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Good morning.

I would say that "production increasing ahead of expectations from c.24 MMscfe/d to c.35 MMscfe/d in the first two weeks of operations" is a very pleasant surprise.

In addition, "gross sales gas of 6.6 MMscf/d was achieved in the three months ended 30 September 2019, with this increasing to 7.0 MMscf/d for the month of October 2019."

In SDX's key market, they are demonstrating better results at two key levels.

Under promise, over achieve, is a winning formula if it can be maintained. Perhaps the plateau "production of "50 MMscfe/d in Q1 2020" can also now be bettered. Lets see.

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If they are going to push through 2 horizontal developments wells on Liberator (quoted very simply as requiring Q2 and Q3 in the Jan 2019 Environment Plan), plus possibly up to 2 appraisal wells on Serenity, then either the programme has got to run later, or it has to start as early as possible.

Of course, now they have a history with the Borgland rig and the team around it (Petrofac etc), they can fine tune their drill programmes and likely be more accurate with their programme assumptions. But it is still a lot of drilling with one rig.

The question may come down to ;

1. how much more additional surveying is required for the LIB phase 1 pipelines, which will to a degree, have changed now that LIB mapping has been updated plus ;
2. how long will it take to get the FDP revised/signed off and ;
3. how soon can they complete the funding.

I do not in any way wish to ignore or over simplify the substantial challenges that I3E have before them, to get their LIB phase 1 development into production, but the way that those two gentlemen were talking in that interview, the intent to me (and I would say the Dolphin strategic alliance is built on this), looks to be to get the Borgland Dolphin back on site after it leaves Shell, which right now looks to be around end of April.

Anything much later and Dolphin have a cost and logistics concern because they will potentially need to place the rig in storage once more. For me the strategic alliance is designed to help them avoid that.

It makes sense for everyone involved to keep the rig active and to get it on site at Liberator, after it has left Shell, which in turn gives the I3E team a very good shot at completing Liberator and those appraisal wells at Serenity, before the weather turns against them next Winter.

This is perhaps why the team have decided to drill the pilot well at A4 prior to the rig going to Shell, in order to save time next Spring/Summer. Perhaps.

If that is the case, then the meetings with the senior lenders, will be being tailored towards an accelerated conclusion to the RBL (be it perhaps in a manner that is advantageous to all stakeholders), or have been advanced in a manner that supports a faster roll out post the A2 result.

As Majid Shafiq says "we'd like to accelerate everything as quickly as possible" and that can be done if they can maximise their advantage by driving their strategic deal with Dolphin, by keeping the Borgland gainfully employed, which in turn gives them a proven drilling team on site, which itself will support their arguments and credibility, for the financial support that they seek.

Food for thought if nothing else.

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Good afternoon everyone,

Some things that Majid Shafiq and Graham Heath both said in the Proactive interview from 29th Oct, have been bugging me.

In answering the question regarding "how far down the track would you look to be developing Serenity?" (18m 50s), Majid Shafiq had this to say ;

"What we'll be doing now is analysing the data and deciding where we want to drill an appraisal well and then working out the timing for that. We'll need a site survey for it. . . Wouldn't be able to shoot a site survey until the weather improves next Spring. . . and then we would look at starting to appraise it"

"everything as always is subject to funding. . . so we would have to have funding in place but we'd like to accelerate everything as quickly as possible"

"And it would make sense (to accelerate) now that we have a very good relationship with Dolphin. We know that this rig performs very well, the crew, our entire group of people that are drilling this for us. . We know that we have got a good infrastructure and apparatus here to drill wells successfully.

"If we could drills more wells next year obviously we would like to but everything as always is subject to having the funding in place"

Graham Heath then adds ;

"Just to be efficient, it would make the most sense when we go to drill production wells next year for Liberator phase 1, that you would try and add on additional appraisal at that that point"

"Hopefully we will be in a position at that point to drill a couple more appraisal wells on Serenity"

The 29th Oct update stated that I3E have formed "strategic operational alliance for the use of Dolphin drilling rigs for i3 operations to August 2023"

However, given that this relationship is built on the successes achieved by the crew of the Borgland and that I3E will want to get the very most out of their funding and the 2020 drill programme, it makes sense to secure the one rig and crew, that you know you can trust, and that have already been there and done most of what you are going to ask them to do again next year.

