Member Info for CrustyPete

Win, BG and edgar, blimey, when did you lot go to the paid rampers school?!

You are doing a great job gents you have even got me convinced; nearly.... ;0)

Oh and don't forget gents before ARA can drill anything they need a 25 yr Dev License. Why hasn't it arrived yet?

The point being RJ that the asset you talk of may be worth £5m or ZERO there is no in-between, it will be commercial or not; and until the EWT or more, that figure will be difficult to establish with any certainty. Prior to that, there is considerable risk and the off taker will demand a premium for that additional risk, and we, the shareholders will pay for that premium - in one way shape or form. I would rather we did not. I/we should pay for the EWT and appraisal well through a funding round and then we get to retain that premium.

Anyway, we will see.

Well there are an awful lot of assumptions and maybe's there RJ, principle amongst which are the figures. IF those figures were clearly demonstrated to me and if they were $60m, then maybe, just maybe. Unfortunately, He1's ability to provide definitive figures is reliant on the EWT outcome and maybe the appraisal well being drilled. So that offtake CEO might provide funding but it is surely going to be after the EWT and, maybe the appraisal well.

Anyway, enough, we are just going round the houses here. As I said earlier my "topping up" strategy is based on my expectations as anticipated after Lorna's last interview on 22nd Feb "consequently, first requirement is to create the model, second test the model with new drill, which will require funding, then a JV, partnership or farm-out."

The only thing that has changed is the insertion of the EWT, which only serves to reinforce my opinions about sequencing, including funding.

So enough from me. Goodnight all.

Particularly with a former Cantor Fitzgerald employee (Sarah Cope) on the He1 BoD.

Oh and by the way I was once a Cantor Fitzgerald employee ;0)

Well deltalo I suggest that the interpretation that many others have made (and they are not all sellers by any means ) is the correct one and yours is simply the one that you choose to read. Indeed yours was my initial interpretation until I re-read it several times before reading it as below

"flowed the equivalent of 0.5 mmscfd of (which) 4.7% (is) helium"

However I am happy to accept your interpretation and hope you are correct ;0)

"Crusty if it is to be a JV I think you may be right, but watching an early presentation by the company chairman last night from back in 2020 he was hinting there were already preliminary talks with the three big off take players"

That is fine RJ but no-one will extend a loan to the Company for a future off-take arrangement until the BoD can confirm the level of that future off-take (it might yet be non commercial); that will not be until after the EWT and, I believe, the next appraisal well as that appraisal may well will be needed to firm up on the reserve/basin "model" . Yes, you will say but 4.7% and a flow rate of 500 scuffs per day is commercial, it could well be but it will have to repay the costs of the off-take infrastructure and / or production system - so it is not only about how much per day but how long will it last? ("internal resource estimates" as per the RNS) The assumption is that is will be endless but I would like to hear that from our BoD in the form of an RNS thank you. Will the Itumbula system repay the production facility costs and by how much? Is that a good ROCE? Remember Kiliwani?

Deltalo you say "Just price up the Helium then x times it by 500k a day" NO! Dear oh dear, where did you learn maths? Or is it simply easier to tell total lies? Only 4.7% of that 500k is Helium. Got it?

"Off taker providing some funds as a way of buying into future profits" as we have discussed in the past, this is just "dilution" by another name. Would this be any more cost effective than the BoD raising capital in the market? That should be the only determining factor; the options that ensures that the BoD optimise shareholder value. Would we be better off with giving away a hypothetical 30% of future income streams or 20% of issued share capital? They would have to crunch the numbers and come up with the right answer.

You may be right RJ, but on the issue of costs. I suspect that much of the £4.7 will have evaporated by the time we get to EWT, with the ongoind costs at the well, cost of the modelling and third party well test corroboration etc. I cannot honestly say that I would guess what the cost of an EWT could be and I suspect that they can differ enormously dependent on scope, complexity, depth etc And then you have the prospect of an appraisal well.

You know my feelings on the prospect of a JV funding drills etc, neither likely nor in shareholders' best interests. The costs of the production facilities is anticipated to be $38m - that will be a chunck of money for the JV partner to swallow on it's own.

Ultimately RJ you may be right but I will be basing my top up strategy over coming weeks on the assumption that we will see a dilution before a JV, as that seems both the most likely, the most suitable and beneficial outcome for shareholders.

