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@HeidHoncho With all due respect, where in what was a specific (granted very long) answer to a post published here, did I say I was not concerned "when the drill failed?"
What we do here is interpret the words we read to the best of our ability, but time and again contributors demonstrate that they do not read thoroughly, what is in front of them. I will readily admit, I can be guilty of this also. The problem with these BBs is the last post is often taken in splendid isolation and not back checked against the many other posts that individual may have presented. That's life unfortunately.
I cannot keep regurgitating the same lines over and over, simply because individuals do not have the time or inclination to search it out. I mean no offence by that, I am just stating fact.
I have never said that Serenity would be a rip roaring success. Nor have I said there is not risk associated with this next drill or indeed the last Liberator drill.
What I have attempted to do these last few weeks, sometimes successfully, sometimes clearly not, is to communicate how I see I3E as a company and an investment, in full.
The Serenity well forms part of that but it isn't in my view the company maker or breaker that I read about here and on social media. That is my opinion only and I have been very clear about that.
I truly don't mind who believes me or indeed who invests or sells and moves on. I share my views/theories on these BBs and I like nothing more than to be tested on them, because it makes me work harder and double check more possibilities, than I can think of on my own.
In the last few weeks, I have heard just about every theory going on I3E. I have researched just about every single one that I have come across, however bizarre, and either discounted it or taken it on board.
Right now I do not see what the general market is seeing or indeed the current SP is indicating. I may end up being wrong but what I won't do is accept a general opinion what the facts do not support, just because it is the general consensus.
I was deeply concerned when the pilot well failed. But what I did was get reading and checking, and not sit around to be bombarded by negative view points, which mainly came from sources that clearly hadn't read a damn thing about I3E.
The pilot well failed but when placed in the context of the greater picture here, in my opinion it has and is still being overplayed.
I am abundantly clear that Serenity carries a larger risk than the pilot well and I am very much aware that WH Ireland carry 56% COS. However, I trust this management team because what I have read, supports that position, and they very much like both the Serenity and Liberator assets, even after said failed drill.
Somewhat confused by the details you placed in your post, and your apparent high expectations of success on Serenity.
You mentioned that the company stated an 80% CoS for the pilot hole, but are not concerned when the drill failed as even with an 80% CoS there are no guarantees.
However, you are apparently more confident that Serenity will be a rip roaring success, yet the BoD have only given a 72% CoS for Serenity (arguably lower still, as their broker and nomad only have it down as a 56% CoS).
Surely it is logical with a lower CoS on Serenity than on the pilot hole, and given that they already had a failed drill on the pilot hole that had a greater CoS, that the lower CoS on Serenity should make you less confident of success on Serenity, not more confident.
After all, the above is the logical conclusion to be made from the details you provided, isn’t it ?
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An 80% COS drill can miss and I3E never told the market that it would not. They planned against the percentage chances, as did a number of company stakeholders, who all independently audited the data that I3E employed, and based their financial commitments on it. So if I3E are to be criticised then so are all of those experts.
From the interims ;
"This was an unexpected result that was not only disappointing for i3's technical team, a surprise to the myriad of independent technical reviewers, reserves auditors, and third-party consultants who have conducted due diligence on behalf of the Company's stakeholders."
"5) Permits not ready for the current drill - rig sat idle for a significant time burning a lot of much needed cash plus pushing the drilling program further into potentially bad weather. This seems like a massive dropped ball especially since they claimed to have foreseen the possibility of a duster. No explanation as to why this was the case."
We are back once more to those core items. In hindsight I would have liked to have seen I3E management plan for this eventuality. They did not and that was an error. However, they managed the situation well, both through their contingencies but also in the way the Serenity drill was quickly executed.
The market was informed of the change of plan on 20th Sept and the rig being "down-manned to minimise standby costs."
The Serenity programme then began start up on 28th Sept (day 1 of rig mobilisation). So 'just' 8 days were lost at a reduced cost. At that sort of level, I don't see that as being a core item. Nor am I or anyone able to say that in the global scheme of things, that this lost time is even significant, particularly when the total drill programme has yet to be executed.
Would I have liked the company to have avoided it. Yes of course? But that does not make it a key focus and it should be placed in the context of the bigger picture. Nor does any of the points you have raised point to a management team that does not have everything under control.
They have had an unexpected well result and they are managing their way through that in a very dignified manner.
I posted yesterday the wording employed by the company in their interim report.
Non of the above items or indeed past performances, give me reason to doubt those words or the people behind them, and those words are presenting a far stronger investment case than the vast majority of the market is understanding or believing right now.
So yes I am very positive about I3E prospects because I have very good reason to be.
