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PC01 - sorry to take a while to respond to your post of 09.06hrs Weds.

I didn't try to put numbers to the theory - all I concluded, after working on a few possibilities since JOG's situation changed so fundamentally on being awarded the new licences (subject to legal completion) - is that 18% of a lot would 'a lot' - £30+ ?? The reason I concluded there must be at least a possibility of CIECO becoming involved is that developing the 5 contiguous licences in the GBA would be much more straightforward were the same partners to share them in the same ratios across what would effectively become one overall project.

Arden's long and detailed research note sets out a number of options that are clearly now open for JOG to consider.
https://uploadfiles.io/k1e9wtbs
Which options they might go for is guesswork. I'm not on the inside so I don't know who's said what to whom and therefore if what I suggested is even a possibility. I'm happy to go along with Arden's comprehensive note and wait to see what emerges. Investing in (what has become) a junior explorer in the oil industry is normally fraught with risk. As I read the situation, whilst risk can never be eliminated altogether, it seemingly has been in JOG, given the discovered reserves it is now in control of and the value an unresearched market.puts on these at present.

From an overall viewpoint, it is difficult for me to see JOG, under its present management, wanting to go "all the way" with this project. JOG's founding directors took an almighty risk when they identified Trapoil as a "reverse" candidate because of its listing and tax losses. I had a sizable holding in TRAP that was worth 5% of what I'd paid for it when JOG arrived on the scene. I quickly formed views by talking to the people and bought shares in the initial placing (and on multiple occasions down to 8.79p in Feb 2016 and more still on the way back up). My further investment ('good money after bad' some people thought) was in JOG's people, not in its situation or even necessarily its prospects. Experience had already taught me that good people rarely fail in life. But what AB & RL (and others) in JOG's have achieved in just 4 years, from practically a cold start and no money, is truly remarkable. I can't begin to tell you how it feels to have been right for once (so far at least) after a couple of then recent experiences had destroyed my confidence in the integrity of the UK stock markets and the people working in them.

Credit is due to Mark Groves Gidney, Paul Collins and Martin David of TRAP for the linked event, announced after the former two had been axed by a bully-boy so-called 'value investor' (ex 'City') who knew and understood a lot less than he thought he did:
https://www.investegate.co.uk/trap-oil-group-plc--trap-/rns/corporate-and-operational-update/201501080700175763B/

GL
dyor

Fuey - I'm only surmising, but it seems likely to me that JOG regards its existing partnership in Licence P2170 as very valuable, given Equinor's reputation as being right up there with best in the world a what they do - and the working relationship that has developed between the two companies thus far. P2170 is aka 'Verbier', although it is likely there is a lot more oil in the licence area than the min 25m barrels so far discovered in this field. Cortina alone is a potential 240mmboe prospect and Meribel a smaller lead; plus we don't yet know the results of the new 'state of the art' seismic study of the wider licence area completed last year, with the initial results received by JOG late Q4 2018 and final imaged data in Q3 2019. The indications are the area to the NW of the discovery well in Verbier might hold good prospects, as does 'Verbier Deep', which is at lower level than Jurassic (I think - I'm not a geologist). Anyway, it's further below the seabed where the discovery well was drilled to about 2 miles down.

Buchan and J2 are too big for JOG to take on alone. Yes, it's possible others might have been interested in paying JOG something to buy into 50% of the fields, but JOG has a lot to lose by not offering Equinor a share in new licence areas that will eventually form the hub at the centre of (hopefully) many wider discoveries that would tie in to the hub, which itself would tie into the Forties Pipeline.

One possibility I see (I might be way off track) is that it could be a great deal simpler for all concerned if interests in the 5 contiguous fields, that are known to contain material resources with the prospect of a lot more yet to be discovered, were all to be owned in the same ratio as P2170: ie Equinor 70%, JOG 18% and CIECO 12% (Cieco is a wholly owned subsidiary of a big Japanese energy group called ITOCHU). 18% of a lot, with so few shares in issue would potentially have a huge effect on JOG's SP which, at the end of the day, is what matters to JOG holders. Much risk would be eliminated were JOG to secure its financial position so comprehensively.