GLA

I am not sure tat you can classify today's RNS as "results" more simply an update. I little more detail around the flow rtaes etc, which is helpful BUT in reality those figures are still "inconclusive". Modelling EWT and appraisal required before the "results" are meaningful, one way or the other.

I am still very optimistic.

I can understand that - I am not underwater, albeit am now holding some that I have bought recently that are underwater but am certainly looking to add. Though I am in no hurry better to keep my powder dry methinks. It will be a relatively long haul until the results of the EWT and any future drill and a good chance of a dilution in the meantime.

The problem is that it is difficult to sit on them! I have believed the above for a while (likely need for appraisal wells and dilution) but it did not stop me buying more in recent days. I would be best served by NOT going online and reading this BB daily!

Whilst it wasn;t specifically mentioned in the RNS I think it worth mentioning the obvious issue of "funding" Blubay. Dilute and be damned I say - bring it on! But it is definitely a strong, short term possibility.

Can we take it that you have sold out LOTM-13?

Deltalo you say "revenue means dividend" no it categorically does not! Revenues will be ploughed back into future exploration, appraisal or production facilities - there will be what 10+ more wells to drill and some of those might not be as good as Itumbula1. Only fully developed companies pay dividends, until then any income will be reinvested.

Cameron F, you ask "but the thing that I ponder on is WHY they are doing more testing...?"

Well rather than me transcribe what I have read - see below a copy and paste from the website of Well Engineers and Consultants. This summary will, I am sure, apply more to Hydro-Carbon wells than to He wells BUT I am sure this summary below is still applicable.

Extended well testing provides substantial reservoir information which can be used to:

Establish reservoir behavior

Evaluate reservoir in real time

Assess the commerciality and productivity of a field

Determine the field development plan

And yes, what they already know is sufficient to continue moving forward but before they invest a load of money on off-take facilities or sign with a JV partner they need to know what they have below ground the ROCE of that spend - fundamentally the commerciality. And better to spend that money up front than to spend in haste on "production" facilities or sign a inequitable JV contract and regret it later.

Regarding the condensate - just a few points the condensate at Kiliwani was owned by the JV partners under the terms of the Kilwani GSA. As we have not seen the Ntorya GSA we do not know whether the same terms apply but TW did state that they would expect the structure of the Ntorya GSA to closely follow the Kiliwani version in the expectation that both would end up selling gas to the TPDC at wellhead, which is indeed what was agree.

Consequently whilst it is not 100% certain that the JV partners get to control the sale of the condensates I would be very, very surprised if they did not.

Q3 is quite a wide target July - Sept. If they are hiring it out this month and to expect to get it returned before June I think that wholly implausible; September? Feasible if it is being used "locally". That said I would hope not - the last thing that shareholders would want to see is our drill being used elsewhere resulting in damage and / or delay to the rig and thereby compromise our own EWT and drilling plans.

So whilst it could be feasible I genuinely hope that they have no plans along those lines.

Under the thread "My takeaway points form the video" 22 Feb and in discussion with Blubay and others I suggested then "Indeed so Blubay, consequently, first requirement is to create the model, second test the model with new drill, which will require funding, then a JV, partnership or farm-out."

I don't see anything that changes my view, more over whilst it may be perfectly possible that and early adoption agreement to be signed I believe it highly unlikely and, more importantly not in shareholders interests. Again, from 22nd Feb "I hope that we do dilute in order to drill more or deeper wells as the greater the proven size of the asset the greater our leverage and bargaining power."

As you say below for the JV partner it is about entering the fray early to get a better deal. A better deal for the JV partner is not necessarily the better deal for shareholders; I would rather see them complete the EWT and even test the new basin model with another appraisal well before entering into that JV. It might involve a bit more short term pain for shareholders but in the interests of a far bigger longer term gain.

Iangibbins, well actually certain things have changed - the RNS tells us explicitly that they will be doing an EWT in Q3 and potentially another appraisal well. Both of these will need funding and completing, as will the basin modelling, before we get a JV signed (imo). This contradicts many on here who said that the next RNS would indicate that any / all future funding would come from a JV partner.

So some months to go and likely as not a funding round in the meantime.

Yes Blubay it is huge but, as we speculated, a lot of work to do to covert that huge prospect into hard cash and most certainly going to need yet more capital to get there.