Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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45% was worth over £100m so 100% in theory could be worth hundreds of millions in the future.
The potential oil and gas reserves here are well into the £billions
Oilex and their 45% cambay share have been valued at over £100m before.
If they buy out gspc and get back to work in the field then a 10-20 bagger here short term is very possible.
If it's a success, then you could see way more upside here than any other share I can think of on Aim. Way more than 20x.
To say this is a bombed out stock is a huge understatement.
So many people will not invest and funds will not be allowed to invest because of the ongoing dispute with gspc.
Now we have a market cap that has dwindled to £5m which is beyond silly but good imo for people who are prepared to wait until the markets put a more reasonable value on this.
Risk:reward is obscene at this price.
The absolute negativity and despair over the past few weeks on this forum just makes me think we must be close to the bottom.
But agreed pretty much to what you said gordon. I guess i interpreted the court ruling as a win to oilex because it stipulated that “GSPC has to continuously pay for the cambay expenditure until arb is solved or commercial settlement”
On the face of it to us it may seem like gspc is in default. However, it can't possibly be that clear cut, otherwise the court would have just awarded Cambay to Oilex. Instead of which they said go to arb and sort it out yourselves. The very fact that both parties didn't want to do this suggests that there must be a big grey area as to the legal position. How anybody can suggest the court sided with Oilex is beyond me. I think probably the best we can hope for is to get some or most of the cash from gspc, do a farm out and get the drills turning. For crying out loud, do something before its too late!
I dont get why theyd have to pay anything for it. Gspc are in default....
The current market cap is a reflection of the total lack of any traction over the last four years and has little to do with the real worth of the asset. Much as I'd like to see oilex acquire the 55% of Cambay for a song, imho it's not going to happen.
Kabaa. Fair point, you sort of got me there. Lol. However, I was really only giving the 8 million as an extreme example. I doubt if they could raise anything like that via a raising. Doubt they could get 0.3 and hopefully they wouldn't dilute by half. Also, it's others on here who have said its worth hundreds of millions. Truth is nobody knows until they start producing.
Gordon - are you suggesting gspc would want more than £8m to sell their 55% of cambay as an out of court settlement?
But our market cap of only £5m is too high for our half?
So oilex shares are screamingly cheap here?
Is that a mildly positive post by you or just an accident?
Smiley. Thanks for your thoughts. Still not convinced that enough could be raised via a placing to buy out gspc, even at a premium. Even if they doubled the number of shares and placed at say an optimistic 0.3 that would give 7 to 8 million. Not only would that be a 50% dilution I doubt it would be nearly enough to satisfy gspc.
Hi gordon. Good day to you. What i believe gspc wants is cold hard cash ( hopefully some of cambay leftover) in the event that they divest this asset. The BOD have been doing alot of equity financing instead of debt financing for obvious reasons ( a small capex company that does not want to run into a likelihood of insolvency). But i believe that in the event gspc and oilex settles for cambay to be fully divested to oilex ( for oilex to sort out the farm out deal), the bod would be able to place an equity financing at a premium price simply bc of the huge underlying asset they are about to purchase. The CFO ( who is CEO of BLOE) definitely knows the rule of trade off theory. Dont take on more debt than ur firm can take on lest it goes into financial distress. And the reason why @ a premium is simply bc oilex can now include this huge asset in their estimation of placing price given 100% PI of cambay ( instead of keeping it labelled as contingent resources)
Well there you go, little old me that has 0 experience in the oil industry is talking some sense ;)
"Schlumberger and Baker Hughes were appointed to complete the core analysis and to report on the reasons for under-performance of past wells. The purpose of their work was to identify any substantial impediments to achieving potential commercial flow rates and to advise on the optimal well and stimulation design required to take the project forward. Notably the results from their analysis has confirmed the potential for substantially increased flow rates with the application of the appropriate stimulation technology suite."
http://www.lse.co.uk/share-regulatory-news.asp?shareprice=OEX&ArticleCode=tc0icbj0&ArticleHeadline=Financial_Report_for_Year_Ended_30_June_2018
All the best (yep :)
I believe they have already been advised by Baker Hughes on better techniques.
Someone like Schlumberger or Baker Hughes......... or both :)
All the best (just waiting on the GSPC dispute outcome:)
With Oilex being small compared to let's say...Exxon. Are their drilling techniques the same? I mean with assistance from a heavy weight that probably has more if not better technology, could increase the chances of a better drill result?
Exactly guod. It's one thing knowing the resources are there, the trick is making it commercially viable and keeping it going long enough to hopefully expand the operation.
Yuri, don't want to seem nitpicking but I don't think Oilex can just drill a hole without the consent of gspc. If they could maybe we would have made more progress by now. Anyway at the moment they don't have enough cash to go it alone. A possibility, implied in your penultimate paragraph is a farm out, where Oilex give up a share to a new partner. Not sure if they need the consent of gspc for that.
The reality is Oilex can show figures on proven resource to the bank, the issue is being able to show they can be recovered in commercial quantities, which to date they have been unable to do. The prospects of success for further horizontal wells after what was learned from 76 and 77h are looking very positive, but it still may be a long road to get there Good Luck All
Over time we buy back the banks share. It's just a back up so the bank feels warm and protected.
It shows how different I do business. If I was the bank, I'd ask oilex to prove how much oil and gas they have in the ground. Oilex then has to drill now. (Exciting for share holders) If they drill a hole that proves they have enough to pay back the debts then I'd shake hands and let them have the loan. A bank can't just say "computer says no". Try to negotiate? Sometimes desperate times results into desperate measures. If the only way to put this to bed is to get a loan. Either let the bank gain a share as a golden hand shake. (More attractive deal). OR Seek a loan off another oil firm that in turn gain a share of the profits but may also provide assistance with technology and capital. Id rather have less profit but make progress than waking up each morning with nothing to show.
So basically we have got 2 companies, each paying their staff a salary to just sit on the wall looking at each other going, "No you!" "Nope you!" "No you! "Nope you!" Until both collapse with no money left. Surely that has to be the most stupidest thing to ever happen. Do you think GSPC are trying to do that? And when oilex folds they get 100% of cambay which will be aid funded from the state? Sounds horrificly corrupt and dirty. Just remember the aussies aren't push overs. To prevent corruption overseas authorities and law enforcers might have to aid the situation. I'd love to sit in that board room to know what the hell is going on. Even if I'm gagged and only allowed to listen.
Yuri, given the possible value of Cambay as discussed, it's very hard to imagine any bank lending enough for a buy out. I know many on here think Cambay is a certainty but I doubt a bank would take that sort of risk. Also, given the sums already invested gspc are never going to agree on splitting Cambay. Gla.
Theirs*
With regards to raising funds and buying out GSPC, I'm sure it could be done with a good bank loan? Debt paid back to the bank through oil and gas sales? Guod7 - In a previous post I have said we need to break away from them. Maybe there's a way we can divide our patch up in to two? However, we are still owed 3 mil. We either gain a bit more drilling area or have to go through courts for it. Courts will delay us more cracking on with drilling probably. Overall which I just said, we could just draw a line through the dirt, and say that's there's, this bits ours and get on with our own drilling and just leave GSPC there to watch us.
Think when we speculate on the value of Cambay, amongst other considerations we have to factor in that the Joint Venture have todate spent approx 100million on data acquisition and drilling (both vertical and horizontal) As for GSPC's future, as mentioned before they are primarily owned by the State of Gujarat and doubt even with all the talk that the National/State governments would allow them to go to the wall. Undoubtedly with the acrimony that now exists between the two parties a clean break may be the best option, how this would be achieved I've no idea.