The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
We know that tests are being done to identify potential shallow gas shows. Until we have news of these being drilled and possibly shows identified, I don't think there will be any SP movement due from this. For the 2D testing, they are hoping to be able to start in November. If we get an RNS stating that the contract has been completed and equipment sourced, then when the scanning starts there may be some price movement. That's all I think will move the price - and the current money will cover testing but not the next "big" drill, so they will need to raise. Hopefully not with a large discount.
So, all this excitement is because we are still in the 8p-9.5p range that we have been in since 26th August? Don't get me wrong, I like it when shares i'm invested in go up 12.5% in a day. We are back to where we were a week ago. And still waiting for news.
On the 11th I posted this chart to show where trends from Tai-1 and Tai-2 may take the SP. https://invst.ly/v--go
Here is an updated version. https://invst.ly/w3n6b Today we passed the orange trendline from the Tai-2 period.
The SP rebounded off the old baseline which may act as a short term ceiling. This is currently close to 8.8p which was the old floor level a few times so probably better using that as the new ceiling guide. We watch and wait... again.
I'd agree with that timeframe. RNS on 26th was the completion of Tai-2 and start of Phase 2. A month and possibly another week to get their plans sorted and finalised; seeing what equipment and tests they would have access to and be able to perform. All we need now is for DM to tell us about it.
Just my opinion. Before the drill, we knew that helium was there due to the seeps. We thought that helium would only be trapped by an efficient sealing system and would need to find this. It appears that a few metres of clay/shale can act as an effective seal so pockets of helium could be found at shallower depths. We do not have confirmation of any flow data or the likely volume that would be stored in shallow traps however.
The market is waiting for confirmation of what the next steps are. We are waiting to see if we can get the 2D Seismic arranged before the rainy season in November, so this will not move the SP until it has begun or possibly closer to the 2D testing completing. We may also be doing geophysical testing of the shallower depths, but we have not received confirmation of this or the time it will take. I believe the market may move a little on this news, but until we know if we are going to be drilling the shallower depths or not (which would be on completion of at least some testing), the market is still waiting.
Hi KeithOz. In my opinion, a trendline before a significant event can indicate the market sentiment and momentum. Just because an event has occurred does not make all previous SP movement obsolete. Yes, there has been a fundamental change which has put the SP to the current levels. The old trend line - if there had been no change in market sentiment, could have put the SP around the current level even without the significant event.
Does this mean that the SP will change from it's current trading range and pattern? Definitely not. It does however provide me and others who look at charts with a timeframe where the market MAY review the current price and sentiment. The old trend's resistance has met the current trend's support.
Does the market see a greater support than resistance given the events that have occurred and push the price up?
Does the market determine that the SP was falling and there is no news to maintain the current support?
Or does it just ignore it and carry on with the SP movement of the past week?
I use the chart as a tool for estimating when there may be a change in the SP as well as a guide to historic levels. I am not saying that the SP will move with the trend, but that there may be some adjustment (up or down) at that time. Maybe not.
I am not sure what will happen to the SP on Monday when a trendline from the start of August comes in to play. That is showing a down trend and we know that tests need to be conducted before any drilling will be done, but I don't think it will just follow the trendline. It is rather steep so it may take the SP to a lower range if it has any impact. https://invst.ly/v--5v
I'm not sure there will be much price movement from the H&P report. They haven't said anything we didn't already know. We have $14m cash, we are doing 2D Seismic which will cost about $2m, we will be doing geophysical tests to identify where to possibly do shallow drilling and the drilling could be done during the rainy period. I think we will be around the current levels until an RNS comes out stating what the next step definitely is and when it will be.
8p has not been seen for over a week, so I would say the current range is 8.5p-9.5p. It could continue here for a while yet or move up on news. There is a chance it will drift until news comes, but we should know if that is likely by the 16th. There is enough interest to retain the current SP but I can't see this being maintained long term without some guidance from HE1. 16th is also when a trendline from the start of Tai-2 could come into play https://invst.ly/v--go.