The fact that Majid Shafiq refers directly to the Borgland Dolphin and its crew when speaking about having "good infrastructure and apparatus here to drill wells successfully," says to me that their aim is to do exactly that.

To date, the Borgland is due to go to Shell in February and drill and complete 1 gas production well on the Knarr field in the Norwegian North Sea.

For the 2019 programme, the Ocean Observer conducted its survey "over the course of March and early April" such that "sufficient data has been acquired to allow the company to proceed with permitting of the 2019 drilling programme" (9th April RNS).

So the possibility of appraising Serenity first is remote. However, Graham Heath in that same interview talks about Lib/Serenity efficiencies, with "no need to mobilise and demobilise twice," so we aren't talking 2 rigs here.

@MTSparky, Understood and apologies if I misread your view point. As I say, its in both parties interest to get a deal done on Bleoheim because it is so under utilised, even if Tain comes on line without Serenity, which is unlikely to happen.

Whilst I am thus far more reserved with my views on RRE and their future intentions towards I3E and their assets, what is clear, is that Serenity and Liberator are very desirable assets, because they can deliver so many cost savings for the Bleoheim, and that means Repsol/RRE.

The table on page 52 of the CPR, shows the Blake/Ross fields continuing through until 2030.

Tain at circa 23mmbbl recoverable oil, even at its anticipated highest extraction rate (6,700 bopd), has a 9-10 year shelf life.

At $80m per annum costs, that's $800m in Bleoheim production costs over that same 10 year period, that Repsol/RRE have got to carry without Liberator/Serenity. So a deal has got to be done. The key is that a purchase/buy in of Serenity/Liberator, would deliver not only the cost savings from the shared production (so I3E owned) but would also greatly increase their own return per barrel too, which has got to be a very seductive thought. Certainly enough to warrant a closer look.

That for me encourages the farm out offer, if indeed it were to come, to be higher than that of an outside party, because the overall benefits are greater for Repsol/RRE, as their own existing costs per barrel, would be lowered.

Timing will be everything, and certainly the next 2 drills would be completed prior to any deal being done. So I3E's position would be (with success at Liberator) about as strong as it could be. Certainly, the period up until 30th April and/or the signing of the RBL, is a critical period.

But as I say, that $800m is a key cost, and a reflection of what Liberator/Serenity can help deliver, and what it could be worth to the likes of Repsol and/or RRE.

I am not so sure that Repsol/RRE have so much room to be political regarding the Bleoheim.

Firstly, the current last known status of the agreements for the Bleoheim FPSO for Liberator oil, was stated on 10th Jan 2019 ;

"The Company also announced that it had received indicative terms from Repsol Sinopec Resources UK Limited ("RSRUK") for Liberator's use of their leased Bleo Holm FPSO facility via Ross field infrastructure, and that the parties were working together to agree the terms for Liberator Phase I construction and tie-in, and transportation, processing and operating services agreements."

Further to this we have the wording from the LIB Phase 1 CPR (See pages page 48 - 52). Whilst the CPR is now technically out of date, in terms of the Bleoheim, it remains relevant.

Firstly, according to the CPR, the Bleoheim has a total capacity of 100,000 bopd and 135,000 water bbls per day.

The key considerations are (oil production wise) that the Blake/Ross production is expected to be around 8,000 bopd per day by 2022. At that point, currently, Tain is expected to add upto 6,700 bopd from two wells. That would make total Repsol/RRE production around 15,000 bopd, with further decline expected from Blake/Ross moving forward.

Page 52 of the CPR states ; "The latest lease and operating and maintenance costs for the FPSO have not been shared with i3 but are stated by Repsol to be around $80 MM per year."

Without further oil production from either Liberator and/or Serenity, Repsol/RRE have to carry this full maintenance costs alone.

Even at 15,000 bopd per day (5,475,000 per annum at 365 days), the Bleoheim would be adding up to $14.60 per barrel.

By accepting a deal with I3E for Liberator phase 1 (assumed 20,000 bopd), on a like for like basis, they can reduce this cost per barrel to c. $6.30 per barrel.

At 5,475,000 x $8.30 ($14.60 - $6.30), they have the ability to reduce their own costs by up to $45.5m. Include the Serenity field, which could add another 3 wells to a combined Serenity/Tain scheme, and things look even rosier.

