Member Info for Blubay

That is one of the maddest investment strategy I’ve heard yet. It’s not a horse race, it’s an early stage small cap company. If you’re investing anything other than a side wager the thing you need most is to weigh up changing evidence and market mood. Passive long term holding is the single biggest cause of retail losses on AIM. More than 70% of AIM shares lose value over the medium to long term, either through dilution or price decay. That includes good and successful companies. Timing the market is essential and blocking out all contrary opinion seems near suicidal.

I don’t think the helium estimate is low as it lines up pretty neatly with the initial capacity of the first processing plant, and they’ve given a mid price already for low grade helium. The bonus is the beverage grade CO2, that could be anywhere up to double the original estimate if the wells flow as planned.

What are you frightened of?

It’s good to exclude chat boards from the linguistic analysis if possible otherwise there’s far too much contamination from opinion bombing to make it helpful. As zebra says, also vital to force a neutral analysis through prompt engineering as LLMs tend to mirror and self reinforce to the point of hallucination. LLMs are not search engines, they will just make stuff up if it’s plausible/predictable. Ideally define a corpus of reliable sources and limit analysis to those. Ask difficult questions, test your least preferred hypothesis.

I probably didn't express that as well as I should. Just for clarity, the gas water ratio is about the amount of gas released from the well by volume at surface conditions rather than the volume in fluid compressed at depth. Most of the flow from the pump is still water but the modelling assumption was that the volume of gas might be equal to it. The model assumed a gas-rich brine with a lot of gas liberation at reducing pressure although that didn't happen in the test conditions. You could easily have a gas water ratio of more than 1 in different conditions, where more that 1 cubic meter of raw gas was released from 1 cubic meter of fluid. With that in mind, here's a list of the implied daily helium yield from all the different scenarios

P90 (CPR) 148 scf

ESP test 227scf

P50 (CPR) 303 scf

P10 (CPR) 2,470 scf

High modelling assumption (after EWT) 6,176 scf

In case it helps Ben...

From the RNS 4 September 2024 EWT flow results...

"Internal modelling demonstrates that this could increase to 20,000 bpd of fluid with artificial lift in the development phase. On this basis, the Company estimates the actual flow rate would increase to 6,176 scf/d of helium, when applying an average concentration of 5.5% helium".

They didn't mention gas water ratio in those results but you can infer it by simply reversing the calculation and comparing it with the probability scenarios in the CPR, which had access to the modelling. Their assumption was a gas water ratio of 0.99 (i.e. 99% gas and 1% water), which is also used in the P10 case in the CPR. For comparison, the latest ESP test results averaged 0.05 (5% gas and 95% water).

ESP results -

The flow test isn't a production test, so you can't just extrapolate from the results. If you did then the assumed helium output would only be about 227-364 scf/day, which is less than 5% of the maximum aspired to in the 2024 RNS, but it's still better than the P90 case in the CPR.

They now have three variables to work on for production modelling - liquid production rate (pumping), gas water ratio (liberating free gas up the pipe without diluting it), and helium concentration (targeting the drill into the strongest helium zones).

If they can both increase the flow to 20,000 bbl/d, and increase the gas ratio to 0.25, while maintaining a concentration of 5.4%, then the model might predict around 1.5 Mscf/d helium. If they could also tap anything like their maximum reading of 9.2% (P10 = 8.8%) then they might top 2.5 Mscf/d. But the gas water ratio remains the key variable where the original modelling was pushing the limits of probability (CPR P10).

But all those readings are based on Itumbula. If they can now use this knowledge to drill new wells elsewhere with stronger results then the odds may increase.

The appraisal seeks to establish the parameters for a ‘typical well’ on which to base the modelling for commercial development (a pilot project with five wells and then a wider project). This is explained in the CPR.

The CPR modelled the P50 case (50-50 probability) for a typical well to pump 20,000 bbl/d initially, with a gas water ratio of 0.25, and a helium concentration of 5.2% (see CPR Figures 3.13 and 3.14). The CPR was particularly uncertain about the gas ratio because of wide variability in the samples.

The purpose of the ESP test was outlined in the 8 December RNS, as follows… "We remain hopeful that by being able to increase the flow rate from this discovery well using an ESP, we will see increases in the helium concentration and gas-water ratio. “

The test yielded results averaging 15,000 bbl/d, with a ratio of 0.05, and a concentration of 5.4%. So the key challenge is the gas water ratio. They believe the problem is dilution from an intermediate aquifer so they now plan to test new wells in other parts of the licence area, for which they are seeking a partner.

It sounds rhetorically persuasive but it has gaping logical flaws as an argument and it's falsely premised. Why keep trying to make the thesis unfalsifiable when you're simply predicting upside without admitting any kind of confirmation test? We can all agree it 'could' be true theoretically but all the data says it's the least likely explanation. If you had to bet then prolonged high volume without price progress more often precedes trend failure than acceleration (I'm not suggesting it will because I think the selling is done and Galactica news will push it up). If your 'furnace' was overheating then the temperature would rise.

