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Will you just shut up scott with your text book length responses. Pathetic person you are. You are probably the most disliked person on the board.
Scot, still sounding desperate, and still banding on about your poor relation barrel price. Shame on you for coming onto another company board to try and get holders to 'swap' their investment to a company that its self is struggling to find partners and investment. I didn't listen to others who said you were a deramper but today you have shown your true colours. It's bad enough that you tell 88E holders that they should be selling but to wrap it up as useful helpful advice with the only reason being to save them money, is unbelievable. Shame on you. You say you don't lie but I doubt it very much, you are definitely in this for financial gain. Nobody believes you who is a holder here and unfortunately I include myself in that category.
Scot 🥱🥱🥱🤡🤡🤡
15:41
Victorcalin - can't come up with any intellectually-based content so let's abuse another poster. Yep, that'll do it.
How about forgetting the abuse and come up with a cogent solution for the bind 88E finds itself in?
15:38
Fact check for Killerpidgeon? False. I have no short position in 88E.
Now then, Killerpidgeon, do you think Burgundy will pay US$3.625m to 88E by the end of June'24? Do you agree that, on the current formal company guidance, the company will be insolvent by the end of June'24?
If you answer yes to the questions above, or even if you are concerned the above may be correct....why on earth would you buy 88E shares today? It is still overvalued v's its direct peer and it's running out of money. A steeply discounted fundraise is, IMHO, going to be required in short order.
If you don't think 88E are in immediate trouble, what's your solution? I'm all ears.
Mr Scot, you probably forgot to take your pills mate, please keep your analysis for another time.
Today 88e is bouncing back...
Scot, You forgot to say: i urge the Bod to raise funds or my short will cost me a lot of money!
[Part 3, continued from Part 2 below]
*If* my calculations above are anywhere close to being correct, then I contend it is the responsibility of the BoD of 88E to seek fresh equity capital immediately.
I calculate 88E is insolvent or is about to become insolvent. The only way IMO to stave off insolvency in the very short term is to raise fresh equity capital. If such a cash raise is being organised, it will not be attempted at 0.21p. It will have to be priced at a sufficient discount to attract new capital from investors who will see that the Hickory-1 flow test data doesn't look too clever. There's also the impending vote on consolidation to consider.
I assess that 88E has drilled its final well in Alaska as operator. 88E needs to recapitalise itself and Namibia will become the primary narrative on which the 88E investment case will be reconstructed (more on that later). That's if the company survives this current cash crunch.
Net, net, net? A fundraise is, IMHO, heading your way right now. It will be done at a steep discount IMHO. 88E’s Alaskan assets will be diluted massively.
If you genuinely like these Alaskan assets, the market is offering you a mathematically bizarre opportunity to swap your exposure to the same asset by selling a lower quality 88E barrel for 16.4p and buying a higher quality PANR barrel in the same formation for 14.1p. For those fundamental investors who remain here, this strategy offers the best mathematical option to see your knowledge of the Alaskan assets rewarded.
I would not have posted this content in such a blunt fashion had it not been for the guys spreading made up nonsense and straight out lies on other forums. I don't lie for my own financial benefit. I find it contemptible to do so. I haven't done it on this forum, you all know that. Make of this what you will.
There is no mathematical rationale for buying 88E shares at this price. Unless you believe in the Fairy Godmother, 88E will be conducting a heavily discounted fund raise in the next short while. Even if you are wedded to 88E until the bitter end, why would you not sell some/all your stock today and buy back into 88E once they raise some cash? /end
[Part 2, continued from Part 1 below]
Cash at hand.
More sophistry from 88E. Cash at hand on 31/3/24 was US$11.3m (AU$17.5m). The outstanding amount due to be paid for the Hickory-1 operations is US$11.6m (US$2.9m already paid). I fully accept that, on the face of it, Burgundy’s share of the total costs for this season is US$3.625m. But here’s some information that is really, really, really important for forum members to understand.
1) As the operator, 88E carries the legal responsibility to pay the Hickory-1 bills in full. If they stiff the contractors in Alaska, it’s a small population and good luck finding anyone to work for 88E in Alaska ever again.
2) If Burgundy doesn’t like the look of the data from the flow tests (and why would they?) then they can simply walk away from the project and their working interest reverts back to 88E. NB NB NB In walking away, Burgundy would not be paying 88E US$3.625m and 88E ***would have to pay the full gross costs of the Hickory-1 bills***.
My *opinion* is that there’s not a chance in hell Burgundy will pay 88E US$3.625m by the end of June ‘24, when 88E inform us they expect to settle the outstanding bills. I guess there is a small possibility Burgundy will pay some or all of the US$3.625m once the comprehensive analysis of the flow test data has been completed. However, examining Burgundy’s historical conduct, they only paid the final tranche of the outstanding balance of their share of the cost of *drilling* Hickory-1 in February ’24! Even in the unlikely scenario where Burgundy does end up paying 88E its share of the 2024 costs in H2’24 or H1’25, in the meantime 88E’s short term cashflow suggests the company looks to be in significant trouble.
Put even more bluntly, if Burgundy doesn’t pay 88E some cash in the next ten weeks and 88E pays all its Hickory-1 contractors on time, then 88E will have no cash left until it receives a Q2 dividend from Longhorn. There won’t be any cash to pay salaries and other essential items. The business will, in effect, be insolvent.
I will examine 88E’s outgoing commitments in a future post.
[End of Part 2, see above for Part 3]
These posts contain important information and analysis, and should be taken very seriously indeed.
The arrival of the Q1 Report overnight was excellent timing for anyone interested in the *facts* of the 88E investment case. Taximan57 was either incapable or unwilling to work out the revenue associated with 88E's share of Longhorn's production so, being the generous guy I am, I thought I'd take a moment to work it out for him.
Guidance from the Q1 Report informs us that Longhorn gross production for Q1 was 328boepd = 328 barrels of oil equivalent per day. We know 88E’s Working Interest (W.I.) in Longhorn is 64%, so that equates to 210boepd attributable to 88E. Ok, so far?
We were also informed the ratio of oil to gas was 62% oil, 38% gas (down from 70% oil when 88E initially acquired its interest in Longhorn in Feb’22…hmmm…..). Using POO of US$85 and gas price of $US3.00 per MMBtu, that equates to revenue to 88E of US$12,504 per day from 88E’s 64% W.I. => US$1,140,990 for the quarter. Once again, ok so far?
Out of that production revenue attributable to 88E, we must deduct: 88E’s share of opex; 88E’s share of Texas royalties payable; 88E’s share of local taxes; 88E’s fee to the operator for running the asset. We know 88E received US$451k (AU$700k) from Longhorn for the quarter. Quite a few deductions from the headline revenue figure, eh?
If Longhorn was performing as originally guided in Feb ’22 (c.600boepd gross production, 70% oil), 88E should have been paid a Q1’24 dividend of c.US$1m. Instead, 88E has invested c.$US15m in Longhorn which is 50% more than originally budgeted, with a further potential investment of US$3m to come in H2’24. At time of writing, and very roughly, 88E management has gone 50% over budget on Longhorn and despite that is receiving 50% less dividend income. Is anyone in this forum prepared to voice their concern at this point?
Let me be crystal clear. The income from Texas might just about cover G&A and maybe some annual lease fees. If you read the above and still hope Longhorn will make a dent in the cost of 88E’s planned exploration activities then you cannot do maths.
[Part 1, see above for Part 2]