Member Info for G_G_G

they're getting 900bopd light oil for $5m. they've added +5% low-decline, higher value light oil. and have 10 years of production for expected recoverable factors without any interventions or new wells. this is a silly roi considering the strategic location and synergies.

sp should have jumped by 10% on this alone. they didn't even need to drill a well for the 900 bopd. not sure wtf needs to be done for this company to move above 50p. it has never been in a better place. record production at 18kbopd. brent above $80. delivery issues being ironed out, alongside other avenues opening this year. cash printing machine. $100m cash pile with no debt. +10% safe dividend. ****ty bbs, but they're still something.

i think they need to do something other than just state some more great figures to get the market's attention. the only thing i can think of that doesn't require a whopping oil well result is increasing bbs and committing to some drills on larger reserves in their portfolio such as 107. market loves to see wells being drilled, in particular high value wildcats.

anyway i've been slowly accumulating the last couple of days and up to 500k shares @ high 47's average. going to sit on these now and see what happens. figure i can get 5-6p in dividends alone over the next year. some decent interventions on delivery, bbs, and a wildcat well and we should be back over 50p and staying there (providing brent stays in the 80's). would like to see them drop some decent hedges now as well. perfect time to put 30-50% against some decent cost collars. aimho gla

This appears to be one of the cheapest acquisitions I've seen in a while. Anyone know expected netbacks here?

This company is such a difficult hold. Another disposal of non-core assets would certainly help. GLA

My understanding is the economics of Selene are much better due to infrastructure. This is why it was more attractive as a f/o proposition. Penascola as far as I know is a much bigger investment to exploit, which is why the f@ckwit political parties of this country have thrown a massive spanner in the works for the f/o and future development. I said earlier the mcap might drop down to £15m, which is effectively the value of the Selene free carry. So that to me is the base value of the company without any value attached to Penascola. From there it's then a coin flip with a 70% CoS to see if it does multi-bag from 15p. Still a gamble though.

I also think £15m mcap may be the nice round number from where they raise cash. You double the share count to get the Penascola drill away with full 30% ownership maintained plus circa £5m cash in the bank. Drop by £5m for every 10% we give-away. One would hope we can get some sort of fee or extra carry for the % loss. I think a £4m raise (plus small fee / extra carry) plus £2.5m from cash in the bank should allow us to maintain 15%. By extension we'll need £8m to maintain 20%.

Having said this I'm unsure if +£5m dilution is allowed. If they don't have the ability to raise up to £10m then mgt are f@cking !diots and shouldn't have a job. They should always have avenues open to raise cash, no matter how confident they were of a f/o. Pure incompetence otherwise.

Hopefully they go for the bigger raise and try to hold onto most of the 30%. Like Dr Patience I felt a raise was the best option when the sp was in the high 20's. And now it's the only option (providing mgt haven't f@cked this up as well). Absolute clusterf@ck but at least the bottom appears to be near.

Valuation here is pretty nuts. We're getting a +10% dividend yield, easily able to produce +17k bopd, opening new delivery routes (major obstacle to growth), and have 20% of our mcap in cash. Not sure what else can be done to realise value other than more meaningful BBs. They're mopping up less than 2% of shares per year. I generally hate BBs as they can often be put to better use and value isn't always seen from them. But when you have this much cash, are constrained in your production / delivery for the near term, already paying a crazy dividend, and relatively illiquid, then it's a no-brainer.

Imo they should set a minimum BB level of 4-5% of shares in issue. This will deliver value for the reasons mentioned above. And the annual £20m cost is something that can be easily absorbed given the cash we're generating and we'd still have a silly cash pile at the end of next year. If mgt are concerned about this in any way they should hedge 50% of our production in the high 70's to cover the dividend, BBs, and enough to maintain production at current levels. Bonkers to have this much cash with the sp sitting at these levels and do nothing.

As I've said previously I think they'll do a raise of some size in 2-3 weeks. Can't see it happening before-hand. The big question is how much they will raise. Keep in mind that any give-away should attract a small fee. And every 10% lowers the cost burden by £5m. So if they give away 15% for say £2.5m, they'll have a £5m burden. They could perhaps fund up to £2.5m out of existing cash balances. So they'll have anywhere between £2.5-5m to find. This would be a good outcome, even with the 15-30% dilution that would occur at current sp.

If this happens I also think they'll make an offer to retail investors in the form described by fairdealer i.e. accelerated book build via Primary Bid. I don't think the major shareholders will be too fussed about this happening as these types of actions rarely make more than £500k from retail, which is why they cannot rely on much money coming from it. Bottom line is any major investors are still likely to end up with more of the company. The one thing that's for sure is the raise value will depend on how much is being guaranteed by the big boys (and who they are).

Either way I think the best outcome is for the company to try and hold onto 15-20% via a raise. If they can achieve what I've described then 30p within a few weeks is very likely. AIMHO GLA

Agreed good presentation and future looks bright providing AECO improves. Something I'd like mgt to clearly state though, is why they believe we're consistently trading at half of peer metrics. It has been years and 'value hasn't outed'. So why is this still the case in their veiw? And what can they do to improve this disconnect. I think the recent asset disposal is a great example of what could move the needle. The issue of course is the market was thinking this would result in instant increased production, and less willing to wait until December before we see the benefits of the extra $25m. But another non-core asset disposal could just do the trick to provide a higher, more solid base to increase from in 2025.

