Member Info for fatsuperman

Sage, the answer is always a combination of things, but the core of it is that this is a tiny little company that nobody knows about. Who is going to invest if they don't know it exists. Big investors / mid-tier or major oil / energy companies won't be investing (not openly) until things are a bit more developed. And they don't care about saving a few million early on I suspect. And most of those won't know about us either - depending on how fast their opportunity identification process works. I'd expect it favours prudence / risk management over speed.

Most of us on this board are in your boat.

Steady increase is far, far better than 3-digit jumps. 'Slow' and steady lets people out and new entrants in, whereas massive jumps tends to entice large quantities of people to try and sell.

I suppose the only time a huge spike occurs and holds is when we get a buy out offer - assume we'd be suspended prior to that though.

Indeed Bladder! And that initial 1-3k BOPD per well is based on nearby producers horizontal wells, but there are quite a few examples way, way higher than that, so it's likely a conservative effort. Muddy Sands down the road has one that went to 12,500 BOPD really quickly. ONE well.

Obviously, not much point making any assumptions on number of wells and average BOPD, but the scale of the find is crazy.

Thanks Demon, although let down by a couple of typos... including one on a date! :O

Correction:
in the comment about Exxon reserves I mention 2028, this should of course read 2018.

Further to this, once a field has been explored and enough known to be confident in the amount recoverable (90% certain), then that amount is declared as reserved and effectively gets added to the balance sheet using one of the ‘standard’ measures for accounting these things.

Loads of links online for that with a few seconds search, but the upshot is many companies will value it on their books based on the money they expect to make from it… no surprise because that it a bloody sensible way to value it!

If they know they can get it out by spending x capital on wells, then they roll that capex into the costs and amortise over the life of the reservoir. They can quite fairly say this many barrels, this fully coated extraction cost, this average selling price, therefore it is x value.

Our one point something billion barrels of oil, even if only 20% gets classed as reserves, is incredibly valuable on someone’s books ($billions)

Devil and Nomad, I’m not suggesting any offer is imminent, but what on Earth makes you think that ‘oil in the ground isn’t as valuable as it was’? There are several standard valuations for these things that companies with lots of oil in the ground use.

The value of an oil companies reserve are one of THE MOSY IMPORTANT factors in their valuation. Remember that for an oil company, the oil is their fixed asset. They sell it and when it’s gone they no longer have a business. It’s not like they manufacture things or offer a service. They literally have their value based on the amount of inventory (oil) they have in reserve!!

There is not a really tight relationship between price of oil and value in ground, given a company needs to manage price fluctuations. But you surely understand that for all oil companies - especially majors - reserves are of critical importance. And so managing the pipeline of new projects from their undeveloped resources is a huge part of what they do. Some great info on the upcoming demand and recent lack of investment in the below note from Exxon.

Spoiler;

IEA estimated that almost $12 trillion of investment will  be needed for oil and natural gas supply for 2020-2040.5 Additionally, the IEA has reported that current industry investment levels are well  below what is needed in these IEA scenarios, indicating  a critical need for increased oil and natural gas investment versus 2020 levels. (1)

It’s also interesting that Exxon (as an example) reserves in 2028 were 15.6bn barrels, and in 2020 had dropped to 8.8bn. (2) Of course due to divesting… but this needs to be met somewhere, somehow.

There is no question whatsoever that large players are looking for opportunities. Christ we’ve got someone up the road with a declared ~$2bn war chest.

Sources:
1. https://corporate.exxonmobil.com/Sustainability/Energy-and-Carbon-Summary/Strategy/Potential-impact-on-proved-reserves-and-resources

2.
https://www.statista.com/statistics/281187/proved-reserves-of-exxon-mobil-by-product-type/

Hey Eye!!! I’m good mate, still waiting for our friends in Zimbabwe ??

How are you getting on?

Bridge, my fallacy was no worse than your original fantasy my friend.

The majority of ‘the market’ is a bunch of know-nothing punters - there is no bloody logic behind this valuation. It has only a slight relevance to any offer we may or may not get - as you already know.

Please write better stories.

