Member Info for Cheapskater

Galaxie's distance from the pipeline has always been a known factor. So the logistics of connecting it up must have been considered and it should not be a reason for delay now. Competition to get drill rigs might be a reason for not delaying as it means they can be ready for whatever the gas pipeline solution is and the winter gas price recovery.

Thanksgiving holiday should be considered as a few days delay on getting F1 connected to the pipeline. In think that news will be in early December, maybe next week. That's quite good timing and with vaccine news stimulating markets to recovery in general. This year we could be looking at the mother of all Santa rallies.

I for one want the warrants to be exercised as it will mean the SP is about double what it is now for them to do that. I'd rather see a surge of interest and the price move up to 0.3, or beyond and then we hear that all the warrants have been exercised as that's cash in the bank, £1.3m+ of it. Even if Falcon makes MSMN profitable it will only just be over the line. Galaxie drill is funded from last month's issue. If F1 is company operating in the black then a successful G1 to a similar level is financial security and the warrant income is something that can be held onto as company reserves and not just reinvested or dwindled on more lavish operating costs.

Why put it into reserves? Profitable companies get something that unprofitable ones don't and that's access to bank funding. Access to a few million in bank funds while there are cash reserves to pay interest allows investment in other existing projects until those project delivier ROI to reduce loans top up reserves and reinvest. Such projects maybe 1st horizontal well at Welch if they still want it, while exploring and drilling Greater Stanleys while doing enough to keep EP145 ticking over so nobody can try to squeeze MSMN to lose the permit. The big risk then is once MSMN are just about standing on two feet financially the BoD try to run before they are really walking by trying to go too big, too soon and one or two projects don't succeed. Then the debts rack up and it's back to the market before the sp drops too far. It may take patience from people as there may be no magic EP145 bullet but if the warrants are exercised it really does have the potential to be the last dilution based on the success criteria above. MSMN really look like that can now go places.

mjng,

Why did I buy in? I was looking short term not long term here. back in May people were looking for the next Novacyt and there was noise on Hemo who had other things too and negotiations going one so it made it look like one of the better options. When deals are signed with big pharma companies SPs tend to shift in multiple. I was hoping for a spike. I even topped up when it dropped and trebled my initial holding with a cash out at ODX. At one point it hit about 15p which was not far from double my average and nothing had got over the line so when it drifted back down I wasn't concerned. It got closer and close to my average with more news of delays and not much fundamental progress on anything major. Then a convertible loan was announced and, there was a euphoria spike because people read about unique candidates with rose tinted spectacles because they are in the share because they have a good feeling about the company. I have been one and still have a good feeling about the long term prospects for HEMO but I intend to retire next year of the year after and I need to work my spare capital and that announcement made me feel that the short term prospects of HEMO are negative.

I like to think I pick good companies and really believe in what HEMO are doing but I think it's now years off with the potential for a sentiment drop. I have to be heartless with investment money and I look at it like this:
5% of £60m (£3m) and £12m (+10% bonus in lieu of interest) first loan tranche are paid for in shares issued. JHFH is convinced it won't have a big impact but £16.2m is about 40% of the current mcap of HEMO. That's a staggering dilution for a loan payment. These share issues don't raise the mcap so unless some other news comes along to significantly raise the mcap between now and that issue, then the risk that Mint shorts the stock successfully prior to the issue you will see 300-400m shares issued in the first wave and your investment down 40-50% from here. After that as more loans are made perhaps in chunks of £12m and map is about the same then £13.2m is 30% again and 50% more shares issued (another 400m) and by the time all £60m is used up. That 50% increase potentially happens for every tranche if the mcap doesn't go up. If it goes down then it's worse. Let me give you an example. If £60 is 5 tranches of £12m and the mcap is about the same then the shares in issue is 424m now > 700m > 1bn > 1.5bn >2.2bn > 3.3bn. If sentiment departs the share (it will if that happens) then it will be much worse. If the good news you want hits before the dilution price is agreed and the issues put into motion then it won't happen.

Basically if you stay here for a big payday and it happens late you may end up needing 10x multibag just to get your money back. I think it's a bad time and this is going to become a traders share rather than an investors share while that prospect is hanging over the company. Just my opinion but I have been there and lost l

Hopefully my instincts here are going to be fruitful. I have unloaded from something I consider has underperformed and has just increased the risks without increasing potential. So I have topped up an extra 2 x 3m taking me to 18m because I think this has fairly limited downside from here. It's the second top up on what is my third time holding here so I'm hoping for third time lucky.

