Member Info for dickupham

Proselenes - if there was more to the ownership agreement Equinor has an option to enter into, JOG would have been obliged to disclose it. All that was disclosed is that Equinor has an option to take up 50% of "the Buchan Blocks" as long as it reimburses 50% of JOG's costs in relation to the licence applications.

Andrew Benitz stated: "We are also pleased to enter into an option agreement with Equinor, which serves to demonstrate JOG's efforts to successfully collaborate and continue to strengthen our working relationship with Equinor as Operator of Licence P2170"

Smart move in my book, giving JOG different options for later development cost funding. I like your scenario (Eq pay dev costs and JOG repays out of oil revenues over a defined period). RBL is also a possibility, as is farming down another - say - 20% to Eq on condition they pay the development costs.

I don't particularly favour borrowing when there's no income to cover the interest (and repayment - it's what scuppered Xcite Energy although there were other equally important contributing factors, not least the fact Rupert Cole was a cretin who had a problem with honesty) so I would favour your scenario, or a further farm down. 30m+barrels is still a lot.

In practice, there'll be something worked out that suits both parties and does the job. If no-one steps in beforehand to tempt the directors with a bid in double digits, I fully expect JOG to join the ranks of producers, if it hasn't done so already by acquiring producing interests in the meantime. Not sure I see it as an operator but Equinor is on hand to take up this role if needed.

Plenty of options for a very well run junior which knows what it's aiming for. The sky's the limit.

Does anyone have any views on the licence no-one has commented on here? JOG must have bid for it for a reason.

all imo/dyor

Robsroom - no disrespect intended but there will be no comparisons to draw between any deal struck by Soliton resources (https://solitonresources.co.uk/about.html) and whatever relationship is struck by JOG with Equinor, which will involve putting in place a plan (FDP) to get the proven oil to the surface.

We already know the terms of the potential "farm-in" by Equinor. If Eq decides to take a 50% non-operator interest in Buchan, it will have to pay a 50% share of JOG's application costs (JOG has been working on the opportunity for 2 years).

There are all kinds of reasons why it will benefit JOG to have a partner like Equinor on board but I doubt we'll see Equinor lobbing cash JOG's way or picking up JOG's share of development costs.

Whatever is decided, JOG will own a minimum of 55m barrels of premium quality proven oil, which is worth $5 per barrel in anyone's books.

jmofwiw
dyor

.........."So from the bottom of my heart i wish you well"............

..............and from the heart of my bottom I wish you well too, AO :-)

Thank you so much for your words of wisdom and advice on what the value of JOG is, AimOracle. I note that you "know the game inside out". I assume the game is making money by gambling (some do it more successfully than others no doubt) which way a company's share price is likely to move in the short term. Had you been as successful as you seem to be implying you are, might I ask you why you feel the need to arrive on a board like this and fill it with nonsense about the price you would like to see the shares at, without ever remotely linking your valuable thoughts to underlying value? Surely you should have your feet up on a fancy yacht that's moored in some glitzy overseas location with a couple of local wenches rubbing you with body oil?

I take little notice of short term price as they don't mean much. Price is the simple result (give or take the usual dollop of market maker trickery) of supply and demand and fundamentals invariably win in the end. I hung my accounting boots up when I was 50 on the basis one spends a long time dead but, when I was in practice, I was a partner in one of the big accounting firms where one of my specialisms was in share valuations, a subject on which I gave expert evidence in Court on numerous occasions. I don't see much point in trying to guess what a herd of people with about as much intelligence as a gnu think the price of a particular share should be, when they wouldn't know what value was if it jumped up and bit them in the balls.

I only invest in companies where:
1 I trust the people looking after the money I've invested (which is usually in meaningful amounts) to carry out their duties capably, intelligently and honestly and to deliver to shareholders what they have undertaken to within the broad timescales indicated
2 I see the prospect of significant gains on the amounts I have invested in the longer term. Patience is key to success in this regard.

JOG & SQZ, in which I have my largest holdings, tick all the boxes in regard to the above.

