Member Info for dickupham

https://www.energyvoice.com/oilandgas/north-sea/327766/ithaca-acquisition-refinancing-ipo/

........was the market right to value JOG's shares at 8.79p (my lowest entry point) in Feb 2016, VC? This valued the entire company at less than the value of my home? At this stage in its existence JOG already held Licence P2170 and employed about 8 or 9 people, all honest, enterprising and determined to succeed. The share price hit £4 less than 2 years later when the Verbier sidetrack drill hit oil.

Is the market right now to tell us that JOG's 190mboe of mostly discovered and flowed (by Repsol Sinopec) 33° API light crude 2C resources in one of the best NS postcodes are worth about 20 cents a barrel (based on JOG's present market cap of £44m - minus cash). If JOG was ORCA - owner of 78MMboe of 11°API heavy oil about 100m east of Aberdeen (which is planned at some future time to be produced using FPSO) it would be claiming its 2C Resources were reserves. Compare and contrast. JOG vs ORCA (market cap £25m, low on cash). Is the market right about this? I asked a senior figure in the oil industry yesterday what constituted reserves and what didn't. His answer was immediate and unequivocal and happened to coincide with my own understanding of the situation: resources can be called reserves when there's an approved FDP in place. Where is ORCA's?

Was the market right to value SQZ's shares at 3p five years ago, telling us that company was worth £7m? I'm still kicking myself for waiting too long to get in (which I did in tranches at 14p, 18p, 22p and 26p)? It's worth £400m today - again according to the market. You make money in this game by working out what the market has got wrong, buying into undervalued companies and having the patience to wait for the fundamentals to play out.

There's nothing wrong with belief in fundamentals generally playing out in the end. All the evidence suggests they usually do. Where they don't there's usually a reason which can be tracked back to the competence and/or integrity of those charged with the responsibility of running the relevant company. Good (intelligent, competent, hardworking, principled) people generally win in life; the others don't.

As far as I can tell, the market you refer to comprises people who trade shares short term without any real interest in or understanding of fundamentals (or anything else). My preferred approach is to understand the overall model, having assessed and formed views about the capability and integrity of the management and senior team, the work that's gone into the overall project (JOG really only has one), the likely view the industry is likely to take on ultimate value and I then factor in risk. It doesn't always work because I'm only interested in oil & gas and the nature of the industry is such that things don't always go to plan, particularly in regard to timing.

How about you telling us how you go about investigating companies you're interested in and we can then take discussions from there? I'm sure other would appreciate this too.

GLA
dyor

..........usual deep, incisive assessment by the said individual............the result of painstaking research carried out over a long period no doubt.

Who cares what "the market" thinks is happening. It's largely irrelevant to the average LTH.

.............."the stock market is a device for transferring money from the impatient to the patient"............WB

dyor

I've forgotten what fighting strength feels like, punter! The monthly injections are to blame, so I'm told. I no longer ask about likely outcomes - the 3 monthly "russian roulette" blood tests tell all. So far so good but I've only had one so far (in May). The next soon is due. Anyway, enough of all that rubbish.

I didn't know anything about ORCA before your post and still don't much, having had a look at the available info. You'd have to be some kind of masochist to want to invest in another AIM tiddler with big plans that entirely depend on attracting a farm-in partner or materially diluting existing holders. ORCA prides itself on owning discovered 2P reserves which it claims are the highest in any AIM listed oilco. As I understand things, reserves are regarded as "commercial" whereas "resources" (such as JOG owns) are regarded as "sub-commercial". I have to say I'm confused by the terminology and who gets to decide what counts as reserves and what doesn't. My recollection is that c80m barrels of "unlifted" oil remained in the Buchan field when the platform was shut in for safety reasons in 2017. Quite why that doesn't count as reserves escapes me. Maybe it will when "concept select" is approved by the OGA (assuming it is).

Other observations? ORCA's oil is heavy, which could make it less attractive to potential partners. Polymer flooding seems to have been chosen as the method of extraction. I'm no expert when it comes to oil technicals, but anything that diverges from what might be regarded as 'the norm' probably isn't ideal.

ORCA stated originally it was looking to raise £5m, but I see it only managed £3m (?). This still valued the company at £25.5m, with c.64m shares in issue - 66% owned by board members. There's a sharp hedge fund involved (RAB Capital - 8.4%).

