Member Info for DevonianExile

Bridget - well I'll mention reserves for you

Have been out and about most of the day - but have just re-read the RNS. Apart from the obvious disappointment on UD2 I remain of the view that this is a hugely positive RNS. They have successfully gone below Eldari A and have good oil flows, good gas mix etc. Re UD2 they will have learnt a great deal more about Zone F.

The only fully detailed future valuation of this company remains the original WHI report last August - placing a future value of just below $500 million based upon purely Zone 9, 14 and 15 Tarabani oil. They can now look to add other oil zones and Tarabani gas - and MK gas simply was never in that original valuation.

The things they are doing just now - ie testing flows by different gauge diameters, testing zones independently before co-mingling , measuring flows with and without frac, and so on are exactly what you would do in the build up of data towards an initial reserve declaration - hopefully later this year. As I have mentioned before the NSA report clearly states the good evidence of flows and mastery of the technical drilling challenges will allow some modest P1 reserve declarations and significant P2 declarations.

Re UD2 side track - or new well - I think this will depend on third party interest in the short term. From a pure economic standpoint the most pressing matter is to get all the testing completed, get money in the bank and communicate what else they can do beyond Nico later this year (given that the drill will now have been booked and Nico is already paid for). And get enough data ready to make that all important first reserve declaration. Hence my view that MK drilling will probably require third party support to progress in the very near term - which of course could easily happen.

Step by step - with the occassional backstep - they are making real progress IMHO

Its a bit like Brexit on the boards at the moment - everyone has a different view on the comms, and just about everything else.

For what it is worth I am very confident that we will of course get a full update(s) - but only when they have completed the process for each well in turn. And keep remembering that these are each test wells (including IMO U2) where the findings will determine a) the future drill strategy, b) the financing required and c) the approach to securing data by which P1 and P2 reserves will eventually be first booked - with each Zone requiring its own independent set of data to prove some element of the original NSA estimates. For the latter the process of proving requires very substantive data sets - hence why they would not have co-mingled until separate zonal data was established (and if you don't believe me read the original NSA reports - they clearly state that early attempts compromised on zone by zone data leaving big uncertainties in the estimation process, and an inability to attribute co-mingled flows to respective zones)

Re Dino they will have obviously already decided whether or not to test Z13. But in my view they would be mad to just give an interim update but not be able to give a detailed update on the entire extended well test. I am pretty sure they want to avoid any interim updates - given the history here and in other companies when incomplete information is provided.

Having come this far I am happy to wait – and most of all I want them to get this right. And I personally do not think they are outside of their stated timetable (have just re-read the key RNSs just check again).

Ok Commy - last one from me!

First - anyone who has been to any of the investor events - or last years phone ins - knows they are lookng for partners of some sort. But correctly IMHO they won't expand on that. So we have to hazard a guess - and I am with Regdik and others. Who would really want to partner oil field development in a big way - and why would FRR even offer it. Over the long term it would be value dilution rather than creation. So by a process of elimination it can only be either/both MK Gas or development of the rest of block 12. Given that MK Gas wasn't even mentioned in the WHI report last year - but low and behold Zaza put his own money into the gas as the first test drill - I'll guess that MK Gas is where the partnership likelihood is strongest.

So then FRR fire off the first drill - run into a few problems - and rebase the test process. You are at the same time in a shop window - and want to clearly state that one option is to build your own pipeline and monetise the gas yourself. Well of course that may indeed happen - but the key point is that you also want any potential partner to believe that is a real option. And as Zaza clearly said several times - the more of the preparatory and proving work you can do the stronger your hand. Whatever - once U2 results are revealed they can then be calibrated into a valuation - but offset against that will be the next round of seismics, and of course the drill and capture costs of field development.

JMO.

Commy - of course the gas is important - and one of the main reasons I am here

But getting gas out of the ground in real scale is a wholly different ball game - and will depend on a third party of some sort. Hence my AEX reference (which incidentally delivered the biggest gain I have thus far managed in investing)

The oil can be monetised today - and as we progress production can be generated from either internal funds or low level capital inflows. What I am saying - and Zaza was pretty clear to me - is that the stronger your position re both data and revenues the better deal you can drive when the time comes. WHI have suggested valuations for FRR based only on what they can confidently calculate.

I would suggest the only people who have a feel for gas valuations are those closest to whatever is going on at the moment.

Excellent summary Mole - which I fully endorse

Re the view of oil or gas - well the whole business model now is based on the oil and organic growth. Hence the WHI report and valuation plus company presentations which collectively are amongst the most detailed I have seen in my time investing. And thus far nothing has happened to suggest the field valuation - projected - should change. So at the best part of a $500 million valuation that is quite an impressive prize assuming results continue to be in line with model. And of course no account has been made for other than zones 9, 14 and 15 in this model.