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You have focused in on the JV, the share raise, and briefly on the junior facility. In my view, the first 2 items are sidelined by the fact that the company was able to achieve a £22m junior facility, and the fact that the 3 well drilling campaign has been fully financed, and financed well, and the company has retained 100% of both Liberator and Serenity.
If successful, then on a fully diluted basis, I3E will be debt free and have just circa 150m shares in issue. That is a considerable achievement.
If successful, I3E will fund the vast majority if not all of their CAPEX to first oil and beyond, through debt and cash flows. At that point, oil prices allowing, the growth in the SP of this company will accelerate well beyond any highs that have been seen to date, thus rendering analysis of those previous share prices, pointless.
The most difficult thing for this company to achieve, was that debt. The JV was and is as far as I can see still alive, but it was run against the belief that I3E could/would not fund first oil and expansion on their own. The junior facility countered that belief and really should be being given far more credit than it has to date.
I3E convinced a set of investors to not only give them £22m but to accept a warrant payment system at an average of 48p. That valued an oil junior with no production or revenues, at circa £72m, when fully diluted.
Such a valuation counters strongly this perception that I3E do not have valid or highly prospective assets.
"4) They drilled a duster that was supposed to have a high chance of success. They claimed after the fact that they foresaw missing the channel - they did a poor job of explaining this in advance and seems like they took an unnecessary risk."
The only comment from the company that I can find is that the pilot drill had an 80% COS. 80% does not mean that the company guaranteed a success. That is a market related expectation that is being blamed on I3E management.
As I have already stated on Sunday, this management team does not spend its time holding its shareholders hands. Nor does it attempt to regurgitate its messages. It presents information to a market that it expects can understand it and no more, and those management teams are my favourite because in my view, they are the easiest to analyse because what they say is very factual and can normally be trusted. My view only.
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In response to your post of 13th Oct 6.24pm.
To date I have examined a considerable amount of I3E information, dating back to 2018. To say I have uncovered everything would be a lie but have certainly had a very good go at attempting to uncover any risks or skeletons in the I3E closet.
I am not new to investing and this is my full time job but that's not to say that I don't make mistakes with my investments and miss things. What I try to do is to be as thorough as I possibly can, limit the risk, and attempt to find opportunities that the market is, in my view, missing.
It should go without saying that part of that exercise is to thoroughly examine what the company has achieved.
I don't trade shares or dip in and out of them. I try to find good companies with solid assets, and trustworthy management teams that do not spend too much time, advertising what a great job they are doing, and then back them and stay with them.
I like this company. I like its assets and I like its management team because everything I have read to date, points to them being capable of delivering a very solid return on my investment.
In response to your list.
"1) Last announcement that exceeded expectations was the joint venture which they did not deliver. Many people including myself felt they did a poor job of explaining this to the detriment of the SP.
2) They placed at a disappointing SP which I feel was in part due to the poor handling of news flow.
3) They delivered on the Junior Loan note so good job."
In my view, a key component to choosing and sticking with a company, is not its ability to get everything right but to get the core items right. No company we ever invest in can get all things right all of the time. Very good senior managers can make very big mistakes but still do a very good job, so long as they are able to recover from them and maintain an acceptable trajectory.
It is the end result that really matters and the return that comes with it.
He doesn’t have a free carry Juxtapose, he’s far too highly stressed.
Report all you like.
I’m here to discuss the company but have now been subjected to personal attack. I don’t stand for that nonsense and I never back down in the face of it.
I would like to get back to discussing the company.
I have made a post fir VigBiteNow that Ophidian has now tried to bury by trolling me. That is a disgrace.
The best informed poster on this BB appears to be BBN. I will await his response.
If you had been around for any length of time, Backwoodsman, you would know that Ophidian was swing trading this back in the 40s/50s and posting on that basis: smart and quite helpful and probably the way to a free carry/very low average.
For you to impute otherwise is fundamentally dishonest and so I am going to report that last post of yours.
I’m surprised at quite how large a loss you’re sitting on.
You really shouldn’t have gone in so heavily.
You need to relax a little Ophidian,
I don’t need to caveat every post I make.
Serenity is a prospect - fact.
Prospects are not appraised they are explored - fact.
I never make Ad hominem attacks (you have your capital in the incorrect position).
I only ever defend myself from trolls like yourself who refuse to allow me to voice my opinion.
I insist on free speech and reasoned debate.
Your persistent attacks now me this evening have disrupted this board and buried my response to BigBiteNow.
If he can’t find my early analytic post I will now need to repost it.
"Serenity is a prospect, not a discovery. It’s an exploration well." October 8th 08:31. Not caveated as an opinion - posted as fact.
