Member Info for dickupham

You're fine, Ajax. I think the general consensus is that there's a lot of oil down there - it's about pinpointing the right locations to sink wells. It doesn't matter what people on here think (assuming they do). I believe the Buzzard field, which is very close by to the West, posed a number of (similar?) early difficulties before becoming the UKCS's biggest producer. Here's something I read about Buzzard in an industry rag recently:

"Nexen and its partners have approved plans for a second development phase to support output from the UK's largest producing oil field, Buzzard, with production starting in 2021, the China-owned company said Monday.
The decision by Nexen, a subsidiary of China's CNOOC, implied a vote of confidence in the UK after the authorities slashed upstream tax rates in 2015 and 2016 during the oil price crunch.
China is a major North Sea player, with Nexen operating fields that produce about 275,000 b/d of oil, or more than a quarter of UK oil output.
A statement from Nexen said regulator the Oil & Gas Authority had also given the go-ahead, "allowing the project to move into the execute stage."
The project aims to boost volumes from Buzzard, which was producing around 140,000 b/d of oil in the early part of this year, down from peaks of 220,000 b/d in the early years after it started up in 2007".

I don't think Equinor and Partners have finished with Verbier yet. No upper 'limit' has been put on the resources it is now likely to hold that I have seen, all references since the dry appraisal drill being only to a minimum of 25MMboe. Hopefully the big seismic exercise across the wider area covered by Licence P2170 will provide information that allows JOG/Equinor to move positively forward with Verbier, apply new focus to Cortina and bring new leads into play in other parts of the Licence area.

There will probably be news of some form in the not too distant future. I wouldn't be surprised to see some 'cash generative' production appear on the scene. There are still some good deals to be had in the UKCS (Serica Energy's BKR deal last year was transformational - 4 or 5 years ago the Company was worth £8m and today it's undervalued (imo) at £325m, with the same number of shares in issue subject to a few exercised options). It's not out of the question JOG can acquire a non-operated interest in a producing field on favourable terms. RBL funds have always been said to be available for the purpose.

I hope also that JOG has been a bidder in the 31st Supplementary Round. The opportunity to farm out to a bigger partner would be likely to be a productive exercise. It is also possible JOG will have bid for new licences jointly with one or both of its existing partners. I'm not sure when the results of the bidding process will be announced.

The failure of the appraisal well was a setback. But to devalue JOG to less than cash plus the worth of its tax losses is imv a gross overreaction

all imo - dwfryw

Make that 3

"ajax just a tip I learnt a long time ago. No one here knows who the hell one is talking too until you see the continuity of posts between various boards. I could say more and point you in the right direction but best you and anyone discover for themselves".

It's supposed to be a discussion forum openly exchanging information and discussing views individuals have on various matters relating to JOG. I'm not suggesting other topics should be off the agenda but riddles that are suggestive of foul play aren't very helpful because they could mean anything and might refer to anyone. I get more abuse (all based on a lifetime spent in a business that's relevant) than most for my forthright views, so I tend to assume the worst when a riddle like yours appeared after I'd gone to the trouble of finding the OGA podcast new entrant to the forum, Tommy had helpfully provided.

I was also affected by graybird's immediate portrayal of Tommy as a fake. The bloke has nothing of value to offer, constantly insults me and posts outright lies (as in Schroders sending out a twitter message to all its investors apologising for investing their money in JOG - good luck to him the next time he walks in off the street and ask to see AB).

Anyway, glad to hear I wasn't the subject of your riddle, FD. Can you put us out of our misery and explain what you meant and what you wanted to alert Ajax to. Might come in handy for all genuine posters.

.........if Harry turns up next you should be deeply suspicious. GB's got it sussed (as usual).

22 filtered posts in a row between last night and 09.04hrs this morning. Is this a record?

Following two farm-out deals with one of the world's most respected oil & gas companies, there are two drills planned (one - P2252 - subject to Shell's further work indicating a drill is supported), the other "as soon as practically possible - CoS stated at 38%). The P2252 drill, if supported will probably be late next year. Combined prospective resources of the two are put at c190MMboe (CLNR's share c.75MMboe). At a conservative ppb of $8pb for discovered gas 'in the ground' the value to CLNR of two discoveries would be something like $600m - or £460m.