I kind of see us as property owners with a lot of scattered assets. Some providing decent yields (rental income). Others less so or nothing. Problem is we have a few amazing assets that can drive significant yield and value gains, but need investment (renovation for the property analogy). So get rid of the low / no yielding assets and invest in those that will definitely move the needle. Feels like they've made a decision on this direction, rather than looking for acquisitions. It will take a little more time for value to build, but if they can make a few more asset sales and get another circa $50m away in 2025 then things could get very interesting here by end of 2025 with an improved gas price environment. Hopefully this is their strategy and they commit to it. I for one am supportive and will stick with a long term core holding providing they stick to this line of thinking (whilst trading at the edges). GLA

Has Shubham or anyone else done an EV:EBITDA analysis of the Canadian O&G patch recently? It would be interesting to see where we sit against peers. I have our year end EV:EBITDA at bang on 3 at current sp. Seems pretty crazy low. Especially when you consider the December EBITDA they are estimating. If they keep production stable for 2025 and commodity prices are stable at WTI$82 and CAD$2.25 then your ratio drops to 2.3 for 2025. Any flex on flat production and / or average prices and the multiple gets silly.

Interesting to see what happens next. Some may hate me saying this but don't be surprised if we drop back to the 9's. Lack of newsflow and weak gas prices for the next 4 months could see further deterioration in the sp. There is of course another asset disposal that could happen, which would put a rocket under current values. AIMHO GLA

Agree it's all a bit suspect. Problem is I'm leaning toward them doing a raise, or raise / farm-down combination and have driven the share price down so PIs see it as a win when they raise int he high teens.

They have just over £5m in the bank. If they give away 10% of the field to Shell for a nominal fee, then they'll require a raise of circa £6-7m. Surely this isn't too hard to find when you have a billionaire as your biggest shareholder. It would mean circa 35% dilution at current sp.

If what I'm saying about a raise is correct then PIs with cash at the ready could do quite well. I don't see any way they can do a raise and not include PIs. Having said that dodgy AIM operators like to put a Primary Bid offer out in the afternoon and you have to subscribe immediately. Will find out soon enough.

Some more seriously chunky trades today. Does anyone know of anything happening at the moment that could be behind this sort of volume?

sorry i should add the worst case scenario for shareholders is the sp keeps dropping and they double the share count at 12p (unless you're buying in at this level). not at all ready to put any money back in here. absolute ****show now but have no doubt that some people will make a lot of money if they can time it right. gla

reckon this is almost at the value of selene drill alone i.e. penascola already written off. if anything is going to happen it will be in a few weeks. i wasn't aware of the may deadline for the deal to pass so i'm thinking they had their potential f/o partner(s) fall over and recognised the need to tell the market before it became a nasty surprise for everyone. it's either that or they've lined up major shareholders (or potential shareholders) for an investment, but have been told it needs to be at xxp. or, the whole thing has gone to **** and they're about to hand over a very large discovery to shell for nothing. that's the worst case scenario and i'd say when the sp hits 15p it's well and truly priced in. aimho gla

Is it divi payment day tomorrow? Some incoming cash is certainly welcome after my 6 figure loss yesterday.

Still feeling a bit sick from today. Took a £100k total loss in the space of 30 mins this morning. Total loss about £80k from original investment. Absolutely gutted.

I won't be surprised at all if they magically find the money from investors with deep pockets in the next few weeks. They'll let the sp sit here for a while so PIs think it was the best possible outcome and not revolt when the share count more than doubles. Make no mistake this would be the best possible outcome as well. The alternative would be losing Penascola for nothing, and taking at least another 5p off the sp. If this goes down as I think it might then expect a late rns with a primarybid 'offer' for those PIs with cash at the ready. As crazy as this sounds, if it happens then I'll drop some money back in here. Otherwise I'm well and truly out. GLA

Also a lot of selling. Something a bit odd going on...

Spike, Shell haven't pulled the pin. They're still going to drill Penascola and Selene. Any discovery and appraisal success will realise value for them or another Nth Sea player especially if Labour don't change what the Tories have in place at the moment (or don't tinker too much). Drills are going to happen, it's just a matter of Penascola ownership.

As for Michael Spencer, you've already pointed out why he would need to pay nearer 20p. There's no way mgt would give away so much of the remainder of the company (Selene) for nothing. They may as well just give away Penascola, which in turn would drop the sp by another £5-10m with less chance of a decent return for Spencer. Point being, it's better for Spencer to put £10m in and have a chance at the company re-rating to £80-100m value on the back of Selene plus Pensascola. Or he loses another £10m in value by doing nothing, on top of what he has already lost. In for a penny, in for a pound.

Company also has +£5m in cash and no debt. Anyway, let's take this over to the other board. Sorry i3e posters.

Reckon you might be surprised Spike. Michael Spencer owns 20% of the company and is a billionaire. He can watch us lose Penascola for nothing, which would cost him more than £10m. Or he can stump up £10m and make it all back and more. If I were him I'd hand over the money required to get both drills turning. I'm thinking today's news could have been to wipe-out the sp so a 20p raise is more palatable. We'll find out soon enough. GLA

Dr Patience, no I wasn't aware of the May deadline. I put it down to not having done enough research. Not sure it would have made any difference as I would have seen it as news being just around the corner, and that news not being what we received this morning.

I may be back Dr Patience if this is what they;re going to do. Absolutely stunned by today's news. How we managed to get away Selene on such good terms and not a discovery is mind boggling. Best case outcome is they give away 60% of the company to some wealthy shareholders. It would be nuts to let Shell pick up 30% of the field for nothing.

Surely Michael Spencer could pay for this out of pocket change. Not sure what Richard Sneller is worth.

Fairdealer, the majority shareholders may have been unwilling to fund the drill at +30p. However they may have told our CEO they would do it for 20p. Hence the number we're bouncing around now. If this happens then you know the deal was agreed before today's rns. There's no way they could tell the market they cannot get a f/o away and have raised £10m with some multi-millionaires at 20p. They need shareholders to believe it was this or nothing.

The rns is particularly bad, which could be for a reason. We'll find out in the next 4 weeks. Good luck folks.