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Was DS drunk when he produced all this? Let's try a simple check. DS has told us $65pb is the price he has plugged in for the duration of the project (not sure anything has been plugged in - he seems to start with the figures he wants to end up with; ie Verbier's "worth" $4pb, Buchan's "worth" $5.5pb etc, then he puts in a lot of other numbers that don't take anyone anywhere).
Following on from the above,JOG has told us the full oil extraction cost is likely to be somewhere around $30pb. So, with a BC price of $65pb (and a carry on the infrastructure cost) I make the oil (in today's money) worth $35pb. Even if it took a 50% farm-out to get a free carry, JOG's ppb value would be way ahead of "DS the ANALyst's" silly numbers.

Rockflow Resources (RR) are the experts. They value JOG's assets pre-farmout (after discounting the whole project by 30% for the risk of it not going ahead for any reason). DCF projections get them to NPV10. I doubt RS could tell us what the letters stand for, let alone use the method to come up with a sensible valuation (which is universally recognised as the best way by far to value an asset, or assets). Longwait rightly points out that the % of the action JOG farms out will reduce JOG's 'share' of RR's valuation accordingly. The link is to the Feb 2020 presentation - more assets have been added since then and my guess (which won't be far out) is that the NPV of the whole shooting match (using a BC price of $65pb) will now be around $1.5bn. https://www.investegate.co.uk/jersey-oil---38--gas-plc--jog-/rns/competent-person-s-report-for-core-gba-resources/201910080701010627P/

Allowing for a 40% farm-out to provide the bulk of the funding, we still get to a share value in the range £30-£40.

One of the last deals in the NS pre-Covid (a field off the coast of Norway) involved the S&P of a 10% WI, before commitment to infrastructure spend. The 10% WI changed hands at $8pb. That was about par for the course looking back over the relevant past. For the market to be valuing JOG's discovered and (mostly) known to flow 2C resources at 20 cents a barrel is little short of insane. Perhaps it's less difficult to understand when you consider that "investors" like Elllltelinv make up the bulk of the market.

It's reasonably clear to me that the average punter doesn't realise that Buchan, Verbier, J2 and Glenn aren't prospects that need drilling to confirm the oil exists. I really think JOG should be doing more to make sure the messages it puts out are incapable of being misunderstood. JOG should also see to it that its house broker comes up with valuations that can be reconciled with those of the real experts, otherwise it all just gets silly and the price remains stuck in the wrong trading range.

How many times have I pointed out all the above? Apologies to those who are bored reading the same story.

all the above is imo only. DYOR

My price of £43 was a 'tongue in cheek' one to record the fact that, had you been a subscriber to Trap Oil's IPO in 2011, you would have paid 43p a share for your holding. When TRAP acquired AB's and RL's Jersey company in 2015 (it was structured this way to preserve TRAP's tax losses) there was an immediate 1 for 100 share consolidation. Had you just sat on your TRAP shares ever since the IPO and done nothing when it was effectively acquired by the Jersey outfit (TRAP changed its name to JOG on the deal) the shares would have to reach £43 for you to break even. It seems to me £43 is a good target for the chaps to aim at.

Speaking for myself, I held just under 1% of TRAP (2m shares - one of my better investments: cost c.£95k - value when JOG arrived on the scene £4.4k). I averaged down to a very considerable extent between August 2015 and about April 2016, because I liked the NKOTB, had quickly formed the view they were entirely trustworthy, were in it to win and they weren't talking small numbers, had significant skin in the game and were no slouches when it came to the oil industry and how to succeed in it in opportunistic times. They haven't once let me or anyone else down, their work ethic has been remarkable and what they have achieved so far is a long way ahead of any expectations anyone can have had at the outset. And JOG hasn't really got off the blocks yet imv.

5 years is the flick of a finger in this industry. Whilst we've all been getting impatient, the JOG team has been focused on constantly adding value to what has become one of the biggest UKCS projects since the 70s. They're 100% focused on doing everything properly - my personal view being so that they can sell JOG for a stack when the time is right and quietly slip away. wdik? That they have achieved what they have to date with no borrowings and have managed to restrict the shares in issue to 21.8m (~24m fully diluted) is even more remarkable.

My only reservation is that I think their pay hikes earlier this year were poorly timed. My guess is that they're 100% confident they'll succeed in attracting a big player - maybe more than one. I've said all I want to and have made my views clear to the relevant people. Time will tell.

