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Good news..............I received a postal order from my elderly aunt in Paignton (the one who used to run a Post Office there) in the post this morning. Louis (the more streetwise of my two my dogs) suggested I invest it wisely for the future so, with his blessing, I bought 1800 JOG shares @ 227p and another 1200 @ 228p.

Let's hope we get a tailwagging event before too long. We're definitely going to hear something soon which may or may not leave all those nervous types who've been scurrying around selling miniscule quantities because they're frightened (or alternatively sensible) feeling as sick as the proverbial parrot.

https://www.youtube.com/watch?v=YMad_HGAC1Y

GLAL
dyor

SpringWater - a good % of the 2C is better than the usual offering, because Buchan was producing at a rate of c5kbpd (and c.50mmboe was certified still to remain - all the above from memory but I don't think I'm too far out (unless my brain is starting to behave like the rest of my failing body) - when the rig failed on health and safety grounds. That was in Aug 2017. For a host of reasons Repsol Sinopec (which held the licence) decided to surrender the licence instead of carrying out the necessary repairs (or whatever). Full decommissioning followed.

As I understand the situation, JOG worked closely with the OGA for more or less than 2 years following licence surrender, putting together a decent appraisal of how they might best pick up where RS had left off (so to speak). There was limited interest in bidding for the licence, which was eventually awarded to JOG - which gave a considerable boost to the SP which had tanked following the failed appraisal drill at Verbier (as 70% owner of licence P2170, Equinor made all the decisions on that drill, although for some reason JOG seemed to get the blame).

32,000 hours of work (by external consultants and JOG's own people) "proved up" significantly more than the 50mmboe of former reserves (by then 2C) I refer to above, so to say that the 2C resources in Buchan were much lower risk than the norm would be something of an understatement.

Regardless, I did point out that my numbers amounted to no more than semi-educated guesswork.

If you thoink $3 pb is a better number to work with, then please feel free to use that number instead.

As ever - dyor and form whatever views you like. I'm not making any forecasts. I'm simply trying to promote a more comprehensive understanding of some of the issues that might be worth considering, after a lifetime spent towards the top end of a semi-relevant field which required me from time to time to give expert evidence on business valuations needed for a host of different reasons. The next major event on my agenda will very likely be my demise ("not before time" I hear some cry. I'd quite like to get a result here before I go (fear not, I'm giving it my best shot and am not doing too badly all things considered - I'm therefore not finished yet - bad luck). I aim to be a real pest to a few who deserve if the spoils here allow it - be warned, don't get me all het up or I might add you to my list..........

OK - $1.75

Don't mean to rain on anyone's parade but JOG's NPV is nowhere near the $6.5bn quoted. Whoever ends up operating the GBA fields will be hard pushed to extract revenue of that amount over their lifetimes.

The effects of discounting are cumulative (akin to compounding). The last time I saw anything produced by JOG (the numbers were put up by Rockflow Resources) the NPV of JOG's assets was of the order of $1.5bn. That was for JOG's assets in total.

Depending on the terms of whatever is offered in the end, JOG will probably end up retaining somewhere between 25 and 50% of the action. If the NPV of all its assets (most are in the GBA) was assessed as $1.6bn (to make calculations easier, 50% retained would leave JOG with a NPV of about $600m (£480m). But no-one would ever pay a vendor the full value of any asset, because that would leave no scope for profit for the buyer. Discount to £320m (??) - or £9 a share (fully diluted).

An alternative way of looking at things might be to take JOG's retained assets and apply a $pb valuation to its 2C resources. $5pb doesn't seem far off the mark to me but wdik? Each situation is different - I'm just guessing. Apply that value pb to JOG's 50% retianed share of a discounted volume of (say) 120MMboe (to err on the side of caution) and you get to 120m x 50% x $5 = $300m, or about £7 or 8 per share (fully diluted).

All the above is just playing with numbers. Each situation is different and much always depends on the quality of the underlying information, the veracity of the fundamentals and the negotiating skills of those sitting opposite the potential buyers. How keen the parties are to do a deal, how many of them are competing and a host of other factors relevant to the deal will always influence price.

Come FDP and with funding in place (provided by a FO partner/s, the 2C resources get to be called "2P reserves" and you're talking different numbers per barrel. Enter PC01 stage left.........