In addition, CLNR has 5 30th Round UKCS licences it intends to farm out to bigger players. It also intends to bid for P2248 and possibly other licences in the 32nd Round.

Whilst CLNR would have to find the money for its share of each planned drill, it has already said it intends to farm down a chunk of its 50% of Licence P2437 in order to raise the necessary funds. 10% (of the whole licence) should more than suffice in this regard, making some reasonable assumptions.

The market is therefore saying the risked value of a potential 70MMboe (conservatively worth £400m+ AND five unexploited to date (but still valuable) UKCS licences, plus whatever else CLNR has in its locker, is £13m.

2.4p a share today - value on two discoveries (one alone would be astronomical) at least 80p??.

C'mon. Wake up, people.

dyor

https://www.youtube.com/watch?v=V7NlFWh7Sz8

seabass - I was questioning why you think up to $5m (£3.5m) would buy a company a 25% stake in a field being drilled which, if successful, would turn prospective resources of 90MMboe into confirmed ones. The CoS put on Selene the last time I looked was 38% so if you were to apply that % to $5m, it would be a break-even bet if a successful drill discovered resources of 100/38 x $5m = $13.2m.

Were a drill of Selene to confirm resources as presently projected, the value of those at, say, $8pb (too conservative?) would be $720m and a 25% interest in that $180m.

And all for a payment of (up to) $5m.

There would have to be a return in it for a party agreeing to pay CLNR's drill costs in return for a farmed down %, but 25% (half of CLNR's interest) is not the right one. A 10% (max - 20% of CLNR's 50%) farm down seems much more likely to me.

The above assumes CLNR is not acquired by a bigger player before the need to raise the funds arises, which seems even more likely to me. Hope you do well out of it whatever. It's just a question of time - the present price defies logic and that never continues to be the case for long

jmofwiw/dyor

You say: "It is obvious from the financial and percentage symmetries that Cluff will farm out 25% of their 50% for the $6.25m (25%) needed for their contribution towards the $25m".

I assume you mean the potential farm down of P2437 referred to by CLNR recently - can't recall where but could probably find it.

It isn't obvious to me why CLNR would part with 50% of its interest in P2437 to fund 25% of a maximum drill cost of Selene of $25m.

Can you explain your numbers, please, so that I am able to understand?

What are: "financial and percentage symmetries " btw? Would 50:40:10 be "financially symmetrical" for instance?

.......those who continue the pointless debate with a1m1 and his pals (who are out to cause damage to CLNR no matter what) and who reply under the negative thread headers chosen (eg: "What's next......placing") simply promote the same negative message over and over.

If you feel there is merit to be gained by banging your head against a brick wall, please at least change the header to something more positive.

..........so it seems unlikely a deal would be done at less than 10p, giving CLNR a fully diluted value of not less than £60m....

.........should have checked before pressing the send button - apologies a1m1

CLNR is now funded for working capital through to next year. It is also possible additional funds will be provided by the farm-out of Round 30 licences, which CLNR is presently preparing for the data room.

The Company has already stated that cash to fund CLNR's manageable share of exploration drills (they're calling Selene 'appraisal') will be secured via farm-down (ie reducing CLNR's share in the licences by a few %).

The failure of the market (which in this case is the hordes of day traders whose only interest in CLNR is price and have no idea about, or interest in, underlying value) to attribute anything remotely approaching fair value to the shares makes a takeover increasingly likely. Because of blocking minorities any bid would have to find their approval so it seems unlikely a deal would be done at a minimum of 10p, giving CLNR a fully diluted value of not less than £60m.

Discoveries in one or both of the licences farmed out to Shell, combined with the further licences CLNR is currently working to farm out would easily support this value. There are prospective resources of 600bcf (105MMboe) for Cluff in P2252 & P2437 alone. The market thinks this makes the whole Company worth £13m.

If you ever doubted the clueless nature of a lot of people who trade in shares listed on AIM, that doubt should by now be very firmly dispelled. Price is one thing, value is another.

