Member Info for CrustyPete

Prospero you say:

"Worth remembering the NT-2 sequence:

• ~1.4p just a couple of months before rig contract

• 1.7p on rig contract news

• 2.2p on spud

• 7.9p spike on results

Where are we now? ~2p — basically the NT-2 pre-contract equivalent.

What your selective analysis chooses to ignore is that between July (1.4p) and September (1.7p on rig contract news) is the fact that at the end of August and early September the sp in 2017 was sitting at above 2.0p just as it is now. So between September and rig news a few weeks later the sp actually fell by 15 -20%. Indeed the sp barely moved on rig contract news on 23rd September, indeed was still sitting at 1.8p two months later on 22 November. So it appears to be the anticipation of spudding before the end of the year that brought about the move to 2.2p and not the rig contract. Though I suppose you cannot have one without the other.... the principle point being that your extrapolation of those numbers presupposes that the sp will still be 2.0p by the time of the rig contract and that the contract will trigger a further rise into the spud - well that was not the case for NT2 so how can you justify using NT2 to support your projections. If you are going to use NT2, you should be projecting the sp to fall between now and rig contract and the sp to flatline until shortly before the spud. And at the moment we don't know when that spud date is likely to be.

The question then is when will that spud date be? Hopefully we will find out with the rig contract news and can only hope that there won;t be a big gap between one and the other.

Furthermore, in my last post I was not suggesting that ARA would wait around to share the M&P rig but simply that if they are to spud within three month of the rig contract that is the only way that will be possible - by negotiating a window to "borrow" the rig for that period. Yes, the civil works is done for CH1 and long lead items are in place; at NT2 the civils were needed but all equipment was in place, 1.5km away. The most critical potential factors in the timing of the CVH1 spud, having identified a suitable rig, are the time until that rig becomes available and the time necessary to get it to Tanzania, on site , set up and signed off. I suggest to you that, even with a fair wind, that is not going to happen in three months and we will be lucky for that to be four or five months. Indeed in a worst case scenario, we might find that the M&P rig is the most time optimal option.

NT2 was "officially" projected to flow at 20 MMscf/d but unofficially was expected to be 50 -60 MMscf/d; hence the eventual well test results were a disappointment - the market was expecting more. Unofficially CH1 might well flow at 50 MMscf/d but "officially" NT1, NT2 and CH1 are expected to flow 60 MMscf/d into the pipeline. Time will tell what they will actually be but, if they don't reach the much vaunted 50 MMscf/d levels will the market be similarly disappointed?

Just bought 50,000 at 9.0p and could have bought pretty much as many as I wanted.....! MM's loaded with stock it seems. Next tick another move downwards surely.

I suspect that this trade accounts for more than just yesterday's drop - they may have been warehousing this for a few days. I am just annoyed that I ploughed all my spare cash into SCLP following Martin Diggle - a lesson learned. I may sell a few things here and there to facilitate a small addition.

Indeed BB, 309,000,000 and if that was a BUY, where is the TR1....? Soon to follow perhaps?

Yes McNol we did but those trades were precisely 50% and 25% of the shares converted that day and at the price of the shares at the date of the funding agreement. There is no obvious correlation between these trades and the recent conversion, neither in the number or the price.

Buggered if I know what the explanation might be. Ho hum.

Ah, I see, Rojo your attempt at leaden sarcasm masquerading as wit?

Losing the plot? "Pot" and "black" come to mind Rojo and I don't mean snooker.

Goodnight.

Well Prospero you asked me about what price would be my limit price and, as I have indicated I cannot comment until a lot closer to the event. Yes the sp is now higher than it was at spud in 2017 and a similar price to the price at spud date. But then in August/September of 2016 the sp was similar to the sp at spud so on what basis so you justify an sp of 3 - 4p at spud? Indeed between rig contract for NT2 and spud date was only 3 months but that was only possible because the rig was stored 1.5km away; that turnaround is certainly not going to be possible for CH1 (unless they negotiate a window of opportunity with M&P for a rig share for their in country drill).