Whilst looking back for this I had to wade through pages and pages of the same diatribe we suffer here on all the other boards this Troll pollutes. Sadly - he uses exactly the same language, strategies and tactics. Have a look it is quite enlightening. Everywhere he can't make a substantive argument, he swaps to an ad Hominem attack. Really a piece of work and a bit too informed about that well known character Chis Oil to be a comfortable coincidence. Research, read, learn people. This character is simply bad news.
No Ophidian, you have been unable to furnish me with an example of my lying.
That’s because there isn’t one.
What you did do was refer to my concern that the Serenity drill shouldn’t be designated as an appraisal well but should be an exploration well.
That’s just my opinion which I am perfectly entitled to express. It is not a lie.
I have given you a lesson in your own psychology today - go away and reflect on that.
no - you stopped talking when I posted the example of your recent lying that you requested. All went very quiet then. Good job everyone can make their own minds up isn't it. Well - I think I've wasted quite enough time talking to you now so toodle-pip.
I wasn’t talking to you Ophidian.
Yep, he's not got his full position here yet. Another week should do it.
Tony’s point regarding the permits for Serenity is also highly relevant IMHO. It does suggest that management didn’t factor in the possibility of failure and didn’t factor in the potential need to switch the order of the drills.
Ultimately I’m contemplating the possibility that the success the BOD have enjoyed in previous ventures may have brought them to a position where they are not giving the possibility of failure due consideration.
4. Seismic interpretation
As the pilot well failed I question the quality of the seismic data and the BOD’s interpretation of it. The research that I have undertaken indicates interpreting seismic in the Moray Firth area is ‘difficult’. This concerns me and I question if the BOD could be too confident in their understanding?
5. The categorisation if the Serenity still as an appraisal well instead of an exploration well. For me to accept this I must believe that the BOD are correct in their assertion that Serenity is an extension of Tain. They say that they ‘Can’t close Tain’. Serenity is a prospect not a discovery so for me to accept that this is indeed an appraisal well I must accept that the BOD have correctly interpreted seismic. Fir the reasons outlined above that’s difficult. I think it would’ve been more circumspect, to classify the Serenity drill as an exploration drill.
6. Given all of the above evidences the possibility that the BOD are overconfident
can I rely on their assumptions around the commerciality of Liberator and Serenity?
The overview that I have and am grappling with is that the BOD might have misinterpreted seismic, they might have overestimated COS abs they might have overestimated the potential commerciality of the assets.
In short the information that you have analysed might not be accurate.
I would be very interested in your thoughts and am simply presenting a logical argument. I am not trying to discredit your research and analysis. I am questioning the veracity if the info.
BigBiteNow - Good Evening.
Firstly I would say, again, that I am only interested in reasoned and analytical debate. I have no interest in deramping the stock. In the context of institutional selling I don’t see how anything I say could influence the SP anyway.
I am also mindful and respectful of the paper losses many here are sitting on. I understand some investors desire to defend their investments however there is a danger that shouting down anyone with an alternative argument simply obscures the issues and denies logical argument. I realise you don’t do that but others do.
To pick up on a point you made you said, ‘That isn't interpretation of "information" that is "flawed," its simply reading what I have been told and understanding it for what it means.’ I’m not disagreeing with you on this. It’s clear that you have analysed in great detail the information around the company.
To clarify my argument I wonder if you have read and understood the information coming from the company without rigorously interrogating the veracity of that information? Have you derived your information from too narrow a range of sources (i.e. the company itself) and are you too confident in the accuracy of that info?
In short I’m not questioning your ability to understand the information that we have but instead I want to take an overview that considers where that info has come from and the quality of that info.
To substantiate my argument I would make the following points:
1. The COS of 72% for Serenity given by the BOD.
WH Ireland, (broker and Nomad) don’t support this view and instead give a figure of 56%. So even the payroll doesn’t support the company line. That concerns me and I would be interested in your opinion on the issue? This is a real problem for me because either the BOD are wrong or the Broker/Nomad is wrong. The real COS figure matters less to me than understanding the disagreement between the BOD and broker/nomad. Who is wrong? My view is that I have to assume the BOD are wrong on this. So the next question is because theirs is the higher figure. Why are they wrong? Either overconfidence, misinterpretation or dishonesty I would suggest. I would prefer to believe the first two of those options rather than the third which I discount.
2. Overestimation of COS in the Moray Firth area.
The research I have undertaken indicates this to be a known problem. It has been pointed out that the document I have studied is some five or so years old, so enough time has elapsed for this to have improved however the historical legacy remains.