Arden Partners' valuation of JOG's shares at 766p doesn't stand up to scrutiny (Daniel Stewart in the ANALyst). Why not register on their site and have a look yourselves? https://www.arden-partners.com/

DS starts off by assuming 30% of JOG's oil will be farmed out (presumably in return for a free carry for JOG on at least the bulk of the infrastructure). He then picks a price per barrel he thinks JOG's oil is "worth" (Verbier $4pb, Buchan $5.5pb, J2 $4pb, Glenn $3.8pb) and then multiplies the number of barrels that are that are known to exist by these insanely low PPBs and then halves the resulting values for something called "risk" before then randomly knocking off a further 166p to get to a "target price".

tbc

...............yeah, you spotted it.............I got it the wrong way round

Re "The skill in investing is to identify companies where the underlying value of shares is less (preferably a lot less) that the price it costs to buy them)..........

it's of course exactly the opposite:
"The skill in investing is to identify companies where the underlying value of shares is MORE (preferably a lot MORE) that the price it costs to buy them

I was known in my younger days sometimes to think with the wrong part of my anatomy and it got me into fearful trouble when I did. It's quite a relief in the circumstances to learn that nothing much seems to have changed..............

Why not register with Arden Partners (it costs nothing) and read their reports. There's nothing logical in my book in discounting the value of JOG's oil by 50% for risk, when you're only valuing it at $5pb in the first place. Or in setting a "target" price of £6 a share, when you've come up with a contrived basement value of £7.66per share on the same page.

Trying to reconcile Arden's numbers with some of the share values others (eg AB and Rockflow Resources' - Tom Gunningham's their man - in their 2019 CPR; Competent Person's Report) I've come up with some numbers to help understand where Arden are coming from (Mars??). Before I do, I can tell you I spent half an hour chatting one to one with Tom Gunningham at last October's Capital Markets Day in London and found him to be a mighty impressive individual. It quickly became apparent that he knew a lot more than I do (and my knowledge and understanding of the subject isn't bad) about DCF (discounted cash flow projection as a means of arriving at NPV - Net Present Value - today's value of all future net cash that will be generated generated by a project; in this case GBA and surrounding acreage "owned" by JOG).

Last time I checked, using $65pb and making the assumption there's a 70% chance of the project proceeding broadly as planned - RR had come up with a NPV of $1.3bn for the whole project, using an average BC price of $65pb over the next 25 years or more. Using $50pb the NPV was still close to $1bn. Since then JOG has added more resources, most recently CIECO's 12% of Verbier, which will have increased NPV further. As an aside, TG's comment was along the lines: "don't be concerned on that score - it's just the norm to plug in a 30% discount for risk of a project like GBA not going ahead - why wouldn't it?".

This leads on to "guesstimate" territory. What % will JOG need to farm out to provide some immediate cash for working capital, drill one or two prospects (Cortina and Verbier Deep?) and make JOG's share of infrastructure cost manageable? It shouldn't be forgotten, there is more than one way of funding a project like GBA. I'll go for 40%. I should think JOG would want to keep hold of the operators ticket so it retains control over timing etc.

B hell - I've run out of space again...........

tbc

Longwait - I don't rate brokers when it comes to valuing companies/businesses. They generally don't have the expertise needed for the task. I valued businesses (usually private companies) for a living in one of the (so-called) 'Big 4' accounting firms. Materially different values applied to different holdings in the same company, depending on the size of the interest I was valuing. EG an insignificant minority holding in a private company with no established dividend history wasn't worth much because it gave the holder no control and there was usually no market for the shares, whereas a holding above 25% gave the holder blocking rights and therefore had nuisance and blocking value. Two holdings of, say 15% and 20% who were known to act in concert - ditto. Above 50%? Control - except in relation to 'direction of corporate travel' that required the approval of 75%+ of the members. Above 75% - more control - higher still. Above 90% - power to sell the company either for a multiple of earnings or liquidate and realise asset values (you're mainly talking property holding companies in regard to the latter).

The above is just for starters - all kinds of different permutations apply and no two companies' circumstance are ever the same. Experience and commercial acumen are required. My work was usually carried out in connection with dispute resolution (eg divorce, or perhaps where second/third generation shareholders of companies established by parents/grandparents had fallen out because one or more of the current generation was playing king dog and cutting the others out, or vice versa). Only in a limited number of cases was I required to give expert evidence in court - where negotiations had failed.

All the above is only to highlight the skills and experience needed to value companies/businesses properly. Ultimately everything tracks back to notional investment returns, but it's too difficult to explain how this works here.

The skill in investing in listed companies, where independent valuation of shares would be about as much use as tits on a bull because there's a ready market (theoretically at least) for shares in any volume. How much are these worth? However much the market is willing to pay you, with those upstanding MMs acting as middlemen.

