Member Info for harel

Important questions but watch out as this bb doesnt embrase negative opinions.
Im a 30p investor and will stay long term as i think the company is sitting on a major value creator asset.
There are questions that cant be answered at this point.
lib east- locating a well requieres another pilot but the potential reduction from the 11m recoverables of lib 1 makes its economics questionable, they might try a strait development well based on l1 testings but again a very risky move, a non commercial outcome will be a disaster.
A good outcome of 5000 bbopd or more, on the other hand, will be transformational for the company because the large and fast fcf will enable the company to finance serenity and lib wests explorations without being dependent on rre's serenity offer.
A 5000 bbopd means 100m$ of annual income with about half as fcf, that makes financing a non issue.
That kind of a risk would be something the bod would rather avoid but doing that they will be dependant on rre's farm in offer.
Serenity is a big discovery, even failing in the next appraisal wont mean that the discovery made is not commercial so im not concerened about that as all the odds are in the companies favour and the upside is huge, the only question is how well the negotiations with rre will advance and according to that the bod will decide the best way to move forward.
I think a fair farm in should see rre taking a 50% of the license or serenity alone for 2$ per bboe when they finance both appraisals at serenity and according to the results of lets say 50m recoverables net for them will pay 100m$ minus 13m$ that were paid financing i3e's 50% cost of the appraisals.
Lib west is a non issue at the moment, i see a lot of posts here already pocketing 400m boe not understanding the difference between stoiip and recoverable and between a discoverie and a prospect.
Lib west is just a potential for future explorations and is and should well be priced at 0 value at the moment.

I know to wait for a momentum change.
Just think what if in 2 months a senior loan for phase 1 is signed.
Even for a modest 5000 bbopd that means all finance problems are solved.
This level of production generate net profit of 60m$ a year and make more finance easy.
Ofcourse the market will remain suspicious till it's done and proved that the amount planned is produced.

I'm in touch with a director of a small cap investment company which I'll keep private.
I asked his opinion on i3e just after the results:

Hi Harel,

I am sorry to hear about your i3E investment - we have all been there - but I suppose its a fact of life in this high risk sector, where its proving increasingly difficult to find 'winners'.

There appears to be 2 issues with i3E's Liberator drilling results:

1. The better quality, high N/G lower Captain sands are below the OWC, and uppermost Upper Captain sands (above the OWC) are thinly bedded sand units

2. The 3D seismic inversion (both iterations) appears to be unable to predict net pay thickness - so no real derisking from the 3D seismic with respect to appraisal/development well objectives. Well 13/23c-9 found no Upper Captain Sands and 13/23c-11 found 15ft net oil pay (from blogs expectation seems to have been 100ft net pay) - insufficient to complete a development well.

So results from these 2 'development well' locations suggest Liberator Phase 1 development will struggle to attract financing (RBL facility unlikely - given reduced reserves and economics) - so path to early cash flow seems cut off for the moment. With Field wide OWC of 5270 Ft. the A3 & A4 locations are unlikely to be derisked by 3D seismic inversion. Focus now shifting to Liberator West and Serenity - where large STOOIP numbers are indicated but appraisal and testing required to prove up reserve base - so presumably more financing required here.

Just my 2 cents worth.

Phase 1 is still on yet simplified.
I find it hard to get how they know where to locate the development well and how much it may produce and how they gonna convince a senior loaner to fund that, but if they do and it's a 5000 bbopd then in a year they will generate a 120m$ annual income from that.
We'll have to wait for rbl in order to recover, till then we are done.

So who will pay the price?
Investors that didn't sell wont be that affected, if the results are as bad as the sp then the sp would drop in minutes given results anyway and if results are fine the sp will rise back up.
Those who'll pay the price are those who baught in when drop started not knowing why it drops, and if results will be ok then the deriskers who sold on rumour.

The rns won't start like:
"We are pleased to announce we encountered 220 ft of water"..
"We are pleased to announce phase 1 is off.
""we are pleased..."

I have addressed that earlier, the 4th drill is a clear sign for phase 1, if they go for it it's great news and shows confidence that phase 1 will fid, if it's not then unless they state clearly that phase 1 is a go ahead in the rns, for me it makes clear they are replaning there business model.

I think it was repsol but same same.
The difference is that repsol is looking to build up the bleuholm capacity and that is why I wrote serenity is a getaway and brings confidence that in any outcome of phase 1 we have something of value in our hands.
Personally I bought in pre serenity and after the success got the confidence to gamble on a2 and more then tripled my holdings.

