Member Info for GingerHippo

Group Cash balances as at 31 December 2022 were approx. $1.4m with Net Debt approx. $1.5m (2021 Cash balances $0.4m : Net Debt $5.5m).

In other words, UOG increased cash by $1M and reduced debt by $4.1M. So increased cash by $5.1M.

Of that, $3.9M came from disposals of assets.

So, even without the disposals UOG made $1.2M.

800 boepd at $85 gives UOG approx $5M PBIT (that includes the 57% going to EGPC and accounts for admin costs and depreciation). Add at least $3M from disposals and we should get at least $7.5M before capex and loan repayments. If we reduce the net debt to zero that's $1.5M spent. Capex is expected to be $4.4M.

So if we start the year with $1.4, get $5M from operations, $3M from disposals that's $9.4M. Less $1.5 to BP and $4.4 capex that leaves us with $3.5M at the end of the year. Not half bad for a market cap of £8M.

"mid review" doesn't mean "50% done"

I'm not expecting anything from the feasibility study until the summer earliest.

They have said repeatedly that inorganic growth is a major part of their strategy.
But they're being careful.
Don't want them buying any old rubbish just because it's available.
Just look at copl. So excited about the new asset a year ago, now 80% down because it's not nearly as straightforward as they thought.

https://www.nation.com.pk/02-Mar-2023/local-fuel

****stan is facing serious economic challenges nowadays.....

We can get out of the chronic balance of payment crisis by exploiting local resources. ****stan has a massive coal reserve in Thar. We can use it to generate electricity rather than depending on expensive RLNG and furnace oil. This will significantly save foreign reserves and ensure energy security by reducing our dependence on imported fuel.

Moreover, ****stan has accumulated circular debt of around 2.5 trillion by using expensive fuel for electricity generation. Thar coal will diversify the generation mix and help us reduce overall electricity cost. According to National Transmission and Despatch Company (NTDC), power production cost based on thar coal is only 3.39 per unit, almost ten times less than the average electricity production cost.

Come on guys, now's the time to get this done.

Very interesting article today - https://tribune.com.pk/story/2403917/china-is-here-to-stay-in-****stan

To the context of the new-found warmth in the US-****stan relations with the visit of the high, multi-agency delegation from Washington, the message from Beijing is loud and clear: we are here to stay in ****stan without influencing its decision-making or meddling in its internal affairs.

Is this a source of concern for the Chinese leadership?

Certainly not! Instead it inflames the desire to double up diplomatic and economic initiatives.

In this context, Chinese officials and business executives mention several power plants, Thar coal exploitation ......... etc as benchmarks for the time-tested friendship.

It appears even the Chinese government is waiting for the political mist to clear in ****stan before reenergising its economic initiatives into the next level. But there is no stepping back from “our iron brother [****stan]” under any circumstances.

Nobody knows how Pak's situation will play out, hence the risk and higher return on bonds.

Our funding is supposed to come through CPEC so even if Pak defaults that shouldn't directly affect our funding. The real question is over the LOI (obviously we won't get funding until we have a LOI). What exactly happens if Pak defaults, I'm not certain. But it's not that a default means they turn all the lights off in the country. They still need power and someone's going to have to pay for it.

All this affects Thar only. Our GH project is not funded by CPEC or the Pak government and already has buyers lined up from outside the country.

https://www.nation.com.pk/01-Mar-2023/pm-says-pak-imf-deal-progressing-well

Prime Minister Shehbaz Shar­if Tuesday directed the au­thorities concerned to ensure completion of all projects of power sector and solarization in the country within the stip­ulated time. He was chairing a high-level a meeting in Islam­abad to review progress on power sector projects and mea­sures to ensure uninterrupted supply of electricity to consum­ers in summer.

Khurram Dastgir said Thar coal have 175 tons of coal reserves which is sufficient to generate 100,000 megawatts of electricity. So far only 2640 MW is being generated from Thar coal, but it is good that all the doubts regarding Thar coal have been removed. It has established across the world that Thar coal can be used for power generation.

lol. That's very true Rick.
Times have changed a fair bit.....

