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"NPV10 will emerge later this year and we"............

..........will get a better fix on fair value.........

Ran out of space.........plus ca change.

I can explain NPV10 unless you want to, Rookie and/or Robsroom......

:-)

“Tipped to take the shares to £5”So that means....? That’s holds as much weight as your sarcastic ukog tip".....

.........would: "£5 - £8 per share was held by many to be likely on JOG's discovered reserves increasing from 4.5m barrels to 12.4m - 23.4m barrels" be acceptable, Rookie? Makes sense to me for an oilco whose value is mostly based on discovered oil in the ground. NPV10 will emerge later this year and we

Now that it has 120mmboe it's supposedly worth the same or less than the original 4.5mmboe. It's as if the extra 115mmboe don't exist (65m if you assume Equinor accepts the gift JOG has offered it) .It's a lot of people's cerebrums that don't exist. I was pulling your leg about UKOG, hence the emoticon (or whatever it's called - smiley?). It won't end up being funny for whoever's left standing when the music stops there.

Your: "discovered oil in the ground is worth $2 a barrel with no partner and no funding" is plain daft. JOG can farm out further interests to cover its share of development funding and leave itself very well funded with cash to acquire producing interests (should it still wish to pursue this route). In the scenario I put fwd as a possibility (70:18:12: Equinor, JOG, Cieco or AN Other) farming down a further 20% to Equinor at - say - $6pb equivalent (to carry JOG to first oil - equal to 18% of development costs of c.$700m - is this realistic?) would still leave JOG with 12% to farm out to CIECO or some other cash-rich oilco at (say) $6pb, which might yield cash of something like $80-90m.

Reference: "Also in your own words, your making the classic mistake of benchmarking JOGS farm out potential with cairns energy’s"............I'd say JOG's farm out potential of the GBA licences is rather better than Cairn Energy's with the Nova field, in which it held a non-operator's 20% interest before the farm out. JOG presently owns 100% of the 4 licences recently awarded and most of the discovered oil is known to flow in commercial volumes. One would think the dev spend would increase most recent flow rates. The fact there's a FDP in place for the Nova field is an advantage but it's logical to assume a FDP will be approved by the OGA for JOG's licences because the whole point of having a supplementary round exclusively for GBA licences was MER asap. Confidence in the GB Area as a whole was in all probability significantly boosted (at least) by JOG's farm out to Equinor in Oct 2016 which led to the Verbier discovery a year later.

I don't care when people buy or sell. But I get frustrated reading the unsubstantiated and illogical opinions of posters who seem to miss what to reasonably-researched others is the blindingly obvious. We all know there are risks - mainly (as I see it) relating to the oil price.

I fully expect JOG's team to respond to any challenges with their customary diligence and consummate skills.

GL with JSE. Liabilities of $0.6bn would concern me somewhat but wdik?

dyor

The £5 -£8 price target was based on JOG's existing 18% of a min known 25m barrels in Verbier, which was supporting a price 200-240p. An appraisal result of 69mmboe (mean est) was tipped to take the shares to £5 and anything above that up towards the higher figure. When the appraisal drill failed to find Jurassic sands, the shares were sold down to about 60p. I bought more. There might have been some 'hope value' included in the 200-240p range, but not that much because the shares had been at or above 200p well for a while before the appraisal drill was announced. 4.5mmboe plus cash easily supported JOG's £40m m/c before the failed drill. The everyone talked only of 25m barrels, when there might be a lot more between the discovery well (where a min of 25m was "seen" in the immediate vicinity of the well-bore) and the appraisal well, some 2km distant.

It's ok to have opinions, but you don't back yours up with facts or evidence Rookie. How do you explain the following: https://www.energy-pedia.com/news/norway/cairn-farms-out-10-percent-interest-in-the-nova-development-offshore-norway-to-one-dyas-177305

Nova is a couple of years ahead of JOG's fields (the FDP has been approved but development spend hasn't started yet).

Can I suggest that, as a self-confessed 'non-expert', you write to Dyas and tell them they've paid nearly four times fair value for their 10% of Nova?

Fwiw, I paid a lot less than you for the vast majority of my JOG shares but this doesn't change my thinking. I invest for the long term based on the facts as I see them. Warren Buffett thinks the best time to sell shares in a good company is 'never'. I aim for somewhere in the middle.