True value will emerge - as it always does. Maybe not today or tomorrow but emerge it will; it is only a question of time. Only those who are holding shares when it happens will score heavily. The rest will be onlookers.

GLAL
DYOR

FD - I didn't intend to sound quite as disrespectful earlier - my apologies. I'm just fed up with reading criticism about JOG's directors who imv are the Company's most valuable assets. This is potentially damaging to my investment in JOG, which is significant to me.

It is people who succeed (or indeed fail) in life by making the best out of whatever assets a company has that are at their disposal. imv, which is backed up with facts, JOG's team has done a first rate job in building value on what what was a very shaky base when they reversed their co into the shattered remains of Trap Oil back in 2015. I had a fair sized investment in TRAP I was 95% down on when JOG came along.

There is no doubt that what happened recently was a bitter disappointment to everyone involved with the Company . But it isn't right to heap all the blame on JOG for whatever went wrong with the appraisal drill when:

1 No-one can yet know what actually went wrong
2. JOG has only an 18% non-operator's interest in Licence P2170
3. Equinor has a 70% operator's interest and effectively makes all the decisions. This is not to say JOG would just concede without making its views known if there was any material disagreement on any important matter, but practically. what Equinor wants, Equinor gets.
4. JOG is a junior explorer and high risk is endemic in all such companies. Moaning at anyone and about anything that causes displeasure, when those doing the moaning have no idea what information is actually available and how much can be released into the public domain without causing damage (eg providing sensitive information to competitors) really isn't an intelligent way to go about analysing the situation now facing the Company.

JOG's directors were constrained in what they could say in the RNS announcing the well result. Equinor decided not to make any announcement and I guess Verbier was also suddenly thought immaterial by the big Japanese 12% partner too. Funny how these people like to have their names and photos attached to news of new discoveries but are nowhere to be seen when there's a dry hole drilled.

The important thing is that Equinor remains fully committed to Licence P2170 and I hope that, at some point in the not too distant future, what has just happened will be seen in context when more successful drilling activity takes place in the area covered by the Licence. I don't think Verbier is thought only to contain 25MMboe or a bit more, but we'll no doubt find out more idc.

I'll mention to JOG that they should employ a receptionist (cost c. £30k pa in Jersey?) so that shareholders can ask for info anytime they want. I expect people they feel should be able to contact them know their mobile numbers.

I think it's too early to rule out the possible acquisition of cash generating production. Such a move would bring stability to JOG's situation and hopefully be well received by the market. Cash is an issue but it could happen.

dyor

I find your post silly, FD. It's not worth responding to in detail. I've already corrected you on a few things you've said that are wrong but you still carry on. You clearly don't understand much that's any use to people on here, least of all me.

One point though: when did I say I detest RG? I don't know the bloke, but I do know his history, which is similar to many of his kind. I neither like nor dislike these people - they (and hedge funds and institutions) are a fact of life in the markets. Sometimes their presence is advantageous to a company they invest in and sometimes it isn't. The jury is out on RG's involvement in JOG but it makes no sense whatsoever to even imagine he'll be getting involved in management. He'd have to become a director first, but for what purpose?

My jibe about him breaking wind was about Jersey, not him. Sorry you missed what was intended to be vaguely humorous. Have your paper losses affected you to the extent you can't stop until you find someone to blame for the duster. Have you thought about trying God?

dyor

P/E is a generally well used benchmark of share value, being a rough approximation of NPV and much easier to understand and apply.

But you can't apply P/E uniformly "across the board" in the oil & gas industry as a true measurement of value because the income streams that lead to net earnings (the "E" in P/E) are finite and the multiples used will vary depending on what stage of their life a company's producing assets have reached. In other words how much longer they will carry on producing.

It is for this reason, among others, that the true measure of worth generally applied in the oil & gas industry is NPV10, which is established using discounted future cash flow projections and applying appropriate discounts to take account of risk and money cost.

I ate an encyclopedia for breakfast.

SQZ is imv still a great stock to be invested in.

