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fairdealer: "erudite"? "araldite" more like.

My best guess is that the WP's drilling schedule was changed to allow the new seismic data to be fully considered before drilling begins. wdik?

The results need to come out positive. Whether the right value comes through in the share price if it does is another matter. All the uncertainty has killed JOG's SP and it's been trading for some time at a level the market has now got used to. The Verbier discovery is valued at base level at best (4.5MMboe to JOG), a 'nil' value is attributed to the rest of P2170, inc Cortina which is prospectively a bigger field than Verbier and JOG's cash and other assets (such as they are) plus the decades of accumulated expertise and experience of JOG's personnel, are held to be worth nothing. People don't seem to believe JOG will be able to acquire any income producing interests, which leaves it in their eyes as a small explorer tied to Equinor's bootlaces.

I'm playing devil's advocate.

It might all turn out well but we know the risks involved. I'm a lot less comfortable with my holding than I was at one time. Happily SQZ has performed like a star for me although I bitterly regret selling quite a number at 28p to add here in the £2 placing and offer in late 2017. I was expecting a different timescale for the further appraisal JOG told us about when the funds were raised.

Not one of my better decisions on the face of it but it hasn't played out yet.

dyor

How did you view the options issued at £2 last year (or was it late 2017?) JerseyCrew?

The new CFO must have made a significant impact in his first 2 months, given he was awarded 150k options at 172p when he joined the Co 2 months ago. Does this indicate we might soon get to hear about an income producing asset being acquired, one might ask?

More options for the two non-executive directors I note. Who approved these I wonder? The award of such options flies in the face of good corporate governance as defined in the Code. Non-executives are supposed to maintain a position that is independent of a company's operations, so enabling them to take a balanced view of a range of issues, including executive performance and reward. It doesn't challenge the intellect to see that it is unhealthy for NEDs to have a financial interest in the outcome of decisions on which they should be taking a balanced and impartial view. The Code is there for a purpose and the defence commonly put forward: "lots of other listed companies do it" doesn't cut the mustard as far as I am concerned.

Mind you, when one reads an early extract from the Code, it is extremely difficult not to fall over laughing: "Over two decades of constructive usage of the Code have contributed to improved corporate governance in the UK. The Code is part of a framework of legislation, regulation and best practice standards which aims to deliver high quality
corporate governance with in-built flexibility for companies to adapt their practices to take into
account their particular circumstances". Improved corporate governance, eh? Had they said "on another planet" instead of "in the UK" it might have made sense. I am not for a second suggesting that JOG's extremely hard-working, well-focused and capable management aren't fully deserving of their awards - I'm just raising a few considerations to bear in mind. It's all about fairness and balance in the end. If directors are awarded 'at' or 'in' the money options, they're expected to deliver value that's measurable in a company's share price.

I never complain if directors' interests are closely aligned with those of ordinary shareholders who have paid for their shares using their own money and have therefore accepted the risks. AB and RL clearly have full exposure to those same risks and have committed fully via the merger of their own company (the original JOG, which they set up and paid for themselves) with the old Trap Oil. At some stage they're expected to deliver, however. Whether or not it's their or someone else's fault, the fact is the share price has more than halved since oil was first discovered at Verbier in late 2017 and the Company hasn't made the acquisitions it is always said to be looking at.

Let's hope everyone gets to benefit from whatever actions the execs and non-execs alike have been taking recently that led to these latest awards. Smelling the pudding is not nearly as good as eating it.

GLAL
dyor

..........I tend not to set prices to sell at because situations are always fluid and my investment strategy continues to be almost invariably long-term focused. Investments need constant appraisal but if the fundamentals remain sound, I'm happy to ride the waves of short-term sentiment, even if it tests one's patience and can affect confidence levels at times.

I see SQZ as a solid long-term hold with good upside potential:
a) when the market realises the full extent of SQZ's positive cash generation post completion of the BKR deals;
b) if the drills at Rowallan and eventually Rhum 3 (?) yield positive results
c) on completion of further value-accretive deals even if not of the calibre of BKR

There is short term price risk if the drill at Rowallan produces negative results, regardless of the fact SQZ is fully carried. Ditto any other short term disappointments. Or a significant holder deciding to take profits.

If the Company doesn't do so itself, I'll have a go at preparing a broadly-based NPV10 value of SQZ's reserves (using DCF projections) when the final accounts are published. Future infrastructure costs will be a guess but something is always better than nothing. It should prove possible to compare the NPV10 value with a much simpler arithmetic calculation of confirmed P2 reserves multiplied by a ppb based on most recent evidence of value-based deals on the UKCS. I'd expect to come up with a value significantly higher than the current SP.

In simple terms I look for as much information as I can find that allows me to form a view of fundamental value. I continue to believe that fundamentals win in the end. Companies that 'go all the way' eventually provide an investment return that allows a more precise calculation of value to be made. Let's hope SQZ eventually obliges in this regard but the reality is it will probably come onto the radar of one or more of the bigger players - if it hasn't done so already.

