill hole (i.e. Tai), the de-risked value is based on a discovery (assuming the reservoir size and HE% are the same as the original prospectus). In reality, it will be different.
However, when "de-risk" is used to describe the "project", this means that they now have proof of concept in the Rukwa basin. It DOES NOT (IMO) mean that the next 2-3 drills will be a success. It does, however, increase the CoS on each drill.
Therefore, the implied fair value of success at Tai will be 31p + (25p - 4p).
31p is the de-risked Tai value.
25p is the risked value for all 4 drill sites.
4p is the risked Tai value (can't include it twice).
(I may be out on the figures, but this is the principle).
However, on top of that you have the "de-risk" of the basin to factor in, so the CoS of the next holes should be higher, so should be reflected in the SP.
Also, the euphoria of the 'proof of concept' will likely lift the SP higher.
Again, just my guess and others could have equally valid views which would be different.
If the current prospect derisked is 133p, is this based on 2% assumption? If the percentage is higher, presumably we might expect a similar increase in the value applicable to the derisked prospect.
Tail is 33p share unrisked so we are almost at that now. However, if the percentage of HE is greater then it maybe atb6% Tai1 is worth 99p and the derisked wider value is 350p.
In that event I would expect the price to settle somewhere between the two values one can extrapolate from the percentage/derisked Tai value. Given 10% at surface and 2% in the mud then finding an area that has a trap and seal should have a strong concentration....
I have a value in mind of 52p and anything before this is cheap to buy based on H&P numbers if Tai is successful. However what I don't understand is this 'Tai de-risks the entire basin' as DM has said this several times.
Does that mean the H&P value of £1.33 is achievable just on Tai or not? I am awaiting further clarification on this. Either way I still think HE1 is a £1bn company as a minimum, fair value of circa £2bn IMHO.
I do agree price will spike past 52p easily on successful outcome before coming back down to circa 50p ish. DM did say we SP should be £1 end of all 3 drills so I am hoping by end of this year we can exceed £1 SP.
My opinion (and that's all it is and is as valid as yours) is that when we get the RNS which confirms discovery, this will de-risk the entire basin (that doesn't de-risk the other drill sites though of course). however, it will increase the chances at each subsequent drill.
Therefore, (within reason), the price you pay even up to 50/60p will not be a risk. There is a risk that the price could spike quickly beyond that, then it may be worth holding as some people may choose to take their early profits. You're very aware of the maths involved in this in terms of HE%, so that will be factor as to what you feel is comfortable.
The advantage that we should have is that we will be able to buy before the rush of new investors due to publicity. The MMs will hike the price I'm sure, and there may be limited volume to buy, but that's the risk we're taking. I daren't invest any more before we know as I have enough exposure already.
Be interesting to get @DeepBlueDiver/@SpaceTomato's views on this too.
@SGF, if we get a RNS monday you obviously intend adding, what buy in price upper limit were you thinking of setting yourself, and do you imagine a short sharp rise or may be over a few days?
Just for ideas since I dont have the experience, but you dont have to answer as its being a little cheeky
I'm also looking to increase my holding in ADV too (sorry guys for the X Ramp, but a little tolerance eh lol). Been offloading some other shares at the moment, as I want some funds for Mon in case we get the RNS here, and I also want to buy on the dip in ADV.
I managed to get in at avg of 2.2767 for my main holding, but can see it getting substantially higher before the drill in Oct and also, with the other planned projects they intimated.
@Odysseus07, Sorry was mentioning another
I am not sure I see a low for He1, not below 25/6p before RNS, unless there is a delay..
Or the MM decides to create some liquidity
But after seeing posters link hashtags and certain words, and the price move accordingly I have seen an angle that with a bit of team work might get 21p..lol