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https://twitter.com/UOGPLC/status/1151008574904197120?s=19

Spent 170k pulled in a desk for 5mil. Very similar to what they are doing with Elephant Oil.

They reckon that Elephant will pull in a farm in partner: their opinion might be worth something.

DYOR

https://twitter.com/UOGPLC/status/1151008574904197120?s=19

Spent 150k on seismic and reprocessing, pulled in a deal for 5mil. Similar to what we are doing with our sub-surface survey, reserves report and CPR.

The work will open up options for us.

DYOR

It will be really interesting to see what sort of deal has been done with QEM. They have a lot of oil and a lot of vanadium.

So pretty soon, (middle/ end 2020) two plants of its own, 1 plant with Valkor, 1 plant with QEM and I suspect 1 other plant (possibly Trinidad or Australia).

DYOR

https://twitter.com/QEMlimited/status/1151281350462382080?s=19

I am not 100% sure but it looks to me like we still have the Matthis lease. I have been doing some reading and came across this.

https://www.rigzone.com/news/oil_gas/a/129431/northcote_plans_1st_mathis_lease_horizontal_well/

I would agree about the forward plans. They probably think they need the CPR and Reserves Report before holding forth on the next step. It /they should open up lots of different possibilities.

Lets see. From here on in, it is down to the decision-making of the board and their ability to strike deals.

As I said, Paolo is conservative on what they put out and he is the Chairman. The next step is the reserves report: only two weeks to wait for that. Once the company has that they can take a view on the next steps.

As long as they don't do a fund raise anywhere near this share price I am happy. We are making progress and we should all be happy about that. This company has been promising various CPRs and reserves reports for years: this will be the first one it has ever produced.

DYOR

PS currently AOGL gets a premium over WTI of about $4.20 for Austin. That means that a given level of EUR/1P translates into a higher PV10 and hopefully a larger RBL in due course.

DYOR

This post is from the ADL BB re RBD....
"Good post Greg. it does not take many bopd to give a decent NPV, as stated before RBD have a 50% stake in 4 workovers in California which produce, oddly enough, 70 bopd ( so 35 bopd net ) and it is set as $10m NPV to the company. We are currently sat at £2m MarCap now all the shares are in issue.
It all hinges on Gregor Mawhinney coming up trumps / reducing the casing gas etc. He seemed very confident to me.
atb"

I post it because of the comment re the PV10 calculation. I am not saying that it will apply in the same way to us but is a useful comparator. This is also useful from NTOG....
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/NTOG/13968742.html

So 646k of 1P gives NTOG an RBL facility of $1.95mil. We should be to sort somewhere between $250k and $500k off the back of Austin and ZR.

DYOR

Relevant to AOGL.

https://twitter.com/MacroOps/status/1149732517701963776?s=19

https://twitter.com/AdamMancini4/status/1149694882258259968?s=19

Two day job to get the pump back online?

Thanks

Hopefully, an update on Indo and Colter next week.

Sorry but the SP is only one consideration in respect of the reserves report. As mentioned in the RNS but perhaps not made as explicit as it could have been, there are a number of reasons for getting a reserves report and/or a CPR. A reserves report is usually not as detailed as a CPR. To generate a CPR we would need to have a worked up and agreed Field Development Plan: I think we are still at the stage of feeling our way forward.

1. To engage with banks for Reserve Based Lending they will want to see two things at the bare minimum, stable production and a reserves report. For an explanation of how it pans out check out the NTOG RNSs from last year. They managed to put a significant RBL facility in place but their sustained production had been over a longer period than ours.
2. Farm in: farm in partners will want to know what they are farming into and what the possibilities are.
3. Sale; if you are looking to sell the assets then a reserves report/CPR is essential if you want to get a decent value. In the US there is a liquid market for oil & gas assets that are producing assets; the price is typically $15k/$25k per flowing barrel. These are people who are after income rather than tax reliefs.

Any of the above will feed across to the share price even if the publication of the reserves report doesn't initially. Based on previous comments, it does look like there is substantial scope for workovers, refracs and new drills on our assets. It will be very helpful to see for ourselves how true or untrue those previous claims might have been.

Getting 150 bopd out of Austin but we only have two years production is one thing. 150 bopd with scope for say three new drills and ten years production is a completely different kettle of fish. It will also reduce the scope for the nay-sayers to weave their magic. I also don't think that people realise how confident the board must feel to commission a reserves report; firstly, it costs money and, secondly, if it comes and says your assets are rubbish we have wasted the money. The reserves report will probably cost circa $15k each; unless the reserves report is going to say something substantial that $45k would be better spent in the field.

I think that we are lined up for an interesting four weeks or so. I am told that Paolo was well received in the meet and greets they had for him over the last few days. I had lunch with him on Monday, he is an impressive chap and there is a lot more to him than he immediately lets on but it comes out in conversation.

We are not there yet but we are getting closer.

DYOR

PPS. the valuation wouldn't normally be based on oil in place because 1. you won't recover it all and 2. some of it may require more drilling to get at.

PS I think you would only shoot the seismic if you were going to start a drill programme or sell the asset(s). There is plenty to be done at ZR without doing new drills.

I was discussing this earlier with one of the larger shareholders. The issue is that you have different ways of measuring how much oil is there and there are different metrics.

PV 10 is a common way of valuing it but you would need to know the EUR, the initial rate of production and the decline rate etc. You would then have to make assumptions about the oil price, taxes, lifting costs etc.
Another way is looking at what is called P1/P2 reserves. P1/P2 would usually be valued at something like $10/$15 a barrel the ground: this won't necessarily read across into the share price but is a useful guide.

But lets make an educated guess: lets suppose that the Austin EUR is 300,000 and that is all P1/P2 then you would say $3mil/$4.5mil. On the same basis for ZR; EUR 200,000 then it would be $2mil/$3mil. If you were to do the PV10 calculation it would normally be greater.

The reason I put down a lower figure for ZR is because the wells are older and they don't have any big producers there. Now if the company had a load of capital and was committed to an active drill programme and field development plan for both fields then all of the numbers would be larger.

It may be that when the subsurface survey comes back that there is a lot more oil at ZR than we think but that we need seismic to firm it up. There is a guy just to the north of us at ZR who is producing from the Prue and he is making out like a bandit and he is doing nothing special.

DYOR