I can't say if CIECO might be interested in buying into the new licences at a time that was appropriate, or at all, but is has to be a possibility. So what JOG might have the opportunity to do a bit further down the road is to farm down another 20% of Buchan and J2, plus 70% of the other two new licences to Equinor, in return for a free carry to first oil, and a further 12% to CIECO, perhaps for cash, to buy some existing production to put any cash flow concerns firmly to bed.

All that would then be left to do is sit back and wait for approaches.

All the above is, of course, in my ideal world, but it doesn't seem impossible to me. The main risk thereafter would be inheritance tax :-)

Thoughts anyone?

all imo/dyor

The point I was making about Schroders is that they don't appear to have complied with the disclosure rules relating to notifiable holdings:
"Once a person holds more than 3% of the voting rights of a UK company whose shares are admitted to trading on a UK regulated market or a prescribed market (e.g. AIM) whether as a shareholder or through direct or indirect holding of financial instruments, that person is required under the Disclosure Guidance and Transparency Rules to disclose that interest. Disclosure is also required if the holding in question increases or decreases through each whole percentage point over 3%".
Schroders disclosed when their holding fell below 5% (10 April 2019) but as at 28 June 2019, they no longer appear on the register of major shareholders. So what happened to the notifications of Schroders' holding falling below 4% and 3%??

£43 a share would get TRAP shareholders (who subscribed for their shares in the 2011 IPO) their money back. It's not impossible JOG's SP could get there but everything would have to fall into place, one has to consider the possibility of equity funding somewhere down the line has to be considered and time would be required. What does seem to be impossible is getting enough people to understand that JOG's shares might be undervalued at a market cap of £50m, when JOG owns as many discovered reserves as it we know about and has no debt.

As I read the situation - and assuming the oil price doesn't fall off a cliff - because of the volume of reserves JOG owns, funding to first oil should be achievable without compromising JOG's share of the overall project moving forward.

Plus, JOG has a capable and experienced team in place that seems to me to have all the skills needed to achieve objectives the BoD has no doubt already set, at least broadly if not in tablets of stone. I don't personally see JOG still being a partners in the five contiguous licences it would seem might become "the GBA field" by the time it gets to production. When might be a good time to receive approaches for takeover from bigger players is a matter of conjecture and I don't know any more than the next investor about this one, so I am only speculating. Sometime after the FDP has been put together would make sense to me but wdik? I doubt JOG's directors, who have significant holdings in JOG's shares would let it go cheaply, given how hard they've worked, the risks they've taken and everything they've achieved so far.

However certain anything might look, risk can never be eliminated, so never take anything for granted.

JOG got some coverage in the JEP yesterday - maybe a few more wealthy people there will start buying? https://jerseyeveningpost.com/news/2019/09/03/jersey-companys-north-sea-oil-operation-could-yield-6bn/

all imo/dyor

PC01 - I rarely, if ever, disagree with what you write and invariably enjoy reading your posts. I am not in any way being critical of what you wrote in your post of 11.19 - I'm just posting to say the anomaly you refer to in JOG's present share price is even more marked than you've pointed out (and I and others have done many times before).

JOG holds an 18% share in Licence P2170 (now called: "Verbier" although it also holds Cortina (prospect) and Meribel (lead)). We're all waiting to find out if further potential drilling targets emerge following the big seismic exercise the partners have been studying for some time now. Perhaps of more importance is the fact the seismic study also extended to further evaluation of Verbier itself, which should make it possible to determine if the min 25mmboe presently confirmed is likely to be a lot more. There seems to be confidence exhibited by JOG in a deeper area below Jurassic level and in an area (at Jurassic level) to the north west of the present discovery well.

The top estimate of oil in Verbier made by Equinor before the appraisal drill was 130mmboe. 25mmboe+ has already been discovered so the incremental oil at stake was 105mmboe, of which JOG's share would have been, top whack, 18.9mmboe.