Can I suggest you invest the proceeds (when you sell at £7) in UKOG. Contrarian Investor (who thinks the Isle of Wight is the "Isle of White") believes UKOK should be valued at a p/e of 35x earnings at levels of production that will never be achieved. The only potential difficulties are that UKOG will never make a profit because the directors will have any first, it isn't appropriate to value a company like UKOG on a forward p/e and there are nearly 7bn shares in issue, giving it a market value that's getting on for double JOG's. Oh - and it has no reserves to speak of either and will never be allowed to produce more than 3500pd because Sussex or Surrey CC (not sure if the "CC" means County Council or Cricket Club) have said so.

Go on - you know you want to invest - it's a winner :-)

dyor

Rookie - you seem to be measuring JOG's value by reference to what most would surely regard as 'anomalous situations'. If RRE is sitting on cash of £250m and is adding at the rate of £200m pa (assuming EBITDA turns into cash) then the market is even dafter than I thought it was. I'm holding a pile of SQZ and it's pretty clear to me the market doesn't 'get it' there either. Both RRE and SQZ are producing, which doesn't make them directly comparable - I'm not going to go into the many reasons why this is the case on JOG's forum but suffice to say both are generating cash and have plentiful reserves. SQZ has a m/c of about £300 but this could change if the H1 results tomorrow don't disappoint.

JOG is not a producer (yet - I hope it will sell before it becomes one). Optimum value to me might come immediately post FDP, having aligned the interests of the P2170 partners across the 5 licences JOG currently holds or (in the case of P2170) has an interest in.

I don't know if Equinor will take up its option on Buchan and J2 but, if it doesn't, another big player would probably pay to farm into these two licences at least. If Equinor bites, JOG might be able to farm down a further 20% to earn itself a free carry to first oil. Offering CIECO (or ANother - recent evidence suggests discovered oil pre-infrastructure spend changes hands at $6-8pb) 12% of 120MMboe could raise c. $80-100m, which would pay for more appraisal/exploration drills, so adding upside.

If JOG (based only on current discovered oil reserves) were to end up owning 18% of 120MMboe, fully carried through to first oil, the resultant 22m barrels would have to be worth $15pb, giving JOG's proven reserves alone a value of $330m. Then there are 300m (?) barrels of prospective reserves, further contingent resources and cash on top.

I am not mad. And I know JOG's directors aren't either and nor is PC01, although I suspect PC's estimate is a future one . I doubt very much JOG's directors would sell at £7. You seem to be making the classic mistake of benchmarking JOG on other companies' share prices and not on their fair value. Price and value might not be aligned in the market known as AIM, but fair value almost always gets paid on a trade sale. I could explain why but it isn't worth it.

I haven't built any upside into my assumptions/calculations above, nor have I factored in risk. You might be able to answer this one: if JOG's shares were expected to trade somewhere between £5-£8 had the Verbier appraisal drill confirmed oil towards the top of the estimated range (130MMboe - 23.4MMboe to JOG) then why would the discovery of 120MMboe (by JOG alone, courtesy of the OGA - ie more than 5x Verbier's top estimate) be worth £7 a share (giving JOG a m/c of £150m)?

At £7 per share, JOG's present discovered UKCS reserves would be worth $1.5pb. Even allowing for Equinor taking up its option it would still only value JOG's 70MMboe at c.£2.5pb.

Perhaps have a rethink, Rookie?

dyor

PC01 - you're flogging a dead horse. The mistake you're making is to apply logic and intelligence to the situation JOG has created for itself. People whose only interest is the price aren't interested, either because they're too lazy or are incapable of understanding what is blindingly obvious. I have made similar comparisons to the one you've referred to today. I too saw Amiseur's RNS and immediately reached the same conclusion as you. Of course one of the main disadvantages JOG faces is that the reserves it owns are in the UK North Sea, whereas Amiseur's are in Colombia, which is particularly noted for its all-round stability.

Whilst yesterday's news wasn't unexpected, it was nonetheless important because it brought 100% certainty to what is an exceptional situation for a junior oilco to be in. JOG explained some of the rationale behind the decision to grant Equinor an option to take half of Buchan & J2 for buttons. JOG values its partnership with Equinor (in particular) and CIECO very highy, for obvious reasons. My personal view is that JOG's position in relation to Buchan & J2 would be more valuable still, were Equinor (maybe for political or operational reasons of which we are unaware) to decide not to opt in. It beggars belief that any number of other bigger players wouldn't form a queue to enter a data room set up to farm out an appropriate interest in all or any of JOG's four new licences. Any number of major, large and medium sized oil companies focused on the UKCS would be bound to show strong interest in farming in to a situation where there were in excess of 100m barrels of P1, plus so much potential in P2 & P3, reserves, when the usual scenario is to pick up interests by offering a free carry on the (usually) c.$20-30m cost of drilling an exploration well that has about an 8-10% chance of discovering oil in commercial volume.