DYOR

Should have written: "In cos where holdings are fragmented and there are few, if any, large holders (such as in TRAP, where an individual controlling 25%+ of the shares - a so-called "value investor" - pushed his weight around to catastrophic effect) a controller of a sufficient number of shares - has to be over 10% so that a GM can be called - a minority holder can sometimes "run the show" using implied threat".

RG couldn't easily get to that position because JOG's directors have significant holdings, as do others who would support them (inc me). My guess is that RG sees JOG as a good recovery play.

PS: RG is a Welshman. He can never become a Jerseyman, although no doubt Jersey welcomes him as a resident. I sincerely hope he doesn't break wind in public, because that could tarnish Jersey's sophisticated image

Luckily I could never become a Welshman even if I wanted to live in Wales (where they probably wouldn't welcome me unless they were mad)

:-)

Why do you say: "Oh Dear Dick", FD? Do you not feel my comments are valid? What qualifies you to know they aren't?

Saying JOG's directors have a cosy life seems disparaging to me. I asked why you felt this way but you didn't answer. I am always willing to listen.

The rights of shareholders are set out in the UK Companies Act. In effect individual holders of small parcels of shares have none. If they could organise themselves (as a group) so that (usually) blocking votes could be effective, things might be different. But it always proves impossible because very few holders know what anything means nowadays and the vast majority don't bother to vote. The advent of internet brokers and nominee accounts makes the situation worse.

Conversely, a holder of 10% or more of a co's shares can call a general meeting (GM) at any time and if the statutory requirements are met (publication of date, venue, agenda etc) the resolutions passed become binding. In cos where holdings are fragmented and there are few, if any, large holders (such as in TRAP) an individual controlling 25%+ of the shares (a so-called "value investor") can push his weight around to catastrophic effect. You know the story I believe, plus why TRAP wasn't allowed to go into liquidation before JOG rode to the rescue.

JOG didn't set out to be an explorer. Licence P2170 (28th Round) was too compelling. It still is. Equinor thinks so too. Who am I to disagree with experts in one of the world's most respected cos? Ask them how many dusters they've had in appraisal wells.

No-one really knew anything about P2170 because TRAP's two "oil directors" were asked its "value investor" via the chairman to resign with an ex gratia payment on top of their statutory entitlements, or a GM would be called (at which his votes would have swamped all others combined) and they'd be voted out and get the minimum. Guess what they decided to do? The $96 hedges on Athena production were then cancelled on the "value investor's" instructions via whoever again, Brent Crude fell off a cliff and the rest is history.

I'm only surmising.

I've explained before why I think JOG has been unable to buy a producing asset (so far at least). I know they've given it their best (and more) but they can't and won't overpay. Reliance on RBL is also a disadvantage because proposals have to be considered by lenders who have strict pre-set criteria. I wouldn't be surprised if competing cos have had more readily available cash in a few cases where JOG was a serious contender, but missed out because the cash was't immediately available.

Running a small oilco like JOG with a view to growth and eventual stability is harder than climbing K2 with one arm tied behind your back. People on here make it sound easy and tell us what they would have done that would have been better. They live in fantasy land.

Thanks for your sensible earlier posts, bullson & LONGWAIT. Hope you don't have to wait too long.

DYOR

mrfedup - no offence intended, but you make GB appear super-intelligent.

One difference between JOG and UKOG is that UKOG has 6.2bn shares in issue and no production or reserves to speak of, whereas JOG has 21.8m and a few reserves at least. I have a soul full of hope (whereas a woman in the bath has a hole full of soap).

As you can tell, I take your views very seriously.

GL

Andrew Benitz
Chief Executive Officer

Andrew Benitz was a Founding Director of Jersey Oil and Gas E&P Ltd (now a subsidiary of Jersey Oil and Gas plc) and has over 17 years’ experience in financial markets and company management. Prior to co-founding Jersey Oil and Gas, Andrew was Chief Executive Officer and Director at Longreach Oil and Gas Ltd, a TSX-V quoted company. He joined Longreach in 2009 as Chief Operating Officer when it was a small private company and oversaw the company’s growth, building a significant portfolio of oil and gas assets in Morocco.