I'm not anti the company based on what I've found, but it wouldn't be one for me. This is probably a very good thing for you as an acknowledged way to make money is to listen to what I have to say, then do the opposite. Ultimately, any company's share price in the shorter term is based on sentiment - if more people want to buy than sell then you're onto a winner.

GL
jmofwiw - dyor

https://www.barchart.com/story/news/2050845/oil-supply-evaporates-the-energy-report-07142021

What you refer to is a different issue altogether, QC.
https://www.fca.org.uk/news/press-releases/fca-fines-arcm-breaches-short-selling-disclosure-rules

I'm not 100% sure but I think what I link below still applies to UK listed companies. I've looked into this in the past and the curious thing is that there don't seem to be any penalties for non (or inaccurate) disclosure. Again from memory, whilst 3% is the threshold applying to all when shares are being acquired, in the case of institutional investors they are only obliged to notify a company when their holding falls below 5%. It's all in their somewhere for those with the patience to decipher it.

As I read the overall situation, many professional investors simply ignore the regulations when it comes to disclosure of holdings. Market makers lead the way (as ever) in deviousness and (imv) dishonesty - the line is a thin one. In the old days MMs' books had to be balanced daily but this no longer applies. They are permitted to hold long and short positions as long as these arise only in the course of their normal market-making activities. Who judges what is "normal" I would ask. They're (imv) a bunch of crooks; almost all being owned by investment banks. I rest my case.

Hope a few will find some interest in the requirements of the lazy, hopelessly inept and ineffective FCA (invented only to improve the flow of private investors' money to the Treasury - they have been singularly successful in achieving that, or why else would Andrew Bailey have been knighted and made the Governor of the Bank of England?).

I could go on but I won't. Something has to give here before too much longer, surely? There's way too much uncertainty; S/Hs deserve some clarity

https://www.handbook.fca.org.uk/handbook/DTR/5/1.html

dyor/ all imo

"I'm on Safari"...........

.........spotted any elephants yet, pt (other than the one in the room)?

sasa - I don't get to read upomega's posts as I applied the filter ages ago - his views aren't worth considering.

When you say "Serica would forfeit its licence", I take it to mean its OFAC licence. The sequitur, so I understand, is that without this licence it would be impossible for Serica to demonstrate compliance with UK "health & safety" requirements.

A great deal of expectation has built up in the minds of many investors here of late - partially as a result of some very curious comments made, inter alia by Mitch Flegg, as to what's next on Serica's agenda. These comments do him little credit imv, serving only to confuse, when more clarity is what's required.

I doubt very much there's been any change in the ownership of the Rhum field. It's peanuts to IOC but (as I understand things) they love having a stake in the UKCS and care little about the fact that profits can't presently be accessed. O&G is a long game.

Like most on here I'd be content with an offer (if one is on its way any time soon) north of 225p, but still reckon the company's worth a fair bit more. I guess the old maxim "always leave something for the other fella" has to apply.

Why have shareholders not been advised what NPV a CP calculates Serica's assets to stand at?? That at least would help us judge what's fair and what isn't, should an offer emerge at any stage.

Not too sure what to make of Jeffery Harris's withdrawal from the scene at this particular time. It would be irresponsible to speculate but I doubt it's straightforward!

GLA - DYOR

..........the "double sale" of 357,027 shares might have been a switch between funds by an institution for all we know. Or an individual switching shares into a SIPP? It's all guesswork.

I prefer to look positively at what were clearly a lot of individuals buying shares in parcels in the range 5k to £40k - maybe one or two of them know something? I know nothing, except that I intend to wait for news I hope will be positive for once - whenever it comes. If there had been great enthusiasm for what's been offer I'd have expected interested parties to have been keen to sign up sooner rather than later.

3.5 months of the 8 months (why 8 months?) have passed.

At least Serica (very well run imv) is providing interest

dyor

Ernest - JOG's website is a mine of information - well worth spending a bit of time studying:

Ref Buchan and its oil existing:
https://www.jerseyoilandgas.com/our-assets/buchan/

I have to admit to falling asleep about 10 minutes into the match, MPO818 (bad mistake starting off on a settee). I awoke to the sound of the illiterate oaf Ferdinand and others of similar ilk banging on as if the Cup was as good as England's. A bit like me continually suggesting people just have to have patience with their investment in JOG for bountiful rewards to head their way, I suppose.