Just look objectively at the week as a whole. Your venue ratio has flipped back massively today, SINT 2% / AIMX 98% - no sign of whale hitting the offer but entirely consistent with the anticipated selling pressure having eased off since yesterday and supply being rebalanced by marginal buyers/sellers again. By far the most likely explanation of the volume price data this week (by far) is that there was simply large opportunistic selling into Monday's news, which is totally unsurprising. You don't need to have a hungry whale or a JV or a takeover to account for any of the data. If one shows up next week then great. Enjoy the weekend.

MC - ""You are confusing Price Delta with Volumetric Reset"...

Surely that's an entirely false dichotomy? Price and volume aren't separable, price moves with supply and demand. Volume is a biproduct. It's not accumulation dominance, it's just a supply balance. If long-term buyers were net dominant the price would go up. A flat price in massive turnover doesn't imply buyers are in control at all. “Whales maintaining flat delta” is just nonsense, as is the idea that “25% capital turnover = accumulation”. It's a seductive narrative but it's based on a complete logical fallacy. The market absorbed a large supply shock on Monday, once the rate of selling slowed down momentum improved on Thursday. Because buyers have balanced out sellers as price fell does not mean buyers are dominant. If they were dominant the price would go up, as it has done today, after the selling was largely wrapped up. But as you say, enough for a Friday. Looking forward to the RNS

As discussed at the time of the CLN churn, I would assume that associated equity fund(s) and/or brokers retained some free carry surplus inventory precisely to trade opportunistically into anticipated company news. De-risking into the liquidity of Rukwa results makes complete sense in that scenario, particularly given the inconclusive nature of the results. No panic dumping, just a well managed de-risking into a liquid opportunity. But I will of course look forward to the TR1 if and when it's due. All options open, GLA

"We have seen nearly 2.52% of the company's entire share capital change hands in a single day without the price breaking down."

And you've seen 25% of the share capital change hands in less than a week without the price going up!

That's also my thinking. Work was done by mid Thursday and the RSI turned upward accordingly (as I mentioned at the time). There wasn't a TR1 holder before and there isn't one now (yet). The 'seller' could just as well be a disaggregated supply overhang from the CLN conversions, sold opportunistically into the much anticipated news liquidity event, risk managed by broker/MM. Could be multiple CLN-related sellers, broker inventory, short-cover, re-hedging, and just longer term holders selling opportunistically. I'm still struggling to see the whale buyer. Not going to rule it out but it seems remote.

Your hypothesis is counter factual, I'm just trying to understand why

At the risk of more boredom... the difficulty with looking at SINT/AIMX venue ratio in a volatile news liquidity event is that you can't just infer 'institutions' versus 'retail'. Whales trade on AIMX too, when they need to, if they're in a hurry orders will hit the book (retail always show their hand, institutions do it when they must). After the anticipatory accumulation last week, there was a heavy share distribution following Monday's RNS which was AIMX led and SINT stabilisation followed, letting it down in orderly ranges. I just don't see your evidence of a whale buyer with a c. 300m+ share interest (let alone a 3bn interest). I see evidence of supported liquidity but I don;t see where you're getting your stealth accumulation from. The SINT bids didn't skew towards buy at al this week, the price wasn't stopped from breaking down. I don;t see how that multi million buyer could keep SINT that neutral, despite your explanation. The AIMX trades show distribution, stabilisation and re-accumulation, classic news shock and recovery event. Objectively, isn't it much more likely you're looking at broker led risk warehousing and redistribution? Isn't there a far higher probability of inferring a whale seller than a whale buyer? Isn't it exactly how a large seller would utilise SINT? It's not a dump, no panic but de-risking in a well paced and managed way into the liquidity. Of course, I've no idea but I honestly don't understand why you think it's a buyer not a seller, it seems counter intuitive.

If the whale "has staked out the 0.73p – 0.75p zone as their territory" for buying why are we trading at 65/70? Did they pop out for a shrimp sandwich?

I would normally only buy or sell this share on news but sometimes the volatility is just too tempting

There was a whale, a moderate one anyway. The whale was supported by a well managed market actor to distribute share blocks into much anticipated liquidity surrounding the Ruwa test results, in a very orderly way. The whale finished selling yesterday and the price has been rebuilt. Very nicely done. I trust everyone made decent money on it and will be treating themselves to an early lunch. Next news from Colorado eagerly awaited. GLA DYOR

For the avoidance of doubt, I have never told anyone to buy or sell. What’s baffling is those applauding people who do, particularly where the financial advice goes directly against their financial interest.

I find the anger a bit baffling to be honest. I shared the risk of share price collapse on the morning the CLN RNS (contrary to the hoards telling people to buy and hold) and I shared the opportunity presented by the announcement ending that agreement. I pointed to the risk associated with the ESP results RNS on Monday and I've posted today the opportunity presented by the winding down of trading on that event liquidity. Goodness knows she'd have a made a great deal of money acting on those events. You can take a horse to water but DYOR.

So you’re saying the CEO can’t speak because there are whales in a data room but if she does speak then it doesn’t mean the room isn’t real? Are the whales in the room with you now?