Member Info for BigBiteNow

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Afternoon everyone,

Having fought the good fight here in defence of the facts and actions of this company these last few months, I now find myself, after a thorough review and think through, feeling rather bearish about the company's shorter term prospects. When I add in the despicable events of Monday and the fact that such an event was allowed to take place, it has driven me to make the unfortunate decision to exit.

It may well be that I will reinvest in the future but before I do I want to better understand, what exactly I3E has in the Liberator phase 1 area and how they can go about extracting the value out of Liberator West and Serenity.

Don't get me wrong the potential in those 2 areas is very significant, but shorter term there could well be significant headwinds, which I am not prepared to be a part of.

I was fully supportive of the actions of the BOD throughout the difficulties generated by the missed pilot well. I was impressed by their deal making skills to keep the drill programme moving forward and indeed to add the possibility of a 4th drill. Skills which may well stand them in good stead these next few months. However, I had thought that they had got their model fully in tune post Serenity success. It now appears they have not and that is a concern.

The 20ft of oil shows is measured depth not TVDSS. The comparison to the discovery is for me not appropriate because that was 24ft at TVDSS. I wish that was not the case but it is. The deviation may be minor, given we are talking a 20ft section but it still needs to be clarified. I have no issue with the porosity and its ability to flow but the big question now is volumes.

Now it may be that they have simply missed the peak once more but then what does that say about their model, and their ability to drill again so soon after this drill? Its a question and a risk that I would like an answer to before investing.

The 4th drill came with a placement at 35p but the shares were not scheduled to be issued prior to 6th December, so post this result. That says to me that they were dependent on a result at A2. Until A2 is fully analysed, I cannot see this drill going ahead. I also cannot see Bybrook committing to a 35p placement when the shares are lower than that. So if they are to commit to the £5m then either the A2 result has got to deliver a positive that gets us there, or the price has to be renegotaited.

In my view, if the A2 result has thrown the model into question once more, then the 4th drill will not proceed, which would be better for I3E's cash balance right now.

That then leaves them having to renegotiate their debt, which I do see them capable of doing but I want to see the results of that prior to investing.

I do feel that there is a very rigid thought process being applied to I3E and their junior debt right now. I appreciate that time along with more details, are required but the combination of the potential of Serenity the its low cost to appraise (S1 stated at $13m), means that there is certainly a bargaining chip on the table.

The same goes for Liberator West, although the model for Liberator does now need to be re-visited and re-confirmed.

That aside, I could see a deal for a free carry element of Serenity being reached, be it that it would need to come with a few softeners perhaps. It all depends on whether outside interest comes in Serenity first, be it that it is early days. Essentially the BOD have until the end of April to achieve funding or an alternative form of funding.

I do have my reservations about Liberator phase 1 but the key to value here is the BODs ability to overcome the debt (they do have good form in deal making of late) and to unlock both Serenity and Liberator, in whatever form it can now be achieved

Its not about the share price, its about those individual amateur investors, who when placed under extreme pressure, by the sort of antics we have seen here these last few months, look to the likes of websites like that which you yourself contribute to, for guidance. It is them I am talking about and it is for that reason, that those that publish articles based on facts, ensure that their facts are thoroughly checked, prior to being employed.

Sorry, I am not trying to single you out as a contributor, it is more what that system of writing creates and who it affects.

@garyn I appreciate the point you are making and I certainly have some concerns over what the future holds for the Liberator phase 1 area.

However, we must be a little careful here. Firstly, in the Oil Capital Conference presentation from 31st Oct, Mahid Shafiq states that the 3 wells (A2, A3 and A4) have relief between 80-90ft.

Upon closer inspection of slide 6, we can see that around half of the A2 peak sits at/close to the 5,200 line, which places it at circa 75/80ft.

I do not wish to split hairs but stating 100ft, goes directly against what the CEO said and what that particular slide backs up. What's also important to appreciate, is that the full width area of the peak at A2 is coming at just 300m, so when we talk peak, it is just that and it is very much localised.