I don't get paid about £50k an hour out of licence payers' money for my views and opinions, however.

I'm surprised you appear to think football players forming human pyramids on the field, plus 40,000 aficionados hugging, kissing and generally crawling all over each other when a goal is scored doesn't comply with the spirit of the Covid guidelines, MPO. You'll be telling us next a health secretary checking out the muscle tone of the buttocks of a female aide engaged by him using tax-payers' money doesn't either.

We live in strange times

2 June 2021:
"The GBA farmout process, which was launched in March 2021, has received broad interest and participation from multiple parties. With the diligence process ongoing it is premature to comment further on the process at this stage)"............
"Define Phase Preparation
Tendering processes for the provision of FEED engineering services were commenced at the end of Q1 2021. Separate tenders for the provision of engineering services for topsides and substructure have been received and are now subject to ongoing technical and commercial evaluation. Invitations to tender have also been issued for the provision of subsea engineering services and well engineering services. Tenders are due to be received for these scopes of work by the end of June 2021. Application made to the OGA to be appointed OSD Installation Operator.
Next Steps
Activities to support the decision gate for progression into the 'Define' phase of the GBA Project are on schedule, with review expected to take place in Q3 2021".........
https://www.investegate.co.uk/jersey-oil---38--gas-plc--jog-/rns/gba-development-project-operational-update/202106020700034974A/

They're doing all this for a laugh

dyor

"These forecasts are doubly important because from January 2022, Serica's share of net cash flow from its largest asset increases to 100% from the current 60%, the bank notes"..............

..........they're right about the bank notes. Serica will be printing them wef 1 Jan 2022

:-)

...........$152

"However this is carved out between JOG and others wanting to buy into the action seems to me to be incidental, given that the market, in its wisdom, thinks the whole lot (excluding cash presently in JOG's bank account) is worth about $35bn. This is about 1.75% of what JOG's directors would say a lot of detailed and skilful work carried out by any number of experts points to it being worth"...........

........... $35m, not $35bn.

If it was $35bn I'd definitely have sold a few.................

Not sure what was in my last post that suggested I was losing my cool, Abatt. I wasn't. Everyone is free to express their opinions. I expressed mine after Herron had expressed his. It's up to him what he thinks will happen and he might well turn out to be right - or at least closer to what actually happens than my research and experience suggests to me is most likely. I'm working with the same info as all others, although it's probably fair to say I have a better handle than most on business valuations, particularly DCF modelling providing the means to calculate NPV, which isn't well understood by most.

NPV is about future net cash generation, discounted back to net present value. In a sentence: what all future net cash generated by the estimated 2C oil resources JOG owns and claims to understand how to bring to the surface (so to speak) in the optimum way would amount to - with the net cash so generated being measured using today's buying power).

That number (JOG's NPV) is probably now of the order of $2bn, the latter being AFTER incurring the capital spend (est £1bn) needed before the oil (and some gas) is produced. However this is carved out between JOG and others wanting to buy into the action seems to me to be incidental, given that the market, in its wisdom, thinks the whole lot (excluding cash presently in JOG's bank account) is worth about $35bn. This is about 1.75% of what JOG's directors would say a lot of detailed and skilful work carried out by any number of experts points to it being worth.

Seems to me there enough give in the numbers to make possible some kind of deal most shareholders would be happy with. We'll know soon enough. The worst case scenario (as I see it) is if no deal proves possible and JOG decides just to offer the 2C resources (190MMboe) and the prospects (220MMboe) for sale to the highest bidder. Pick a number. Does it come to less than 20 cents pb?

Imagine the effect a discovery of 190MMboe of 33°API in the CNS would have on the market's value of a mid-sized E&P co listed on AIM - backed up by drill-ready prospects in abundance. But for some reason it doesn't count where JOG is concerned. Is it their PR? Or past record when it comes to disappointing shareholders with its drilling activities? The sector generally is out of favour but surely not to the extent of valuing discovered resources, with all the research done on how to land the oil in the most efficient and eco-friendly way, at 20 cents per barrel?