The above are just my personal views and they're not necessarily right. LTHs all have their own ways of establishing value - there are many ways of getting there. It goes without saying that share prices don't always reflect underlying value because price is (or should be) the simple result of supply and demand. There are any number of short-term traders who concentrate only on price and these can determine prices in the short term. Fundamentals can be expected to play out in the end.

I might sell a few at £10 in two or three years' time :-)

GLAL

dyor

I understand your position fully, Mommur. SQZ does indeed have all the attributes.

My loyalties are split, however. I like all three companies I mentioned, even if two (JOG & CLNR) appear a lot riskier than the other (SQZ). I shouldn't enjoy risk at my age but I do. At least when (I think) I understand it and can see significant upside. When we invest, we effectively entrust our savings to others. On too many occasions we are let down by directors whose first priority is their own financial gain. So the people at the top matter a lot to me. I have to trust them - it took me too long to learn.

As I intimated in my last post, I trust those making the judgments in the 3 companies I have investments in today. As each story plays out I will withdraw funds from the markets entirely - they are now fundamentally dishonest and I want no part. I'm in a position to understand the macro game that's played to convert people's savings into tax for an increasingly empty Treasury. Government borrowing via the issue of Gilts has become little more than a giant ponzi - it's no wonder MPs want the ECB to take over the UK's finances - imagine the UK having to earn its way out of crippling and unaffordable debt. Easier to grow a few million money trees I reckon. The link below is only to the National Debt. Depending on the assumptions used, you can conservatively add another £3 to 5 trillion of 'off balance sheet' debt in the form of unfunded future public sector and old age pensions, plus all the crippling PFI commitments Gordon in particular signed up to. The good news? We're not as badly off as the US.
http://www.nationaldebtclock.co.uk/

Happily, in the midst of this giant mess we have Serica Energy plc, run by a highly talented, well balanced and honest man called TCW, who put personal sadness behind him and pitched back 100% into what he knew best - and he came up trumps for everyone. I can't tell you how much I admire and respect him.

Otherwise just ignore me - most people do and it doesn't do them any harm

GLAL

dyor

PS don't miss the boat on JOG, ferotty - there are only 21.8m tightly held shares in issue and when there's news the price moves quickly.

Mommur - I held 2m+ TRAP and was down 95% when JOG arrived. There was a dirty story to tell on TRAP (Guillenhammar in particular - I aired a lot at the 2015 AGM). In order to win, you'd need to have formed views on JOG's main men (Benitz & Lansdell), taken the 1 for 100 consolidation for 27% of the new-co on the chin, added multiples to your holding, then waited. £800k was raised and the new shares hit the market at 22p (Aug 2015). The new TRAP - now called JOG - had a market cap of about £1.8m. There were £25m of tax losses, the new team had a good track record and a good plan - plus TRAP had unexplored assets, not least what TRAP had called 'Cortina' (Licence P2170 - next door to Buchan - with three defined prospects: Cortina, Verbier & Meribel), enough working capital to start putting the new team's plans in place and a capable and incredibly well-motivated workforce - I made it my business to meet them in person and formed my own views.

I subscribed in all three placings, along the way cashing out about 25% of my holding at prices from 200p to 390p. I'd started with just over 20k shares and added multiples at prices between 25p down to 8p and back up again. 8p was hit in Jan 2016, at which price JOG was worth (according to the market) less than my house! The low oil price was in JOG's favour because its then aim was to acquire late life producing interests with good tie-back arrangements, then wait for the oil price to find more normal levels. RBL funding was in place with a major bank to enable qualifying interests to be bought.

They haven't bought any yet, for reasons that are understandable.

What was then called Statoil farmed into Licence P2170 in Oct 2016. Drilling was fast-tracked and oil was discovered at Verbier in Oct 2017. It's shortly due to be fully appraised and expectations are high. I make the shares well undervalued at today's price.

I used part of my JOG proceeds to buy into SQZ - Messrs Benitz and Lansdell think very highly of TCW (and Mitch) and this reassured me when building a decent stake at prices between 14p and 26p. I de-risked half when Trump intervened and used the proceeds to make significant improvements to my home, but I still have a lot left and share many of sasa's views on what should happen from here when cash flow becomes plain to see.

The only other share I'm involved with is CLNR (Algy is an icon and it's his swansong). The market thinks CLNR's eight highly prospective NS gas licences are worth £12m. We'll soon find out.

Life is sometimes strange. I'd believed far too much Cole's self-serving garbage on XEL and lost a fortune. Then along came JOG, SQZ and (maybe) CLNR. Who knows if my 6 figure punt on CLNR will win? I trust those running the 3 companies I'm in now. If you don't want risk, don't buy shares - there are too many crooks running companies and in the City today. The Gov needs to tax your savings, which it can do if your shares are lent to others to benefit from

FYI on a qu

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