Member Info for GreyPanther

I’m wondering what the real background is to today’s RNS. I don’t suppose I’m the only shareholder that is surprised to find that we suddenly need to borrow £1 million from UJO, and I’m left feeling that I‘ve missed something important in the RNS. I’d quite like to know more about why we suddenly need this money than “The loan will provide us with additional liquidity and reflects the prudent cash management philosophy that we adopt at Europa when looking at the various development settings that we could face in the near term. One of these scenarios includes a success case side-track that ........... could prove up further volumes in addition to those proven by the main wellbore and these additional funds will ensure that we have sufficient working capital to progress all of our assets under the potential growth scenarios that we are modelling." This sounds like waffle to me and, with an 11% interest rate, I can only assume that UJO was the only place our new Finance Director could find this kind of money in a hurry. And that 10% of our Wressle interest is pretty worrying too. So let’s hope we can pay them the £1 million back when the loan falls due. It seems very odd to me after more than a year of Wressle income running at about $0.75 million per month, and the £7 million placing in March (which some felt was on rather poor terms) that we still don’t have sufficient cash to see through a sidetrack to the imminent Serenity well. I think we should be asking our board some questions about this. Thanks for bearing with me if you’ve got this far!

Hi itsawrap. It's even better than that! Your extract from the annual report shows that the subscription price for UJO's Egdon 4 million warrants is only 2.5p.

I'm wondering if the lifting of the fracking ban will help us at WN. We apparently have a porous and fractured reservoir in the Zechstein, but it doesn't seem very permeable, so far. So maybe fracking could help if it can be made to work here. There's also the deeper Bowland Shale potential, as seen in the Crawberry Hill and WN A-1 wells where it was cored but not tested. This could now be worth a look, even though previously it didn't seem to have much value in the absence of fracking.

Hi Mirasol. Aren't Gaffney Cline doing the reserve report on Wressle for UJO, and RPS doing the West Newton CPR for Rathlin? Unless I'm mistaken about this, I can't see how GC could have given them much for West Newton. All the best, GP

The ADX presentation only shows "Farmout Discussions Ongoing" up to the end of March '22. Does this mean anything at all, or is it just a typo?

Could you provide a link to the ASX release? Thanks.

Have your people studied the Crawberry Hill? If not, their opinion concerning this well has little value. Or maybe they don't understand the published data.

Crawberry Hill-1 was definitely a dry hole and IMO the RNS was "economical with the truth" and It was, of course, drilled some time before RBD joined the WN joint venture. I suggest looking at the released well logs, as I have. There were no gas or oil shows in any of the three potential Zechstein reservoirs (the Brotherton, Kirkham Abbey or Cadeby Formations). A friend suggested that in his opinion (and with hind sight, naturally) it was drilled outside structural closure so it had little chance of success. You are, of course, welcome to believe what was said in 2015, which was before the well logs were generally available, and no outsider could analyse / verify the statement at the time.

There will be severak days between the Stena Don coming onto contact for the Serenity well and the spud because the rig will have to mobilise from the Blake field and move to Block 13/23c. Anchor handing etc, assuming a semisubmersible rib still relies on such things, doesn't happen in a few minutes. It can take days to get underway and then re-anchor at the next lcation.

WN could perhaps be helped by a series of "mini fracks" o maybe a proppant squeeze, as was done at Wressle. But we will need to have a measurable flow rate that can be improved. I'm hoping the forthcoming B site horizontal well will achieve this. However, the released info says that Crawberry Hill was a dry hole, so no amount of fracking could help there.

Tovovoc. Thanks for that. We must have put aside a fair amount for Serenity, presumably a further ca. 8 million on top of the 7 million placing proceeds. What I'm not really clear about, though, is why this should affect our profits so far. I reckon very little of these funds will have been spent so far. All the best.

Suit yourself about paid posters, Selfish, as I'd always wondered whether you might be one. But in any event, I'm not one. But IMO time will tell about EOG's annual profits, or the lack thereof.

Thanks for your thoughts HappyInvestor100. I'm reasonably happy to wait to see more of the value of the arbitration award reflected in the SP. Having recently participated in RKH's open offer, plus a few more shares because of what I hoped was an imminent arbitration decision, I'm feeling fairly relaxed as I sold a few shares soon after the RNS to exercise my warrants at 9p. Good luck. GP

Hi boltok. When you say "14 million mcap for a company making net profit of around £6 million. EOG running costs ae very low" I'd agree with only some of that, but not the "14 million mcap" nor the "net profit of around £6 million" bits. Are you seriously suggesting that when EOG's annual results for the year to 31 July '22 are published they will show a profit for the year just ended? Or is this your hope for the future? Sadly, and it's only a personal opinion, we won't be seeing a published profit for a while yet, even with all our Wressle & Crosby Warren income. But let's hope I'm wrong

Wressle's production stats for May aren't shown by Drill or Drop in their monthly summary today. This might be because the NSTA approved the Field Development Plan only in late May, and it wasn't announced until 30th May. So there were presumably only 1 or 2 days in May which had full FDP consent. IMO it probably wasn't worth including this small amount of data in the monthly stats. However, I reckon we'll see a full month report for June in late September, all being well.

Hi itsawrap. The NSTA probably approved the Wressle Field Development Plan very late in May '22 as it was only announced on 30 May. There were presumably only 1 or 2 days in May when there was full FDP consent, so it probably wasn't worth including this in the monthly stats. But, as you say, we should see a June report for the full month in late September, all being well.

Hi DaveT. There's some confusion over this matter. 1t's the "Share Premium" from the balance sheet that we're talking about but IMO it doesn't represent the difference between the nominal value of a share and the actual stock market value.. I think it's actually the difference between the nominal value of a share (5p) and the amount paid per share when shares were issued from time to time. Unfortunately this sum doesn't exist in a cash terms, so UJO don't have ca. £21.5 million to splash around. The £21.5 million has already been invested in UJO's projects and running costs etc

My guess is that we could rget a typical AIM yield of 2.3% and that would be about 0.75p on a 32p share. The actual outcome will depend on UJO's SP on the day their board makes its final decision. It's not generally recognised that only about 195 out of the 867+ AIM listed companies currently pays a dividend, so that's only 22% of them. I believe the average yield from all the paying companies is only about 2.0 to 2.5%. If there is to be a divi, UJO don't really need to pay more than 0.70 / 0.75p to give us a typical AIM yield. More would be nice, of course. However, I'd expect UJO's board to be aiming to pay a sustainable dividend if they can. IMO this won't be easy to accomplish with the bulk of UJO' srevenue coming from just one field. Perhaps we can hope for a nice long, stable production profile when we finally see the Wressle reserves report.

Hi Subsea. If you're thinking about the water monitoring boreholes planned for Fiskerton, I too am extremely interested in what's going on. I believe the field has been shut in for some months now, possibly be due to mechanical issues with the (?one) remaining producing well. So this presumably expensive activity must mean that a lot of value remains to be recovered from the remaining reserves. At $100 per barrel that's a very good thing for both Egdon and UJO.

It's interesting to speculate why Egdon and UJO have such similar (£35 to36 million) market caps, especially with UJO having a significantly larger interest in most (?all) of the projects we share with Egdom. IMO the recent excitement or hype over fracking is what has suddenly increased Egdon's value. However, IMO it will be many years, even with a PM in favour of fracking, before any value is extracted from Egdon's shale gas licences. In fact I'm quite glad UJO has almost no exposure to a licence with shale gas potential as drilling and fracking a long horizontal wellvis a very expensive operation. It's not something, again IMO, for AIM minnows like Egdon or UJO.