Re the gas their is no proposed business model or WHI valuation - or at least one that has been published. I personally believe the wait is nothing to worry about - but the core future valuation still remains with the oil unless a major does finally come in to help get the gas out of the ground. If in any doubt about this then just read the AEX story - producing gas, contingent reserves (modest by FRR expectations) and new drills required to get production to required levels. Cost - estimated at $150 million - hence their recent farm out. And because they have no other options (ie they have no oil to create a revenue stream) they are forced into a less than ideal farm out arrangement.

Anyone who attended the last shareholder event will have been very clear about what Zaza was saying. The oil is absolutely fundamental to creating early monetisatisation - which in turn allows him to play whatever hand he has with third parties - be it for gas or even for oil. And the more drill data he has the more confidence he can have regarding the NSA reserve estimates. So the hand gets stronger

JMO

Having a quiet morning - and just catching up on weekend posts. I am very firmly in the "Mole" camp, and just want to add a few words.

First - I have absolute confidence that we will get positive updates, and for me the longer interval adds to the positive view

Second - from the shareholder events this year I too took away a very clear view, from Zaza, that interim updates caused more problems than they were worth. He would strongly prefer to let each test run its full course and then update - and my guess is that each well will probably have its own detailed update.

Third - today is the 16th July. One month on from the YA deal being announced. By any interpretation the first payment must have now been made (I interpreted that the deal possibly put the first payment to a month on). The payment of $265,000 can only have been made in cash.

Fourth - at the May event I asked Zaza about the politics. He was of the view then the PM would be gone in a short spell - and of course he was right. The day before this conversation he invested £130,000 of his own money in the company.

Could go on - but as Mole says - let them get on with it. Most important for me is that the next RNS(s) is/are definitive - and will not allow certain sections to say - ah, yes, but............….

JMO

Hi Regdik

I think AIM Rules prevail over Caymans in all but one situation - ie the disclosure of holdings element

Regarding major transactions, change to business or sale of assets AIM rules prevail. So if the transaction meets the AIM criteria shareholder agreement should be sought. Pretty sure this is right - I did check with the Nomad last year when the prospect first arose.

Matt - BPC entered a Confidentiality and Exclusivity Agreement - which is very different to an NDA

There were financial considerations in the agreement which you wouldn't get in an NDA - and what they essentially entered into was a shut out arrangement with a party who did not wish to be named. Ie you go to the next stage but lock out all other interested parties from discussion - and essentially get paid a premium for doing this. Can be good - but can also reduce competition re the commercials that might arise.

BPC are receiving $250K each month whilst the discussion progresses - which is the price of locking everyone else out. It is this income that is reportable at this stage, although the prospects of a deal are also driving the SP.

has just been filtered - in doing so I managed to wipe out 117 items of self indulgent nonsense posted over around 20 days.

As primarily an LSE reader that is quite a bit of my life returned to me

Well for me – despite the very low MCap/SP – this share has been de-risked enormously over the last few weeks. In fact I think it is now fairly easy to summarise just three big steps to achieving the end game of a power station play. Each step has to be completed in turn – but I would be pretty certain that the market will respond if the next few RNSs demonstrate real progress

First – they have to get production and sales towards the stated requirement – ie towards 10,000 tonnes per month. Self-sufficiency is crucial – particularly as they have forsaken the opportunity to issue more shares without shareholder agreement. Dropping the resolutions might have been expedient but surely they wouldn’t have done that without some strong confidence re operational progress? Achievement here represents around $6 million revenue per year – so above the current MCap.

Second – along with Sinohydro - they have to plan how a 300MW power station will work. For EDL that means establishing how to produce around 100,000 tonnes per month – of the right quality and in continuous supply throughout the year. Also need to demonstrate, I guess, at least 40 years of continuous supply at the right volume and quality. That is a serious call – and the plan will need to be agreed by both Sinohydro and no doubt the authorities. The plan would effectively be to make EDL a $60 million a year revenue business.

Third – that all sounds great but execution of the step change is key. Moving up to that sort of increased capacity will need serious capital. My sense would be that some form of JV with Sinohydro or ANO might then kick in – and debt financing might become an option. Simply because the power project is a) funded by the World Bank, and b) because for this strategically important loop EDL have the only available source of coal.

I also suggest that shareholders – against a serious plan to make such an upgrade – would be persuaded to stump up more cash.

All JMO

Mole - must have missed that. I'll take my punishment sir!!!