At this stage we do not know if the model is out vertically or not. However, it must be remembered that we have 2 successful wells in the phase 1 area, and the 2nd is just 570m from the A2 site. The 24ft of sands above the OWC at that well is a reality. It is not going to be changed simply because this peak was misunderstood. So on that basis, I am struggling to understand the current conclusion that the whole model could be out vertically. That said I remain open minded and certainly cautious, until further results are available. I would think those with further reach than I, should consider a similar course of action.

@Backwoodsman Agreed, which only adds to the confusion and is why I asked about the 80ft relief vs expected oil thickness.

It is why we require more information prior to making any solid conclusions.

@Alexios Thank you. I am about to down tools for the evening but I have seen those pages and what they demonstrate is expected relief, not expected oil. That is as far as I understand.

It is thinner than I3E hoped for, but nobody here can truly claim that this result is commercial or indeed non commercial.

Nor i fear can many offer sufficient detail to confirm their argument.

I have my reservations over the content of the RNS but I also recognise that this RNS would not have been released, if the shenanigans of today had not taken place. I am unhappy as to the way the whole episode has been allowed to unfold, and some of that displeasure I aim directly at I3E management. However, there is a rat in the camp, and it is they that I really feel most aggrieved with.

That RNS is not worthy of a drop to 19p but nor is it right now worthy of much higher valuations. It is at best a holding RNS, that needs more meat on its bones, and that meat would have been delivered, had the events of today not taken place, and I3E had ad the chance to complete their wirelines and report on what they actually have in their hands.

By removing this opportunity, we now have an army of opportunists, who wish to appear educated in the world of I3E, just a few hours after this news became newsworthy.

In repeat, nobody knows at this stage, if this well location is commercial or not.

All we know is that "circa 20 ft MD of the Captain sand with oil indications has been found above the expected oil water contact." That would indicate that we are talking 20ft of oil indications. The expectation for sand relief above the OWC in this location was 80ft. At this time I cannot locate any evidence in either CPR, presentation or reports, that states that said 80ft was expected to be 100% oil. So we do not know what the average anticipated oil content was, that was would have been used to determine the oil in place (STOIIP), although I expect it was upper end.

I am in agreement that the volumes in place could well be affected, but right now it is too early to determine that, as the wirelines haven't even been started, and they may be closely followed by a vertical seismic profile (VSP).

It should be noted that in the interview post L2 pilot well result, Majid Shafiq talked about the VSP only. He did not mention wirelines and the TD was late the previous day, so that indicates strongly that the wirelines were not carried out for that well.

IF they can establish a 20ft oil column, then it will be similar to the oil discovery and in the CPR, that well is stated as being commercial at 2P recoveries, as a stand alone well, at Brent $57 in the first year of production (production start at 6,300 bopd). This was then anticipated to include a 2nd well in the 2nd year, paid for by the first well, which wold raise production to 8,800 bopd in that 2nd year.

I am not saying that will happen, I am merely offering what is known as opposed to what is concluded, by voices that in my view, have nor read too deeply into the actual documentation.

We need more information and as I say I have my reservations, but a write off is too hard too fast for me.

What is also very critical to remember is that how I3E move forward, should not be placed in a box that is defined by the RBL, in its current format. Ever since the L2 result, the market has been putting I3E into either the 'lets get rich quick box', or the one marked 'company is going out of business.'

The actually reality is far different to that.

It should also be remembered that I3E bought the original Liberaotor 13/23d block with an oil find with a 20ft oil column, and their CPR stated that said L1 well, was viable on its own. Whetehr investors believe them or not is their choice alone.

What I3E have been attempting to do since then is make the whole scheme bigger, and the market has been dogged in its determination to judge them against that plan, and is not prepared to consider how that pkanb could be adjusted, to ensure that 1st oil is hit.

This result is below their expectations, but the key is what does it mean for the actual path to 1st oil because establishing that, is what opens up Serenity and Liberator West, where the sands are deemed to considerable thicker.

The company now needs some space to determine exactly what they have and what it means for their model. What is clear to me is that nobody at this stage could say that this oil find is not commercial, nor that the RBL is under threat.

The pricing action today said otherwise, which makes the whole episode leave a rather nasty taste in one's mouth.

