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Hi Persimmon - Uk day ahead gas is currently trading at 172p/therm, this time last year it was 30p/therm. Krull was correct in saying that it is up 450% (in fact a little more) and your correction was wrong, either by design or mistake. Either way, an apology is probably in order?
Flatearther - I didn't try to imply that you didn’t know what blackmail is, there was no “imply” about it. I stated that you don’t know what blackmail is. And you don’t.
Rathlin will pay into a community fund if they get planning permission - you do something that makes us money, we will pay you some of that money. It’s an incentive to approve, a straightforward transaction. You call this “pretty much the defection of blackmail”. I will assume you mean definition. This is the actual definition of blackmail
“the action, treated as a criminal offence, of demanding payment or another benefit from someone in return for not revealing compromising or damaging information about them”
Rathlin are not demanding payment or another benefit from the council, it is Rathlin that is offering pay the council! There is no compromising information involved. You could not be more wrong.
UJO interims today say the 65m hydrocarbon column at WN is 45m oil and 20m gas. Maybe I’m wrong, but I can’t recall RBD, Rathlin or UJO confirming the presence of oil at WN so specifically before, or the size of the liquids portion of the column?
Regardless, it still has to flow, but this is very interesting. The next two weeks couldn’t be more important for RBD as data comes from the A2 well - if we get tangible evidence of flow (backing up the company’s analysis of what wrong at B1-Z) then the original upside case of 3p+ value for WN net to RBD is back in play.
Don’t want to **** on anyone’s chips, but Uk day ahead gas is at 140p therm and we’re not getting any gas from Victory before 2024 at the earliest. As for WN-A I reckon we’re at least a week too early for news there, but let’s hope I’m wrong (as long as it’s good news)
We’ve had these big rallies after big falls before, most recently 27th July and week of 16th August. Today could just be speculative buying on the attractive potential upside/downside at these levels (I think 10/1 - albeit high uncertainty) but obviously we’re all hoping that someone has heard something good from A2.
On that note, there’s a some chat on Twitter about a flare at A2, but it feels too early to me - they need to get the equipment across from B1-Z, then my understanding is they need to kill the previous well and reperf, as in the UK you can’t just go back in as you could do in the US. Maybe one of the more knowledgable posters can confirm this. Anyway, would mean genuine news more likely week of 20th onwards rather than now, so today’s move therefore speculative buying rather than something concrete. I’ll take anything that gets the share price up, but would obviously prefer the latter…
I somewhat agree - credibility is clearly very much in question with shares at these levels, they’ve effectively bet the farm on West Newton and it’s not delivered…. yet. But it is also not over yet, and until it is then mgmt credibility is not shot. If (big if) what they say is correct and the B1-Z test failed because of the way they drilled it and not because of the qualities of the field, AND they can demonstrate that via the A2, then we’re Ok. Indeed it will back up a lot of what they’ve done to date, including the raises.
My personal view is that upside/downside risk from here is attractive (potentially 10/1), albeit the likelihood of the downside case is higher than you’d want. Arguments that CEOs are just there to take a salary are nonsense when you look at their personal capital commitment. I’m not throwing in the towel before data from A2, but that really is crunch time.
This has all been extremely painful, but I tend to agree. It’s not hard using sensible multiples and recovery rates to get a value of West Newton, net to RBD, of 3p or more. Clearly though, as has always been the case, this requires it to flow. In that context the B1-Z test was a failure, but just because it didn’t flow then doesn’t mean it can’t flow at all - the injection data was even quite hopeful on that front, even if the test itself failed. They now return to the A2 well, which could provide confirmation of oil before the end of Sept, followed by a test for the as-yet untested gas zone. Little has gone to plan so far, but the upside/downside at current levels has to be 10/1 at least.
I really, really hope so deemule - I looked at the data from the B1-Z well in Dec and it looked great, especially the porosity, but the oil & gas industry is littered with assets which looked good on paper but weren’t commercial in practice. We don’t know if WN is flowing yet or whether it ever will, if we did the shares wouldn’t be anywhere near here, and if after all this WN proves to be a dud the. the market will not price Victory as nailed on, it probably won’t price it at all. So yes, I’m worried - I hoped by now that we’d have footage of oil trucks driving out of the site and scattering Swampies into the ditches as they go, but we don’t. Fingers crossed for something from the AGM tomorrow, let’s hope share price today means someone knows something.
I own a fair bit of RBD, so I have no interest at all in talking the shares down. The likes of BMD and his cronies clearly play games with the share price and only have their own interests at heart. But let’s also be honest, it all hinges on WN and things are clearly not going to original plan - we all hope that the delays are due to the difficulties of working with condensate, or the need to test multiple zones etc but the fact remains we were meant to have flow data after six weeks and all we’ve had is a holding statement, albeit one with some hints (but only hints) of good news. It’s squeaky bum time
For what it’s worth, Stifel (RBD broker) say on their research note from yday that they think there will be limited readacross from the B1-Z flow test to potential production rates from a deviated production well, which could see flow rates >10x higher.
Put in the previous base/upside case for oil and gas in place, take a 25% oil and 65% gas recovery and use $9/bbl and $6/boe multiples and you get to about 2.1p base case and 3.7p upside case for RBD’s stake in WN.
3-4p would definitely do me, and I’m not saying 6p is impossible - though personally I think it’s pretty top end. Just pointing out that BMD categorically does not know WN is worth 6p, at this stage he’s just guessing/hoping, like the rest of us.
I’d like to believe 6p, but to get there you’d need to boost the previous upside case on oil and gas by almost 25%, assume a 30% oil recovery and 70% gas, and be pretty generous on the $/boe assumptions too. I don’t doubt that BMD gets information on things like placements when they’re not yet meant to be public, but at present no-one knows how much oil and gas is in WN or what recovery rates can be achieved, therefore his 6p is a guess at best.
I’m sorry, but £40m for UJO’s stake without a flow test is just nonsense - after a successful flow test then more is quite possible, but not before.
Equipment should start to arrive for the EWT next week, results near the end of the month, if successful best guess RBD sell either all of their stake or part of it, but either way will then have plenty of cash and no need for a placing. If unsuccessful then we’re all screwed.
Previous placings have indeed been dilutive, but if WN proves to be what we hope it is then those placings were exactly the right thing to do, especially given the Humber deal. We will know soon.
Thanks Albino for some much-needed sanity to counter Persimmon’s drivel. According to Bloomberg the Oza family have over 250m shares in RBD, which is about £1.5m at the current share price. But of course Sachin will be more interested in doing nothing and pulling a salary than monetising WN. Of course. Only bit of Persimmon’s post I agree with is that management probably don’t care too much about PIs, and frankly they shouldn’t - they should care about their institutional holders who bought in at the last raise (and one before), and look to get in more, by getting maximum value for WN. Yes, they have overpromised on timing, but they’ve had to adapt their plan several times, they’re a small company, dealing with Government agencies is a nightmare at the best of times, there’s a pandemic on, and Brexit to deal with. It’s understandable.