I am well into my sixties now and you might ask why I spend time on these boards if I've been as successful as you'll no doubt tell me I imply I have been. The answer is because I have plenty of time available to me and I like promoting clarity and passing on some of the knowledge I gained in what was a long and broadly successful career. I also find I learn from others whose expertise lies in subjects I am less familiar with - generally on the technical side of the businesses I invest in.

Gambling on price movements is fine. Without short term traders there would be far less liquidity. But trying to point others in a particular direction only because that's the direction that makes you the most is to my mind disingenuous.

You don't fool me and I doubt you fool many others.

Offski in Polski

dyor

Precis of info from a pro commentator: "Buchan brought onstream in 1981. Has so far produced 148mmbbl of oil (33.5 degrees API). Field shut in in May 2017 when the production platform fell out of class. It was not redeveloped by previous holder Repsol Sinopec
(there is ongoing litigation amongst the Repsol Sinopec JV). Field is development ready. Buchan Andrew is an undeveloped discovery above the main Devonian Buchan reservoir. J2 is an undeveloped discovery made in 2006 by Talisman in the 20/05a-10-Y well.
Option for Equinor to take a 50% stake in the new licences, reimbursing JOG for application back costs. JOG would remain as operator.
Next step for JOG (apart from the outcome of the Equinor option) is submission of FDP. This might encompass initial redevelopment of Buchan (including new wells and new facilities), followed by tie-in of J2, Verbier and any other new discoveries. First oil targeted for 2024, and development plan submission forecast around mid-2021. JOG’s existing cash funds the company through the FDP process (depending on any further drilling that may be carried out on P2170)".

Still not sure it's a sure fine thing, with the value of the confirmed but undeveloped oil (taking account of the 50% destined for Equinor) worth a minimum of $7pb if JOG were to put it up for sale whenever?
c.55m barrels of the stuff, adding about £300m to JOG's bank account? Work it out per share (21.8m shares in issue). I make it £13.76. Use $5pb if you like - still gets you to £10.50 a share.

JOG's not going to sell but the oil won't go away. Selling is always an option though - hence my comments about the SP being underpinned many times over. JOG's key people are more ambitious than that and imv have the capability and commitment to make JOG a serious midcap player in the industry in the short to medium term. Look at JOG's progress since August 2015. JOG had a market cap of less than £700k at a SP of 8p in Jan 2016. Those who invested at that price and have remained holders have been very well rewarded. And imv there's a lot more to come. Keep backing winners is not a bad philosophy to adopt, some might say.

dyor

Oracle - re: "However i think the shareprice should not be here on my fundamentals valuations".....

.......would you care to share the bones of your "fundamentals valuations" with us? It would help us understand.

Have you had your calculator checked recently?

:-)

I hear what you say about tying in even more closely with Equinor but very much doubt JOG would do this for the simple reason it would restrict its flexibility.

On a more general level, for some reason (I don't really know why) my thoughts go back to Dana Petroleum and I wonder if maybe the directors have ambitions for JOG that they hope might give rise to a similar outcome. There are notable differences, not least the oil price and the fact Dana had producing assets but the direction of travel the respective companies have taken have certain similarities. JOG's directors are certainly very capable and committed people and so far have delivered remarkable shareholder returns to those who backed them from the start.

For those who are unfamiliar with Dana, it was Tom Cross's (PMG group) first listed vehicle and delivered spectacular results to shareholders, also netting Cross something like £50m in the process, part of which he used to set up PMG. He's made his fortune now and imv prefers it these days if others (called shareholders) take the risks, while he takes a big annual package and uses "share appreciation rights" or "SARs" (I had to look them up - very clever) to boost his take even more. 't'is the way of the modern world sadly (AIM in particular although not in JOG - so far at least).

Anyway, here's the story. I could be that little old lady who was there from the start although the relative number of shares held might be a bit different. She went for a bungalow - I'd be after a small town.
https://www.telegraph.co.uk/finance/financetopics/profiles/8113069/Dana-Petroleum-chief-Tom-Cross-reflects-on-the-deal-of-the-decade.html

Ignore the desperate clowns who've pitched up here urging caution for all sort of nonsensical reasons. JOG's SP is so underpinned it's unreal. Value will out.

all imo
dyor

Hey TopAimer - you must be a very smart investor, as I see you're heavily into the world class Greatland.