It isn't rocket science.

The response you got to your post could have been predicted: "chooo chooooo".

Truly pathetic.

"The brain-dead shall inherit the earth".............

When the cap comes off this, a lot of people are going to be kicking themselves.

Good.

dyor

"31st Supplementary Offshore Licensing Round - Greater Buchan Area Plan
The Oil and Gas Authority (OGA) has offered for award 4 licences to 3 companies in the 2019 31st Supplementary Offshore Licensing Round, which closed for applications in May 2019.

Eleven blocks were originally on offer in this Supplementary Round which was focussed in the Greater Buchan Area of the UK Continental Shelf (UKCS).

This was the first time the OGA has linked a licence round offer with an Area Plan and the application process included the requirement for applicants to demonstrate their wider area plan development concepts and to seek to collaborate with other area licensees and applicants.

The round offered blocks under flexible terms, enabling applicants to define a licence duration and phasing that will allow them to execute the optimal MER UK work programme.

In all, 4 applications covering 5 blocks were received and the OGA is now ready to make offers of award in respect of 4 licences covering the 5 blocks.

Two of the awards are for work programmes that will proceed straight to Second Term, either for potential developments, or re-developments of fields where production had ceased and the acreage had been relinquished. The remainder of the licences will enter the Initial Term (exploration stage).

Scott Robertson, CNS Area manager, said: “From bringing together interested parties at an early stage to releasing extensive digital data in advance of the licence round, the OGA sought to facilitate a common understanding and industry collaboration. The resulting commendable level of engagement between operators and high quality applications enabled us to make awards confident that the right assets are going to be in the right hands to deliver the optimal MER development of the Greater Buchan area. We look forward to working with the awardees as they deliver on their work programs and commitments and to exploit the opportunities to re-purpose and sustain existing infrastructure.”

The OGA fully supports the transition to a low carbon economy. Government forecasts show that oil and gas will remain an important part of our energy mix for the foreseeable future, and maximising economic recovery from the UKCS is therefore vital to meet our energy demands and reduce reliance on imports"..........

......https://www.ogauthority.co.uk/licensing-consents/licensing-rounds/

.........if it does fall to £2.16, I'd buy a few more if I were you, craig. Even more if it goes to £1.16. And if it goes to 16p, I'd back up the truck.

You seem to blame JOG for the fact the small % of shares that are traded on a daily basis (on the sell side) are mostly traded by people who are only interested in price. People who believe that JOG is fundamentally undervalued because they have done their research and (in their minds) reached logical conclusions about the true longer term value of JOG's shares can't be expected to just keep buying. More "converts" are required - hence the CMD on 8 Oct.

'Price' is the sole result of supply and demand and (in the case of junior oilcos) is rarely related to value, in the near term at least.

Investing is a longer term game. Day trading is different, but the two come together in the markets. If they didn't, liquidity would be compromised. If there are more shares on offer than the MMs can turn at a margin, so they drop the price until buyers are tempted - it doesn't much matter about volumes as the MMs generally like to keep their book in balance, so they mark prices up or down to achieve this balance.

Maybe the recent price dip is the result of a few people who don't understand much about JOG (or disagree about its prospects) deciding to cash in their JOG chips so they can pile into that sure-fire winner UKOG instead. Good for them. Or maybe 88E or another one of the penny share traders' favourites. Pity FRR didn't turn out that well for them; it had about a million followers with a combined IQ of about 26.

How do you go about deciding which shares to buy and when to sell them, craig? I'd be interested to know.

I'm not having a go at you, craig. It's just that you only ever talk about price. Do you understand what you've invested in? A few of us who've been around a while have tried to explain our thinking. This doesn't mean we're right, but at least we've thought about it. These discussion forums are about facts and opinions but it's important imv to be able to back up opinions, otherwise the relevant posts are of no value.

I am under no illusions about what people want to read and consider, however, as I see my earlier post setting out thoughts on a possible way things might play out to shareholders' advantage within 2 or 3 years wasn't of interest to anyone. What does this tell me, I wonder..........mmmmm

GL - I think the price will go up or down tomorrow. Or maybe stay the same.

dyor

PC01 - might there be a plan about how JOG intends to position itself re the 5 GBA licences? Bear in mind that JOG has to abide by the terms of the licences, which will include adherence to certain milestone dates and (possibly) events.