Rocket
Fyi, repsol turned down free farm in to jogs license.

The probable result I mentioned is worst case scenario for a farm out.
The point was that at this price we have a chance to go back on track if phase 1 is on and a getaway if all goes bad though it will take time.
A 25m bbod reserve net to i3e with repsol as operator value at least 100m$.
Even diluted that means sp at the 50's.

If phase 1 is not coming through, i3e's luck is that serenity holds tain development hostage.
That should be sorted out quickly.
With no cash its going to be a saleout.
I'll take the probable result, rre and repsol taking 70% of the license for 2 appraisals carry, that means 7.5m$ for 70%.
bottom line- in that scenario no one here is going to get reach but also no one here will lose money.

Thank you for all the information you shared on this board.
I agree with your view but not selling at a dusters price before it is even a duster.
No question, a phase 1 killer on the rns will be a disaster to the sp but still, looking at jog for example, I think the company should trade at mc of about 20m£ if no phase 1 so we are under that already, yet the chance of a reduced phase 1 and it is a 1 year multy bagger.

I think we all better wait for Monday's rns instead of speculating (my earlier posts inclooded).
Hopefully the company will make clear whether lib 1's reserves are less then evaluated or not and if l1 is still on for a reduced phase 1 of 10k bbod.
If that is the case then all good for me.
phase 1 is all about the rbl and fast fcf for serenety and lib west.

My posts are not positive because of the rns released by the company.
Loosing so much money made me start writing to get of steam.
The Mars remark was out of place but to see a post ignoring the reality that the 23m bboe is no longer valid made me react that way.
Luck for us all
Harel

Hi kev,
Yes I'm a big holder and a reader of this bb for a while.
I didnt write till now because I'm from Israel and my English is not that good and Im probably making a lot of spelling mistakes, so excuse me for that.
I wish you would counter my assumptions with facts instead of trying to picture me as a deramper.
It's hard for me as well to turn from my all in strategy to the harsh reality of small cap exploration.
Anyway as I wrote, not selling at this price.

You must have landed from Mars just before writing that post.
What 23mmboe are proven?
The l2 was suppose to prove that but as you already know it didnt.
Well have to wait for final results but it seems not only it didnt prove those reserves it even proved l2 is noncommercial and proved the all lib east model was based on wrong assumptions.
If you can't wait for results then I suggest you take all lib east out of the game as it looks like that was a waist of money.
Lib west is also out of the pic for now as there is no funding to throw there.
Better get use to the fact, i3e has no money, a debt and one discovery that needs 2 more appraisal drills, if they manage to drill 2 successful appraisals next year they will be in a situation of a take what we offer or go out of business with the tain consortium.
I'm a very big holder and I won't sell at this price, I'll hold till hopefully in the next few months it will get back to the 30's and then will decide by the fundamentals.
Harel

no, its called a bad result in a binary drill!

excuse my spelling as English is not my first language.

next week we'll know wether lib is commercial or not and if phase 1 is over.
for me (a very big holder of i3e) the rns is one step away from a duster, do I sell?
no.
I allowed my self to get in a beat over my head knowing serenity will keep the company in business in worst case scenario of lib turning out to be uncommercial.
the company must have known there's a potential problem with this drill and that's why it secured the option for another drill.
if the all model turns out to be incorrect (that's my opinion at the moment) they will not exercise the option because i3es biggest problem in coming days will be the finance!
in that scenario we will have to be very patient because recovery could take months or even more till the company will get the finance to appraise serenity and try to farm out from a very bad starting point.
the goal in that case would be for me to sell at my average of 30p and maby keep some in.
unfortunately the happy days of me thinking I found the ultimate multibagger are over.
if phase 1 is still in the picture even with A1 alone and a 10k bbopd, then the sp is over reacting and the rbl will pave the way to a much higher sp.
a forth drill at liberator will be in my view a very good sign that phase 1 is still alive.
we'll have to wait for final results!

buchan alone holds 80m bboe.

do you think the company can get a rbl based on L1 alone and move to fdp phase 1 of 10K bbopd.
I know they said that it can be developed as a stand alone but can they get the funding.
a 10k bbopd is more then enough to get serenity appraised and developed.
once finance is unlocked the true value of the assets will be reflected in sp.