Member Info for dickupham

"No hair and a yellow tie hmmm keep your back against the wall P.C"...............

.........care to elaborate on this, happydayz? Are all bald people who wear yellow silk ties (Jermyn Street) a risk in your book?

I'll mention your concerns to my wife and kids - they don't believe it when I tell them how dopey some people are on these bulletin boards.

They will now.

PC01 - if you want to say hello, I'll be wearing a blazer & yellow tie. I don't have much hair..........

:-)

Re: "..........now beginning to lose interest in the company"...........

........"the stock market is a device for transferring money from the impatient to the patient" (Warren Buffett) ...........

dyor

.....btw Robsroom - I'm pretty sure Rookie was asking about IOG not JOG.

Don't know much about IOG, Rookie- otherwise I'd let you have some views. GL if you're invested

...for the avoidance of doubt, JOG's shareholders won't be putting up the money for development spend or further appraisal drills. The Company will be using the 124MMboe of P1 reserves it owns and can farm out to to provide the necessary funds (if it gets that far without being taken over).

Post farm-out JOG will still own enough (fully funded through to first oil) reserves to value it at multiples of its current market value.

I expect all the above facts to be made fully clear to the assembled audience of about 80 people attending the CMD next Tuesday.

The risks as I see them are shared by all junior and mid-cap oilcos (in particular) and come from possible events outside JOG's control, largely geo-political in nature. The risks around JOG being unable through its own efforts to add significantly to shareholder value - through exploration and appraisal drills failing to discover oil in commercial volumes - is a thing of the past.

Shareholders now depend on the ability of JOG's directors to monetise the 124MMboe of already discovered high grade oil it owns in the central North Sea, which is one of the most stable and convenient places in the world in which to operate. I have every confidence in them to deliver.

all imo - dyor

.........Einstein would have had a lot to learn from you, Robsroom.

Thanks ever so much for your brilliant interpretation of the situation JOG faces and the likely outcome. As they say: "Nil points".

The reality of the situation (to use your words) is that judging by your facile take of the likely way forward for JOG (and Equinor - have you passed on your views on to their CEO?) you must struggle with most things in life.

jmofwiw - no offence intended

Ajax - I won't get back until late Wednesday so am unlikely to post anything until Thursday 10th - too difficult. I'm still hoping for news before the event but am not confident there will be..........

.........the market was clearly waiting for your signal, ajax :-) Hope it works out well for you.

Can't say how negatively the market would react to Equinor declining to take up JOG's offer (seems odd to think they might not but there might be things we don't know about that could influence them) but it seems to me JOG would have little difficulty attracting another (bigger) partner a bit further down the line. Did you pick up on the language AB used in his CEO's interim review last month?
"In the event of the option not being exercised, JOG will consider farm-out terms for value with other industry partners and alternative funding opportunities that can be put in place over the course of the next two years as the FDP develops. We are confident of securing appropriate funding for a project of this calibre".

A good outcome seems likely either way as I read things. The oil is definitely there, which is the main value driver

GL

dyor

JOG's discovered (and mostly proven to flow) reserves are valued by the market today at less than 50 cents a barrel. The market chooses to ignore £15m of cash, tax losses with a cash value when used of c.£10m and it also ignores at least 300m barrels of prospective reserves in the 5 licences. Significantly it also ignores the hugely valuable intangible asset in the form of the knowledge, skills and application of JOG's fully committed team of industry pros upon whom we all rely to make the right choices and deliver maximum value (not least for themselves).

UKCS-focused oil companies queue up to acquire working or operators' interests in NS licences that require them to drill discovery wells at an average cost of £20m with an average chance of commercial success of 10%. The process takes years just to get to FDP stage. JOG has 124m barrels (as above) but somehow this doesn't count?? Why do people invent problems (mostly around funding) that, put simply, are unlikely ever to exist?

The whole situation is insane - one can only conclude not enough people understand simple arithmetic, or perhaps enough people don't know about JOG. Were JOG to have announced it had drilled an exploration well and had discovered 124MM boe of high grade oil, the price would be in double digits.

My guess is that next Tuesday will mostly be about explaining patiently to an assembled audience that needs to know and understand exactly what JOG actually owns - and the enormous potential this offers to investors who know how to work a calculator and then apply simple logic.

If I didn't already own so many shares I'd be buying ahead of next Tuesday but this doesn't constitute advice - everyone's circumstances are different and people are free to think what they like.

"Price is what you pay. Value is what you get" (WB). It's no good buying after the news is out and the penny has finally dropped because by then the bird might have flown. There can be no reward without risk - investing (imo) is about understanding it and putting it in its place.