The skill in investing is to identify companies where the underlying value of shares is less (preferably a lot less) that the price it costs to buy them. Then in being patient enough to wait for the fundamentals to play out and real value (based on notional investment return) to align more closely.

Then buy an upmarket static caravan park near the seafront in Skeggers which is undervalued because people there don't yet know that an upstanding high-roller called Ajax is soon to become an owner of a couple of the s****iest units.

I'll talk about house brokers (generally people of limited intellect/experience) later. They sometimes have some very strange notions...........

tbc - dyor

AB - CEO's report 29 Sept:
"The preferred development concept for the GBA is to locate a new production facility at the Buchan field location. The facility will be supported by a single 4-legged steel substructure. Production wells for Buchan and J2 will be drilled from the platform location utilising a heavy duty jack-up. The platform will house production facilities to process fluids to export specification. Export of future oil and gas production will be via subsea pipeline to existing neighbouring infrastructure. Additionally, the platform will be designed to accommodate fluids from nearby field developments via subsea tie-backs.

The Buchan location benefits from close proximity to existing export infrastructure for both oil and gas, lowering our costs of getting product to market. Engagement with operators of these pipeline systems has confirmed entry specification requirements and tie-in locations. The entry specifications of each export option are broadly similar and hence the export route choice does not have a significant impact on the processing requirements for the GBA facilities.

A new platform will ensure a long production life of at least 25 years for the GBA, acting as a hub for:

- Core discovered and development ready resources owned by JOG

- Additional discoveries owned by JOG

- Exploration upside owned by JOG

- Third party discoveries and prospective resources within the GBA catchment area

- Otherwise stranded reserves from shut-in regional production hubs

Regional Collaboration

A key advantage for the longevity of the GBA and long-term value potential is its surrounding prospectivity, with future ullage potential from nearby discoveries owned by JOG, nearby high-graded exploration targets owned by JOG and other third party operated proximal discoveries. Discussions and other work is ongoing for potential area collaboration with third party operators to establish if the GBA facilities can act as a regional hub to tie other hydrocarbon discoveries back to the planned Buchan facilities.

Power Options

JOG recognises the need and has an aspiration, to deliver production from the GBA development at an industry-leading carbon intensity level. Accordingly, options have been assessed that offer the opportunity to eliminate carbon dioxide emissions associated with power generation on the platform.

Studies have determined that the most attractive technically feasible solution for platform electrification is to provide power via a connection to the UK national grid via the installation of a subsea cable..........etc"

The team has not been sitting on its hands these past 12 months.............

Thanks for your message, roisin - stopped the board dead! Most will have got it though. Is Stonyhurst your alma mater?

atb

.......JOG's SP seems to be going in an unusual direction. Que pasa? Very strange :-)

I'm relaxed about JOG, Nubi - half the comments I've made in the very recent past have been tongue in cheek, but the underlying messages are clear enough. Or at least I hope they are.

Q1 2021 is when things should really start to happen if I read the situation correctly. Ref infrastructure costs, JOG's team will have their finger on the button - they've been going all out for a long time now, making sure everything is ready to press the 'go' button when the time comes to take on a bigger partner in whatever form when a deal emerges. I really can't see why a project as sizable and potentially lucrative as the GBA one is won't interest a lot of bigger players looking to add to their reserves with decent volumes of the right quality oil. JOG owns 100% of the action so there's plenty of scope to consider more than one type of deal. Who knows what sort of options might arise? Time will tell.

In the meantime JOG is doing everything properly as it prepares to either take a farm-in partner onboard, or maybe contemplate some other kind of deal that unlocks value for us shareholders. What's good for them is good for us because their key players have significant skin in the game. I'm certain they're more driven towards the achievement of capital reward in the short to medium term than the prospect of being well paid for along time in the future as GBA plots its way towards production. The COO (RL) hits 70 next March so why would he want to hang around for another 5 or 6 years for second oil at Buchan when he can expect to bank a good few million if JOG leaves the hard work and future risk to someone better equipped to deal with it, inreturn for cash in the bank now or the near future?

Longwait - PC means prostate cancer. I've got a real rip-snorter that's already gone a bit too far for comfort but I'm chipper and am not letting it dominate my life. I'd much prefer not to have it but as I do, I'll have to get on with beating the bast**d. R/T means radiotherapy (external beam type).

That's the last medical update you'll get from me - it's my problem not anyone else's. Now let's get on with achieving some spectacular returns,shall we? Oh - and starting to talk sense about JOG's chances of being the means to do so..............

all imo - dyor

Hi Mommur - yes, I do have a decent holding in SQZ - I bought the shares at between 14p and 27p a while back, so it's been a good investment for me. I know it's been good for you too. I'm a fan of Tony CW and Mitch Flegg, who have done a great job for shareholders. I see SQZ as significantly undervalued for reasons that are well understood by most who post on the subject. At one time I thought there might be possibilities of some kind of tie-up if JOG and SQZ compared notes, but I'm now worried that JOG's main men might see the company going on to become a significant NS producer, which scares me.