JOG's funding situation would imo have been less favourable than it is now, in that it finds itself the owner of 120mmboe and is expecting to farm out 50mmboe of this to Equinor, who would clearly benefit in return only for paying a share of JOG's licences' application costs and sharing future development costs. This would still leave JOG with the option of farming out further interests in the GBA licences to help fund development cost, either to its existing partners or to other oilcos looking to add to their reserves for future development, with minimal uncertainty over the existence of the oil and the ability to bring it to the surface (so to speak).

I'm looking forward to learning about everything JOG has in its locker now, when it decides the time is right (Oct?) to advertise what it has and how it sees the future unfolding. It will surely makes the usual presentations to the great and good in the City at some point soon. Then we might see some real price action. This is not to say a positive sign-up by Equinor will not be well-received anyway. JOG has plenty of options even if for some reason Equinor decides to decline the invitation. Others will certainly be interested.

dyor

Calm down, Chaz - I wasn't doing UJO down. It might go on to do very well and make all its shareholders rich.

I was making a simple comparison of market capitalisation between the two companies, based on discovered reserves. JOG has 120mmboe in the GBA of which 50m will probably be farmed out to Equinor (or another big player ) somewhere down the line. But that would still leave JOG with (pre-development cost) reserves of 70mmboe. There is recent evidence (Cairns's farm-out to Dyas of a 10% interest in the Nova Field on the NCS) to suggest discovered resources at a pre-development stage might be worth $7-8 pb. So, in simple terms, a guide to the value of JOG's proven reserves might be c.$500m (£400m). That number, of course, is then 'risked' to take uncertainties into account, but it still leaves JOG with a value that's a few multiples of what the market currently affords it.

Then there are JOG's prospective resources - some of which at least are likely to 'come home' - of another few hundred million barrels. These have a value, although it is a lot lower pb than proven resources. I haven't taken these into account. Using your terminology, some of JOG's prospects could be 'monsters'.

You say West Newton was worth 1 billion before the recent RNS update (I assume you mean dollars). This would make UJO's share worth $167m (£135m). Assuming you double that (I'm being conservative) following Thursday's exciting announcement, this would make UJO's share worth £270m. And as you rightly point out, UJO has a number of other exciting opportunities, including the 'monsters' you refer to. But I see that the terms: "OIP" and "contingent" are used a lot throughout research notes, annual financial statements, RNSs etc. This would cause me to adopt a rather more cautious approach than you appear to. Each to his own though - it's a free country (or at least it used to be).

Cutting to the chase, are you able to tell us the total discovered resources owned by UJO and how you see UJO raising the funds it would need to bring all these into production? Are you anticipating any resistance from people with homes in the relevant areas to plans to bring all these resources to the surface and transported to the relevant refineries?

Finally, do you happen to know the world record for the number of shares any one company has had in issue at any given time? UJO looks uniquely placed to claim a new one (whatever the old one was) because I see it already has more than 10bn (fully diluted) in issue and will surely be looking to issue a lot more to raise funds to cover the future development spend you're anticipating.

Let's have another chat in about 2 years' time....................

GL - I hope UJO ends up a winner and that all its shareholders do well

dyor

FD - I was giving you the opportunity to demonstrate your enclyclopaeidic knowledge to others. I was specifically asking in relation to the descriptions used in the matrix in section 10 of the OGA. At the application stage there seem to be two choices:
1. No work programme: Offshore Innovate licences at Phase A or Phase B of the initial term of the
licence.......or
2. Work programme: Onshore licences or any Offshore Innovate Licence that will open with a ‘Phase C’ work programme

As I'm not aware there is a a work programme in place for the licences JOG was awarded, I would have opted for 1 above. I would have to have looked up what Phase 1,2 & 3 work programmes are to be absolutely certain............
........which is why I immediately thought, as someone who is occasionally able to think quickly: "I know - I'll ask fairdealer, because he's a savvy investor and he knows everything".