I am not a fan of this type of financing. I have been in other shares where convertible loans have seen a drop in sentiment every time a tranche of loan is converted and every time they are at lower and lower levels leading to more and more dilution. The spin on the RNS said no interest but the interest is an immediate 5% arrangement fee and soon after a chunk is taken it paid back at a 10% discount in shares. Unless there is an agreement that the loan holder cannot short the stock then they will short it, knowing they are getting shares at a fixed price to give back. Having worked in pharma for a few year I know trials take a long time. Phase 1,2,3 before you can apply for an actual license to make money from it is typically 5+ years so unless someone else finds value here then the sp could well be heading south for the foreseeable future. I think it's too much of a risk not to sell out while I am in a small profit position. Good luck to anyone who thinks this is still going to go big. I may be very wrong, in some ways I hope I am but I am reinvesting elsewhere for the time being. I didn;t have a huge amount in here.

@Soulac

Your figure of almost $5m a year would be nice but I strongly suspect with previous assets and this one it will struggle to be US$2m/year. Hopefully it will be >AU$2m/year.

If you look results for MSMN you will see two headline figures - revenue and cost of sales. The latter is not broken down and the revenue figures never match the production figures in terms of barrels * average poo and the results are often disappointing.

I usually try to be conservative with my figures and I don't like the boepd gas to oil conversion as the prices don't track each other. Probably no oil well produces 365 days a year, work it to 250 days and you should be closer to the mark, gas on the other hand might be able to do more days even if the oil here drops to much lower levels. Oil also has higher separation, storage and transportation costs whereas gas is extremely low when you are connecting your output to a pipeline which may be where a chunk of the cost of sales comes from, some might be work overs and other higher maintenance charges to keep oil producing, especially where pumpjacks are concerned (not Stanleys initially but the others) The big one you are also missing out on is royalties which are typically about 20%. Higher at Challenger (27% I think) which is why I don't like that prospect. I have never seen the royalty % quoted for Champion so I am assuming the typical 20%. Welch is about 20%, Arkoma is similar and also the Stanleys. Lease royalty owners don't bear any drilling, maintenance, storage, lifting or shifting costs. they just get 20% of the sales revenue. Nice slice if you can get it. I don't know if Texas has a natural gas tax but they do have a straight percentage for oil that comes out of the ground so and Oklahoma has a higher oil tax than Texas. These are not profit related they are straight production taxes I think 8% and 14% IIRC. Not big but it all adds up.

All that is kind of why I left the oil portion of the estimated $1m/yr for Falcon1 as MSMN have never got anything like the headline amounts we hear in the flow rates. It may well be the case here too and flow rates will drop down as pressure in the system decreases.

I hope that makes sense in principle. In essence headline bpd * poo is very far away from real life and you shouldn't base your share price target on that for investments. Feel free to feel uplifted by this news though. It's way higher then my best expectation and as high as my 500-600 boepd day dreams. I can't believe the sp is still where it is.

Trying to work out what's 2.78mmcfd in $.

So today at the Henry Hub Lousianna the price of natural gas has been about $2.70 mmbtu. there ate 1,037 BTU in 1 cubic foot of natural gas. So 2.78mmcf * 1,037 BTU/cf = 2,883 mmbtu which is about $7,784/day of revenue. Half to MSMN minus royalties they should be able to pull in close to $3k/day in pre-tax revenue once connected to the pipe or in other words about $1m a year with no shut ins and no massive fluctuation in gas prices. Okay that's a few "what if's" and I have no idea what it costs to get it out of the ground and into the pipe, but that's just the gas there's a bit of oil in there too which if sustained could be about 45% of that again so to say this is $1m a year is possibly an underestimation of what this is worth to MSMN if those rates are sustainable for any period of time.

Incidentally the final results were published on 1st Nov last year. As we're after that point I expect a "covidelay" and these figures won't appear in that report but when it comes I wouldn't be surprised to say this was on stream and what it is producing. Perhaps then we'll see some movement on the SP because in last year's report revenue was AU$1,106,095 or about US$800k at today's exchange rate and made an operating loss of AU$1,208,836. This one alone is worth more than the annual revenue in the last published annual report. Revenue was already on the up for MSMN though as the Half year report after that in March showed revenue of just under AU$1m or US$730k at today's exchange but that was pre Covid so the second half of the year will be very poor with the WTI price even having gone negative during the period.

So when Andy Carroll said he believed this one was possibly going to make MSMN operationally profitable he may be proved right. What's not to love? Bring on Galaxie1 and let's see the price go way beyond the warrant price and see that extra £1.36m in warrant exercise income. 3.2bn shares in issue, who cares? This should be MUCH BIGGER in the next few months. Oh, and Australia have signed the Pacific trade deal along with China this week so trade relations there should be starting to thaw which could bring EP145 back into play in 2021 with vaccines. I really want some more of these shares. Just need to work out what should I sell to get them?