Absolutely win win that, M&S get a new wholesale partner, and the public don’t have to eat the awful Costa food anymore :) :)

Should be launching in the next month or so for that one, so hopefully we’ve got good news followed by good news!

Hi Bridgedogg, I would like to formally offer to buy your house from you, for a very reasonable 20% of its market value. Please let me know your address so I can pop over and get the contract started.

I note that this is by far the best offer you have, so I assume we don’t need to bother with quibbling over my incredibly generous offer. No no, you don’t need to fawn and beg and thank me, it’s my pleasure to help you out.

Regards,
Fats

Indeed, perhaps they think they will need some shares on hand to sell. The analysts seem to think M&S will have done well - traditionally they are strong in this period as people treat themselves a little. So this is not a smoke signal to be worried about imho.

And to my friend Constantly, yes I think sandwiches - in fact the entire 'food on the move' ranges - are still suffering from reduced footfall in town centres. Still a lot of office people working from home and therefore not going in to an M&S to grab their lunch :( That'll come back in time for sure

Good luck tomorrow everyone, looking forward to some stellar numbers myself!

Some of the comments on here are laughable. We are a few days into this discovery being public., we have the barest information about it, but the potential is staggering. A large handful of people consistently posting highly negative statements about the current share price reaction - do you really expect value to be reflected this early in the process? What nonsense. We've got a long way to go yet before we are anywhere close to a reasonable value.

The share price reflects the market dynamics, which sadly will include a lot of people that just 'want their money back' from however long ago, and the usual people flipping for a nice little trade. Someone quoted Buffet earlier, which is a great reminder for those that are questioning why the 'share price doesn't reflect the value'... when does it ever! only when there is absolutely no doubt.

Does 88E reflect the 'value' of the company? Does Tesla?

Sorry, rant over! :)

Constantly, I don't think 'Hirestreet x M&S' is remotely material. MKS partner with lots of start up firms (I recall a digital clothing one a few years back), and the majority of these are long-term plays, or tests. But to your point, I suspect that Hirestreet will have suffered with all the rental businesses, in that the peak trade for them is Christmas party season, which was massively affected by COVID. They would have taken a small fraction of what they anticipated, with customers cancelling booked garments left, right and centre.

Full price clothing & home sales is what we want to hear about :)

BigBear - absolute tosh about 88E there from you. They have PROVEN production at every hole they've drilled. Go and check the RNS' to date - every single hole is producing lots of muddy water. It's glorious and well worth the market cap.

Monte, the quarters relate to our financial year, starting April. Not the calendar year.

If you think that the value of a company in the midst of a significant development cycle should only ever shoot up, in an investment timeline of six months, then you shouldn’t be investing anywhere.

Very broadly, people should either trade shares in a very short term cadence, or they invest over a much longer period and aim for value.

It will take years before I’m ready to sell, and the price will be horrendous at times, amazing at others.

What event where you waiting for to get your profit? Or was this just a pure punt?

Canada got autocorrected to candy, which I prefer :)

Something mildly interesting for all to discuss tomorrow, CUDA are selling their Candy gas play (Alberta). $2.67m, which won’t go very far in my humble opinion.

https://ceo.ca/@newsfile/cuda-oil-and-gas-inc-announces-agreement-to-sell-alberta

3LP, in simple terms, the federal lease states that we had to drill by year end, to keep the lease. Due to some local wildlife, we actually needed to do that by August end. The rules isn’t related to royalty payments, but more about making sure companies make use of the leases they have, rather than just sit on them doing nothing / land banking. They want us producing oil so we pay royalties (and taxes).

The point about additional drilling was that after we are producing from this new discovery, we then need to drill in the adjoining leases. And I assume the wave rolls on, if we have yet further lease areas adjoining those. The interesting piece for me was when he said that those additional drills would be 6-8 months away, which means he thinks we’ll be producing something from the new discovery well within that timeframe :)

Noob, he also said that once we start production at the BF federal (deep) discovery, we need to drill in adjoining leases, and that we’d do that in 6-8 months. So we can easily deduce we’ll be producing at this new well in Q1. I’d hope some info on reserves before then!