3. The failed pilot well COS
We have previously established that the 90% COS given for this well was nothing more than a BB myth. We think we understand that it was derived from a WH Ireland figure of 84% given for a planned well that didn’t progress. There does not seem to have been a COS figure for this well at all. Why? Did the BOD just assume it was a given that it would come in?
Your posts are well reasoned and informative but could also be considered overly optimistic. You focus a lot on what they have said but have you considered what they have done. I have a significant holding which I hope is still
Significant after the results but consider the following:
1) Last announcement that exceeded expectations was the joint venture which they did not deliver. Many people including myself felt they did a poor job of explaining this to the detriment of the SP.
2) They placed at a disappointing SP which I feel was in part due to the poor handling of news flow.
3) They delivered on the Junior Loan note so good job.
4) They drilled a duster that was supposed to have a high chance of success. They claimed after the fact that they foresaw missing the channel - they did a poor job of explaining this in advance and seems like they took an unnecessary risk.
5) Permits not ready for the current drill - rig sat idle for a significant time burning a lot of much needed cash plus pushing the drilling program further into potentially bad weather. This seems like a massive dropped ball especially since they claimed to have foreseen the possibility of a duster. No explanation as to why this was the case.
So whilst your of the opinion that management have everything under control - this currently does not seem to be supported by actual events.
This could all change with a good drilling result. - lets see what happens.
The question is can you trust the people in charge to deliver or is it just hot air? Same can be said for AAOG. But got to be in it to win it!
My only saving Grace in this Share is that BNY are still in ? Lombard obviously. And the other Institutions maybe still in at 2.99%. The Board own their own slice which is also good.
Have i3 published any up to date figures ??
Can anyone on here add Opinion on this. It’s Vital we know who’s in at this Stage !!
BBN. Some Merit in what you have just said. Yes. They want to keep 100% Interest. That’s Good and they have a case. But Carson said just before The JV failure at a Conference that they were at Final Stages and then the RNS SEP 18 2018 caused the SP to tumble £1.20 to 40p.
So ... is it better to go Joint Venture or is it better to go 100% ?? The SP tells you Joint Venture is Best does it not ? And given that Carson himself said it was because of the Partners Re structure/ then they could not make the Funds available !! So he was ready to sign.
Now you tell me he prefers to go it alone ???
Nope. Why ? Because now it is all the ability to raise the $100m dollars. And we know what that depends on. Because if the outcome of these 2 Drills is nothing less than Amazing ... Then they might have to Dilute to get the money. Or not even get the money at all. Everyone wants their slice. $100m is a lot for a field 4km x 10km.
This is why SP is 20p and not £1 as before. Because it all has to go Perfect to get to First Oil. Anything goes wrong and people walk away. It’s all about Risk. If it was a good thing / James Caird would be still in along with Milton. This is why it’s 20p. All the Risk lay with anyone who bought 50p to £1.20. The only way their Shareholding Value comes back is if Serenity is a 100% successful Drill. Liberator will not deliver £1 on its own.
Does BBN know more than them ?..
BBN “What if they tell it like it is, with very solid reputations”.
They already failed regard the Joint Venture. Carson said “We are at an advanced stage re Joint Venture”.
Soon after / RNS SEP 18 2018 JV pulled. Sp tanks £1.20 to 40p.
We have since had a failed Drill / so I fail to see that a $100m Senior Lending Facility is anything other than a Dream. It all depends on these 2 Drills. They failed with the first one.
Cheers. Your thoughts ?? Anyone ..
Have a listen to the 25th Feb 2019 interview regarding JV progress, then tell me it’s deadman’s they have failed. Have you considered that the reason it wouldn’t come to fruition is because I3E want to keep 100% of both assets because they can fund them themselves through a ‘robust’phase 1 development?
BBN “A $100m Dollar Lending Facility”.
Scroll back to RNS SEP 18 2018. Bad News re Joint Venture Funding failure. SP tanks £1.20 down to 40p to end DEC 2018. Every Institution traded down. James Caird went 4.99% to below 3% and probably 0% hence the SP Fall to 40p Over 3 months.
At this Point they had not completed First Failed Drill.
First Drill fails to Verify anything re Liberator as they missed the Oil.
Nothing is yet Proven / so you think a $100m lending facility is progressing nicely ???
Nope. I’m happy to be proved wrong but I fail to see how things are evenly balanced when
1 / They’ve failed before re Funding via Joint Venture SEP 18 2018. And
2 / They have still failed to prove we have sufficient Oil / due to missing Upper Captain sands on SEP 10 2019.
Somebody please prove me wrong. It all depends on assessing proof of Oil data. So it hangs on findings of Serenity Drill at the moment. Does it not ???