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GP, thanks for clarifying the position, and you may well have a point about PR. RBD's PR impressed me a year or more ago, but I must admit I have felt they have been quite quiet recently, comparatively speaking. Maybe they think the assets will speak for themselves......I'd like to hear more from them.
UJO have paid 25% of all the WN A-2 costs, and this includes the EWT. This was a 25% payment for their 16.665% interest so it represents a 1.5 for 1.0 "promote" and it was paid to Rathlin for UJO's farm-in. Thereafter, including the B-2 well, they are not promoted, so they will pay only 16.665% going forward. This isn't a guess as I had it from the "horses mouth" at one of UJO's presentations. One further thought on the UJO vs. RBD valuation discussion: Over the last few months UJO have commissioned quite a lot of research from companies who are not their usual brokers. Shard Capital are the latest, but there's also been research by Arden and TMS Reach, whoever they may be. It may well be that this is having some effect on new investors, and I don't think RBD do this. Maybe they should.
Is that a guess isdeer?
It was as they had to buy in as part of the agreement, that’s no longer the case now unless someone can tell me different.
The initial deal was for UJO paying 25% of costs isdeer, but I'm not sure if that was just for the first well or all subsequent works.
Have you adjusted according to % interest, i make it ujo pay less than 17% of the costs for WN.
Thanks GP. I posted earlier:
UJO £5m placing last November -
'The proceeds will be deployed into what Union Jack believes are highly accretive projects including the drilling and testing of two further appraisal wells and the acquisition and reprocessing of new seismic data at the Company's flagship asset at West Newton. Funds will also be used to drill an anticipated side-track well at Biscathorpe and to provide additional working capital.'
To me it seems relevant to post on here as it proves the RBD under-valuation. UJO may well be properly valued, unless Chrisoil is getting involved again of course.
Rubey. That's certainly the case. There's £500k for Humber's 12.5% Wressle interest and £115k for 3% of Montrose's Biscathorpe interest, so there's £625kat least. It will be quite helpful to see how much cash is left in everyone's 30 June interims. I've assumed that only the B-1 well will be drilled in 2020, but B-2 would add another £1.25 MM approx. for UJO, and there's probably a WN seismic programme to factor in. Maybe we should be posting all this on UJO's BB!
They've been doing a lot of buying since the placing GP.
Can you see the 3 precast concrete rings on the twitter footage.
A drilling cellar is constructed using these pre-cast concrete rings.
C.
Some good WN drone site pictures on Twitter.
Rathlin are certainly getting on with the job.
Have those MMs seen the footage?
C.
Hi BlachHopper. Many thanks for your comments. However, I don't think I've ever said "it should be .8p now"- although I may have implied it. I'd sincerely like our SP to be much better than that, but I don't think I've ever indicated a price target for RBD. All the best, GP
Rubey, I'm pretty sure that nothing like all of UJO's £5m cash will be required to cover their share of West Newton costs. Some of it is definitely earmarked for their Wressle development and the ongoing Biscathorpe costs. This is only my recollection, but I have read somewhere that the A-2 EWT has mostly been paid for in advance by UJO. I assume the WN-B2 well will cost about £7.5 million gross to drill, test and complete, so it will only come to about £1.25 million net for UJO's 16.665% share. Plus, of course, there are all their other ongoing licence costs and corporate overheads. In summary, my sums indicate that they will be OK for all their current assets in 2020.
Thanks BH.
I think Rubey means that any cash reserves RBD has are just that, as funds from the £24 million raise have already been passed to Rathlin for the 2020 work program. 18th December RNS:
The programme (at WN-A) will include pulling the existing completion assembly from the well, running a new tubing and pumping bottom hole assembly and the installation of a pumping wellhead. These operations will be followed by the running in of the pump and well rods and the installation of a surface pumping unit. The well will then be pumped to recover load fluid, directing all recovery through the test unit and incinerator. The well will be monitored for inflow and, following the EWT, will be shut in and suspended.
The estimated cost of this additional work is well within the original well test budget.
Furthermore, statutory planning permissions are in place to drill two additional wells, West Newton B-1 and B-2, the locations of which are considered to be optimal to test the Kirkham Abbey formation and test the potential of the prognosed Cadeby formation, a further, highly important and potentially high value target.
Rathlin is fully funded for the 2020 work programme.
So are ADX for Parta IMIC-1 and 2.
Subsequently RBD made the Humber '£1.4million plus 350,000,000 shares for their 16.67% of WN' deal. We await formal confirmation.
Any way you cut it there is a big disconnect between the UJO SP and RBD SP based on percentages of WN owned.
Therefore, there is only one conclusion. Yes. The SP is being held down for a 'technical' reason to allow someone to benefit from a low SP for a few more days/weeks. As B well spud approaches it is going to look more and more suspicious.
Hence the coiled spring analogy.
Basically, you were right GP when you said it should be .8p now. Still below .9p placing but closer. This close to spud and EWT makes .6p look very silly.
I think what you will see in the next few day is some very big buying. Approx 6 weeks ago this charged from .42 to .65 in the space of a day. This time it will be .6 to .8 ish, again in a day or two.
Fun and games.
If that's addressed to me isdeer, this is pretty much my take on it fwiw:
UJO £5m placing last November -
'The proceeds will be deployed into what Union Jack believes are highly accretive projects including the drilling and testing of two further appraisal wells and the acquisition and reprocessing of new seismic data at the Company's flagship asset at West Newton. Funds will also be used to drill an anticipated side-track well at Biscathorpe and to provide additional working capital.'
RBD placing for £24m last October -
'make a cash investment of £16 million in Rathlin'
how did you come to that conclusion.?
Am I right in thinking UJO's entire £5m is required to cover West Newton costs, whereas RBD's cash is currently unallocated and all this year's West Newton costs are already paid, GP?
The difference this morning up to this point: UJO = 110 trades and 20 BB posts, RBD = 19 trades and 10 BB posts. The availability of trading the shares is making a difference in my opinion.
Thanks Rubey. RBD had just under £7 million cash at year end, and I think UJO had about £5 million. Obviously a fair bit of that must have been spent by both companies since then but, if you take the cash off the market cap you will get what used to be called their enterprise value. For RBD this is (or was) £40 - £7 or about £33 million and for UJO it is £35 - £5 or about £30 million. That's even closer, so it doesn't help us all that much.
Until the first cash offer comes in for a project ;-)
I'm surprised this situation has not been sorted out by now. RBD is loosing out on liquidity which would also help close the share price spread. It's mostly cheaper execution only brokers that will not trade in RBD shares
The fact that some brokers wont deal in RBD Shares will most certainty have a detrimental effect on the share price.
Plus, when you consider free cash, market caps are level!
Could someone please tell me why our market value and SP are completely out of synch with Union Jack's. The latter are up another 7% today and their market cap is now £35 million compared with our £40 million. So what is it that they are doing and we are not? Perhaps it's only that UJO has a large following of what might best be called "day traders", whereas we - I hope - have mainly long term holders. Any ideas would be appreciated by me. Thanks.