Supply and demand sets a company's share price. I'm not sure where all the supply is coming from, or why shares are being sold when they are. Doesn't make sense to me but wdik? People are entitled to do what they want. I've done my best to explain why I see things as I do, but it's fine by me if others know better. It's their money not mine to do with as they please.

I have an unusual appetite for risk and this has cost me occasionally in the past. But it isn't half fun when it pays off.

Ref: "It's possibly just that sort of figure that would tip the balance on an investment decision in favour of our project".......evidently the JOG board, backed by its other senior personnel and its advisers, which include Sclumberger, Petrofac, Rockflow Resources & Vysus......ie any number of people who have enjoyed successful and financially rewarding careers in oil & gas, disagree that it might take BC @ $100pm to get this major CNS project away. Otherwise they wouldn't have been engaged for so long working on models that project various financial outcomes based on Brent Crude prices of:
$50pb (low price scenario), $62.5pb (mid ps), $75pb (high ps).

Applying the mid case of BC at $62.5pb - to TRR of c.100MMboe (Oct 2019: https://www.investegate.co.uk/jersey-oil---38--gas-plc--jog-/rns/competent-person-s-report-for-core-gba-resources/201910080701010627P/) JOG’s TRR were assigned a NPV of c.$1bn. JOG has now "proved" a further c.90MMboe and the ‘high price scenario’ must now apply (with BC at $75pb). It doesn't take Einstein to work out that the effect of the increase in the price of BC, together with an extra c.90MMboe of TRR, on JOG's NPV must be exponential. As of 6 May 2021, when BC was c.$68pb, NPV10 had increased to $1.7bn and projected pre-tax cash flow from the project was estimated to be $6.4bn. I guess these (undiscounted) numbers, minus forecast cash spend, are what are discounted back to get to the latest NPV10: https://www.investegate.co.uk/jersey-oil---38--gas-plc--jog-/rns/final-results-for-the-year-ended-31-december-2020/202105060700047025X/

I doubt JOG is being slow in pointing out all the above to those with whom it is presently in discussions. These people in any event are bound to be aware of what’s going on, because everything always comes down to cash. AB has already told us: the £1bn Phase 1 spend will unlock a flow of cash that returns capital outlay within 3 years. Everything after that, net of OPEX, is profit. A lot of it.

A question for you, Herron. If you think it’s going to take BC @ $100pb to get this project away, why are you invested? No-one can seriously believe $100pb will be hit within a timescale that wouldn’t leave JOG in a pickle, were BC not to get to that number (which I doubt it will).

I’ll stick with the chaps at JOG and their advisers. My guess is that they know rather more about the subject and the specifics than the average (very average in some cases) poster on a forum like this. They clearly believe the project will work for a farm-in partner/s, for JOG’s shareholders and for themselves – and with a BC price of a lot less than $100pb. That’s not to say it will. Until JOG has secured a partner/s, or sold the oil, we’ll continue to worry. People’s resolve is being sorely tested, but these are strange times. I hope we will all be very well rewarded for our patience, but there are no certainties in life (death and taxes excepted).
Good luck to all
DYOR

If anyone is in any doubt as to the utter stupidity of supposed investment analysts, the following should immediately put any such doubt to bed once and for all. To describe SWS as 'total cretins' would be to pay them a compliment. That they don't understand the first thing about what makes a sound investment and what doesn't is as plain as a pikestaff. That they don't carry out a modicum of detailed research into the companies they freely comment on entirely inappropriately is even more obvious.

Take a look at what concerns them and what doesn't about SQZ. And someone pays them for this cr*p?
https://uk.finance.yahoo.com/news/serica-energy-plc-lon-sqz-041121481.html

dyor

...............keep on pretending there's none there - and even if there is it isn't worth anything - Mr Market...............it's entirely up to you............

............we'll all find out soon enough. The world is not going to stop needing every last barrel of oil that can be commercially lifted until there's none of the stuff left on the planet, because the simple fact is it'll take 30 or 40 years for human behavioural changes to make a significant impact on global warming. Halving the world's population might have such an impact I suppose, but it's difficult to see how this could be achieved without a certain amount of social inconvenience.........................

dyor/all imo.........talk among yourselves............