GLAL

jmofwiw
dyor

............do others read anything into the thought processes that seem to be going on in relation to the prospectivity of Licence P2170 (Verbier & Cortina)?...........................

ok..............

............"JOG's management estimates that the Sgiath discovery is 20 million barrels of recoverable oil volumes and that the Upper Jurassic test is potentially the eastern extension of the Verbier field"................

..................." Directly to the North East of Buchan lies the Capri prospect, which we currently believe represents the updip, slope apron fan deposits of the basinal Cortina prospect recognised in Licence P2170. Directly to the west of Buchan, JOG has been awarded the 20/4c block, where JOG has mapped the Zermatt and Chamonix Upper Jurassic prospects and the Courchevel lead which is a Sgiath reservoir target"............

..........."A large part of the mapped area of the Verbier discovery, located to the north west of the recent 20/05b-14 appraisal well, remains untested and further additional resource potential, which was not tested with this appraisal well or the 20/05b-13Z discovery well, has also been identified in a deeper horizon beneath the Verbier discovery. These prospects, along with the Cortina prospect, also situated within the P2170 licence area, will be re-evaluated, utilising the new seismic data and considered for potential future drilling".

The plot thickens. I'll be attending the CMD (as I believe will be PC01) on 8 Oct so will report back idc. The current intentions re the FDP are set out in AB's report.

If there' news to come before 8 Oct it will be welcome but the only real possibility as I see things is that Equinor will make a decision (yes or no) on taking up their option without going too close to the wire, but according to Parkinson's law, work expands to fill the time available for its completion. Equinor declining wouldn't be a disaster by any means altthough the market would probably react negatively. Funding should be even easier to secure if another big player were to farm in. JOG's directors don't seem to be too concerned - they're consummate pros and the way I see things we're lucky to have them:
..........."Should the option be exercised, JOG shall act as Licence Operator and Equinor will reimburse JOG for its 50% share of costs in relation to the licence applications. In the event of the option not being exercised, JOG will consider farm-out terms for value with other industry partners and alternative funding opportunities that can be put in place over the course of the next two years as the FDP develops. We are confident of securing appropriate funding for a project of this calibre".

There are always risks and we know what they are. Nonetheless, JOG has a remarkable opportunity to deliver exceptional returns to shareholders. Eventually the SP should reflect this. Patience.

GLAH

dyor

contd...................

"The original 20/05b-13Z Verbier discovery well encountered excellent quality oil bearing reservoir sands. A full suite of wireline logs was acquired during the 2019 appraisal well programme, the data from which, together with all the previous well results, is being integrated into the final processed 3D seismic survey data, which was delivered during June and July 2019. The resulting analysis will be used to evaluate fully the upside potential for further Verbier appraisal activity. A large part of the mapped area of the Verbier discovery, located to the north west of the recent 20/05b-14 appraisal well, remains untested and further additional resource potential, which was not tested with this appraisal well or the 20/05b-13Z discovery well, has also been identified in a deeper horizon beneath the Verbier discovery. These prospects, along with the Cortina prospect, also situated within the P2170 licence area, will be re-evaluated, utilising the new seismic data and considered for potential future drilling"..........

contd................
"The J2 oil discovery, discovered by the 20/5a-10Y well in 2006, is some 3.5km north of Buchan and represents a viable tie back opportunity to the proposed Buchan hub. The well reportedly encountered hydrocarbons within the Sgiath Formation Sandstone that flowed at 2,850 bopd plus 1.2 million metric standard cubic feet per day ("mmscfd") of gas (37o API, GOR 426 scf/bbl) on test. Additionally, the well also encountered approximately 16 metres of excellent quality Upper Jurassic sands that flowed at 4,800 bopd plus 2.6 mmscfd (39o API, GOR 500 scf/bbl) on test. The two reservoirs are contained within different pressure cells. JOG's management estimates that the Sgiath discovery is 20 million barrels of recoverable oil volumes and that the Upper Jurassic test is potentially the eastern extension of the Verbier field. Development plans for J2 Sgiath will be run concurrently with our plans for Buchan.



The Glenn oil discovery is located some 15km to the east of Buchan and is also a potential tie back opportunity to the proposed Buchan hub. The Glenn oil accumulation is a faulted horst structure with oil trapped within late Jurassic, shallow marine Sgiath Formation sands. JOG's management estimates that 14 million barrels of recoverable oil volumes can be potentially produced from Glenn. The licence in respect of Block 21/2a comprises a two-year initial term with certain firm work obligations, principally comprising geotechnical studies, with a drill or drop well obligation at the end of the initial term.