You raise very clever points in your 04.27 post which most people here won't have thought of. EG I hadn't thought before about following what Fund Managers do but, now that you've raised the point, I think I might do in the future. Fund managers are very clever people who always have their pension investors' interests at heart. This is why they're always lending their shares to hedge funds, investment banks and other worthy institutions so that they can make money shorting them. The lending fees are worthwhile and this can be very good for their bonuses.
We'll probably have to wait a while before it's confirmed just how clever the fund manager in L&G has been but I won't forget to let his boss know if he's due a special bonus for losing his nerve when he did when they did. The Schroders Fund Manager's decision to sell more than half of the pensioners' money he'd invested in JOG in the £2 placing at about 65p was a very wise move, wasn't it, TopAimer? He's definitely one you should follow.

I'd wait until JOG's share price falls to about 110p before buying if I were you. The downside is that you might have wait a while before the Company has a 10 or 20 to 1 share split, however.

Your research clearly didn't extend to reading what I wrote about 6 hours before your own valuable contribution. Have you ever heard of the term: "go do one"?

GL TopAimer

dyor

Quepensa - imv the problem lies in CLNR's management. GS doesn't care about anything or anyone except himself. Turning the company into a joke by issuing 800m shares to the 550m already in existence, when CLNR's price was 10% of what CLNR's own brokers had said it was worth just a month before, making only a token contribution to the placing, then following it up with 20m soft options to him and his pal Nunn, told everyone anything they needed to know about the bloke.

That's everything except the fact he told us goodness knows how many times how keen Shell were to farm in, yet failed to do the most important thing of all, which was to negotiate a free carry on the fist exploration drills on both licences Shell was interested in.

Before any of this happened, he should have been savvy enough to get CLNR's shares out of the territory penny share traders love to get involved at. A 1 for 10 share consolidation would have done the job - get the price to a decent level and make the shares a bit less easy to trade. It would have encouraged longer term investors and eventually probably resulted in them being more tightly held.

Why raise all the money for two drills and enough working capital for 3 years, when he's already told us P2437 is being drilled first and there's every chance (Shell seems to think so too) that the exploration drill, probably early next year, has a very good chance of success.

I'll tell you the answer. Because he wants his salary and position as new king of CLNR (in his mind - he'll never be a king of anything unless it has "wet behind the ears and greedy with it" in the title) guaranteed for the next 3 years regardless. Wait until you see the bonuses the two new top mongrels shyly take this year for their great success so far. Remind me what this is and how shareholders have benefited.

If Shell has any sense it will make all future announcements about the licences they're involved with because their professionals are probably embarrassed about CLNR's performance since the tie-up was announced. They'll know by now that no-one is likely to believe whatever the present lot in CLNR write. Whatever it is will probably send the price even lower.

Algy did everyone a great disservice leaving them in the present hands.

Other than as above I'm very happy with my holding here. It isn't worth selling.

all imo/dyor

I'll try to explain again why JOG's present SP is an aberration. Feel free to comment on my logic.

1. When the Verbier appraisal well was being drilled and JOG's SP was 240p (which was felt by many to be too low given it had c.5m barrels of confirmed reserves in Verbier, the Cortina prospect and a load of cash) it was generally thought that on the appraisal drill being successful and Verbier oil showing up near the top estimate of 130m barrels - 23m barrels to JOG including the 5m already confirmed - JOG's SP would increase to somewhere between £5 and £8.

2. When the appraisal showed no more oil than JOG presently held (still holds), the share price was trashed down to 70p or thereabouts, giving a total value of the Company of less than the cash it had in the bank. Utterly daft .

3. JOG has recently been awarded 100m barrels + of top quality oil in Buchan and J2, without having to do any exploring. Most of this oil is known to flow, because it WAS doing until as recently as late 2017. The oil won't have run away. Furthermore, there is already some useful infrastructure in place that will reduce the cost of getting back to production and shorten the timescale. No doubt JOG (and probably Equinor) will be giving considerable thought as to how to maximise what has come their way at no cost to them so far.

4. So today, with 110m barrels of top quality oil (apv33) JOG's SP hasn't even recovered to the level it was at when it only owned 4.5m barrels in Verbier.