Yes, Abatt, I'm less grumpy than I was yesterday. The patience that's needed here is now beyond what it's reasonable to expect LTHs to have to apply. I put the blame for this squarely on the shoulders of our latest PM. Any deal was complex enough to put together before the U-turning clown set about destroying what remains of the UKCS

JMO
dyor
GL
GTARJ,G

JamesS - you need to improve the quality of your research. There was no widespread shareholder revolt in Longreach of the kind you imply. As I understand the situation it was basically a boardroom coup orchestrated by enlisting the support of one or two shareholders who had subscribed to a recent placing effected under AB's leadership. AB, his father (BB) and RL went immediately and the NKOTB proceeded with an action plan in Morocco that resulted in LOG going bust. The above is just my interpretation of the situation. The idea of JOG was than hatched by the three and in mid 2015, JOG (a CI company) reversed into Trap Oil (which had also trapped my money - about £100k of it). The rest, as they say............
I owe AB and RL for not only getting me my money back, but a whole lot more on top and I owe myself for having had the foresight to back them, having quickly formed the view you don't get too many ABs and RLs to the lb (or should that be kg?).

The balance of probability is still that a ground-breaking agreement will be signed that adds materially to shareholder value although, thanks to Rishi Rich, with assistance from (in particular) the aptly named Looney at BP and Shell (who made it easy for the vote-seeking, money-grabbing types who have turned the Conservative Party into Social Democrats)the terms won't be as favourable to us as they would have been, but for the heist.

What many don't seem to appreciate is that whilst infrastructure spend on new investment will benefit to the extent of 91% of cash spend being directly recoverable in cash, by virtue of the new investment allowance, the tax recovery will be a once-off event. The GBA licences are forecast to yield net cash of something like $6.5bn over the lifetime of the fields. All this will now be subject to tax at 75%, because there is no reason to suppose that any form of reversal of policy will become evident for the foreseeable future. Talking of the new provisions only lasting until until 2028 is poppyc.ock. The Conservatives will be history from 2024 onwards - and since when did Labour ever reduce taxes, let alone taxes on carbon emitters?

Oilcos with a concentration of activities in the UKCS are bound to find what's on offer appealing. We need one or more of those to quickly understand and get to grips with what's likely to happen in the future - then get on with the business of buying JOG, preferably lock, stock and barrel - and for a lot of money.

jmo
dyor

PJT12 - frankly, I couldn't care less how you or anyone else view my comments. Where I live in the UK on not a single day or night did the temperature fall to freezing pint or below last winter last winter. I have a max/min thermometer set up outside to warn me I'm in danger if the temperature gets to 10C or below - unless of course I put on another sweater, or in extreme circumstances take to my bed with a hot water bottle. Hang on a minute, that would use electricity to heat the water for the bottle - this is where my argument falls to the ground.

I grew up in a home where there was no central heating. We had a coal fire (seldom lit unless it was really cold) and a two bar electric fire (ditto). Warm sweaters were the norm. No-one died.

What politicians need is to be accountable. If there happened to be a cold winter (it would be a welcome change imv simply because one of the advantages of living in a country like ours is the unpredictability of the weather) there's no way our nanny state wouldn't step up, in the event of a cold winter to pay the bills - it'd be a vote loser if it didn't, see? - with more money for people who didn't work when they were at school, took no steps to improve their qualifications at any stage in their progress (?) through life and have signally failed thoughout to put anything aside for a rainy day. Now it's fair for them to benefit from others who have not been similarly feckless. I exclude from my comments anyone who is (genuinely) ill, or otherwise finds themselves disadvantaged by circumstances beyond their control Society is there to help such people, but imho is not there to provide a meal ticket for the idle and feckless. They seem to have enough for up to the minute mobile devices, Sky subscriptions, holdidays and cars. I of course don't include everyone in my generic comments - there are genuine cases of misfortune .

Your silly comments about me being selfish, idiotic etc (Greener thinks I'm sisnister!) label you as a one-dimensional thinker. In your and Greener's simple book, if you've seen and heard it on the BBC, it's bound to be worthy and true. All nurses are Florence Nightingale and can do no wrong - they desrve to be paid whatever they want. I can tell you from first hand experience over the last 2 years or more that medics (inc nurses) come in all shapes and sizes. By no means all could righfully be proud of the way they go about their work (or not, as the case may be). Take the case of a male in a bed next to me when I was waiting to (yet again) have an MRI scan. He had come to after a period of unconsciousness and had a catheter attached to two bags, both of which were close to overflowing. I was ignored by all 5 nurses on duty in the ward not many people expect to come out of with a draw). I was trying to attract the attention of one to do the necessary. He had earlier managed to tell me he'd been given a prognosis of 2 weeks - and that was 3 weeks before.
tbc