My god that's pathetic. I completely missed the news as I check at 07:50 and nothing so ignored today and now I'm looking. I saw the price rise and thought "nice steady increase on anticipation of flow rates" After hours I saw there had been an 3 RNS and thought with the trading range today that it must have been neutral and read it to see if my holding was not worth keeping....but 543boepd!! that is around double what we have been thinking would be a good result.

I am clearly not lost for words but I am dumbfounded that this has not been played today. Perhaps because the RNS dropped after market opening the players we're ramping somewhere else? I seriously cannot think of a proper reason why this news has not taken the SP to at least the 0.23 warrant price. I would have expected a 3,000 trades day on that news and an almighty spike to 4-5x yesterday's close for half an hour before being sold into and bringing it back and then news in a few days of warrants exercised but hardly as much as a whimper. Oh well. Poo still moving up gas trading in a reasonable modest range. No reason to unload as this should still head higher and it if the price want's to stay here for a few weeks until G1 hits or new on gas sales comes in and I get some funds from somewhere I think I will start to fill my boots even more.

Thanks to the share issue after that RNS his 8.23% dropped to a whisker over 5% for the same holding.

I even miss the numpty posts when there are none at all. Everything was massively busy yesterday. I was unable to connect to HL trading platform for quite a while. I didn't need to trade but I wanted to see their take on my actual portfolio as my Modern Water shares were being converted to DeepVerge but fortunately no Flow test results in here needing a trade decision to be considered. I heard other platforms were similarly busy. No issue for me today in HL just in this Chat forum which is thankfully back now. Has anyone else had "withdrawal?"

Praise be. I have been converted. Well my MWG shares in my HL account now say DVRG so, "hello."

I do like your expression "mushroom treatment" for being kept in the dark. If I remember it, I may use that. I'll offer one of mine in return "charmaggeddon" for the attention overload that happens when a company REALLY want you to sign something. :)

Since there is no immunisation for any other coronavirus then I think the "vaccine" is going to be aa shot that enables some degree of resistance. I.e. it won't stop you getting it but it should help the body to identify it faster and not need to learn from scratch how to deal with it and that should mitigate its impact. Not saying we won't get deaths amongst the vulnerable, but relatively fewer and the ability to retransmit could be weakened. Overall even that is worth having as it should mean no economic shutdowns in future unless it mutates and the shot loses any effect but then they should know how to modify it an it will be like an annual fly shot for the vulnerable. I am not expecting panacea for SARS-Cov2 virus but something that makes it about as annoying as a bad cold, which are caused by another set of coronaviruses would be okay.

Wednesday 21st last Andy Carrol on ProActive interview said Flow testing in about 2 weeks and results in 3 weeks. It's not even 2 weeks yet. On 28th he had another interview on 28th there where the service drill was "ready to move to site" so you should not be expecting flow test results until sometime next week. The better than expected results he referred on on 21st should hopefully be worth waiting for but no point going on about why they are not here yet. We've been told they're not expected yet. Only a little bit longer. The Baja site doesn't contradict this either. The "prior to the end of October" referred to testing a production to commence. It says nothing about results. Flow testing is production and they had to install production facilities which is part of the commencing work. I understand frustration when it is because they are not delivering to the time frame but in this case it's not true....yet. If you don't hear anything by the end of next week then by all means ***** and whine but you have jumped the gun here. Listen to the interview again and read it again. Baja tend to be optimistic and I can see how it has been read as it should be producing by now but short term optimists not looking for the true meaning but they aren't subject to rules of misleading the market in the communications because they are a private company with no traded shares. The stuff coming out of MSMN is a bit more cautious/deliberate. No long now. Still tie to grab some if you think it might go big, even for a moment. I have and I'm hoping for a better outcome that previous times. I'm backing it up with millions more shares but I am waiting for next week. Outside chance of an update this week but it would probably refer to some sort of delay rather than the results being sooner but you never know.

So I had a little wobble on the recent dilution and sold out and almost immediately regretted it. Now back in a bit lower down with 20% more shares as I was starting to get the FOMO wobbles with the flow test results coming up in the next couple of weeks. Hopefully the right decision but I don't really have a target here any more. I think we are going to see quite a bit of volatility until Galaxie1 is a goer. After that I'll try to have more of a plan.

Thinking about the acquisition and it looks cheep which might make people thing there's nothing there but while we had the cash this is an excellent time to be looking to pick up assets from distressed rivals if the homework is right. Now we need to see this rise enough above the warrants to see them exercised and have that extra money in the bank which could see MSMN through the other side of the second wave and into what will hopefully be a recovery with no third wave, while still developing F1 and G1 while drillers and infrastructure are cheap due to lack of demand. If they both deliver the goods then the future should be bright regardless of EP145. A bit like Wolfie I suspect EP145 may have to lapse at some point but only in the sense that I am not factoring it into my expectations. Anything positive there would be a welcome bonus.