Prior to his move into industry, Andrew worked at Deutsche Bank AG as an Analyst within the Oil and Gas Investment Banking Group as well as within the Equity Capital Markets team, where he worked on a broad range of oil and gas M&A transactions, together with equity and equity-related financings. Andrew is also founder and Director of Titan Properties SL, a real estate business in Spain.

He completed his undergraduate studies at Edinburgh University graduating with a Bachelor of Commerce (Honors).

Ron Lansdell
Chief Operating Officer

Ron Lansdell is Chief Operating Officer and a founder director of Jersey Oil & Gas E & P Ltd. Previously he was VP
E&P at Longreach Oil and Gas responsible for exploration in Morocco.

Ron held a number of senior technical and commercial roles during a 13 year career at Eni. These roles included roles in Nigeria, Kazakhstan and exploration management in the Atlantic Margin UK, Faroe Islands and Ireland. Ron began his career in 1972 in seismic data acquisition and processing, initially at Digicon and then at CGG in London, before joining Elf in Norway and then BHP Petroleum as Exploration Coordinator, Western Australia. He spent nine years with Elf (in Norway, France and Syria) and then joined QP as Chief Geophysicist in Qatar before joining Eni.

Ron graduated in geology from the University of London, is a member of the PESGB, the Institute of Directors and is a Fellow of The Geological Society.

Vicary Gibbs
Chief Financial Officer

Vicary has over 20 years' experience as a corporate financier advising oil and gas corporates on M&A, capital raising and restructuring transactions.

He previously worked at BMO Capital Markets Limited as a Managing Director, Investment Banking. Prior to this, he worked at Canaccord Genuity Hawkpoint Limited, Bank of America and Deutsche Bank AG.

Vicary has a BA in Business Administration.

I hope RG’s interest in JOG is purely mercenary (there’s nothing wrong with this – making money is the name of the game) and that he doesn’t start to imagine his <7% holding entitles him to start telling others who know a lot more than he ever will about running an oil company what to do. The longer his interest remains purely ‘mercenary’ the better as far as I am concerned. He hasn’t contributed a penny to JOG so far because his company has simply bought shares in the market at what most people capable of judging would probably regard as a discounted price.

Significant risks always exist in exploration and development oilcos and JOG is no exception. It has had an unexpected accident from which it can recover. What doesn’t kill you makes you stronger. That’s the way I prefer to view the situation anyway, not to direct insults at JOG’s directors and naively pretend I could have done a better job than experienced industry professionals giving it their best.

There’s no certainty they’ll get the next drill right either, or that any other action will guarantee big returns. This wouldn’t necessarily label JOG’s directors as failures either – the industry is unforgiving and outcomes can be cruel. The risks are high but the returns can be astronomical. You can’t have the latter without the former.

I’ve invested in the people who currently run JOG and I’m sticking with them. I know and respect them and have discussed face to face the commitment they continue to give to making JOG a success. I’ll post their CVs separately for people to consider. There is no certainty I am right to think as I do. I make judgments and one lives or dies by these. Others can think and do whatever they like. I don’t give a FF.

My suggestion to those who don’t trust JOG’s directors is to sell up and put your money somewhere else, where you judge management is better. It’s daft to say on here what JOG's directors should or shouldn’t have said or done, when very few of the corroborative facts have even come to light yet. At the bottom end of a 3500m drill, the width of the column is 8 inches. I expect all the necessary information will have just flowed to the surface from the samples taken and the other data collected all that way down, as if by magic.

RG is a Welshman, not a Jerseyman. If you lived in Saudi Arabia would it make you an arab? It doesn’t matter where he lives, who he does or doesn't know, where he spends most of his time or where his companies are registered. His (and their) presence in Jersey will in all probability all be about tax status.

DYOR

The debate about where RG is officially resident is pointless. It doesn’t matter where he lives. Better that one of his companies bought 6.87% of JOG than not if you’re interested in the short-term price, because Blake Holdings picked up the lion’s share of the shares Schroders sold.

