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Looking very clever this morning having spent all weekend telling everyone that any shorts will get burnt this morning! As I stated I have no short position and never have done here, but never let that get in the way of a good story. Slept so well last night I’ve only just woken up :)
Being issued a warrant free of charge is not taking shares in a placing! The only reason that BP and the others received warrants in addition to Bybrook, is that the terms of the Junior Loan meant that if one part was issued additional warrants, then the other lenders also would be, as per their contractual rights. BP already hold warrants - which they have yet to exercise - as part of the 24 million warrants issued to the lenders who jointly provided the Junior Loan.
All of the shares were taken by funds managed by Bybrook, as per the RNS (BP did receiver free warrants though as part of the terms of the Junior loan): ‘i3 Energy plc, an independent oil and gas company with assets and operations in the UK, announces that further to its announcement on 8th November 2019 ('Liberator A2 and Funding Update'), it has now received subscriptions for 14,285,715 new ordinary shares in the Company at 35 pence per share from funds managed by Bybrook Capital LLP.’
June 3 2019 RNS: ‘i3 Energy plc, an independent oil and gas company with assets and operations in the UK, is pleased to announce that it has closed investments with funds managed by Bybrook Capital LLP, BP Oil International Limited, funds managed by Lombard Odier Investment Managers group, and James Caird Asset Management in a £22mm junior loan note facility, the key terms of which were announced by the Company on 1 March 2019 ("Junior Facility" or "Loan Notes").’
Possibly if he is liquidating other assets as part of the Mets deal, and given that some of those might have yielded a profit, he may see now as a good time to crystallise a loss here to offset against potential tax liabilities elsewhere?
He holds a small amount of shares that he took in the March placing - can’t remember the exact number but less that £40k worth if I remember correctly. Compared to what he earns as his total remuneration package... Was always one of the negatives here for me, as it is in any company (not just amount of skin in the game but how much they paid to obtain it is also important), but the Liberator looked to have enough potential to outweigh that and other negatives. But unfortunately we now know that Liberator is very different to what they expected it to be.
Jester, the only reason they got a junior debt facility for these drills is because they were supposed to be for the development of Liberator, and it was quite unusual to obtain it in this market. I’d be absolutely amazed if they managed to get debt funding for purely appraisal drilling, just doesn’t tend to happen at this end of the market.
Interviews are simply unregulated PR exercises and in many cases are paid for - any material news/info will already have been contained within RNSs, which are regulated. It amazes me how much people seem to rely on the content of interviews!
Nothing wrong with giving opinions and discussing the various outcomes and what they might mean, but ultimately all comes down to the RNS! Seems much quieter on here today from a lot of the traders who were predicting all sorts of rises!
BTFATH, I’m only going by the result I expected from this drill in terms of thickness of the upper Captain, and the potential implications for Liberator phase 1, and if something doesn’t feel right to me I sell. It could still turn out that I’ve made the wrong decision. Hopefully everyone will have done their own research into what they expected from this drill anyway.
Any reserves based lending (which is basically what the senior facility will be as it is secured based upon the reserves present) is determined by the size of the reserves, the return on the investment and over what period of time, and the level of risk involved. It all comes down to the risked value that the lenders would assign per barrel of reserves, plus off course achieving a sufficient IRR (internal rate of return) to make the project a viable investment for them. Any reduction in the total reserves for Phase 1 could have a negative impact on that - they've already had to alter their modelling once to incorporate more of the Liberator extension area into Phase 1 (as well as needing to drill that before going ahead with development) as a result of the failed first pilot drill. All of what is being said here is just opinions though - which is the whole point of these chat forums, and at this stage no one knows anything for certain.
Too early to know for sure, but my opinion is that if volumetrics of the reserves were based on the upper Captain being much thicker than it appears to be, plus the potential issues of the sort of flow rates you could get from a thinner reservoir just above OWC without potential further water ingress (it is already present in the paleo-oil zone), then I would expect that it will be Phase 1 in doubt and won't yield the required reserves that they'd need to support an RBL. Where they go from there if that does occur is anyone's guess, as is what will happen with regards to the junior lenders if the deadline to secure a senior facility isn't met. Lots of unknowns at the moment.
Desireoil,
Based on the findings of the original CPR I think it is possible that net to gross could be close to 100% here (as it was in the 2013 drill). I agree with much of the rest of what you say though - given that part of the reservoir is already flooded with water (paleo-oil zone). Did wonder if they might try a sidetrack? Although I know believe that the modelling is out vertically and wouldn't be worthwhile at this location anyway - only based on my own opinion though of what the seismic show and the fact that this should have been the high point of the reservoir at this point. Also interesting that they refer to the Captain Sands (which of course extends all the way down to the top of the Valhall shales), rather than specifically mentioning Upper Captain as they have in previous RNSs, presentations, etc.