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Tier

the cashflow figures are generated in conjunction with the company's technical advisers.

NPV10 looks at the net cashflows over 20 years. NPV is Net Present Value. They discount the cashflows by a factor to reflect the time cost value of money. In the case of NPV10 the discount factor is 10% per annum.

So the NPV10 is an indication of what the future cashflows are worth now if you discount them by 10% pa. Just look it up there are plenty of references to this type of calculation and it is something you should be familiar with if you are going to be investing.

I don't understand your last calculations but if you look up Red Cave wells on the internet you will see that the initial production is around 48/50boepd. Because they are fracked wells, the initial rate drops off pretty quickly and then stabilises round 19 boepd. So if we drill 17 wells and the stabilised rate after the initial decline is 19 boepd then we end up with 17x19x0.75=242.25 boepd.

The initial cashflow surge plus the RBL permits companies to drill further wells without issuing further equity.

However, the Bivins Ranch deal is key to the company raising its profile in the Red Cave and Brown Dolomite assets around Borger/Amarillo. If we do a JV with someone we can transfer to them our carried forward unused Intangible Drilling Cost (IDCs). The value of the IDCs is about $5mil.

Hence the MOU the company has signed. That is the next big step. In effect we have IDCs worth $5mil on our balance sheet that we cannot make use of in the short term but doing a JV with the right party would mean we could use the IDCs as our capital into the JV.

The above is something that PA said he would look at and the arguments have been rehearsed on here multiple times. In this case of instead of using the IDCs to secure private investor partners for new drills in the Austin we are seeking to use them in a JV but otherwise remain pretty much the same.

DYOR

Well in that case you best sell your shares and move on.

Decent analysis and one I largely agree with.

We made some decent money on a trade in PFP last year during one of the pump and dumps that happen on a regular basis.

We had a mining chap have a look at the actual assets and he reckoned even if they got license back that there was no money to be made given the marginal costs.

If it keeps dropping there might be another pump and dump to take advantage of in due course.

DYOR

No not spoken to him.

Chin up! I am sure it will out fine with PFP, in the end.

As I suspected you really are an intellect.

Who knows? The company has a credibility issue given its history. Maybe there are people on here who just won't give them credit for anything they have got right?

Why would someone with 25,000 acres bother talking to us? If you can think of a reason other than they would like to work with us because we can increase their upside, I am all ears.

Not at all. The last thing you would want to do is turn the production off. As the company has previously stated, it will continue to seek to maximise revenue. You want all the assets producing as much as they can up to the day that they are sold. I don't know but if it were me I would still be looking to do stuff to improve production. I think that there are wells at ZR that can be brought back online that are not yet producing. If I remember rightly I think there are 18 and we have dealt with 12 or we had last time they were mentioned.

DYOR

PS you do really have to ask yourself why someone with 25,000 acres wants to bother with Attis?

Ideally, we would end up with a JV that means we are the operator, provide the well services, do all the planning and drilling and have a decent NRI.

Anyway, to be seen what happens.

DYOR

About $290k to drill each one not buy them. We have a lease with 17 drill targets on. They would normally be done in batches of four and take only a few days to drill each one. They can be put on production immediately they are drilled. Initial production you would expect to be around 50 boepd. A big attraction is that they produce gas as well as oil and locally natural gas sells at a premium.

The wells need fracking and the cold weather means that they fluids need to be heated which puts the costs up: hence the delay to April to drill the first batch of four.

No idea on what ZR and Austin will sell for but more than enough to get drilling in the Red Cave. We would need about $1.2mil for the first four. The SWD can generate income in the short term.

Once we have the first four done then RBL kicks in.

If you read the RNS I think that the next news will be re the MOU/NDA. For Austin/ZR to be sold will take till December/January.

In line with this refocus, the Company has entered into a Mutual Non-Disclosure Agreement and accompanying 30 day Memorandum of Understanding ("MOU") with an owner and operator of approx. 25,000 leasehold acres in the Texas Panhandle. The MOU allows the Company to conduct due diligence over the acreage, determine feasibility, and, if satisfactory, enter into good faith negotiations on structure, and mutually acceptable terms for a potential transaction.

The company didn't enter into the MOU today and so there is less than 30 days left. Something may happen or it may not.

DYOR

You seem very keen to run the company down and maybe a little bit desperate. Did you get caught out by your little friend giving you the steer that there was going to be a placing?

Well you can give it a rest on a placing for a little while now. You will have to think of something else to abuse everyone else about.

Fingers crossed we get some very good news on this MOU/NDA they have signed sooner rather than later.

DYOR

PS don't forget that the revenues from the services contracts started to kick in from September and we should now be doing quite well out of them. I expect that we will be picking up more well services contracts soon.

I emailed it to him on Thursday and spoke to the Nomad on Friday and sent them the presentation as well.

Well Corallian have a pre-IPO fund raising document out at the moment that gives NPV10 of £157mil for Colter and £60mil for Purbeck. There is no way that they could put that in a fund-raising document unless it had been signed off by a third party. Presumably, ADL has access to the same documentation. I brought this to their attention last Thursday and I am very disappointed that they chosen not to comment on it. The Corallian document also states that farm-out negotiations are under way. "Currently undertaking farmout process to provide additional funds to progress drilling".

So the fund raise is not to fund a drill at Colter/Purbeck/Wessex Basin because they think that they can get it funded for a drill via a farm out. It doesn't say whether the farm out is on behalf of Corallian or on behalf of the JV as a whole.

I don't know but I suspect that the next drill would be Purbeck and that they would look to develop Colter afterwards.

DYOR

A lesson for ADL investors over at ADME. I have told ADME investors for a while that ADME should sell the OML113/Aje asset and reinvest elsewhere. The asset is vastly undervalued in ADME: well today it has been confirmed that Panoro its selling stake in Aje and on a look through basis this puts a valuation of about $10mil on ADME's position plus it has about £1mil in cash and carried forward losses etc.

ADME's mc is about £3mil.

In my view we have exactly the same situation here with regards to the Wessex Basin assets. ADL has a vastly undervalued asset and if the value is not going to show up in the share price then it needs to sell and reinvest elsewhere.

DYOR

https://www.naturalgasintel.com/articles/108871-texas-panhandles-red-cave-formation-eyed-for-exploration

1. I put money into the loan
2. I am happy with where we are up to
3. The key is that TB has been working on this plan for a while
4. TB sees the future as a full service company operating out of Borger
5. The MOU is a big deal but the company needs to close the deal
6. Critics don't value the IDCs, which are worth about $5mil
7. We can't use the IDCs but we can pass them onto JV partners
8. As pointed out several times the CPR/reserves report is not a hard and fast thing: several factors vary valuation. One factor is, does the company intend to and is it able to drill on the PUD in the next 24 months? If not they drop out of PUDs. Another is has there been any recent drilling on similar assets/intervals in recent years? If not they drop out of PUDs.
9. If we drilled certain intervals at ZR and Austin a bunch of our assets would drop into back into PUDs. The lack of activity is why the PUDs is at zero not because there is nothing there.
10. When Austin/ZR are packaged up for sale the potential purchasers will realise about the PUDs.
11. At ZR the main interest in recent years has been the Red Fork and at Austin it has been the Eagleford.
12. Red Cave is a well known and well understood interval around Amarillo/Borger. Banks will give RBL against it.

Fingers crossed.

DYOR

MXO is up because of the Panoro deal.

Worth a read up. A big opportunity for the company.

And why might he be in HK?

If I am inside I can't comment.

Things will become clear soon.

You wouldn't believe the things that come out of left field to slow things down.