5. Discovered oil in the North Sea has recently been changing hands at prices per barrel of between $7 and 15$ per barrel. Buchan is at the heart of the GBA and it offers enormous potential not only for the future delivery of hundreds of millions of barrels more than has been discovered (and flowed). It can also act as a 'hub' for nearby producing fields to tie into for onward tie in to the Forties pipeline, which makes Verbier and Cortina even more viable: https://www.energyvoice.com/oilandgas/north-sea/193585/ineos-to-pump-500m-investment-into-forties-pipeline/.

Work can immediately start of a field development plan that sets out exactly how the field will operate. JOG might not need to take things beyond that as, by then, it will be a very attractive proposition indeed. Both main directors have significant holdings and the one thing no-one says on their deathbed is: "I wish I'd worked for longer".

Mr Market thinks JOG is worth less than it was before any of this happened. Good for Mr Market.
If you didn't think Mr Market was born without a brain, you do now. Mr M comprises a whole lot of desperate for money dimwits who don't know their proverbials from their elbows, are fixated only on 'price', have no interest in value and wouldn't know what it was if it jumped up and bit them.

JOG is 'worth' the min price its oil would fetch on a sale (post 50% to Equinor). $275m - c.£10 ps.

Price is about supply and demand. The supply will stop as the reality sinks in.

........how long should I dream for, Einstein?

....each...........

"The stock market is a device for transferring money from the impatient to the patient" - Warren Buffet.............

........also from the same author: "Price is What You Pay; Value is What You Get" ...............

...........and from a different author (who now wishes he'd bought a lot more at 8p in 2016):
"The patient's children and grandchildren will inherit a couple of top of the range statics in Bognor Regis"

.........might sell a few at £10 and buy one myself in Mother Ivy's Bay :-)

re L&G: if you didn't previously think that fund managers (as a breed) understand very little, you might do now

Plenty more news to come this year I reckon.................

dyor

basb - fwiw, as I understand LSE's rules, all messages on the same thread as a single post that is removed get taken down as well.

GL

For info: https://www.ogauthority.co.uk/news-publications/news/2019/31st-supplementary-offshore-licensing-round-awards/

TBT - the way I read things the shares should be upwards of £10 now, never mind £4.50 in a few years. Working just on minimum values JOG's oil would fetch on a sale ($5pb), assuming Equinor takes up 50m barrels it would still leave JOG with more than 50m. $250m is near enough £200m at today's rate, then you've got all the prospective resources to add in - they're worth something too, plus whatever cash JOG has kicking around the place. £10 a share would value JOG at £218m.

I just don't think the market has taken this all in - the deal was so transformational. If you didn't know before that JOG's senior people are switched on and focused, you do now. Clearly the OGA is impressed. JOG has some powerful allies, particularly given its absolute age and size. Incredible progress in the time available.

Further news to come over the next few months should help drive the SP closer to where it should be. One thing's for sure - the price is underpinned to an extent that couldn't have been foreseen last week, last month or last year. 50m barrels of discovered oil it's known will flow - top quality too - and the market thinks it's worth less than $1 a barrel. Get real.

Never look a gift horse in the mouth. My guess is that a lot of people are going to be kicking themselves in the near future when the institutional and professional investors' calculators start coming out................

dyor

YingYang: re: "Equinor joining in for 50% and covering drilling costs (to a large extent)".............

.........where did you get this info??

It isn't particularly relevant now but in Monday's RNS AB said it was BP that first discovered oil in Buchan in the 1970s. I have long thought it was Algy Cluff's first significant achievement in the industry. He obviously thinks so too:
https://www.energyvoice.com/oilandgas/north-sea/197044/cluff-says-farewell-to-north-sea-after-nearly-50-years/

Ajax - no, I wasn't joking about Equinor being granted an option to take up a 50% non-operator interest in the Buchan Field on condition (only) that they pay half JOG's application costs:

"JOG is also pleased to announce that 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".

AB said in the RNS: "We are also pleased to enter into an option agreement with Equinor, which serves to demonstrate JOG's efforts to successfully collaborate and continue to strengthen our working relationship with Equinor as Operator of Licence P2170."