In addition to the above discovered oil volumes, JOG has also been awarded acreage that includes a number of exploration prospects that we have identified. In aggregate, JOG's management has estimated mean case recoverable prospective resources of 91 mmbboe across these prospects. Directly to the North East of Buchan lies the Capri prospect, which we currently believe represents the updip, slope apron fan deposits of the basinal Cortina prospect recognised in Licence P2170. Directly to the west of Buchan, JOG has been awarded the 20/4c block, where JOG has mapped the Zermatt and Chamonix Upper Jurassic prospects and the Courchevel lead which is a Sgiath reservoir target. The licence working obligations include a drill or drop well obligation to be elected after two years.



As part of our strategy for the development of the GBA, in 2018 JOG pre-funded a major 3D seismic survey by PGS that covered a 1,000km² area overlaying all the acreage we have been awarded in the 31 SLR. The final, fully-processed data was delivered to JOG in July 2019 and we are pleased to observe a significant improvement in the image quality and an enhanced resolution. This data will be of significant benefit as we progress our subsurface work across all the awarded acreage"...........

Some may have missed out on reading yesterday's CEO's H1 Report Extracts below:

"The Greater Buchan Area - A transformational event for Jersey Oil and Gas

In July 2019, after expending significant time, effort and investment on an application, JOG was awarded 100% working interests and operatorship of four blocks in the 31 SLR. The acreage awarded includes the Buchan oil field and the J2 and Glenn oil discoveries and additional exploration upside and is contiguous with JOG's existing interest in Licence P2170 that contains the Verbier discovery. JOG's acreage interest in the GBA, including P2170, is estimated to contain in excess of 120 mmboe discovered mean recoverable resources in addition to in excess of 300 mmboe identified mean prospective resources. Work has now commenced on preparing an FDP for the Greater Buchan Area development project with, subject to funding, first oil targeted for 2024. By way of a low-risk accumulation of discovered resource volumes, this is by far the most significant event for JOG since its inception and we are excited that work on this new project is underway.

The Buchan oil field was discovered in the mid-1970s and was brought onstream by BP in 1981 with nine development wells with initial production peaking at 54,537 barrels of oil per day ("bopd"). 148 million barrels ("mmbbls") of oil were produced under natural depletion with aquifer support through to May 2017, at which point the field went into early cessation of production because the Buchan Alpha platform was no longer compliant with the current safety rules and regulations. Buchan oil is a light 33.5° API oil with a low gas/oil ratio ("GOR") (285 standard cubic feet per barrel ("scf/bbl")). Buchan benefits from a significant oil column in excess of 1,900 ft (well 21/1a-6) and a number of in-depth studies compiled since 2014 have concluded a strong case for Buchan to be redeveloped. JOG has already spent two years investigating the subsurface attributes of Buchan and estimates that over 80 million barrels of recoverable oil volumes remain to be produced from the field. Additional oil has been discovered in the Andrew Sandstone, a recognised shallow reservoir that sits above the main Buchan reservoir. JOG currently anticipates that Buchan will form the new hub for our area development plans for the GBA and this will be the focal point for the Company as we progress our FDP".................

...........tbc

Rookie - just to finish the discussion, you say:
"This is my analogy to you, if I was to built a house and it was say 200M2 but valued it at £1million and you came to view house, do you not have a right to question that valuation just because it is my trade to build these houses?"............

..............yes, of course I would have the right to question you on your valuation of £1m - but I wouldn't do so by pretending another one could be built for a lot less with materials costing about 25% of what it is crystal clear you know they actually do cost.

I am referring to your comment that JOG's discovered reserves in the GBA licences are only worth $2 per barrel so JOG can only be worth $150-200m.

Not sure you got my point, Rookie. As you say, it's not worth pursuing.

I mistakenly thought you were a longer term investor whereas you now say you're trading the shares for short term gain, based on your interpretation of what will happen to the share price if Equinor don't take up the option. I don't have particularly strong feelings about it but would probably marginally prefer it if they did. But if not, JOG would then have 50m barrels of discovered oil to farm out which (as I read things) would probably cause a queue of potential farm out candidates to form, each asking how much per barrel JOG was looking for.

I don't trade the shares of companies I invest in for short term gain because of my conviction that value will out in the end. The danger to me would be on selling (say half) just before positive news arrived and never again being able to rebuild my holding to its former level, thereby missing out on the big prize.

We're all different.