@Dai
Not sure I would read too much in to the selling. The most recent price drop was after they published a trading update and the market didn't like it. They only entered the finances they were sure of getting next year and left a fair chunk out, but as the company has been besieged by setbacks, there is little value currently placed in prospective income.
If the September deadline for the bank is delayed again, it could drop - I have a baseline just above 0.25p https://invst.ly/vzo9e but doubt that will hold if there is another delay. If they get confirmation that the bank is in place, then your increase could very well happen. I think only the first transaction completing will really push the SP here though.
Possibly. The current range is 8p-9.5p which was in place before the director trades - don't think that will change anything. There will be a few weeks of testing to be done on various sites before any new drilling decisions is announced. Not sure it will hit 8p, but won't be surprised if it goes back down there a few times in the coming weeks.
Hi Fortnefvrsbrve
There are rules around when a director can or cannot trade. These fall under the Market Abuse Regulations, Insider Dealing offences and the Model Code. Basically, if they have information that has not been made public that could affect the share price, they should not be buying shares. If they are caught doing so, a criminal record, hefty fines or jail time could be the result.
For the ISA question, it would need to be kept separate. You could keep your own records of your overall share purchases and average price. An option may be to average down in an ordinary trading account and when you sell any shares, transfer that money next year to the ISA account. There is no way to add to this years limit though.
I couldn't remember the amount off the top of my head , but the 3D mentioned was to be conducted after a discovery had been made. No idea what area that covers. We will be doing a 2D survey which is much cheaper, but before drilling should we be doing 3D as well?
Ivuna & Korongo are about 70m below Tai's Altitude at about 810m ASL. Any prospect to the West of these could be a target. I'll need to look at where the infill 2D was as well as the historic 1000km they had.
I believe an Oil & Gas rig will be required for the deeper targets rather than a mineral rig and that could be £3M per hole. Before the deeper targets are drilled (and that will still be exploration), the company have made reference to a 2D Seismic survey of the area being completed beforehand. One of the posters here (SeismicPro?) suggested that a 3D Seismic survey would be a better option (approx £4.5M+?).
Before we can either get the O&G rig or arrange for 3D Seismic, we would need to raise funds. The last raise was at 10p and they raised £10M (although they cut this back from the £22M on offer) in April. The SP had just moved beyond 14p and pulled back over a few days to 12p before the placing. Within a week the SP had recovered its previous position and continued to climb. Hopefully any dilution will not be more than 15%-20% this time around either.
To get the price moving in a positive way again, phase 2 will need to be explained and the market able to see where progress can be made before sentiment returns. If it is possible for natural gas to be extracted from shallow discoveries, then the same should be the case for helium - I have no experience or information on this however. If the geological tests can identify where or where not to shallow drill, it will still take a while for the target zones to be tested and the data analysed. I'm not sure there will be much price movement until we have confirmation that shallow drilling is an option; phase 2 outlined to determine timescale and costs for any testing; and an outline of any drilling work (shallow or deep) released.
It looks like the market has taken the trading update as an Interim Statement.
We had confirmation that annual inventory monetisation fees will be paid in the next 4 months. The £3.9M-£4.9M estimated income for next year is only a small part as that is the confirmed revenue. Anything from the Captive Bank, Sharia and the ICC agreement have not been included.
It will go up again... eventually.
I think it's a new one. https://t.co/2x524sboMc?amp=1
Once they compare the different test at Tai-1 and Tai-2 they may be able to start testing other targets - especially those that were originally identified in the 2D. If they do a winter drilling campaign after they have picked a few potential sites, then we might get back up to mid-high teens. Hopefully.
At 08:50 (@ 9.5p), it hit off a trend line taken from the last week of the highs, before the last drop.
It is now roughly following a trend line of the peaks since the drop.
https://invst.ly/vwt81
9.5p was pretty much missed out last time. Current range is 9-10 but there is stronger resistance at 8.8.
No idea if that will hold though.
I had wondered if we had only booked the rig for 3 months. As there was an option for an additional 4th hole, then maybe not, but I don't know anything about booking rigs and what those contracts entail. It would be weird to stop part way through a drill.
