London South East | The UK's favourite investor portal.

I didn't think I was being rude, MagaTron.

CLNR might not have physically relinquished the Licence yet, but if it hasn't it will be 'dormant' ('mort' might be a better word) assuming the information provided in the RNSs of 28 Nov 2018 and 8 February 2019 was accurate. Were it not to have been, then a RNS would have been required to correct it, or to state that it had changed and in what way/s - and we haven't had one.

The most relevant RNS is linked on CLNR's website. It includes the following statement:

"If the Company runs out of time and a farm out is not agreed and announced by 28 February 2019
the Company will relinquish the licence and seek to re-licence it in the UK’s 32nd Offshore
Licence round.

The 32nd Offshore Licencing Round is due to commence during mid-2019 and the Company
has identified a number of potential opportunities that are complementary to the existing
portfolio and, if applications are successful, could provide a number of additional future drilling
opportunities.

The Company will provide updates on each of these assets and opportunities in due course".

That seems up to date to me. If every company that didn't update its website as often as some perhaps believe it should were to be found guilty of acting illegally, we'd end up in a right pickle. I'm not even sure websites are regulated territory.

I think what may have confused the issue is the two dates - 28th Feb to give a firm well commitment and 31 May when the licence runs out. I can't throw any light on what options are now open to the OGA to take and what choices CLNR has remaining. 'None' I would guess - the fact is Cluff hasn't been able to satisfy the OGA's conditions for extension. If the Licence is now to be offered in the 32nd Round, the OGA will want it relinquished asap I should think, if only so that civil servants can tick all their boxes. Can't be offering a new licence before the old one's expired kindathing.

jmofwiw - I am using the same info available to all. I just seem to see things differently. It will all wash through in the end. Cluff can only now be affected positively if later this year it regains the Licence on better terms. People like Aim1 will then argue vehemently that there's no gas discovered yet so it shouldn't be counted as an asset - even if Cluff manages to farm out half to someone like Spirit (too small).

There's no pleasing some people.

back to the golf now

"..........'nite jon-boy (Aim1)"
"..........'nite grandpa"

dyor

.........a few on here live in a dream world - haven't got a clue. It would be better if they stopped giving opinions and advice they aren't - and never will be - qualified to give.

It's abundantly clear Aim1 has an agenda that's intended to achieve the opposite of what he's telling you (ie he's only trying to help you not lose money). He's on the case 7 days a week from morning to night - he's probably getting paid for each post that's intended to brainwash you into concentrating on the wrong things - the 'loss' of P2248 being his main focus. Plus anything else he's able to put a negative slant on. I'd probably be banned from LSE if I said on here what I think of him and his type. As far as I'm concerned they'd be at home in moist tunnels under the street.

P2248 should not be what you're concentrating on. It's just what sometimes happens and is dealt with without fuss. CLNR has said what will happen - no RNS is required because nothing is new. Cluff will apply for a new licence in the 32nd round and there's a decent chance it will get one.

Even without P2248, CLNR has a clear path to owning gas reserves of 70MMboe+ if Shell makes an investment decision on P2252 and P2437 and gas at mean estimates is discovered. Small cap explorers aren't blue chips, yet Aim1 refers all the time to the risk of this and the risk of that happening to Cluff as if it were a blue chip company and people were looking for a safe 3% pa dividend return. If you understand small cap oil & gos cos, you'll be looking for returns of multiples of your investment cost and risk is a constant - but there are degrees of it. What makes a good investment is one where the risks can be understood and the chances of a spectacular win make the risks worth taking.

Ignoring Cluff's other licences, which contain prospective 2P reserves of 300MMboe or so in addition to those in P2252 and P2437, including a modest number of 1P, 70MMboe (in P2252 & P2437 that would belong to CLNR on discovery) would be worth somewhere in the region of £400m. No significant dilution will be needed so the simple arithmetic says 60-70p a share. Knock off half for posterity and you still get to 12-15 times today's market valuation.

I referred to JOG. He put up a load of twisted nonsense about JOG to justify his valuation of next to nothing for CLNR. JOG only had once licence with total prospective 2P to JOG (half with a low CoS) of about 30MMboe. CLNR has (without P2248) 70MMboe in 2 licences alone. Plus when JOG farmed out to Equinor, the industry was on its knees. Nothing was worth anything because costs were so high. No longer. Tax rates were off the scale and the OGA's "MER" - with all the benefits it is delivering to companies like CLNR - was embryonic.

P2248 will take care of itself - forget it. CLNR has plenty to concentrate on that's positive, including finding farm out partners for all its other licences.

2.5p a share? £15m market cap? Do people really understand this little?

Stableboy - if you've had SQZ "on your radar" for a while you should already have formed some views of your own about its underlying value as an entity and what this might increase to in the future should its future plans be realised, If you've then factored in the risks, you'll have made some progress. It is a short step from there to work out what "value per share" this works out at and you can then go on to compare this with the current share price - and you're ready to go.

Keeping companies on your radar and not doing anything until you've watched the share price rise a few times over, then asking others what they think (particularly those who are already invested) if you've missed the boat, isn't the smart way to make money. Information anyone needs to carry out the research that's needed to support any kind of investment is always available. You might do some immediate research, reach some preliminary conclusions, then make a modest investment (in your terms) which should encourage you to learn more. If you like what you learn, then add - and so on. If you don't, then exit.