JOG and Trap Oil are the same company. TRAP changed its name when AB & RL came calling. They wanted Trap's listing and tax losses and Trap needed life support. I held just shy of 1% of TRAP and was £95k down on my £100k investment - which would have become £100k down had a series of events (to which I became privy and did my utmost to prevent) been allowed to play out (a so-called "value investor" with 27% had been running the show as a shadow director, with disastrous consequences certain people wanted to bury by letting Trap go into liquidation - over my dead body). It's a long and complex tale which is now history - I have it all recorded for posterity in a transcript of the 2015 AGM and a series of emails preceding and following the same.

I really liked the new team that came with what was originally called JOG but changed its name so that TRAP could be called JOG. So JOG is a UK company run from Jersey, which is where the two principal directors are resident. There is no CGT in Jersey, which might be relevant given they have significant holdings and bundles of options exercisable at prices between 110p and c.£3.

So you will have held JOG shares at one time if you were a TRAP holder when the original JOG reversed in? There was a 1 for 100 consolidation (TRAP's price was 0.22pat the time) so the shares under the new set-up hit the market at 22p. I owned 2m TRAP shares so ended up with 20k JOG worth £4.4k. I subscribed in the placing at 22p and bought many multiples more on the way down to 8.79p (Brent Crude bottomed at $27 in Feb 2016) and on the way back up to 25p or so, when I stopped before exceeding 3%. Statoil then arrived and you know the rest. I took enough off the table at 250p to 390p to recover the cost of my TRAP shares and give myself a free ride with the rest. Along with many others I got caught in the £2 placing and offer but most recently I bailed from Cluff (now Deltic Energy) when the SP was about 1.7p and put the money into JOG (2/3rds @ c.70p) and SQZ (1/3rd @ c110p).

Too much information but I thought some might be interested to learn (some of) the history of my holding in JOG. I used proceeds of JOG sales to buy some of my SQZ and sold some SQZ to subscribe in the £2 placing (very bad move - SQZ was 27p at the time). So I haven't always called it right.

I might sell a few at £43 if I'm still alive.
dyor

I haven't disappeared, mjga786. I was diagnosed with something nasty a short while ago and I've been concentrating on getting the best possible outcome. I'm not going to go into the detail but it's likely to be a long haul. It's certainly had the effect of putting things in perspective and concentrating on what's important, most particularly one's family.

JOG's situation and share price performance are frustrating for its shareholders but we're not alone. The whole sector has had a severe bashing and I doubt it's over yet. But the tide will turn, as it always does in the end The world can't function without oil. If there are only sellers in evidence the price is bound to fall - as it has done recently (and has done before). Not many shares are being traded so the tail is wagging the dog . I'd be surprised if any of the larger holders have sold (I certainly haven't) so the waverers (the "don't knows or don't understands") are the ones determining the SP. When it shifts on any volume it shifts quickly, as we have seen more than once before. You either believe there'll be strong interest leading to a farm-out on favourable terms; or you don't. If you don't, or you don't like the risks, sell and put your money into a building society or somewhere else that's safe.

L&G had a shuffle around within their various funds and their their JOG holding ended up in more than one fund. As I understand it they mucked up the disclosure process but it's now been corrected and shows L&G again holding 4.55% or whatever.

I've spoken with AB a couple of times of late. As ever he strictly observed the usual protocols in not telling me anything he wouldn't tell any other holder. He didn't , however, come across to me as someone who was losing sleep as a result of captaining a ship that's heading for the rocks. I wasn't any more pleased than others with the timing and amount of the recent pay increases, which were insensitive and inappropriate in the extreme. I've made my views known - fat lot of good it will do. That said, it won't matter if they manage to pull off a deal that will see JOG significantly funded through to first oil.

My personal view is that the GBA project is too big for a minnow like JOG, regardless of the expertise of the team and the impressive way they continue to focus solely on what they know has to be done before they take on a partner (via farm-in). I say: sign up a partner, make significant progress with the FDP then welcome bids for the company that give it a market cap that properly reflects its prospects. GBA's postcode is a hell of a lot better than HUR's Lancaster field et al, but what happened there should be a salutary lesson to all aspiring minnows . Shareholders lost virtually all their money because Trice and others got their ambitions mixed up with their abilities and the rest is history. Leave development to others that have the expertise and the cash to do it without the risk of crashing.

tbc

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