It's possible JOG on its own would have been seen as too small to raise the funds for the hub development and any new well costs. Equinor's involvement would make JOG's task a lot easier and there's always the option of farming down up to 20% to raise funds, which would still leaveJOG with over 30MMboe, plus 18% of whatever Verbier is eventually found to hold - the oil is there and the chances are they'll pin it next time. By the time the funds are needed the SP should be a lot higher and any equity dilution would be more palatable in these circumstances.

It's all guesswork at this stage - we don't know how ambitious JOG's directors really are. A friendly approach by a well funded industry player two years or so at the right price might prove tempting to them - it would be to me if (for instance) I was 70 and was sitting on 1m shares. I'm ok on the first bit but the second needs a bit of work :-)

Re JOG's potential: "Together with its interest in the Verbier discovery, the new GBA acreage provides JOG with a significant opportunity to potentially establish and operate a future major new area development to access more than 100 mmboe of discovered mean resources (refer to table 1 below) plus in excess of 300 mmboe of identified mean prospective resources that are estimated to be present in the GBA"

100m barrels that's known to flow (maybe 50m if Equinor bites) plus P2170 - and the market reckons JOG's worth £39m inc cash and b/fwd losses (£25m @ 30%) plus whatever else is in JOG's licences???

I increased my holding by c.40% when the price was in the doldrums so am feeling relatively cheerful for once.

dyor

I was fortunate to put 2/3rds of the proceeds of sale of the 3m CLNR I sold recently into JOG and the other 1/3rd into SQZ. I had significant (to me) existing holdings already and have done extremely well in both. Both are companies with very skilled and committed senior management, who are people of integrity.

The comparisons with what's on offer here could not be more stark. Swindells has produced nothing of value so far to shareholders but has seen himself and the other exec director ok for the next 3 years at least. Wait 'til you see the y/e bonuses. What for?

I am still extremely disappointed at Algy leaving loyal shareholders in the hands of people who imv are not of the right calibre. The pitiful plastic lawn that so changed someone's life says it all.

Wish I'd sold the lot now. The MMs wouldn't take a 500k sell order this morning when there was an opportunity to add on a dip elsewhere. What does that tell you?

all imo/dyor

Wh0sethedaddy: re:" You do realise that's not just free money right? They need to fund the drilling and more importantly the DEVELOPMENT. HUR had to raise $520m to develop Lancaster".......

...........you don't seem that intelligent. If you read what I wrote you will see that I referred only to the value of discovered oil in the ground in a place like the NS. I then compared what JOG's SP might have been had the appraisal well confirmed oil at the top of estimate in Verbier (23.4MMboe to JOG) which, conservatively would have been £5+, with what it is today at less than £2, when it is now the owner of 110MMboe of proven oil in Buchan, J2 and its minimum interest in Verbier. The proven oil in Buchan is probably requires less work to land than top estimated volumes in Verbier would have taken (and cost).

JOG might yet let Equinor join the party on a free pass - I guess because of existing relationships and to be certain a partner is on board with the right levels of skill and money to help get to first oil in the timescale indicated. That's assuming JOG's key people don't decide to sell before it gets that far. Get the FDP approved first and interest would be bound to emerge at a price a lot higher than the $7 bare minimum I used as an illustration.

Basically, as a result of a seeming determination to retain 100% of Lancaster, HUR failed to add value through constant fund-raising, the result being there are 2bn shares in issue and the price isn't even where it was when first oil was years away. The directors have done ok though, with generous packages and countless soft options. I doubt JOG holders will be diluted to obscurity -it's not in line with the Board's thinking. It will also be a lot cheaper to build an extraction infrastructure in the GBA than it was half way to Iceland.

In order to get to a true valuation of shares a NPV10 exercise would have to be carried out and we're too far from production to make such an exercise worthwhile. This is not to say someone won't have a bash.

You'll have to try again, wh0sethedaddy. Next time why not read what's written and try your best to understand. Ask a teacher maybe?

JOG is fundamentally undervalued at the present SP. It's shares will soon be in even fewer hands if existing holders have got any sense.

jmofwiw
dyor