I'm a long term investor who doesn't expect to make millions overnight. But I do in the longer term. To make millions you have to choose the right companies and stick with them. If circumstances change along the way, you should react and manage your investment accordingly. It's not rocket science but it isn't always easy to formulate - and follow - an overall strategy that returns what you're looking for in the long term, Luck always plays a part. But there's a say I certainly subscribe to, which is: "you make your own luck in life".

I only invest in companies where I totally trust the directors (particularly the 'main men') as to their 'competence' and 'integrity'. (I'm only in SQZ, JOG & CLNR). Most AIM company directors talk a good game but fail to deliver results. They feather their own nests before shareholders have had anything - if there's money to be made it is only by gambling the share price will rise because others slower than you have been fooled into buying into the horse manure they talk as they get fatter and richer.

It might be that you're asking if SQZ's share price is likely to increase. That would depend, in the short term on many
things, all of which are unpredictable. As many on here will know, according to one well-known long term investor: "price is what you pay; value is what you get" and "the best time to sell a good share is never". If I were you I'd put him on your radar.

GL whatever you decide to do, stableboy. Fwiw I regard SQZ as fundamentally undervalued at its present market cap. I don't make predictions about short term share prices. Fundamentals (long term value) always win in the end

dyor

......"but either way it would require an RNS"...........

......why, LA? It's about transparency and CLNR has already said what is likely to happen. It might still be talking to the OGA for all we know. The extension is until 31 May, even if CLNR doesn't intend to (or can't) progress it at this time. I say again, Exploration has explained what might happen if P2248 is relinquished (which I expect it will be) and why, CLNR has said it might bid for it in the 32nd Round. The fact CLNR knows the Licence (or maybe an amended form of it) will be coming up in the 32nd Round might say something.

This fixation with P2248 has become bizarre. Nothing is being made of the agreements with Shell, which doesn't make a habit of entering into agreements it doesn't believe are likely to prove commercially successful. Shell has a rich history of making the right decisions at the right times. It certainly wouldn't be entering into what might be long term partnership with a company made of straw - Shell must therefore be confident CLNR can fulfil its obligations under the agreements.

Were both Licences P2252 & P2437 to progress to the stage exploration wells were drilled that led to discoveries, CLNR could find itself sitting on confirmed 2P of 70MMboe+. Work it out.

Everyone knows (or should know) the risks involved in investing in small cap explorers, It is nothing short of a dream that one of the world's most respected oil & gas companies - a super-major;Shell - has teamed up with a minnow like Cluff on potentially 2 licences. Maybe more agreements are to come - why not?

The skill in investing lies in identifying companies that are undervalued, then waiting for value to unlock. CLNR's share price reflects nothing of substance, when substance is what it potentially has in spades. The market said JOG was worth £650k when I significantly increased my holding there; that same market says it is worth £50m+ today. SQZ has a similar profile.

I'm going for three in a row and a bonus point. Of course there are risks - they simply can't be avoided. If you don't want it, put your money in the building society.

Sorry not to stay away for longer. I'll disappear now and leave the board to the pitiful penny share traders whose lives will never change for the better because they can't beat the market makers in the short term. I am not directing these comments at all contributors to the blog btw. Concentrate on what's there, not what might not be. That would be plain daft.

dyor

Given the clarity now provided re Licence P2252 in the Corporate Presentation ("Cluff retains the option to farm down its 30% interest to offset exposure to drilling costs"), the same option must surely apply for Licence P2437, of which Cluff remains operator and retains 50% pre investment decision. P2437 is due to be drilled before P2252 according to the data provided in the Presentation.

It stands to reason that Shell would not be entering into these agreements on the terms proposed unless it was certain Cluff would be good for its share of the exploration costs.

Looking at the situation conservatively, if one takes certified discovered gas to be worth $8pboe (equivalent) and apply a CoS of (say) 25% (likely to be higher) to the prospective gas in the fields potentially being drilled, in order to raise enough cash to cover its share of two exploration wells (30% of P2252 and 25% of P2437):

1) Cluff might have to farm down a sufficient % of P2252 to provide 30% of the well cost (say $20m total – exploration costs are covered by Shell until an investment decision is made) ie $6m. To provide $6m, with a gas “price” of $8pboe (equivalent) @ 25% CoS (“chance of success”) would require Cluff to farm down prospective reserves of 3MMboe (equivalent). Given Cluff’s 30% of prospective 2P resources in P2252 amounts to 30MMboe (equivalent) this would mean Cluff farming down 10% of its existing 30%, leaving it with 27% of total 2P prospective resources in P2252.
2) The same exercise done for P2437 (90MMboe equivalent) would result in Cluff having to farm down 2P prospective resources sufficient to provide $5m towards a well cost (estimated cost $20m) which amounts to 2.5MMboe (equivalent). This would reduce Cluff’s share from 45MMboe to 42.5MMboe.

Whether Shell or another party would “farm into” the Licences is unknown at this stage and any deal would probably be differently structured. I am simply applying arithmetic to the facts to put all the fear-mongering about massive dilution into context.

It doesn’t seem to be an issue.

In light of the above, I have increased my short term (6 months) price target from 6-8p to 10P and my medium term target (3 years) from 40p to 50p.

dyor

Latest Share Chat

Member Info for dickupham

Followers

Following

Posts (Last 30 Days)

Posts (All Time)

Last Post

Member Since

Share Chat Post Distribution (Last 30 Days)

Activity Log (Last 30 Days)