If there were negatives about JOG (that weren't already known about - sector risk being the biggest as I see it) I would freely cover them in my posts. Discussion forums should be just that but only a few talk about fundamentals - most seem to be fixated on price.

I invest mainly in people these days, after learning a lot (to my cost) on this score over the years. Both JOG and SQZ have exceptionally talented and committed management teams in place and the results of this can be seen in the growth in shareholder value they have produced within very short time periods (in oil & gas terms).

Why jump off when the ride has only just started? There have already been bumps (big ones at that) along the way and there might be more. It's how the situations that caused them are understood and acted on that counts.

GL

With respect, Rookie, you seem to react quite negatively to people who seem to have a lot more experience in investing than you have said you have. I didn't think the comment about spending your time more productively was particularly unfriendly - it seemed to me to be sensible advice. I would hardly call trying to set up dummy trades: "keeping an eye on your investment".
Or are you saying you wanted to sell at (say) 230p but couldn't get a quote? If it's the latter, then you might have thanked the 2 or 3 people who responded to your post and explained about 'limit' and 'fill or kill' orders.

I'm hardly the right person to talk about the irritation certain posters can cause to others. I irritate most people in life, although my dog never seems to find fault in me.

Can I give you an analogy?. You say you are a stone mason by trade, but have read up on the merits (or otherwise) of investing in the oil & gas sector. You have recently told us how we should be valuing JOG.

I spent my career with one of the big accounting firms in 4 different offices in the UK. I became a partner at 32. I eventually had two main specialisms, one of which was in valuing companies (and individual holdings in companies - the two are not necessarily the same) and gave expert evidence in Court on many occasions. I hung up my accounting boots early and have bought and renovated a number of properties, choosing to 'project manage' the task myself. The last two each became my home. I watched and learned from a number of extremely skilled tradesmen over many years. They made, inter alia, dry stone-walling look easy. When I tried it (even under their tutelage) I found I wasn't very good at it.

Were LSE to set up a forum on dry stone-walling, I would not make posts advising people who have done their jobs professionally and extremely competently for decades, on how to go about the task of building dry stone walls.

On these forums too many people hiding behind aliases present themselves as experts. They are a danger to others. Some even get aggressive if they're challenged. The best way to meet the challenge would be with reasoned argument supported by facts and evidence, but these very rarely follow. Unsubstantiated opinions are of no use to anyone.

Just musing on an otherwise peaceful day on the Devon coast..............sea's bit rough today.........

dyor

..........what a sad life you must lead - desperately trying to talk down the value of other people's assets based on your biased (and pitiful) interpretation of accounts that are beyond your level of comprehension.

It is impossible to draw any meaningful conclusions about the significance of cash movements, in a period of 2 months, from the H1 accounts published yesterday . In order to make an intelligent and persuasive argument to support your unqualified and irresponsible statements, you would have to produce full cash flow data (in a format similar to the cash flow statement for the full 6 months published yesterday) showing how - and in respect of what - cash flowed in the period you refer to.

The fact is that in the 6 months from 1 January 2019 to 30 June 2019, SQZ generated net cash of £44m, as shown and fully described in the Group cash flow statement. This ties in with the comment made in the results analysis:
"At 30 June 2019 the Group held cash and cash equivalents of £84.2 million (31 December 2018 - £42.1 million) plus term deposits of £3.9 million (31 December 2018 - £1.0 million), an increase in combined cash and deposits in excess of 100% during 1H 2019. The main element of the increase was Serica's retained share of the strong net operating cash flows from the Company's producing interests"...................

Ref gas prices, these move up and down - it is par for the course but the following is relevant:
"At 30 June 2019 Serica held gas price puts covering volumes of 240,000 therms per day for 2H 2019 and 160,000 therms per day for 1H 2020 all at a floor price of 35 p/therm with no upside price restrictions".

You don't appear to be very clever, NI.

No offence intended

dyor

NKOTB - you say: "Interesting SQZ decided not to utilise their tax pool to improve post tax figures £30m, unlike last year. So we still retain US$139.3 million (£109.4m) ..... sure we all know what SQZ intend to use this for ! "...............

........I don't think that's quite how it works NK. If the ring-fenced losses were available to use, SQZ would have used them.

