Member Info for haggis_trap

^ lots of long term holders in same boat. The days of 60p long gone : but I remain hopeful there is value even with higher OWC ...

Ha, will check my phone at 7am. Just like every day last week ;-)

If you think a deal will be done here (which it will) then best ignore small fluctuations up or down in share price. Not many shares in issue and 90% of those held by institutions. So any buys or sells have potential to affect price.

Patience required

There are two ways to increase reserves on companies books:

1) Drill a new well at cost of £30-50 million. Might not find anything...
2) Buy existing asset / discovery. At current low oil price daily production of circa 10bpd might cost 50-100 million

In low price oil environment there maybe better return, and lower risk, on option 2? Investing in LBE is basically a longer term bet on management team and price of oil.

Company has raised a modest 10 million. This proves the company is credible and allows them to apply due diligence on possible "deals". If a deal is done then company will need to raise 50-100 million. This will be a mix of new debt and equity raised by floating more shares in company. The hope for initial investors is the second equity raise will be at higher price than current share price of 120p. This seems reasonable as company will then have assets / fundamentals. Plus the original investors will want return on seed investment. At that point there will be many more shares in issue : but hopefully at higher price than today.

The business plan for LBE is to conclude 2-3 such deals. The management team and are geologically experienced and maybe be able to add value to assets purchased by drilling in vicinity of infrastructure to extend life.

Can it work? RockRoseEnergy proved the business model with remarkable x42 jump in share price over 5 years (before take over). The same might not happen here. However what is current a small £10 million market cap company *might* quickly become £100-200 million with the right deals and increase on oil price. Any future debt / equity taken on to finance future deals is best thought of as gearing on the initial 10 million. Think of it like putting down a 10k deposit on 100k buy to let mortgage. If property price goes up just 10% to 110k the original investment of 10k has doubled to 20k.

To good to be true? Anyone investing should think of a 5 year time scale, rather than a quick pump and dump next month. Plus your are at mercy of management team having the contacts / finance to conclude such deals.

Good luck all!

@ash : share price might not jump. However look at list of initial seed investors on website. They will expect a return for stumping up the initial £10 million to get boat afloat. LBE was basically formed as company because Faroe had unfinished business after hostile take over from DNO (so likely know where deals can be done)

20-30p seems a reasonable 6-12 month target. As long suffering long term holder I am in the same boat (as are many!)

20-30p send reasonable 6-12 month target. As long suffering long term holder I am in the same boat (as are many!)

Re : company valuation. The initial 10 million raised at IPO is clearly not enough to buy north sea oil field for 50-100 million. So hope is there will be a second placing (which rewards the initial investors rather than dilute). Investors like Black Rock / AXA are not mugs and will be expecting return on their seed money

As I see it :
- experienced ex-Faroe management team with contacts in North Sea.
- access to funding
- last RNS gives board up to 15% share in company if they deliver
- unique chance to invest in early stage of oil company
- low oil price / covid makes it great time to acquire assets.
- likely they have target acquisition before company formed

Current share price is almost irrelevant as if they do a deal it should be multiples of 80-120. The risk of course is that it takes two parties to do "a deal". So until news drops there are no fundamentals

Let's be honest : the last RNS was very big clue something is cooking. Management have significant personal incentive to get a deal done / double share price

Tumbleweed...

In my experience news always lands when you least expect it

Volume is up considerable in recent weeks. Pre covid LBE said themselves a deal was expected by end of June. However if daveri007 published credible sources it would be clear insider trading (... So having been given nod and wink it's unfair to demand he exposes source).

All we can do is be patient : tomorrow might be the day. If not then likely soon based on evidence available

Agree, in sane world this would sit at float price of £1 until a deal done. There are no real fundamentals, or risk of negative news, at present - just informed speculation the management team are solid and well connected / backed to do a deal

Fully agree with fair comments above. Uncertainty remains : however recent RNS is fantastic news.

Fwiw : All problems started when 7z well came online... Given company didn't produce from it for 6 months after start up I am confident they know why

12% is tiny water cut and easily manegable. So long as it remains stable (which it did before 7z came online) then happy days. All the problems started when 7z started producing - there were obvious question marks given company produced exclusively from 6 well for 6 months after start up. Now the reasons for that become obvious

The important bit is that 6 well remains dry and is running naturally. Suggests 7z was unlucky dud which crossed huge water zone.

Fantastic news! Big smile on my face this morning

17k and water reducing ... Yee-ha!
Will be very happy LTH if that drops in the morning.

Monday might be interesting : but if man on internet wrong about incoming news then share price will drift back to £1

Tough share to call.... On the plus side there is a credible board with contacts in North Sea and access to funding. Could be good opportunity to get in early. However the low number of shares issued / market capitalisation could easily cause share price to drift much lower in absence of a deal.

FWIW : I think the board will eventually do a deal. However the timing of that maybe out of their control.
In the meantime expect this share price to drift all over the place! In last 30 days it has gone from 70p -> 130p (and might yet go back to 70p in next few weeks).