Just to say some of us are still trying to make the ii website work! Hard work though. Am sure TOT won't mind me posting something he came across - Newsletters on FRR on the EDI homepage.

http://ediholding.com/newsletter.html

Good detail - mirrors what FRR have said - and no doubt Dustin was the link to these guys

Just to say some of us are still trying to make the ii website work! Hard work though. Am sure TOT won't mind me posting something he came across - Newsletters on FRR on the EDI homepage.

http://ediholding.com/newsletter.html

Good detail - mirrors what FRR have said - and no doubt Dustin was the link to these guys

C5 - I echo Regdik's response and won't add to his post - other than to repeat that there is no FOF based private network that I or others are a part of - it all ceased to operate once Zaza started to engage with a broader group of shareholders. Regarding the charade of the last day or so it quite frankly reminds of the kindergarten.

I am certainly not going to apologise for FOF - I and many others have very substantial amounts of personal wealth invested in this company - and shareholder communications had fallen to a very concerning low a few years back.

As for posters on LSE - well that's up to the individual and how or why you think I or others should even attempt to control LSE members is beyond me. You might not like the volume and content but that's the way it is. Unfortunately for me iii have managed to completely mess up their offer, and the ADVFN board is arguably the worst of all worlds. So I will simply post less often.

For those who have been around for yonks - I am certain they will deliver results before the close tomorrow. But several times they have done a late morning release -could be today or sometime tomorrow

Part of the problem is if there are any late wording revisions on the commentary and then matching US, UK and Georgian time zones. Nomad has to approve. so can go backwards and forwards a bit

For what is worth I think the accounts will have been done weeks ago (because the auditor has to approve them) - it is the accompanying RNS wording that they leave to the last minute. So will be interesting if commentary carries any ops update - or if that is done by separate RNS.

JS - from the WHI report. The question is of course how frequently they can do this going forward - the twitter photo was in my view a very welcome tease.

"The group has existing production infrastructure to monetise its oil production.
The group operates a rail terminal and storage facility at Dedopliskaro, which has a storage capacity of 27,000b and can discharge circa 10,000 b/d. The railway is operated by Georgian Railway LLC, the state owned railway authority.
Dedopliskaro Export Facilities
Oil can be taken by truck from the Taribani field to the facility at Dedopliskaro.
Once a sufficient amount of crude oil, usually in the range of 10,000 – 20,000 b has been accumulated at Dedopliskaro, Frontera arranges for the oil to be transported by rail to Batumi, a port on the Black Sea, where it is loaded onto tankers destined for the international market.
Oil sales are typically transacted F.O.B. at Batumi."

Spot on Noloss

All an NDA does is allow info to be shared under a legally binding agreement not to disclose - ie what you see you can only use for one single purpose. So you go into the "data room", see and assess the info and decide what you want to do. If you do nothing you are still covered by the NDA - you can't use it for any other purpose (remember the Outrider issue and what happened there). If you want to exxplore a commercial opportunity you are still covered by the NDA - until a tangible outcome arises (eg MOU or Contract).

NDAs operate apply in every market and every busness sector in the world. And I doubt if they would be disclosable anywhere - Nasdaq, FTSE, Bourse etc etc. AIM is no different to anywhere else.

And if 5 companies are in the data room then 5 NDAs wll be in place.

So around 4000 tons per year for 1MW - so 1.2 million tons for 300 MW (Source https://www.quora.com/How-much-coal-required-to-produce-1-mw-power). Will vary by grade of coal of course

So around 100,000 tons per month. That is some serious upgrade - and will require a lot more financing, kit etc. (But of course transport becomes less of an issue.) And the coal contracts in the interim will no doubt have to be fairly short term.

For those at the AGM perhaps worth confirming the numbers with RS, plus what the standard stock reserve would have to be to support such volumes. I would guess around 2 months - because of the seasonal issues - but am no expert

Also the logistics, management capacity, financing etc that goes with it - and do they see a partner supporting them at some point (could of course be Sinohydro).

Plus do they have a mid term MCap target?

Plenty of food for thought

NDAs are never RNSd in my experience,. In fact they usually contain clauses forbidding any publicity at all.

Companies can state that they are looking at partner opportunities, have agreed an MOU or have agreed contractual terms.

Usually most employees will not even be aware of NDAs. Those that are will be working on the issue and should have signed detailed confidentiality agreements - copies usually held by the Company Secretary

Also even smaller companies might have quite a few NDAs on the go at the same time - I personally have been involved in upto 4 at any one time

Hope that helps

Fantastic news - and clearly this was al drafted and just waiting for the World Bank funding confirmation Also possibly suggests that this timetable was known - hence the timing of the AGM

Also just about seals it for me that a) it will happen, b) it will happen with these two parties, and c) that Sinohydro are happy with life and not phased by EDLs team or current production challenges

Message to those attending the AGM. Yes - listen, ask relevant questions, listen to the answers, make appropriate and realistic suggestions. But do not rock this boat.