I intend pausing for thought now in an attempt to take all of what happened today fully in.

@SApike501 I think after such a lost and testing day, what none of us should be doing is jumping to conclusions too quickly.

Facts are what we need and what should be employed to ascertain what all of this means.

First and foremost we have an oil strike and the drop to 19p demonstrated something far worse than that.

In the 31st Oct Oil Capital Conference presentation, Majod Shafiq stated when talking about the 3 further wells in Liberator (A2, A3 and A4), that "all 3 of these have about 80-90ft of relief."

If we refer to the Liberator update presentation, we can see that the A2 is the smaller of the 3, as it peaks a tad bit lower than A3 and A4, so its likely where the 80ft reference comes from. He says relief not oil column, which is why I say tread carefully.

In all honesty Spike501 I believe a bit of a breather is needed here and some time to gather one's thoughts a little. I have never witnessed anything like that in all the time I have been on AIM.

I believed they had hoped for around 80ft, so 20ft certainly reduces the oil in place. However, my initial thoughts are that what this oil find does, is make the 4th drill far more of a certainty.

I appreciate greatly that there is a belief that 20ft of oil is a tad thin for a horizontal well but the L1 well has never been removed from the scope, and that would be attempting the same thing. The risk is certainly a tad higher on a thinner oil build up but what this is not, at this very early stage, is a duster because if L1 is commercial at 20ft, then one would assume (very early stages), that the A2 location is too.

@spiceygoat I don'rt disagree regarding the suspension, which only adds fire to the lack of an RNS.

@Ophidian If that theory is indeed correct, then they should follow the same pattern and complete their wireline logs, which last drill took circa 5 days. That though would leave the market hanging far too long and would only add to the disorderly market that we find ourselves in already.

Like I say rose tinted glasses alert, but by this time of the day, I would have expected a duster to have been reported, in some shape or form because the pricing action demands it. The pricing action says someone knows something the rest of us doesn't, and it point towards a duster. So if the company indeed had a duster, then they would need to even up the playing field, and certainly not wait this long to do so.

That says that there may well be some mileage in what you say, be it I do still think things could have been handle far better, whatever the result turns out to be.

I finding myself checking myself, to ensure i am not simply putting my rose tinted glasses on, but there are a few things that bother me.

1. This all started on day 18 of the drill, a drill that spud the same day the rig arrived at the A2 drill site.

2. The previous 2 drills have required 19 days to reach TD and the L2 pilot well hit TD late on day 19. That same drill was reported via RNS at 10am the next day.

3. The pure fact that the SP has dropped 50% at one point today, says that there is little left to be worrying about, when it comes to any affect on the SP. That aside, the BOD have proven with the L2 result that bad news is given when it must be, and it does not take all that long to deliver.

4. They may have found time over the course of this drill but really how much time can they save, given the short programme involved here. If anything the savings have come from the rig moves and the contingency, which bears out in the latest L4 drill (4th drill). So they are at the very front end of the possible timeframe to hit TD; which saysthey have at best, "petrophysical information obtained from the Measurement While Drilling (MWD) tools."

5. The latest presentation is clear, in that it states that the failed L2 pilot well, enabled them to establish where the channel edge is. hence the c.120m statement. They have positioned the A2 drill well within that zone and they have gained added confidence from the Serenity drill.

6. So if they knew where the captain sands package was and have hit them, then they should at the very least have oil shows, because they are within 600m of an existing oil discovery, that shares the same sands.

So I question if it would be possible for this drill to be declared a duster without the need to conduct wireline logging, which even with the best will in the world, they surely haven't had time to do.

I may well be wrong and the pricing action is certainly against me, but I am not entirely comfortable with the timelines and the belief that a duster could be a solid outcome. Of course they may have missed the channel again but the odds are certainly strongly against that.

With all due respect, whilst I may not be happy with the lack of reporting by the company today, their efforts in achieving what is a very significant oil strike at Serenity, and their management through the problems that surrounded the failed L2 pilot well, have been exemplary.

Its the easiest thing in the world to find questions and holes, when the chips are down. I stand by what I said earlier, however foolish it might make me, the price action may point directly to duster, but the facts and the logic, say that its too just early to know, and certainly too early to warrant such a significant sell off.