An asset held for commercial gain can only be worth today’s value of all the net income that asset will generate over its lifetime (or period of ownership where it’s expected a disposal at some later time will occur). The value I’m talking about is known as Net Present Value (“NPV”).
To arrive at NPV in the case of an oilco, all the expenditure incurred in generating actual and projected future revenue is deducted from that revenue to arrive at a net sum (after tax) the relevant asset will generate each year. A discount to reflect “risk” and “the cost of money” (inflation in simple terms) is then deducted cumulatively from each year’s projected net revenue before all the projected future net income projections are added together to arrive at an overall NPV – the net present overall value of the asset being valued.
Investment decisions are fundamentally based on the NPV of the asset being valued – commonly when a value is being sought for farm out or sale purposes. As explained above (hopefully in a way others can understand) NPV is about lifetime net cash generated by (for instance) a UKCS licence.
To the extent infrastructure costs can be reduced by favourable tax treatment of development expenditure, the net cost of (in JOG’s case) getting to first oil might be lower than it otherwise would have been, but for the tax relief. But tax relief is a “once off” event and the net income expected to flow over its lifetime from an asset like GBA would be expected to be many times the amounts spent on up-front development spend. All this future income, assuming no-one naively believes the new tax rate of 75% will ever be reduced – Labour doesn’t do tax reductions, least of all in the oil & gas sector – will be taxed at this crippling rate. I wouldn’t mind as much if the tax was linked in any meaningful way to super profits resulting from an artificially high oil price. But it isn’t. Today’s price isn’t out of the ordinary, yet we have Sunak et all salivating at the prospect of all that tax, with scant regard to what his socialist proposals are going to do to the oil & gas industry. I really do hope for a few cold winters to show him and his acolytes what happens when you’re motivated by the wrong policies. He’d never be able to stop subsidising the electorate’s energy bills.

tbc

fwiw my view is that the EPL is only about short term inflows to the Treasury combined with popuarilty among the failures who are looking for the Govt to feed and clothe them and the hordes of kids they can't afford to raise properly, pay their mortgages, holidays to Lloret de Mar and Benidorm with still leave to go down the bingo. Don't give me all this poverty c.rap - most of them are as fat as houses.

It must surely be clear to the priniples-free muppets who have hi-jacked what used to be the Conservative Party that to whack NS energy companies in the way they've decided to will put the UK back into the situation it was in a very few years ago - with "Nil" being paid in taxes by the UK O&G industry because everyone had abandoned the NS in the face of a total tax rate of 60% under Gordon "tc" Brown. Unbelievably George "t even bigger c" Osborne increased it in 2010 to 62% (in about 2013/14?) until at least some sense prevailed - but he still left it at 40%, despite the price of oil being on its knees.

The total absence of tax revenues from the O&G industry for about 3 years (mid 2010s) led to the establishment of the OGA - motto: MER - maximise economic recovery. In my view it had performed with great credit until Sunak evidently decided it should be euthanised in favour of the short term cash and popularity I refer to about. Also fwiw, my guess is that the ability to sidestep the punitive higher rate via "super tax credits" on inward investment will be either pared down or removed entirely as it wouldn't be a vote winner. The Conservatives are toast anyway and as £60bn (the so-called black hole) is a drop in the ocean given the Government's overall level of debt (£6-8tn depending on actuarial assumptions adopted) I have no idea why everyone is getting so hot and bothered. The problem seems to be that Rishy Rich doesn't seem to be considering what's genuinely in the best interests of the people who voted them into office, a lot more of whom vote for what they believe is in the best interests of their country not just themselves. In other words those who aspire to being genuinely conservative. Such people have no-one left to vote for as The Reform Party doesn't seems to be making much noise - and now would have been the time to do so.

The new theme song of the O&G industry looks set to me to become:
https://www.youtube.com/watch?v=rY0WxgSXdEE

On a wider subject, the following makes interesting viewing. Note the absense of narrow-minded hysteria and the presnce of sound verifiable data. I think what's being suggested is that carbon dioxide might not be cause of all the worlds evil. Please don't tell Greta and the BBC - they'll get all uppety and where would that leaves us?
https://www.youtube.com/watch?v=pj-Iu1i317E

Now for some peaceful reflection.................
https://www.youtube.com/watch?v=pj-Iu1i317E

dyor

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