The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
My 2 cents, nothing more. Its impossible to dive deep as we don't have data therefore a critique at best. i hold just a few shares, a bit less than SGF and SI, but not far.
Firstly, not all CPR's are equal. I know RISC well, but generally have a stronger lean towards DeGolyer, ERCE or the now defunct LR Senergy.
The CPR also don't address operational and contract risks correctly. RISC in their CPR attempted this very poorly.
I recently raised the point that well construction program for a 3000+m well usually / generally takes up to ~70 days, all in (planned program, NPT, WoW, etcs). Drilling is part of a well construction program. Now both Carnarvon and ADV seemed to think they can do it in 30+ days. If they do, great. if they don't and the time it takes to complete the program runs to 60-70 days as is generally what i see here in UK and US for those depth, i won't be losing sleep. Its fine.
Operationally, the rig is still with another party. JSE is doing workovers, and the nature of workovers in general is you will come across both known-unknowns, and unknown-unknowns. In short , expect delays so you will be happy if its on time. This has no bearing on the project fundamentals. So don't get spooked by delays. Expect it.
Other risks:
1. This is a new team (ADV), they have no track record as a team. So be mindful things may take a bit more effort than where they were in their old cushier positions and likely more impediment to address now in their current seat. If you believe in their ability, stick with them. Before you shoot me, i bought ~1MM shares just on the back of their CV before due dil and big buys later.
2. Carnarvon has no operator experience on production and development, therefore another risk that i see on the timeline.
3. RISC turned a blind eye on CO2 content and issues related to it. Poor from RISC in my view.
On outcome of appraisal, the CPR fails to address re-segregation and flush during the long shut in period. Therefore, based on the limited public data i have, i expect much better outcome than the CPR eg better oil column, saturation.
HODL is best. It will get to where it needs to get. I am aiming 5.1p by xmas, and 50p by end of 2023, anything above that i am forever grateful. Thats a >25x on my sp average.
May the growth continue for the next 10 years and beyond! 60B target to dethrone Illumina!
Some angry posts on this thread - chill. We are all investors of the same company. Rooting for its success and our profits.
I think its a simple error / honest mistake on LP's part in the interview, the appraisal program should be completed after new year, perhaps mid to end Jan 22, not this side of xmas bearing in mind the reservoir depth (3000m+), likely a 70-80 day program. The reservoir depth is given in the CPR by RISC.
It doesnt impact the fundamentals on the project, nor the valuation.
DPYC, the following link from pages 33-44 will help.
https://www.advanceplc.com/media/1092/risc-cpr-buffalo-23mar2021b.pdf
Numbers check:
RISC CPR 2C net to AETL: 12.5 MMBo
On CO2, they won't bother injecting newly sourced CO2 or re-injecting their produced CO2 . they already have up to 18% CO2 in the associated gas which can cause integrity and flow assurance issues.
I am doubtful of $2 premium to Brent, but lets see what offtake agreement they can get from the traders. Happy if i am proven wrong on this.
Do you have a target sp? I bought some last week and today but planning to add more over time. Was hoping to come in at 400+ but looks like that has sailed away
Dai
Did you pick up ONT yesterday? I mentioned it a long time ago. Sp is shooting since yesterday.
SX should also be good when they come onto market. I think ONT laid the groundworks for them.
Section 4.3.1 of CPR clearly mentions a 3 well development @ 49.1MM USD cost. Total capex to bring to production is $125MM (145-20; 20 being the appraisal well already funded).
Downside: Watch out for cost of rigs creeping up which generally follows oil price.
Upside: if appraisal well results are great, they might only need 2 wells which brings total capex down by 26MM.
Please read CPR and DYOR.
Spot on Spike.
Luckyman2 is right. Thats the plan.
Hello SGF
Its physical crude trade so ADV will need to produce it, and the traders having exclusive rights on buy /sell / marketing of the crude.
Hello SGF
Quoting:
"This high quality... helped Advance secure funding, and the firm is negotiating with a major oil company to trade the crude, with a provisional letter of interest (plus caveats) already in place."
Likely its an LOI from BP Trading or Shell Trading. They work just like any other traders, Mercuria, Trafigura, Vitol etc and there is no link between the Upstream business to Trading whether its Shell Trading or BP Trading (my bet its BP Trading). So please don't read too much into it with regards to the Upstream business potential.
What it does however, from a business standpoint, gives ADV access to a debt syndicate via the traders for senior debt, junior debt / pre sale funding so ADV can raise equity with certainty on the market when the time comes. The badge helps too. Smart move, as city banks doing E&P funding is getting very thin nowadays. Very positive development in my book.
GLA and please DYOR.
Chaps
Spoke to RBC, they advised its for institutional investors only. However, if you are with a wealth management company you can ask them to contact one of the bookrunners and try to put an order in (£1mm) although no guarantees you will get any. Worth trying.
Hmm, sounds like IPO day investment then for me. :(
Shareinvestment
I invested in both 1 and 2 pre IPO, but no luck with 3. If either of you or Curator figure out a way, please let me know. I will try and contact their broker today and see what's what
Sorry to hijack this but i wanted to share with anyone who is thinking of having a bit of diversification from " drill bits shares". I own large swathes of shares of ADV (less than SGF though), KIST (from listing) and the unfortunate HE1 .
Using the same logic as ShareInvestment: buy in early then hold, three upcoming IPO which i find interesting are:
1. SpectrumX (there is a webinar on LSE next week). Listing planned in Nov. Pre IPO raise now. Their nebuliser tech on HOCL is a game changer and their trial results are 100% successful against all covid variants and viruses tested. See also interview with Chelsea and Westminster hospital on SX.
2. Technology Minerals - first mover on LSE, circular economy. Listing end of Sept?
3. The mighty Oxford Nanopore listing in Oct. My favourite.
Sorry again, and if this is too much bother, please either skip it or report it to take it down. Its not financial advice, just sharing the outcome of my own research and my own plans. Apologies again for using the ADV board for this.
https://www.telegraph.co.uk/technology/2021/09/16/oracle-pumps-150m-oxford-nanopore-float/amp/
Dai
And the above too. Ive been following them for over a year. Listing next month
ST
All fields awarded (signed off by OGA) will be listed on the pages i shared. So non core or core, it will be on there if awarded and terms agreed.
Thinking about it:
The team at ADV is focused on a particular type of asset: underdeveloped, proven fields. Eg barrels have been produced but shut in, not due to lack reserves.
Keeping these undrilled gas prospects seemed antithesis to their model hence i assume they cleaned up and refocus. Better for me as i prefer a focused company and continuing with their "proven bbls model"
Hello ST
Here are the OGA links (public domain) you can use to check:
https://itportal.ogauthority.co.uk/information/licence_reports/databycompanyandblock.html
https://itportal.ogauthority.co.uk/information/licence_reports/offshorebyblock.html
Hope the links come out ok.
Dai
For spectrumX (SX), sanitisers are a small bonus for underlying CF. Check out the interview from Chelsea and Westminster hospital about SX. I am focusing more on the nebuliser for inhalation as that is game changing and the recent trials has been 100% successful for all and any variants (HOCL is non selective). The fact you already use HOCL is already superb!