Maybe. Any rise gets sold into here but how big the rise. There was a not very much RNS about a farm out of EP155 which is not going to do anything for a MSMN for a long while that lifted the SP from around 0.05p to about 0.25p in an instant. Yes that was sold into. Then the 0.15p warrants were exercised bringing it down further. Since then it help up pretty well until the 0125p share issue. I bailed my long term build of 6m on the day it spike and was frankly relieved but if something not going to make a jot of difference for a few years can lift the SP by 400% then I don't see that 150% is unrealistic on news that could materially affect MSMN very quickly and for several years and possible yield corporate profitability at an oil price that's perhaps not too far above where we are today. I might be slightly optimistic but I do think you are undershooting with 0.2 and then a pull back but you are entitled to your opinion. I did qualify it with the line "I could be well off." I'm really just looking forward to see what happens.

Hi crober23, choose your short term...these are my thoughts
This week - drift 0.1375 +/- 0.15
next week - not much but perhaps an uplift to the end of the week in anticipation (buy on rumour of Falcon 1 flow news)
3 weeks time - we should have seen flow results which if good could lift the sp to >0.3 then warrants excercised at 0.23 and 0.25 dragging it back towards 0.25. I don't rule out a spike to much greater than 0.3 on 200+boepd flow test but it will be short lived, maybe < half an hour, but it has happened here before a few times so it will be traded and ramped to the heavens as the day traders pile in and try to support their exit price with unsupported "5p by Christmas" nonsense.
6 -8 weeks - once the warrant have cleared and the extra £1.3m in cash is in the bank from them and there being 3.2b shares in issue all eyes should be on Galaxie 1 drill which is declared as funded without the warrant income. Hopefully that will be known by Christmas and we could see the end of the <0.3s with the right results with even a steady 0.5p+ back on the agenda. I think it's too soon to be expecting 1p+ but there are fingers in other pies which may change sentiment.

Make no mistake that it's a good time to be interested in here and a good figure for Falcon1 is expected to be transformational for MSMN as it was touted by a BoD member last year as hoping to make MSMN corporately profitable due to 50% stake. It might not be profitable yet with current oil prices but if it could be with oil over $50 then it's still transformational as we don't expect to see these prices by this time next year. and by then G1 will be hopefully producing a lot more. That's not short term any more so I guess you are just looking to play it for the time being. Obviously I could be well off the mark in either direction. Unexpected news is always a possibility. Play it how you feel but I think you have some days to research the official news and watch the interviews on ProActive Investors. I wouldn't be taking a punt on opinions of people like me without that. It's just an interpretation. Good luck.

What do you mean by when is it due? There are bits that are done and more bits needing to be done.
Done:
Drilled to target depth. Wire line logs examined, Cased and cemented. Pipeline commercial agreement
Yet to be done but underway:
Service Rig to perforate casing at target identified by wire logs for extraction. Surface facilities to separate and store oil/gas.
Yet to start
Flow testing. Connection to gas pipeline.
The answers are more vague than specific but middle of last week, except for the gas pipeline connection I think the quote was 2 to 3 weeks from Andy Carrol o the proactiveinvestors interview. Is that to start or finish or a ballpark I am uncertain but I'd say no news on that this week possible next week but also possible the week after but there may be a progress update RNS or two before it's done to keep up the interest. If there's info from other sources like Baja website then someone will notice and post here.

You should have a message telling you what to do. There should be a dark blue option not normally there to the left of the deal option which comes up with a message. Scroll all the way to the bottom and there is an accept button. There's no do not accept, that's just do nothing. Click the accept and your holding goes to 0.00 which means it's committed to the offer and you can no longer sell them. That's all. If you don't have it try contacting HL rather than post on a bulletin board.

I'm not holding my breath for a China deal for EP145 in 2021 let alone 2020. Not saying it won't happen but there are some significant obstacles in the way. Aborignal groups access permission is just the start. The relations between Australia and China are at a very low point at the moment and recently Canberra were looking to pass a law where they could veto individual states deals with foreign governments/companies that it deems against the national interest. I suspect this could be one of those deals is the gas is to be syphoned off to China as I think they are fed up of foreign companies taking Aus natural resources and not getting much of anything for it. Perhaps it would just put conditions on a deal which may be more favourable to MSMN considering they are based in North Sydney or Australia in general. Better to have the government behind you in negotiations rather than against you.

Link to new on proposed law https://www.abc.net.au/news/2020-08-27/can-federal-government-stop-states-signing-deals-foreign-govs/12603012