29th April - Mobilisation of drilling rig and equipment from locations in Tanzania and Mozambique to a forward holding yard
13th May - {Tweet} "the Rig has arrived at our camp!"
The original plan was to drill 3 holes taking about a month each.
12th June - Drilling started at Tai-1
11th August - RNS on the completion of Tai-1
19th August - RNS on the start if Ta-2 (Doesn't state when it was started)
26th August - RNS on the completion of Tai-2 (Doesn't state when it started or completed)
We haven't heard any mention of Mitchell Drilling - if we are continuing to use them and their lighter equipment. For both the shallow and deep options, it reads as though we will be doing testing before anything else so may be arranging new contracts and logistics. The site staff will probably need a break for a while too. That should give them plenty of time to let us know what Phase 2 is.
The Environmental Impact Statement Assessment covered an area of 320km² so drilling can still take place in this area. There might be a winter drilling programme, but we need to do testing and contract a new drill if we are replacing the current rig. To paraphrase DM, various testing techniques will first need to be performed before data from Tai-1 and Tai-2 can be contrasted - which may be able to identify gas in situ. Tai was not the only target identified by the infill 2D Seismic and hopefully they will be able to drill into the apex of some of those closures using the 2D and these other tests to hit a thick gas column.
If typical gas plays can find commercial gas at shallow depths then that would be encouraging, but I have no idea. We don't know if the shallower shows are being supplied with helium rising from deeper shows or if there is lateral flow and charge from the system. It seems like we will be in a testing phase for a while, so hopefully some of the questions will get answered.
It's like we have most of the border pieces of a jigsaw in place, but the picture has been obscured so we still don't know what we are looking at.
HE1 started trading in December at 4.25p and had £6m which was earmarked for 2D Seismic infill and drilling 3 wells
From January to end of March it traded between 6.8p-8.2p
In March we started the 150km 2D Seismic exercise (later extended to 200km)
Mid April we had a 10p Placing for £10m (SP had risen to 12p (briefly at 14p))
Having these funds enabled them to contract the current drill rig (capable of appraisal drilling). It also covered a 3D seismic programme and feasibility study of any discovery. As we have no discovery, it is now being used for more seismic (and possibly some drills). The SP and strategy almost mirror where we started from in January with the SP currently bouncing around 8p-9p.
We have information from the 200km of 2D Seismic, knowledge of the Tai stratigraphy and a better understanding of the drills required for both the shallower and deeper depths. Unfortunately we don't have any wireline data for the shallower and deeper depths. We only have that data from 880m to 400m (potentially) where the Tai-1 casing ended. We know that the Helium will rise from lower depths, but not move laterally at shallow depths, and that an efficient seal is not required for it to be effective. We were also unable to perform a Drill Stem Test to capture any samples.
From the admission document, the following costs can be referenced :
Working Capital and General & Administration expenses (G&A) £2,157,710
Infill 2D seismic work £692,300 (This was originally 100km-125km but ended up at 200km so possibly £1m?)
Licence fees £569,230 (We will need new permits for the 2D. We have some drilling licences but will more be required?)
Fieldwork £192,300
Drilling £1,461,540 (Originally 3 holes - the current rig was around £1m per hole but Tai-1 ran to around £1.4m)
Well evaluation £276,920
The Costs for work on discovery were estimated to be :
Appraisal well drilling: £2.4 million
Enhanced well completion: £0.5 million
3D seismic programme: £3.8 million
Feasibility Studies and licence fees: £1.2 million
Additional operational contingencies, working capital and expenses: £2.1 million
We don't know the extent of the seismic work that will be undertaken and we will require permits before that can start as well as arranging for the equipment, contracting etc. We have not been given any information on whether shallow drilling will be going ahead this year. If it does, I am not sure we have data to suggest that a discovery could be made from it. If we so drill, will we be testing different trap types as per the initial plan, or was there enough detail extracted from what was found at Tai-1? DM mentioned that for the cost of 1 O&G well they were able to drill 3 Helium wells which suggests if an O&G rig is required, the funds required could be substantial.
Hopefully we get some clarification soon, but right now it seems there will be a few months before anything really happens.