Yes I3E have to find the right balance between bending and standing firm, but at $45m per annum and rising, so do Repsol too.

Admittedly the calculations are very basic, but these are the figures that I3E have provided the CPR team, so they were relevant at that time. So do have worth.

So for me it is within both parties interest to work together, even if any party involved, has eyes on a greater prize or not.

https://i3.energy/wp-content/uploads/2017/03/20171103-Liberator-CPR-2017-Phase-1-vF-1.pdf

Morning all,

Having red through the deal, I took the decision to sell down my holding completely, and am out at around 18.85p.

Whilst I am disappointed with the deal, I am fortunate enough to have had a low average, and so it has been a profitable adventure for me, be it that, like so many, I expected far more from it. As I stated yesterday, my biggest concern was the strength of the desire, this particular BOD had, to get out of this business, and that this could undermine their ability to push back on the top offer, if it isn't at a level that would normally be acceptable.

There isn't a lot of pride in this final offer, that is for certain.

I have been waiting for this deal to complete so that I could reallocate what is a sizeable amount of capital, into other opportunities, that are waiting. So waiting for the additional circa 2%, was for me, simply not worth it.

It is a great shame that these assets, could not have been put to far better use than they have. It has no doubt cost a good number of longer term holders, and I feel for those that have stood by the company, and not been properly rewarded for that loyalty. However, at this stage, it is better a sale goes through, than not at all, for the actions of some of AMER's partners, could then have meant a far longer drawn out process, for all AMER holder. Easy to say now but I feel true, given the actions of ONGC, through all of this.

I wish you all well with your next adventure, which I trust will be more successful, than what we have just witnessed.

Good morning all,

I would be careful building up too much expectation from the recent share price movements. It looks very much to me that the main seller is finished, be it completely, or for now. This is in my opinion, allowing a more realistic valuation based on what has been achieved and what is about to be completed, to be realised.

We are only at day 8 of the A2 drill, so it is too early to be getting excited about a result, or a market indication of a result.

Any talk of RRE making a move this early on Serenity or indeed I3E, is also for me far too early. They will be busy reviewing their strategy, which itself will take weeks at best. The same should be applicable to Repsol, although I have heard that their current survey in and around Block 13/23c, did not even know that I3E were drilling. If true, then the don't sound all that switched on to things just yet.

On Twitter, Redmirres has tweeted an abstract from the 4th drill programme, which states that it is called LA-04, which would mean that it is the pilot for the A4 development well location.

It is possible that the lenders have insisted on this extra drill, but it also possible that I3E have driven it and they have made a good strategic move to take advantage of the fact that Dolphin want to keep their rig busy until Feb 2020, when it goes to Shell.

I3E made the move to extend the Dolphin deal to the end of Jan 2020, set up a strategic partnership, and with it defer payments to Dolphin, all of which has opened up this 4th drill opportunity, all before they met with the lenders (stated in 29th Oct interview with proactive as meeting later than week).

However, at that time they did also say ;

"The LA-03 well, originally planned to be drilled in i3's 2019 campaign, is now likely to be drilled as a pilot during Phase I development execution to optimize the placement of a production well, as will the LA-04 well."

So there is a small conflict there in the wording. However, for me I3E were being cautious until such time they had the additional £5m in funding, which came on 8th November.

Whichever way investors wish to read it, there looks to be a 4th drill in play, which de-risks the 3rd drill, and if as expected, it is in the A4 location, then they have the chance to significantly de-risk the A3 area, thus delivering more reserves/contingent resources, for the RBL facility negotiations.

The more they have the larger it can be, which given they want to appraise Serenity, must very much be on their mind.

We have a situation whereby AMER have confirmed "Multiple well-funded parties are engaged in the process" as recently as 11th Oct 2019.

Said AMER management look to have effectively downed tools, with little signs of chasing or updating on their assets, which says to me its purely about how much can they get.

Even a poor negotiating team would have to work very hard to blow multiple interests away in what is just over a month. Its possible, but the percentages are against it.

In my view, the main concern here would be that the final price achieved is high enough. I am fortunate to have a low average but I am aware that many aren't so fortunate. I take support from the fact that JW has a sizeable holding and that multiple parties should drive a better price but if their attitude is as I say, that the business is definitely going, then it will be about how far they feel they can push back on any top offer.