Anyway, making a guess that JOG's applications fall (or fell) under category 1 above (and in the matrix) there is virtually no requirement for an applicant to provide evidence of future funding plan,s so I'm not quite sure what all the fuss has been about. As I read the situation, JOG has plenty of options, some of which might already have been aired with its P2170 partner/s. We'll find out idc.

You persist with your silly references to me being JOG's PR officer (or whatever). It is hard not to be positive about JOG's prospects and most intelligent investors would probably do so too (if they took the trouble to carry out as much research as I do about the things in a company that matter). There are many others on here whose contributions I find valuable, even if their views are not as positive as mine. I don't know how many times I have added the caution that risk can never be eliminated. I don't mind risk as long as I understand it. Your difficulty seems to be that you don't - otherwise (imv) you wouldn't have started (some time ago now) throwing dirt at JOG's committed and extremely capable directors and decided to bet the ranch on CLNR, which Algy (when he abandoned ship) left in the hands of greedy second raters.

I stated yesterday where I gained the experience I have to date. People can judge for themselves whether or not my views are worth considering. I have little respect for people who are openly critical of these views but are not prepared to say where they gained their experience and why it qualifies them to be critical.

Some might think you're lining yourself up with the wrong types in your quest to get Robsroom and others all het up about me dismissing their views as infantile, but I suppose in the kingdom of the blind the one-eyed man is king.

Do you wear an eye-patch? :-)

dyor

What point are you trying to make, FD? It was interesting to learn of the various criteria applied by the OGA when considering JOG's (and perhaps others') applications for the individual licences, but it is clear the OGA has a good deal of discretion to issue licences to whichever organisations/people it sees fit. It is encouraging that JOG was seen as a fitting licensee for the 4 licences it was awarded and it says a lot about the regard in which JOG and those connected with it are held by the OGA.

As for me being "JOG's PR machine", I don't believe it is fair to describe me in this way. My posts are usually backed up by facts, or at least views that are supported by research, knowledge of JOG's circumstances and experience I have gained not only through investing in a number of oil companies of varying types and sizes over many years, but more specifically during a relationship with JOG/Trap Oil that goes back 7 or 8 years. This includes an active role during the transition period from TRAP to JOG, which it would not be right to discuss here. My 'valuation' and general "business-related" posts are backed by decades of experience gained at a senior level in the accounting profession. I have made no secret of the fact I really appreciate posts made by those with a background in the industry, which are the most valuable of all; to me at least. I am grateful to these posters for sharing their knowledge and experience and generally have a great deal of respect for their views.

I have every reason to be supportive of JOG's directors and senior team because they have (so far) multiplied the value of my residual holding in TRAP by about 10x - and the multiples of the number of shares in JOG I started with (as an initial entitlement as a result of my TRAP holding) by another (about on average) 10x. This doesn't, however, make me JOG's PR machine.

imv JOG is still at the starting line. There is much still to achieve and the circumstances have been created to make it possible. There are rivers to cross and hills (rather than mountains) to climb but it's "do-able". People seem to forget that JOG's appointment of a CFO whose ability and experience is more than impressive must have been for a reason. As must have been their appointment of BMO Capital Markets as joint broker. Just as telling imv is BMO's agreement to act for such a small company.

Ref section 10 of the OGA document and the funding requirements JOG had to satisfy the OGA about, can you explain the types of licences JOG applied for so that everything is clear, please fairdealer. Presumably CLNR had to do the same in respect of the 6 or 7 NS licences it was awarded in the 30th round?
https://www.ogauthority.co.uk/licensing-consents/types-of-licence/

dyor

As you seem keen for me to extend my disdain for people who claim expertise and understanding they don't have, when my remarks were principally directed at another poster who always seems to find ways to be critical of industry professionals with a fine track record who don't behave as he thinks they should, can I ask you why you think (to use your recent exact words): "......(it) would be great if we got something similar!!!"