Furthermore the flow rates for NT2 were expected to be equal to that for CH1 and look what happened. Now I am not suggesting that the same will happen at CH1, far from it, but the sp post drill and well test results will be determined by the extent of those flows and the extent to which those results support the estimated reserves. There is no guarantee that they will meet those much vaunted expectations.

Your point about pipeline availability is a good one - indeed one I referenced myself and it should have an impact even if that impact is simply to protect against a post drill sell off.

Your condensate point I believe is something of red herring as similar expectations were equally true of NT2.

I do though expect a significant contribution from Institutional Investors but, most likely after the CH1 well test results and not before - assuming the drill is successful of course. That is a very strong reason why I may not choose to set a limit order at all for the CH1 drill as I did for NT2. However it would not likely impact the level of that limit order should I choose to set one.

Anyway Prospero I must dash - out to the pub for a birthday celebration now - and no, not mine.

Maybe he has to go and get fitted for his Santa costume ahead of the festive season?

And nor did I offer them Rojo so what are you bleating about?

I have just checked Prospero and as I suspected you will see that the AEX sp peaked just 2/3 days ahead of the well test results after which they fell some 30 - 40%..... Circumstances this time are a lot different as, once well tests complete, any gas will be plugged almost immediately into the pipeline, so far less ongoing uncertainty - however the impact of that CH1 "production" will surely be significantly influenced by flow rates and if they are underwhelming the sp could well be impacted.

Some of those variables rely upon waiting for the Well Test results - in all honesty Prospero if the sp had risen by a similar %age to the NT2 comparator I doubt I would wait for the actual results - the downside could be a lot more than any additional upside if those results were perceived as "disappointing" and who the hell knows what those market expectations might be?.

That rather depends on the time frame under discussion Prospero? If we are talking about the CH1 drill (closest comparator to the 7.78p at the time of NT2 drill) it will depend significantly on the price at the time of the spud methinks and that rather depends on how long we will have to wait for that date and what happens in the meantime? My limit price of 8.0p was only placed after we knew what the spud date was, drilling had commenced and TD had been reached - in short after any mishaps had been eliminated and the upside was contingent purely upon well test results. At the time of TD being reached I believe (from memory) the sp was circa 3.25 - 3.5p, so from there the sp rose by about 125 - 150%.

I would expect something similar on this occasion and, if I choose to do the same this time, any limit price I place will depend upon the circumstances (sp) at the time.

CMG I am simply canvassing opinions in relation to peoples' perception of the wiggle room available and, should that wiggle room run out, the impact on Drilling, Rig availability and timescales. As an investor I genuinely consider these important questions and, "no" I do not need to sell up, I am holding and with a healthy profit margin, so am very "calm" thank you.

Quite right BG, 7.8p BID in March 2017. I remember it vividly, my "limit" price was 8.0p at the time😩..... just too greedy I guess?

I have already made my views clear Rojo and have no intention of repeating them.

Well EE, we can only hope that you are correct. Unfortunately no-one appears to be heeding your cautionary tale.

Anyone looking for 4p to break even certainly will be looking long term Rojo, so yes maybe you do need to heed prosciutto's hyberbolic scaremongering. The majority will be happy with their profits and looking forward to taking them, whether that be in the short, medium or longer term (or a combination of all) is of no great concern to them.

£700m is not totally beyond the realms of possibility but that would be after a bloody good ESP outcome, a compelling Feasilbility Study, comprehensive and attractive funding options and the successful drilling of 40+ successful Rukwa wells.

Unlikely that all of the above will be delivered without "hiccoughs" but all doable, even if there is a lot of water to pass under the bridge yet.

All of that may be true but, honestly, would you rather now be sitting on cash or with 10+m shares bought at a higher price? I know what I would rather have....

If there proves to be a delay and the scheduled drilling window disappears will that not then require BoD to look for a new rig?