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Also don't ignore the £1m of debt they took on. Standard ukog, bury it in the fine print.
"The Company has signed a binding Heads of Terms with PW Well Test Ltd ("PW") for a £1.65 million purchase of all existing PW Equipment used to produce oil and gas at Horse Hill. The purchase is via three equal instalments of £550,000 as follows:
- Initial instalment payable upon signature of the asset purchase agreement via equal amounts of cash and UKOG shares. Full title to the Equipment will transfer to UKOG upon this initial payment.
- Two further instalments at 6-monthly intervals, or earlier at UKOG's discretion. Each payment either wholly in cash, or wholly in shares, or part cash/part shares, each at UKOG's sole discretion."
If this is what you are talking about it has nothing about depletion. Only maximum traffic rates.
https://planning.surreycc.gov.uk/planappdisp.aspx?Appno=SCC%20Ref%202019/0196
What a douche.
Just when you might expect to start to see signs of what the depletion rate will be, they plan a HH-1 intervention. Great timing. The previous CPR had a base case of around 30% drop in flow per year, I wouldn't be surprise if it was greater than this. It is ukog after all it is all about the initial flow rates, the ones you can game the most.
P.S. I never see the rampers mention the expected depletion rate. Strange that. It is almost like they want people to do a barrel per day * 365 * years calculation and therefore misvalue this stock.
"I thought death spiral finance meant the share price went down with each conversion"
BS. https://www.investopedia.com/terms/d/deathspiral.asp just means the holder can always convert at a discount to the prevailing price, this along with them typically selling will produce downwards pressure on the price. But it is rare any stock price moves in a straight line.
Yeah ukog did a bunch of stuff, the problem is it never proved any of it was worth much. To date it has been far more effective at creating shares than barrels. Need to see an updated CPR and year by year flow rate projections. Instead of spin and cherry picked results we need substance. The emperor can only be naked for so long before people notice.
"The inevitable lowering of the price to allow further II's purchase very obvious and expect a big bounce "
Do you have an evidence? No I think not. I suspect it is more likely the MM have a huge sell order in the background. You do realize that a buy/sell label is rather arbitrary, every transaction has a seller and a buyer, the label is just applied based on the MM matching price.
"death spiral" doesn't mean it is impossible for the Ukog SP to rise. It fact it does all the time, over various time periods.
I haven't seen anyone claim that, I believe you have formed a strawman to argue against.
https://www.investopedia.com/terms/d/deathspiral.asp
All that death spiral finance does is put constant downwards pressure on the share price. That pressure increases in line with price drops and decreases with price rises.
"The Company will consider reasonable offers and remains pragmatic in the context of the challenges faced by energy market participants against the current global backdrop. "
Ruvuma is obviously worth a decent amount, worth spending over a 100m to bring it to production. ARA leveraged their large AEX holding to get a good deal for themselves for the AEX farmout. Do you think solo will be able to negotiate a premium to that?
IIRC most of the board bought in from 2p to 3p. That will probably influence what they think is acceptable. Hopefully not bad news for long time holders with a greater average.
The key point was that was break even at an asset level only. Doesn't include the large admin overhead of ukog. Get again mugs taken in by the ukog spin.
How are they getting from 17 to 11.50 by increasing capex. Of course, and given they haven't released the lifetime projected output, mug punters can't even tell if that capex will ever be recover. More ukog games. Buy buy buy, 20p by tomorrow etc etc.
Not in a share where institutions are selling to retail. Retail take lots of little nibbles to clear the big blocks the institutions have made available to the market makers. Note death spiral providers are not interested in the company, only in shifting the shares and ensuring their cut.
They are only profitable at the asset level, which is fairly meaningless. It doesn't include the millions of admin cost of ukog, nor the enormous capex. Any company can reduce their opex unit cost by moving costs to capex. Give me a million dollars and I can create a project that "absorbs" that million and creates a asset which will yield a few thousand for a few years, then I will pay myself generously out of that project. I will give you a dividend if I ever deem it suitable, but you see I have to think about the long term, my next years wages and bonus.
300 barrels a day * 365 ~= 110000 barrels a year
SS costs £600000 a year (cash + cash bonus)
$17 opex cost per barrel. Need $6 a barrel profit just to afford SS. Never mind a few million for general admin.
Any company can reduce their opex unit cost by moving costs to capex. Does anyone honestly think these wells will ever pay back all their associated capex and the ukog admin costs for however long it takes. No wonder SS prefers cash.