Yes for all my belief in the technical and management skills of the I3E BOD, their failure to issue an RNS to support the very shareholders that have supported them, through thick and thin, is highly disrespectful of the resolve and efforts, it took to give them that support in the first place.

Whilst everything is currently pointing towards a leak on a failed drill, I keep coming back to the facts.

The drill is at day 18. Yes it is possible that previous experiences have sped the process up but it still highly likely at TD, at best.

If I3E are so confident about the position of the captain sands packages, then they surely will have hit them. If they have hit them so close to the discovery well in sands that are such positive attributes, then there must at the very least be oil shows. If so then there is a process to be gone through before any final result can be determined, which smacks in the face of someone having sufficient evidence to determine a duster.

But I am acutely aware of the price action, which is at best extreme.

From the latest Liberator "13/23c-9 well post-drilling analysis" dated 29.10.2019.

"Post well analysis indicates that the 13/23c-9 well missed the upper Captain channel edge by a horizontal
distance of c.120 meters"

"New mapping incorporating the VSP/shear wave sonic data with the new seismic data clearly images the
Captain sand packages in the 13/23c-9 area and across the Liberator field"

If they know where the captain sand packages are, then the chances of hitting them and oil shows with it, should be very high.

If that is the case, then it would be too early to define the result to the extent that a mass sell off was required, or so the logic goes.

Whilst a large drop in SP is certainly noteworthy and anything is truly possible, the reality is that the LIB drill is as we speak, at day 18 (previous 2 drills took 19 days to hit TD).

So it would have to be a couple of days ahead of schedule and would at best be at TD.

The likelihood of #I3E missing the channel completely again surely has be very low, given the data available and the fact they were able to announce in their last presentation, just exactly how far they missed it by (120m). If so then given the close proximity to the discovery well, we should be talking minimum oil shows, which would mean the start of wireline logging.

That situation doesn't lend itself to a known outcome that warrants a sell off, inside information assumed or not.

@Sankeys A key aspect of this is that the close proximity of Serenity to Liberator. It means that any 2020 drilling programme can be combined, as it was this year, such that appraising Serenity (which if successful will unlock substantial more value in the asset), comes with limited additional cost.

The June 2019 Proactive presentation states that the Serenity drill was to cost $13m. Even on a like for like basis, which I would think could be better, given they should be drilling twice and know far more about their subject there, we are talking 'just' circa $26m to appraise Serenity to a point that they would know what they have for an asset.

If I3E are indeed successful at Liberator, then they should/would have far better scope to achieve additional funding, and I do include the option of returning to the markets, be it in a fairly limited capacity, because it should come with no fear in my view.

Success at Liberator makes that c.$26m figure of no serious concern, such that other than a strategic desire to de-risk their assets, I3E would not need to entertain any low ball offers for a farm in to Serenity. So even though Serenity is at a fairly early stage, it should need a very good offer (see Majid Shafiq comments 29th Oct interview) for a new partner to enter the game there.

The words being used by I3E in that same 29th October interview, were delivered along side the words that they have had no direct contact with RRE. They were also highly likely delivered prior to any tangible discussions being held with any other interested party, because it was simply too early.

Yet the team is already busy looking at appraisal targets and a plan for drilling in 2020. They are able to do this simply because the funding needed to drill, is so achievable. What other junior oil play has 2 such sizeable assets within 10km of each other and an FPSO sitting on their doorstep?

The first drill at Liberator was a disappointment but that should not be allowed to undermine the strength of the deals that I3E have achieved, sometimes under a great deal of pressure, in order to give themselves not only their chance at Liberator in 2020, but also a 4th unexpected drill, which itself comes with a number of strategic advantages.

That sort of ability is very attractive in terms of investment and if they can do all that prior to finding oil, then what can they achieve if they have 2 fields, and one proven to produce at up to 20,000 bopd?

A2 starts the process and has to be brought home, but it also acts a trigger to much bigger prizes, which will not be reflected in the value of the company overnight, but given enough time and patience, should be well worth sticking around for.