Your comments were made about Equinor's 85% farm-in to the “shallow, low risk and potentially sizeable exploration Isolde target”........for what consideration we aren't told (probably 'nil' in return for Eq paying for the work leading up to a drilling decision to be made by Equinor alone, always assuming the seismics pass the test first - Isolde is only a target).
https://www.energyvoice.com/oilandgas/north-sea/204418/equinor-farms-into-central-north-sea-field/

JOG has 120m barrels of discovered oil in the GBA, of which it has offered Equinor just under half, presumably in the spirit of partnership. Maybe there's more to it than this; we don't yet know - but certainly JOG needs a partner to share future costs. You think a farm-out of 50m barrels of discovered reserves that is something akin to the Isolde farm out would be "great"???
Which planet are you from?

The OGA must have formed the view JOG will be able finance the development costs of the licences it has recently awarded it - one way or another, with or without Equinor's participation - or it would not have awarded JOG 4 out of 4 of the licences it applied for. It is not yet certain Equinor will take up the option; but I would guess another big player might be interested if Equinor isn't, for whatever reasons.

It won't have been possible for JOG to put forward detailed plans of how it will get beyond the FDP. But its general approach to what needs to be done to get to first oil in 2024 must have found favour with the OGA or its applications would have failed. My best guess is that the OGA is confident, in issuing licences of this value to the UK to a small-cap like JOG, that JOG's track record to date is no fluke and that the best chance of the OGA meeting its own MER targets is by issuing the licences to JOG.

I trust JOG's directors to know what they're doing. The OGA trusts JOG's directors to know what they're doing and so do a lot of other people who post on here and on other boards, who have carefully and intelligently considered and thought about JOG's overall situation. You and another expert appear to be exceptions to the rule. Nothing is guaranteed but the rewards for success could be significant - even life-changing for some.

Fairdealer thinks JOG's PR (among other things JOG's directors have got wrong)is a failure and that funding might be provided by "a Major Shareholder building control"...............

..........maybe it will. We're all entitled to opinions but no-one can force people to accept daft ones

dyor

I'm not sure that was called for, noix. I've always made it pretty clear I find your posts well-researched, well thought out and helpful to all investors. Conversely there are others who, over a period of time, have sought to undermine JOG's directors, for whom I have great respect. They are extremely capable people (as their CVs make clear), their work ethic is beyond question and they are undoubtedly people of utmost integrity. How common are these traits in the whole of the stock market today, let alone in AIM? They have served shareholders extremely well since they took over the helm of the holed ship known as Trap Oil some 4 years ago. TRAP had a market cap of about £0.5m, no cash and a recent auditors' report that said they would go bust in a few months at best if a white knight didn't ride in pdq.

People who claim expertise and understanding they don't have are dangerous to others. Whether they realise it or not, some can be subject to influence by people who aren't qualified to express the views they do. I was only referring to one or two people - make up your mind who they are.

People might look back at the number of things the people I refer to have found wrong with the way JOG's directors have conducted themselves. Of course we all want good news, but it is wholly unreasonable (and could well be very damaging) for JOG to issue 'interim news' just for the sake of it when so much is going on. The directors will announce what shareholders need to know as soon as they can - as they have always done. JOG isn't UKOG or SOU.

I see it is now JOG's PR that is found wanting. This latest comment is totally unjustified. It isn't the responsibility of directors of a listed company to make statements designed to influence the SP, nor is it the right of minority shareholders to be kept informed about what is going on, when the overall objectives have been explained and the directors are only half way through what is a complex and time consuming process.

My posts are only ever intended to be informative and I always make my views plain. No matter how certain anything might look, risk can never be eliminated entirely. Nothing I say is ever intended to constitute advice because everyone should make up their own mind. I do, however, try only to comment on things I understand and have experience of, which it is reasonably clear is not the case with some others, who would have people think they know what they're talking about when they don't.

Roll on Q4 and some full presentations on where JOG is currently sitting and how the directors view the future.

dyor

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