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I appreciate that the whole situation can look like a buying time exercise and possibly kicking the can down the road, but what if it isn't?

The funds raised on Friday are stated as described as follows ;

"Such proceeds will bolster the Company's cash resources as it enters the drilling of the A2 well at Liberator which, in conjunction with Dolphin Drilling's partial payment deferral as announced by i3 on 29 October 2019, gives the Company flexibility to extend its drilling programme."

Given we have now just seen a new drilling permit go in, I would say that the above statement points towards sufficient funds being raised to drill a 4th well. This is backed up by the fact it is Bybrook leading the charge, and they are unlikely to be happy, if I3E were intending to go and raise even more funds soon after.

The pure fact that it is Bybrook that have backed this deal, and it is they that are supposed to being paid their 8% per annum fee on the junior debt, says at the very least that the financial position, could well be under control, given they were a party to the extension to 30th April 2020.

Since the 10th Sept L2 result, there has been a constant stream of first to find the negative. A 'ah but what if' campaign if you will, with little or no respect being given to the deals (several of which have been arranged at very short notice but still on good terms), themselves.

These guys are attempting to balance the books during a time when they are trying to establish a development plan, for what is now 2 significant, 100% owned assets, close to established infrastructure.

That doesn't come with perfection, but to date this team has managed it very well, and to the point that they still have junior debt holders willing to pay 35p a share for additional funding, despite the concerns of investors and the recent sustained period of value well below that level. So why no discount?

When are investors going to give that some recognition i wonder? There may well be hurdles still to jump through and perhaps eventually even some more cash to be raised, but as I said earlier today, the pure fact they are willing to drill a 4th well, in Winter, at Liberator, says a lot about their forward planning, their confidence, their investors confidence, and their will to control their development costs, and thus potential dilution down the line. It also says to me that cash is under control.

They didn't work this hard to go and blow it all on a keep the lights on style cash raise.

As for the depressed share price, there appears to be a strong sentiment driven stance, that despite Serenity success, I3E still have to prove that their model for Liberator is correct, and I can actually understand that, but it is skewed given what they just hit, where it is, that it used the same model, and who is next door.

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@tonynorstrom1 My post wasn't designed to highlight general perceived risks, more risk that have been tabled as answers to why the valuation isn't higher, or why investors would be wise to place their money elsewhere. The main reason I started posting so often on this BB, was because from the moment I3E hit an issue with the L2 well, a cacophony of negative noise, hell bent on finding something wrong with I3E, came to the fore, and gave smaller less well armed shareholders, little chance to breathe.

The actual position in the accounts is that I3E spent £7.5m in the period of which £3.3m was on exploration and evaluation assets.

During the period in question the Borgland Dolphin contract was executed and the Gardline contract employing the Ocean Observer to survey the drilling locations for this year, was also signed off.

I cannot say that all of the £3.3m could be attached to the 2019 drilling campaign, or that it is all part of the reported $41m cost for the drilling campaign, but then nor can you either.

What is clear is that drilling campaigns don't just involve drilling and they don't just begin being paid for when the drilling starts.

As I have stated many times before, the $41m contract to this day, has never been stated as being for just 94 days of drilling. Nor can it be easily concluded that I3E raised money for a 94 day programme, knowing fine well the wells could take up to 121 days.

Given the $41m figure has been around since at least the end of last year, £3m of deferred payments agreed with BGHE, when thy went into contract on 2nd July, surely have to be removed from that figure. The campaign is still costing $41m but part of it is either deferred to first oil, or being paid in I3E shares. I make that about $3.75m.

So the starting figure is closer to $37m and not $41m.

What the company has said since, is this ;

" i3 Energy has secured a right of first refusal on the Borgland Dolphin semi-submersible rig to 31 January 2020 so that the Company can continue drilling operations at Serenity and Liberator. "

"Associated with this contract extension, Dolphin has agreed to defer certain payments for drilling costs beyond 30 September 2019 which the Company will be due to settle between January and August 2020. With this payment deferral in place, i3 Energy remains comfortable that it has the cash resources available to conclude its planned 2019 3-well drilling operations."

What nobody can conclude is that the deferred payment was required to ensure that I3E could meet their obligations. What it says is that a deal has been done to allow I3E to continue to drill at Serenity and Liberator.

Then came the £5m from Bybrook, and then we see a new drilling permit for Liberator, with a planned start on 8th December.