"That's how it is with AIM stocks right, slow gradual decline down unless some serious news"

Rick, I would normally agree with this statement, but since the BoD have stated their intention to sell our Russian assets, the "serious news" could land any day and our holdings will realise cash. I don't know when or for how much.

So I'm only focussed on how likely do I think it is that the BoD will (and can) deliver; what's the potential risk versus the potential upside.

I'll put it a very crude calculation as to why I'm still here (albeit with a reduced holding):
Chances of success for say 50p a share - 10%
Chances of success for say 30p a share - 40%
Chances of success for say 15p a share - 25%
Chances of failure and we go back to 2p a share - 25%

That gives an EV of 50 x 0.1 + 30 x 0.4 + 15 x 0.25 + 2 x 0.25 = 21.25p
That's 6 bags from here and I dare say fairly pessimistic.

The quality is not the highest, but perfectly suited for Pak's needs. See this article from last week - https://tribune.com.pk/story/2402860/there-is-more-to-thar-coal-than-power

it is heartening to see a few institutions thinking ahead. Thar Coal and Energy Board (TCEB) in Sindh is one of them. Within a decade or so, the myths that Thar coal is of inferior quality, that the sulphur content is too high and that the moisture is an insoluble problem have been exploded. Out of the 13 blocks identified for development, coal has been successfully mined in two, used in producing over about 1000 MW of power and supplied to the national grid as the third cheapest source. At the end of this year, it is estimated to rise to 2600 MW.

Bob, I can't say I understand it any better.
But I would have though it would be just one token transaction for each time the inventory changed hands, which would be 4.
Also, I thought the inaugural IM was already gone through the entire process both ways.
That's why I thought anything we see now would be for subsequent IMs.
But, as you point out, I don't know for sure.

I don't remember that, but I'll take your word for it.
I think nothing at all will happen until suddenly everything will happen at once.
It's too good a resource for the Pak government to ignore it.
But they need to sort their finances and security out to smooth out the CPEC relationship.
Meanwhile, thankful that GH is not dependant on CPEC.

Looks good.
I'd like to see a trading update though. If more deals have gone through why haven't they announced anything? Was supposed to be $10M by the end of 2022 but we haven't heard anything except the inaugural.

China chucked in another $700M over the weekend.

https://www.ndtv.com/world-news/cash-strapped-****stan-receives-700-million-from-china-3812509

The CPEC site hasn't changed for at least a year, probably a lot longer.

The PPIB site shows it at the bottom because it has no expected COD yet. If we get the go-ahead soon and COD is established in say 4 years, it will be moved up.

"it is heartening to see a few institutions thinking ahead. Thar Coal and Energy Board (TCEB) in Sindh is one of them"......

"TCEB brought together stakeholders and experts from all over the country on last Wednesday in Karachi to seek advice on opening up more blocks and explore new, non-power uses of coal."

"Urea is another big ticket item."

https://tribune.com.pk/story/2402860/there-is-more-to-thar-coal-than-power

I'm sure that was a sell. Probably took a fair amount of time to arrange and looks to me that an MM made decent money on it. I reckon that's the last of Mr Rowe's shares gone now.

But it's a sideshow to the business fundamentals. Here's hoping for good results from ASH8, Jamaica and a good acquisition soon.

Obviously Jamaica's hit and miss. But if it hits, bye bye 1p hello 10p+ IMO.

The session was organised to discuss the avenues to utilise Thar coal reserves to not only solve energy problems for ****stan but also drive industrial growth by the Thar Coal Energy Board (TCEB).

Energy Minister Imtiaz Ahmed Sheikh stated that the provincial government would go all out in enhancing energy security for the country, and was currently working on multiple projects to support macroeconomic stability of the country.

Source - https://www.dawn.com/news/1738636

https://financialpost.com/pmn/business-pmn/****stan-imf-deal-due-any-day-to-boost-economy-minister-says

"the IMF mission visited ****stan for the 9th Review from January 31 to February 9, 2023.

Issues relating to power and gas sectors were also part of the negotiations"

I wonder what this means. Maybe the IMF saying if we give you money, you have to use some of it to progress cheaper, indigenous resources. Maybe. Who knows.

https://www.brecorder.com/news/40227746/oil-falls-on-worries-interest-rates-will-rise-more-and-curb-fuel-demand