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In July 2021 Canaccord reiterated a price target of 463p and advised to hold, and it has dropped ever since then! Will be interesting to see the size of the buyback today - although volume hasn't been particularly high today anyway.
CMC do also use PWC as their auditor, but then the same applies to a large number of other companies and it would be surprising if they were late in auditing the accounts of all these companies - it also appears that they may well have already informed the companies where there is going to be a delay (SFOR). Looks to me more like a fishing exercise to take out stops and gather shares to fill more of the buyback orders.
Just over £3.313 million spent so far on the buyback, which bodes well considering how much the share price has moved since March 15, and given there is more than £26.6 million still to spend before June next year!
If it’s a buyback then the company should have informed the market via RNS at the end of the day when they bought the shares or before market open the next morning (given that it is price sensitive information and they’re required to RNS it). If it is an ongoing thing then you will get a ‘Transaction in own Shares’ RNS on a daily basis.
Unfortunately ‘residual oil’ basically means what was left over and couldn’t be extracted previously - by Buffalo-7 - and it is often mixed with water which flood the reservoir and replaces the oil that was recoverable (which also ties in with Buffalo-7 producing for a brief spell before rates dropped off and water cut rose to a level where it was no longer economical continue, and it was abandoned).
Unfortunately I think that is just their way of saying it will be plugged and abandoned - they’re the operator and responsible for doing so, and just the terminology they’ve used. Unfortunately it looks as though any recoverable oil was already produced via Buffalo-7 and the water which caused the issues there and was the reason for it only producing for a very short period of time is present on the section Buffalo-10 has intersected (not a huge surprise unfortunately, given the depth it was intersected at). Will be interesting what ADV say in the morning.
No problem - it is just an opinion and none of us know what the next RNS will say. I also don’t believe that the management here did anything wrong (the chairman stuck on over £400k in the last placing at 2.6p) and all the data was independently verified by a reputable company and a CPR had been carried out. The only thing they could have done differently is maybe to highlight the risks (although no directors tend to do that as part of their job is to promote their company as a good investment!), including how erratic the historic drill results were and possible questions over the accuracy of the reservoir depths in their modelling. They did also gamble everything (money-wise) on this one drill, but everyone who invested new that anyway (all of the financial details on the funding for the drill were in RNSs). Even with a COS as high as this was assigned (the gCOS still looks fine to me as they have hit the reservoir and oil - it is just much thinner than expected), it still means that every so often you will get screwed by a bad result, and unfortunately that has been the case here.
I think it is screwed based on what they’ve announced so far - they needed far more pay than that and even allowing for what should have been there, it appears that the reservoir they have hit may be lower than the original expectations. None of which appears to be good if you compare it to the historic Buffalo logs and the drillings logs for those. I would expect they’ve found oil which could flow/produce for a short time (analogous to Buffalo-7 maybe) but not in the quantities that support the resource in place estimates which were needed to secure debt funding, nor generate a sufficient IRR to be attractive to those investors. Just my opinion of course and we are all just guessing until the next RNS (which I think will also state ‘plug and abandon’. Unfortunately the nature of seismics and interpretation/modelling will always have a degree of error, and that can be highly significant in how it impacts a drill result (eg a slightly deeper than expected reservoir can have significant implications for speed of water ingress, or even be below OWC).
I covered it, not Tom - he doesn’t have any input at all to the content of my articles and disagrees with some of them! Just to be clear, on the basis of the available information and data that was in the public domain prior to the RNS, I wouldn’t change anything that I wrote in that article anyway (nor the one I’d previously written covering it as a speculative buy some time back at the 3p level). All drilling carries risk (as was highlighted in my article) and if you are going to hold for drill results you just have to accept that you won’t always get the outcome that you wanted!
Actually,
Ignore that last post that was the trading halt pending the announcement - generally the operator will
release news first and has to do so as soon as they’re aware of anything price sensitive, so worth watching Carnarvon announcements on the ASX: https://www.asx.com.au/asx/v2/statistics/announcements.do?by=asxCode&asxCode=Cvn&timeframe=D&period=W
The news was actually released around 9 hours earlier than that anyway… https://www.carnarvon.com.au/wp-content/uploads/2022/01/B10Drilling.pdf
The last update from RISC was on March 23 2021 (reiterating the CPR they’d signed off at the end of 2020), and previously they’d done work on the Buffalo field for Carnarvon (2017 I think, but don’t quote me on that as an only going from memory!).
Those saying that RISC (which carried out the CPR) are some sort of shady outfit etc might want to actually have a look at that company (have been around for over 25 years) and some of the companies they’ve worked with during that time! Seismic interpretation and reservoir modelling is not an exact science - you just have to accept there is risk and also a margin of error (especially when it comes to something that is a few thousands metres down and where tens of metres difference in depth can be the difference between hitting oil or water, for instance!) which can make a huge difference to the outcome of a drill.
Keep an eye on Carnarvon Energy on the ASX (Australian exchange). The news there came the night before - usually around 11pm. They are the operator and the next update will most likely be released there first as well - good chance of that Sunday night I would think.
They have found oil and intersected part of the target reservoir, but the issue is likely that I'd be amazed if it is commercial (based on the analogous properties it probably shares with Buffalo-7 - that flowed at 4,000bopd prior to water cut increasing to a level where the field was abandoned in 2004). They need to hit the reservoir top much higher up and give the sort of oil pay - somewhere around the 50m level probably - that had been found on the historic drills that had produced the larger flow rates. To make the field attractive to debt investors, given the Capex required for further appraisal and development, the results here needed to be substantially better. It isn't a 'duster' (you wouldn't expect it to be as the reservoir is a known one!) but given what has been announced so far is unlikely to be commercial. All in my opinion of course.
Looking back, I do wonder if the MMs took the last shares off of a seller at sub 3p and then helped the rise getting going the next day to shift them all at a very healthy profit! That amount of trades wasn’t all just small PIs but then volume just died and all the noise was from the usual pump and dump brigade (certainly on Twitter) plus that tweet from the company that got everyone excited (was never going to be price sensitive news as they’d RNS before tweeting).
Pretty much tripled my position (and significantly averaged up) here since the equity financing was announced, although didn't expect the market to react as poorly to the news as it has done and with hindsight would happily have bought the whole lot around 6p!
IG were offering 5.95p yesterday briefly - took some more on a CFD. Would have been nice to have bought them all at that level, but have added a number of times from 7.1p and below. Now just a case of being patient and waiting to see if all goes as planned!
Exactly - anything held in a nominee account is in the brokers name anyway (hence why things like voting involve filling out paperwork, as the shares/voting rights aren't actually listed in your name). A lot of AIM companies are hard to short anyway, even if you wanted to, due to a lack of available borrow and the cost of that - although obviously forward selling of shares awaiting settlement (from a placing for instance) does occur.
Unfortunately that is all a bit of an urban myth unless you actually have the shares certificated in your name rather than a nominee broker account! Generally there is far less shorting of AIM stocks than you'd think from reading these chat forums - in many cases share price weakness is because the company is worthless junk! Obviously different here in terms of the quality of the company but the shorts here are only small anyway (possibly even some sort of hedge) and make little difference to anyone who intends to hold longer term.