Whilst I respect your view point, the information to date does not in any way point to towards a process that cannot find a buyer, that is willing to pay more than the original offer.

The last update from the company was 'only' on 11th Oct and clearly stated that "multiple well-funded parties are engaged in the process." Furthermore, the pure fact that AMER also added that "the Company is seeking to conclude the FSP in Q4 2019," indicates that they have sufficient keen interest, at a level that would be acceptable to the directors. Hence why they say they at that point, they are "inviting firm proposals to acquire the entire issued and to be issued share capital of the Company."

If it wasn't going well with at least one of those multiple well funded parties, then they would have kept their options on the table, meaning partial sales too. They haven't. They have pushed for the full sale, which means they have that interest to a point they can conclude the sale.

Whilst some retail investors may have become impatient (perhaps because they likely spend a great deal of time watching and waiting, which is their prerogative, but can lead to over analyzing things), the actual process is nowhere near the point at which it should be worrisome.

My own personal view was that multiple parties would require circa 4 weeks to update their bids, if not done so already. Then AMER would need minimum 2 weeks to review. The time frame may alter within that, and there has been a rumour that the bids are in. However, the general time period is not uncommon, particularly when one considers that we are talking about multiple parties, which may mean longer analysis time needed by AMER, which may mean many more conversations being had, as the bidders are encouraged to adjust their offers, be it by make up or amount.

The fact that we haven't seen anything yet, indicates no binding offer has been made, because that would need to be declared. So the process continues to lend itself to one of AMER potentially pushing towards one preferred candidate, in order to achieve a result that can be recommended. Hence the "seeking to conclude the FSP in Q4 2019" statement.

Whatever, it turns out to be, the process is far younger in its development than the demands set in some investors minds. Selling a company to one party takes time, attempting to position oneself in the right place with multiple parties, can feasibly take far longer.

More patience is required as always.

@Bella6532 I would think the upfront money is to support the business full stop and ensure that all project pipelines are maintained, such that the company the least possible disruption during the transfer of ownership.

What that should do is allow the Enerox employees the confidence to continue with their business, as usual.

I think the key point about the Eskom BESS project, is that given it is a battery project, there will be several VRFB companies vying for its work. With deals now struck with 3 leading VRFB companies, BMN are positioned to play a part at a number of different levels. Not my words, Mikhail Nikomarov's words from the Energy Storage 101 webinar.

Now we can see where they are heading, we know what that many different levels means. It could be that Avalon, Redt, and Enerox all tender. If they win, then BMN can if it wants to, supply the vanadium into that contract.

The beauty is that now those 3 companies are in BMN's court, they have a renewed sense of purpose to tender for S.A. based projects, because that is where the vanadium is potentially at its most cost effective, be it that the electroyte plant is not yet built.

So if nothing else, that should force them to the tendering table. Any other VRFB company out there, has got to beat all 3 of those companies on price, local content, etc, to win those contracts. A tough task even in a low vanadium price environment, which is not a given when the batteries actually get built and deployed. However, for at least one of those 3 companies, it likely will be, in some shape of form.

Lets nor forget, that the battery tender is due any time soon, but the actual vanadium won't be needed until later next year, at best. At that point BMN will be a shareholder or part owner of those companies, so the deal can be done on the vanadium, if it gets that S.A. based project over the line, and Eskom in the bag.

That all said, the Eskom project is for me a must have for BE as a developer. Therefore, the deal perhaps will be done on the batteries themselves, as you say, and so could be across several manufacturers. That in itself could land all 3 manufacturers a lot of work, and also help deliver phase 1 faster for Eskom, given their tight deadlines.

What is clear from all of these thoughts is that the possibilities are numerous, and that one way or another, a BMN involved BESS tender, will highly likely, one way or another, be the best VRFB option on the table, such that it may well be about their option vs Lithium only.

I'll take that as a 1 on 1 contest, no problem at all.

PS Well done to you for pinning down that Cellcube move. I assure you my viewpoint was not plagiarized.

The world is perhaps still asleep to the fact a 4th well has been applied for, and what it means for the bigger picture here.

Perceived risks.

1. I3E do not have enough money to pay their bills post A2. A 4th well answers that. One does not push the budget even harder, even for a discounted well, if money is tight.