In Note 11 to the 2019 H1 accounts the situation is explained as follows:
"The Group's deferred tax assets at 31 December 2018 and 30 June 2019 are recognised to the extent that taxable profits are expected to arise in the future against which tax losses and allowances in the UK can be utilised. In accordance with IAS 12 Income Taxes, the Group assessed the recoverability of its deferred tax assets at 31 December 2018 and 30 June 2019 with respect to ring fence losses and allowances".........
........"The Group has UK ring fence tax losses of approximately US$139.3 million (£109.4 million) available as at 31 December 2018 that are available indefinitely for offset against future ring fence trading profits of the company in which the losses arose".

In the balance sheet a 'nil' value is then attributed to deferred tax assets, meaning it is unsafe to assume the ring-fence losses will be used in the future. I've only been around for about 3 years so don't know if, for instance, SQZ acquired a company (which might now be a subsidiary) which had unrelieved losses at the date of acquisition and these were then carried forward to the extent they were unused. Can anyone throw any light on this? It isn't made that transparent, which is disappointing.

A future acquisition likely to be (or become) profitable might be made by the subsidiary with the ring-fence losses, so they won't necessarily go to waste. I didn't 'major' in tax when I was in the profession so don't take my word as gospel. Why not ask the Company for more information?

I'm quite happy just to wait. I see the shares as significantly undervalued and look forward to seeing the real value unlock as the market begins to understand that cash generated from present operations (assuming no disasters) will just about equate to SQZ's present market cap in less than 3 years. This takes into account the fact SQZ retains 60% of BKR profits in 2020 and 2021 and 100% from 2022 onwards and in addition Columbus is expected to come online in 2021. Looks to me as if Rhum 3 is being carefully looked at so that might accelerate production when/if it comes on-stream. Lots to look forward to.

SQZ seems a terrific investment to me, regardless of the doubts about ring-fence tax losses. I like only JOG's chances better :-)

Fortune favours the brave (and the sensible).

GLAL

dyor

Rookie - there's been no evidence of demand on the buy side today and there wasn't much yesterday. Perhaps the MMs haven't wanted to add to the stock they're holding in case the "news vacuum" continues - at some stage they have to balance their books and stand to make a loss on the turn if no-one's buying.

If you really wanted to sell you could leave a limit order. Whenever I've had the same message as you've had today I've put in a limit order just out of the money (buy or sell) and it's usually executed before too long.

Not saying I'm right with my take - just my thoughts on the subject.

dyor

Calm down, Rookie. I'm really pleased you've done well with your investment in JOG - lots of other people have done well too. This is largely due to the hard work and planning of a dedicated team of professionals in JOG, who have a lot of their own money invested. They have set stretching targets attaching to growth in shareholder value and throughout JOG's existence to date have been extremely careful in managing cash, which has included taking what would be regarded by most as very modest packages for themselves, so far at least. I know for a fact their ambitions stretch a long way beyond a market value for JOG your share price target of £7 would suggest.

Good for you if you're happy to sell at £7 a share, assuming the price gets there. Price and value are two different things; increasingly people don't even look at underlying value, which ultimately relates to investment return. It's too early in JOG's life to relate price to investment return but the oil industry - when oilcos are a bit along the line and have a clear vision through to production - has a means of doing it, which is to apply DCF modelling to get to what's called NPV10. DCF aere only ever forecasts though, so have to be interpreted with care. Ultimately, any asset held for commercial return is worth the present value of all the (net) income it generates for its owner. Bids are usually made at a premium to SP for various reasons - how much is down to how far off true value a company's share price turns out to be. With shares as tightly held as they are by people who have bought into JOG's plan. A hostile bid would likely prove unsuccessful unless it fairly valued the company (in which case it wouldn't go hostile).

I'm allowed to say your $2pb estimate of JOG's already discovered and proven to flow high grade reserves in the North Sea is poppy**** - it is. I've provided evidence of what discovered, pre-dev spend, oil in the ground recently changed hands at on the NCS (a 10% working interest in the Nova Field) which was $7.50pb, but you selectively ignore it.

JOG has several different options to raise dev funds because it owns 124m barrels of (mostly) proven to flow high grade reserves in one of the safest locations to own them in the world - and with a following wind in the form of the OGA & MER.

I also hope you do well with JSE. I wasn't doing it down - just saying it wouldn't be one for me. For whatever reason JSE didn't generate any cash in the last three half year periods and it has $581m of liabilities, which is 10 years of net profit on current performance. It does business in SE Asia and N Aus and the directors take $6m a year between them in exec pay. I didn't spend much time looking at it because I'll be cashing in my chips when JOG & SQZ play out, hopefully having added a few million to my modest existing pile :-)

Re JSE - see P4: https://www.jadestone-energy.com/wp-content/uploads/2019/08/Q2-2019-FS-Final.pdf

GL
dyor