For all we know, the fund in Schroders that holds the shares could be managed in accordance with pre-set guidelines and major events (such as the one JOG experienced) might trigger certain actions – in this case a sale of 50% of the fund’s holding. I don’t know if it is or not, but I know some funds are run along these lines. Why not ask JOG?. I don't believe there will have been emotion involved and the fund manager won’t have been bad-mouthing JOG’s directors for Equinor deciding the place to drill was the right one, when it turned out not to be.

It is incorrect for you to say: “Your missive concedes the decision to drill before seismic data had been fully analysed was a mistake”. I actually said: “With hindsight it would probably have been better to wait until all the new seismic data had been received and fully considered before deciding where to sink the appraisal well”. It wasn’t a mistake imv – certainly not on JOG’s part. An advance decision was taken based on results of the 2017 side-track well and the expected timing of some of the new 3D data being received. The location chosen didn’t produce the intended result, despite everyone believing in advance it would be. S,hit happens. Hindsight is a wonderful thing. Mine’s 20/20. How about yours?

There is much still to come from JOG imv. What we are considering here is the failure of a single appraisal well in one identified field that is known to contain more than 25MMboe but it is not known how much more. I am not making light of the event which caused much distress. It is important to view everything in perspective, however, and to look forwards not backwards in recrimination. Maybe the final imaged data now expected in June will give an indicative answer to what went wrong and we’ll then find out. Maybe a better location to sink another appraisal well will emerge – I hope it will. The April 2018 RNS is worth reading again:
https://www.investegate.co.uk/jersey-oil---38--gas-plc--jog-/rns/3d-seismic-survey/201804240700068537L/

Reference delaying the recent appraisal drill further, rigs have to be booked, drilling locations planned, the OGA’s approval sought and obtained and a mountain of other things have to be arranged many months ahead of any planned drill. Cancellations and delays cost money and can impact on all kinds of other things including reputations. Equinor, as operator, will have been responsible for all the detailed planning and ultimately for making the final decisions, after consulting its junior partners. Why blame JOG’s directors for events they were only partly (at most) able to influence?

tbc

FD - How is it possible for anyone not in possession of the facts to judge what JOG's directors should or shouldn't have told shareholders and the market when they found out the appraisal drill had failed to find the expected oil-bearing sands earlier this month? It isn’t part of a director's job to speculate, to tell half-truths or to report every last detail of everything they might know or think to shareholders - and certainly nothing that could prove disadvantageous or damaging to their Company if publicly disclosed. I am referring here particularly to information relating to Licence P2170 that other companies interested in bidding for new licences in Greater Buchan (in the 31st Supplementary Round) might find helpful.

The directors of most well-run listed companies are usually happy to respond to individual shareholder enquiries but they don’t have to. They can simply refer shareholders to publicly available information and tell them they have the chance to ask anything they want at the AGM. JOG’s directors treat all shareholders courteously and openly (or have done so far – if I were them I’d change this policy because it encourages stupidity). They even courteously and openly welcomed GB walking in off the street without having had the common decency to ask for an appointment.

Insofar as their responsibilities under the UK Companies Act are concerned, they have discharged their duties properly and fully by reporting an event likely to have a significant effect on the Company's share price as soon as practically possible. People on the WP rig will already have known the well result and it was therefore important to disclosure the facts sooner rather than later. My personal view is that the statement you believe they should have issued (instead of the one they did) would have caused pandemonium. Total confusion would have been followed by a false market and the Company (and its share price) would have been very badly damaged. The statements JOG made weren’t that informative, but it was possible to guess why; they just stated the facts and not much more, probably because they couldn’t. But they truthfully presented what facts were known, as soon as they knew what had happened. Or rather what hadn’t happened.

Things are always easier to see after the event and it is easy to be critical of others when results of a particular initiative don't go according to plan. You make some very disparaging public remarks about people I happen to know give 100% commitment to JOG in everything they do (because I have met them on a number of occasions and keep in regular contact - you know this already).

For you to suggest AB & RL run Jersey Oil & Gas in a way intended to give them a cosy life is deeply misplaced. Can you explain what makes you think this?

tbc