2. I3E are potentially taking a chance with their Liberator model and thus the COS for A2. A 4th well answers that. If the model was doubted by I3E management, then why would they logically conclude it is a good idea to drill it twice?

3. I3E do not have enough reserves around the A1 & A2 locations to secure an RBL big enough for Phase 1. A 4th well answers that. The 2017 CPR is clear that upto 2km, there is far more certainty about the reservoir. Drilling even just the A4 pilot well in this programme, brings the A3 well location well within that 2km zone (approx 1.2km from A4).

If they decide to bypass A4 because it too is well within range of the A2 drill site (1.5km), and go for the A3 well, which was the original step out planned for this Summer, then upon success, they open up what is now a much bigger Liberator West, because they will be 'only' 1.2km from the perceived connection point, between Liberator phase 1 and Liberator West.

All of which opens up the opportunity to establish more reserves/contingent resources, which in turn opens up greater options for the RBL, which itself can then potentially fund more drills, be it at Liberator or Serenity.

So whilst my first reaction was it is A4, there may be far more worth in it being A3, which would deliver the entire drill programme, as planned, be it more expensive, but potentially opening up, what will be a much bigger.

A successful A3 drill this Summer, should effectively transform Liberator West into an appraisal programme.

Now it could be that the lenders have forced this hand. However, I don't believe that its the case because the deal with Dolphin (deferred costs and strategic partnership), was made prior to the fund raise for the "flexibility to extend its drilling programme" being secured, and prior to the meeting with the RBL lenders. However, I recognise that it could be seen another way

It looks very much to me, that I3E have taken advantage of the gap in the Borgland's work programme, to strike a deal for a more cost effective 4th drill, and set up a chance to deliver what they said they would at the start. This is for me, supported by the fact that ByBrook are supporting the move, rather than I3E having to go to more common methods to obtain the cash required. My opinion only.

@1210 My position, post these announcements, and assuming said deals complete, is that the VRFB vanadium supply chain, top to bottom, have finally found one another, at a level where they can really take it to lithium-ion.

It will take time, and I am personally under no illusion, that the market currently, has not got a chance of understanding this. If it did, then twitter would be alive with gasps and whoops of delight. It isn't. Yet.

The share price, for me personally, does not mean a thing right now. It is a reflection of a lack of understanding that will be put right, when the time is appropriate, and I have time to wait.

The question is, will energy storage be successful? Which with the likes of the World Bank Group, has a more certain answer.

These moves being put together by BMN, create a landscape where by VRFBs can/will show themselves to be the dominant technology, be it they will continue to be the smaller market participant. However, that does not matter to me, because I am not here for the whole market share, I am here for BMN's market share, and post these successfully completed deals, that share is about to start to get a whole lot bigger, and those gasps and whoops, a whole lot closer to reality.

Nobody should underestimate just how far BMN shareholders are ahead of the curve. There's nothing wrong with that because its the most rewarding place to be, on so many different levels.

@Alfacomp Yes I did see that and it is most impressive, given that BMN support (rental contract, guaranteed prices etc) can certainly improve their conversion rates on that work. However, right now, just like with Redt, its a pipeline list, which needs more development.

I am just as happy to recognise actual contract wins and what they do for the relationship moving forward. In June 2019 Cellcube (Enerox) issued the following contract win ;

https://www.cellcubeenergystorage.com/cube-press-release-6132019

Its a confirmed $6m contract with Immersa, for delivery over the coming 24 months, so its very much alive.

The update came with the following rather interesting quote fromthe CEO & Director of Immersa Ltd. Robert Miles ;

“the combination of a best-in-class performance product at predictable price and delivery terms is key for our finance partners and customers. This allows Immersa not only to offer services at an attractive price but to deliver on multiple projects at the same time. The goal for many of our clients is to replace conventional generation and cover grid shortfalls with green energy thereby reducing CO2 emissions significantly and as soon as possible.”

This is pre-BMN input, pre a potential vanadium rental agreement or indeed guaranteed supply at guaranteed prices. So just imagine what that sort of security can add to the arsenal of a Enerox sales team, that is already able to secure a $6m contract without it.

Incidentally, and as an example, a circa 20% return on that project would deliver the BMN consortium around 10% of its total investment back, on just one project.

