Member Info for GingerHippo

I don't think it's nearly as complicated as people are making out.

We know that average boepd in H1 2021 was 2730. That makes in 180 days 491,400 barrels. That's what was produced, not what was sold.

So how many barrels weren't sold?
Well, inventory increased in H1 by $75,364.
This is held at cost, cost being about $5 per. So, that $75,364 equates to 15,072 barrel not sold.

So, during H1, c 476K barrel were sold. Approx 80% is oil and 20% gas, oil averaged $63.1 and gas averaged around $20 (I don't have precise average for gas), so revenue looks like this:
476,000 x 0.8 x 63.1 x 0.4253 = $10.2M
476,000 x 0.2 x 20 x 0.4253 = $0.8M
That gives you $11M, which is fairly close to the given revenue for the period of $10.2M.

Similarly for the year (except the change in inventory which we don't yet know). 2327 boepd is c 850K for the year. Again, an 80/20 split with oil at $68.9, gives you this:
850K x 0.8 x 68.9 x 0.4253 = $19.9M
850K x 0.2 x 20 x 0.4253 = $1.4M
That gives you $21.3M , which is again not far off the $19M revenue figure given, especially as I don't know the change in inventory levels.

The small difference could be down to loads of things - increased inventory, discounts/refunds, customers unable to pay, more than average sold when prices where a bit lower, and a bunch of other things that I couldn't possibly know about and there's no reason that I should. As an investor, as long as I can get within an acceptable margin of error, I'm OK with that.

So what we have here is a company valued at £15M.
That made £2M net operating profit in 2021 (current PE of 7.5) and will likely exceed that slightly in 2022 and significantly in 2023.
That has significant upside at AS.
That has c £7M due in from 3 divestments.
That has a healthy balance sheet and only very slightly negative retained earnings.
That hasn't had a placing for 2 years (yes, this is an AIM company if you can believe it).
That has a massive asset in Jamaica with interested parties.

Re revenue, take the boepd, multiply by the price (we have approximately 85% oil, 15% gas, so make sure you're using the correct average price), then multiple by 42.53%. That gives you the value of UOG's net oil produced.

That's NOT the same as revenue because not all that oil is sold within the period in question. In a growing company, inventory would normally be getting bigger, so revenue will be less than the value of the oil produced.

In H1 2021, inventory increased by $75K. But inventory is shown at COST, not at market value. So that $75K worth of oil when sold will have brought in revenues closer to $1M.

So as far as I can see, the figures do work out within an acceptable margin of error, (which will be my error, not theirs).

I have no idea what the level of accounting knowledge is on this board. I hope what I said makes sense.

Seems to me that there is a lot of baseless negativity here now. Some is not baseless, but a lot of it is. People are assuming the worst without first clarifying the position properly or asking the company. It's annoying to LTHs such as myself, but more importantly, will likely lead to poor investment decision-making.

Seriously, they have an investor relations manger now. So all you have to do is ask.

"Someone is not being very open about the accounts."

This is outrageous. The accounts haven't even been published yet.

Why don't you wait to see what they actually say and then if you have questions, ask them.

You'll need to wait for the financial statements in April to understand this properly.

Cash has been reinvested into development and exploration wells, and on repaying the BP facility.
Without seeing the cash flow statement, that's the most I can say.

Can I make a suggestion to everyone on the BB?
If you have a question, ask the company before posting so negatively on the board.
You might be surprised by the clarity of the answer, as I was when I asked questions.

“depletion rate is potentially a serious problem.... Should they not be planning injectors or other measures to prolong given the anticipated recoverable amounts?)“

First of all it’s not as serious a problem as ppl are making out. It’s normal for new wells to produce more at first and go down 10-15% shorty thereafter.

Second, they are taking steps to manage the water cut issue by installing electronic submersible pumps across the ASH field. That should sort the problem. But the guidance is based on how things stand now, not how things will be once the pumps are in place.