If it was me (luckily for you it isn't) with modest cash reserves, I would look to derisk the unique position JOG finds itself in, having been awarded these valuable licences that contain so much already discovered and proven to flow oil. Clearly the OGA must have felt that the plans JOG submitted when applying for the licences (with 100% success) were the most plausible of those it considered.

All we presently know about JOG's intentions re "sharing" is: "Equinor and JOG have agreed and entered into a three month option agreement under which Equinor has been granted an option over a 50% equity interest in respect of Blocks 20/5d and 21/1a (the "Buchan Blocks"), which contain the Buchan oil field and J2 oil discovery. Should the option be exercised, JOG shall act as Licence Operator in respect of the Buchan Blocks and Equinor will reimburse JOG for its 50% share of costs in relation to the licence applications".

So Equinor can take a 50% interest in 105MMboe on the terms stated. But It doesn't preclude the parties from taking discussions further.

One scenario I see as possible would be for JOG to farm out interests in the 4 new licences to Equinor and CIECO, so that the same ratios as presently apply in Licence P2170 (Equinor, as operator, with 70%, JOG 18% and CIECO 12%) would apply across the board.

I have no idea how much it will cost to develop the licences to production stage but would guess at a few hundred million pounds. Recent evidence suggests discovered oil in the NS at pre-development-funded stage is worth $7-8 pb, so (ignoring the smaller licences) and assuming Equinor wants to play - JOG farming out another 20% of 105MMboe (Buchan & J2) might buy JOG its share of development cost of the licences to first oil (21MMboe x $7.5). ie Equinor picks up JOG's share of the spend. Why would CIECO not want to join the party? In the spirit of partnership, JOG might offer CIECO a 12% paying interest in the licences at a discounted - say - £5pb. Say, $63m in cash, which would pay JOG's share of further appraisal of Verbier and an exploration drill of Cortina, still leaving over.

Where would the above leave JOG? Ans: with at least c.23MMboe of fully funded to production reserves (inc the 4.5m barrels min in Verbier). Plus 18% of the upside in Verbier and anything a Cortina drill might discover - and a healthy bank balance on top.

Excluding prospective reserves and cash, JOG could be sitting on an absolute min 'fully funded to production' reserves worth 23m x $15pb (??) = $345m, or £280m - £13 a share, plus whatever prospective reserves and cash might add.

A queue might form post FDP. £15 anyone?

It's speculation, but today's price is imv down to a lack of understanding.

dyor

Beneficial owners of the shares being lent to the people and organisations that sell them short rarely know their shares are being used for this purpose. How many people, if they knew what was going on, would entrust these savings to fund managers who lend the shares bought with their money (who pocket the lending fees for themselves) to outfits like Muddy Waters, or traders in investment banks, which can then do their dirty work before returning the damaged goods to the lender to tuck back into the funds they're supposed to be managing for the benefit of the people whose money they were supposed to be protecting? 'None' would be my guess.

Fund mangers doing the lending claim short term price damage doesn't matter because they invest for the long term - and that the lending fees allow them to keep management fees to a minimum. Boll**ks. Its a subject on its own.

The regulators oblige organisations holding short positions of more than 0.5% to make disclosue in their useless register, which serious shorters can walk around by setting up offshore operations, or splitting shorting activity between any number of different, apparently unconnected, organisations. What I would be more interested in is who lent the shares being shorted and why. And I would make it a regulatory requirement that pension fund managers, in their interim and annual performance reports, disclose the effect of their lending activity on fund performance.

Most fund managers count lending fees among their bonus generators, so comparative performance becomes a much lower priority. I phoned about 10 different outfits in the pension fund management business a few years back and asked them specifically if they ever lent stocks that were subsequently shorted. They all denied doing - as they would - and you won't find it in their literature either. The people I increasingly fear have entered the 'stock lending game' are internet brokers, who sit on gazillions of shares in every company in their nominee accounts. What better way to make a return on these than lending them out for fees?. If this is going on, shareholders in companies like BUR are, in effect, having their own shares turned on them as weapons.

Why is it allowed to go on? Because it makes money for HMG. The Treasury gets about a thrid of all its revenue from the City. HMRC can't tax savings in pension and share ISA wrappers, but it CAN tax highly paid, London based managers of spiv outfits masquerading as saints - at top rates too - and the outfits they work for (via corporation tax) to the extent their profits are taxable in the UK.

'Portfolio' insurance is available via the options market. But owners of the shares ultimately behind the options have to give their consent before the options can be traded. It is reasonably clear why the exchanges are so small.

No.1 to blame for making this dirt legal? Politicians, who allow it because money wins votes.

all imo/dyor

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