What I really like about this deal, is not just the energy storage ownership but the access these purchases give BMN/BE to the customers and contacts, that these companies have built up. Leads that were perhaps previously borderline, in terms of what Enerox, Redt, Avalon, could offer, given a little time, and it will take time, can be transformed by an injection of BMN willing, which will create a WIN/WIN scenario, across the board.

BMN talk about supporting the fledgling VRFB industry, but in one fell swoop, BMN just signed up 3 of the world's leading VRFB companies, to their vanadium, and their vanadium only, if it so suits.

So yes they are supporting that industry, but in reality, they are looking to dominate it.

What that means for the Bushveld vanadium resources, is simply unimaginable at this juncture.

Yes I have just had a look at the energy portal and seen it too.

Here is a link to the portal for those that do not have it. You need to type in 2019 and then scroll down.

It is stated as being an appraisal well, so I wonder if it is the indicated pilot well for the A3 or A4 location.

Well done to those that supported the 4th well theory, I wasn't convinced. With a little hindsight, one can see that there was a good deal to be done with Dolphin to keep the rig active through to the end of January, this ties in nicely with the delayed payments and strategic deal. If so then I3E may well be taking advantage of a market opportunity to really solidify their phase 1 development opportunities.

What this does is really put the cat among the pigeons, because it de-risks the outcome of A2, because its not the last drill, and it offers up the chance to push the reserves higher and thus strike a better/stronger RBL deal.

Lets not forget that I3E will be, one way or another, to appraise Serenity next Spring/Summer, so the better the RBL, the less the potential lean on investors.

Still needs some more thought but looks like a really positive development.

https://itportal.ogauthority.co.uk/edufox5live/fox/edu/WONS_WELLBORE_SEARCH_PUBLIC

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That doesn't automatically place the IDC of S.A. as a partner in this buyout. Whilst they have some foreign investment interest, it tends to in neighbouring African countries. However, a subsidiary of Enerox could very easily set itself up as a partnership with the IDC. That would then satisfy all current communicated plans, and deliver BMN and their shareholders an local, active VRFB assembler and later manufacturer, that is automatically part owned (significant minority interest), that automatically takes its vanadium from BMN (1).

(1) Fm in the RNS says that "Bushveld will have the right to match commercial terms for the provision of vanadium products."

If Enerox is building VRFBs in S.A, then I cannot see how BMN could not match any one else's commercial terms, particularly if those batteries are destined for Eskom.

I am not writing off UET and I am absolutely sure that UET, still needs BMN more than BMN needs it. If that weren't the case then we would be seeing a far more active project pipeline from them. If that were so, then where is their rental product? Where are the projects?

For all their perceived Chinese backed might, they do not appear to be succeeding, and now 3 of their competitors just signed up with the largest high grade vanadium resource company in the world, owner of 2 of the world's primary processors, owner of an active vanadium rental contract, and the driver of lower cost VRFB inputs.

So if nothing else, UET Technologies just had a good number of their bargaining chips (if they truly had any in the first place), removed from the table, such that once again, if a deal is still to be done in S.A. then the power at the table, is BMN.

The Enerox transaction may complete post the Eskom BESS Project going to tender, but for me the message is clear ;

"An initial sale and purchase agreement (the "Initial SPA"), to be signed as soon as reasonably practicable after the signing of the term sheet, whereby the Bushveld Consortium would for a sum of €1.65 million (including the €300,000 referred to above) purchase 24.90 per cent of the share capital of Enerox (the "Initial Shares"), including shareholder capital contributions of €1.2 million for working capital purposes over the course of the coming four months."

This initial investment will be before the "technical, legal and financial due diligence" required for the actual sales and purchase agreement, which is a tad risky but it provides the necessary support for Enerox and their active contracts, for the 4 months leading up to the full buyout.

So if Enerox want to tender for the Eskom BESS Project, they can. If they want to employ the BMN rental product, they likely can, be it that the "as soon as reasonably practicable" could do with getting a bit of a move on.

All of that said, the Eskom project is just one project, it is not binary. It is merely a very nice to have, which I am sure BMN are all over. The question is are Enerox now too.

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Good morning all,

Well where do we begin?

With the potential purchase of Cellcube, I just wonder if Bushveld Energy and their partners, have just found the product and company that will form the basis for their South African based VRFB assembly and production.

Up until yesterday i was fairly convinced that it was merely a matter of time until UET sign up to a partnership of this sort, but the fact that we are talking a buyout of Cellcube's Enerox GmbH, has certainly stopped me in my tracks.