100% Duster.
A blip.
Circa $2.8M (£2M) net profit for 2021, and that's after circa $4.5M depreciation (because we reinvest in assets), fair value and interest expense on the BP facility of another circa $4.5 (which will be drastically reduced this year).
The issues we've had have helped the BoD get to know the asset much better now, and they are confident that they're on the cusp of significantly increased production from it.
If they achieve their goal of close to 4000 boepd within 2 years, we'll be sitting way higher than we are today.

CT, if production averaged 1716 from 1/10/21 until 26/11/21, it could have been 2000 from 26/12/21 until the quarter end and ended up with an average of 1826.

In fact production might have increased from October to November before dipping again.

It's normal for new wells to have a fall in production early on.

I know I'm reaching/guessing a little, and that's cos I haven't got enough data, but it's definitely a possibility, and I'd prefer to give him the benefit of the doubt.

"Apparently it had been $3.737 million at end June 2021"

Not sure where you got that from. This is the figure in the interim accounts, BUT that has been measured at fair value, ie discounted to present value. The actual balance in real terms would have been higher.

In fact it's even more complicated than that because it's partly hedged against oil prices, with fair value losses going through the profit and loss.

Try working out the actual balance from the accounts if you want to give yourself a headache.

Jono, they explained all of this very clearly in the presentation.
Not sure what else to tell you.

I think you're expecting way too much here.
I don't know of any company that gives daily or weekly production updates.

Jono they RNSd that this morning.
More important is the significant increase that is very likely to follow successful completion of the work programme in H1

Very clear and addressed my concerns entirely.
Anyone who sold out this morning, before listening to what they had to say, is very silly IMO.

I agree with a lot of what's here.
But would reiterate that the BoD are chasing 4000 boepd in the next 2 years.
Hopefully, this is a blip.
Things don't always go up in a straight line, not even production apparently.
At anything close to 4000 we'd be massively raking it in.

We know we got 2730 boepd in H1 and 2022 boped in Q3. For the year to average 2327, Q4 must have had an average of 1826.
(2730x2) + 2022 + 1826 = 9308
9308/4= 2327, as per RNS.
So, not far off 2000, and obviously production fluctuates somewhat which might account for the 2000 boped comment in November.

The only issue is why the guidance for H1 2022 is lower than the production for Q4 2021

Even 1650 boepd at $90 a barrel, we are still fairly profitable for such a small mcap.
It gets us about £2M for 2021 and similar for 2022.
Giving us a PE ratio of about 9.
Hopefully production will only increase from here.

Pd prices make for pleasant reading:

$2205.00 Jan 26, 2022
$2198.34 Jan 25, 2022
$2148.20 Jan 24, 2022
$2107.34 Jan 21, 2022
$2073.30 Jan 20, 2022
$2008.59 Jan 19, 2022
$1903.68 Jan 18, 2022
$1873.00 Jan 17, 2022

Chicken,
May I ask.
What percentage of your portfolio is in EUA?

Let's discuss tomorrow after the update

We're going round in circles now.

A divi is something a company gives when it's not sure what to do with excess cash. We don't have that problem. The cash is being reinvested back into the business. They're doing exactly what they're supposed to.

I didn’t scoff. They can buy shares if they choose.
But they don’t have to.
That’s all I said.

If you recall about a year ago there was a lot of noise made about directors not buying shares with their salary. Certain PIs here got quite angry.
I’d prefer not to see a repeat of that.
Like I said, they are not compelled to buy, it’s none of anyone’s business and it should not be taken as an indication of anything company-related.

Tuvok, the directors' job is to grow the business, not to worry about the share price.
We want them to make decisions on the basis of what's best for the business, not what's best for the share price.
Obviously, these are not always mutually exclusive, but in this case they are.
A share buy back would help the share price, but would not help grow the business.
I'd much prefer the BoD to focus on the business only.
Reinvest in the business and the share price will take care of itself.

Rita, obviously a share buyback is separate from a director purchase.
I addressed these separately in my post.
FYI, dividends are not an option at the moment due to negative retained earnings.