Enclosed below is a copy of Cellcube's March 2019 presentation. It is well worth a thorough review but I am particularly fond of slide 17, where the LCOE for the Cellcube FB250 series (one of those 4th Generation units I talked about yesterday), is offered up against the likes of Tesla, Lgchem, and most importantly, BYD.

It is BYD whose lithium-ion battery is currently installed at Eskom Rosherville. The LCOE calculation is always more complicated that it appears, but according to that slide, under the right circumstances, the FB series can be upto 40% cheaper than that of BYD.

That is before we start talking about vanadium rental, or indeed localised supply of beneficiated vanadium.

So in theory (and we do have a lot of wriggle room, particularly when I think that BYD are not S.A. based), a Cellcube offering for the Eskom BESS Project, should wipe the floor with BYD, and BYD are the only potential tenderer, who has a credible battery installed at Eskom.

There is of course the question of the UET battery at Eskom, but as Vsun have begun to demonstrate, a confidence can be built up in a VRFB supplier, even when they decide to employ an alternative battery supplier. This is particularly true when one considers that it is Enerox GmbH that has the 140 installations and 12 year track record. It is they that own the Generation 4 series, which is plugged as being "the most advanced (“VRFB”) on the market today as stated by independent industry experts."

I do not easily discard the merits or potential of a UET tie up but with their strong connections to Rongke Power and Balong New Materials (all effectively owned by Dalian Bolong Holding Group), they are potentially a more tricky partner with which to strike a favourable deal.

With the buyout of Enerox, if nothing else, BMN and potentially their partners, have another option. Opening a S.A. based subsidiary of Enerox, when you already control the company, is a lot easier to plan towards.

https://static1.squarespace.com/static/5b1198ada2772c6585959926/t/5c9cd83ff9619a021c2de4c4/1553782876741/CellCube+Investor+Presentation+-+2019+March+26+%281%29.pdf

@Shakeypremis No argument from me I assure you, I am happy to take on knowledge and learning as it comes along.

I have always worked on the premise that SDX are 55% working interest operators at South Disouq.

In the Sept 2019 presentation, the company states "First gas in Q4’19, with gross plateau production of 50MMscfe/d/8,333 boed (27.5 MMscfe/d/4,583 boed net to SDX) in Q1’20."

The same slide however states ; "Gas price US$2.85/mcf, Opex estimated at < US$0.30/mcf, Government take c.51%." The 51% was not at that time, attached to the gross production figure.

Today's RNS stated ;

"All gas production will be sold to the Egyptian national gas company, EGAS, at a fixed price of US$2.85/Mcf, with the Government of Egypt's entitlement share of gross production equating to approximately 51%."

I appreciate it all essentially adds up to the same thing, but the wording is a tad misleading. I assume this is done this way to allow SDX to recover capex costs for the plant, which they are paying out upfront. So technically, the gross production figure is correct, its just that SDX would never see it.

It looks very much like I have failed to understand the entitlement properly, but this appears to have been compounded by Edison.

At full production of 50mmscf/d, the now better understood ownership, would have SDX entitlement at 13.75mmscf/d, which equates to circa $12.3m per annum gross net entitlement. I therefore wonder where Edison have derived their near $16m figure from, given they have used the same base case figures.

That aside, whilst I still very much like the now $12.3m in added income, I have certainly missed something here, which I will now need to review. So thank you for your help on that.

@shakeypremis I have more than happy to be corrected if I have missed something, but my post did not state that it was "25mmscf/d net to SDX at the moment."

I said "a circa 25mmscf/d net interest" at full production, hence why I employed Edisons figures.

Current production is "an average gross production rate of 23 MMscf/d of gas and 120 bbls/d of condensate, equivalent to approximately 24 MMscfe/d."

So its running at around "circa 50% of South Disouq production." That being the anticipated gross production figures expected in Q1 2020.

The "the Government of Egypt's entitlement share of gross production equating to approximately 51%." So SDX should therefore achieve 49% of gross production, which is "circa 50%."

So how can SDXs entitlement only be 6.7mmscfe/d?

I take on board your comment regarding North Gemsa, and will look further into that. I have not previously picked up in the various reports, that North Gemsa would become uneconomic in 2020. If you have a link to this I would gladly read through it.