Member Info for highlandmatt

Thanks cperkin.

Daft question. Aminex is still the operator. Can we drill CH1 under the existing licence, or has it expired? It's been so long I've forgotten.

Hi John. I'm a LTH. I was accumulating all the time it was under 1p, lowering my average, increasing upside potential but also increasing exposure to a higher level than I would like for my portfolio balance. I sold some in the 1.3p spike, to lower that exposure and release some funds for other investments.

Would I have been better holding for today and a higher price? With hindsight, yes. But you don't have that info at the time. You have to make a decision based on the info to hand, and your personal strategy. I don't regret my decision, the price could have dropped. I'm still heavily invested here and happy with the rise, but just thought it prudent to trim my holding and take some profits that I had bought the additional shares for.

Everyone will have their own strategy, reasons, thinking, or even calls on cash in their personal lives.

@whatif. Which? Offer price or share price post fundraise and suspension?

Indeed. If folk think profit per year will be 10m+, then MC could be 100m on this deal alone.

Rough hypothetical numbers, but...

Raise 20m @5p = 400m news shares.
MC of 60m / 1032m = 6p?

Suspect the weakness in the oil price is the main reason for the drop in SP.

Thanks CPerkin. I did wonder, and that makes perfect sense - if you benefit from the income, you also have to contribute to development and maintenance. And a 'credit note' against the purchase invoice makes more sense for the vendor.

http://www.solooil.co.uk/~/media/Files/S/Solo-Oil/reports-and-presentations/2019/solo-oil-plc-agm-presentation-2019-08-27.pdf

Slide 7 - Business Development.

Thanks OGn.
Frank - calm down mate, you'll do yourself an injury. Value adding acquisitions are always good, as long as we don't become over-burdened with debt. However, if each brings a return, there should be the appetite from shareholders to keep answering fund raises. I've started to transfer funds in to my share dealing account in anticipation of the corporate action. This is the kind of scenario where having a diverse and balanced portfolio can help - if you have holdings that you can reduce (i.e. where you don't expect much positive movement in the short term) to fund these opportunities.

So, here's my rough thinking re market cap.
1. Ntorya - the Aminex deal values 25% at $20m once the licence hits (licence is pre-requisit for the deal). (=£16m)
2. Helium1 - estimates seen on here for 10% stake being worth $8-10m. (£7m?)
3. North Sea assets - CEO and RNS state that NPV of the assets is 40m euro (£36m)

So, assets will be approx £60m.
To fund this, we are raising 38m euro (£35m). 18m euro loan, which will be repaid quickly (esp as the Effective Date of the deal is 1/1/2019 - backdated income due is 15m euro (£13m).

So, it is just the share issue we have to worry about in terms of a calculation. 20m euro (£18m) placing, to gain £36m of assets and 20m euro per annum income looks good to me. Share price post deal will depend how many shares they need to issue to get £18m.

Or, to look at it another way. In a few months we could have assets of £60m, cash (from backdated deal) of £13m, and a free cash flow after loan payments of approx £13m per annum (assuming £5m per year of loan payments).

Have I got anything wrong? It looks an excellent deal, and a great first step on the journey.

Credit : Zeusfurla

tektonic Thanks for that. 1 or 2 other things to add. Results likely from Coho and Casca 1st week in November, dropping share price due to liquidity issues in market and wider sentiment, impact of T&T budget overall approx 1-2% reduction in overall NPV (not too significant) but Paul disppointed Govt missed opportunity to encourage more exploration, 1st drill under budget at c$2.8m and can see some small further cost gains for future drills, approx $60 Brent fine for drilling campaign, worst case scenario may have to push a drill back a Quarter (if oil prices drop), $49/barrel more profitable than $56 due to tax regime, if Royston 10500' drill a success likely will need to go deeper with bigger drill, may drill 2nd well from Casca pad (14 approved in total) if Chinook delayed at all, Heritage an excellent company to work with operationally (but tax regime could be better), VAT refund to come c$5m timing uncertain - early 2020? Overall $7m cash end H1 + $3.6m per half year with drillls at $2.8m each - enough likely from these figures for Casca and Chinook. Royston fundable if Coho cash flow in Q2. Can truck oil from Casca/Chinook if successful until pipelines built. Very positive update overall with patience required over the next 3-4 weeks until news. New deal with Heritage hoped for later this year?

Huge advantage to keep the programme rolling continuously. Funded for Royston? Will have to see at around Q2 next year. If Coho and Cascadura as successful then it will be self-sufficient and will not require financing. When the team applied for the certificate for environmental compliance, this covered 14 wells on the Ortoire block and they are approved. Development side of things - Heritage wanted to get a long term plan for the field development PB see's this as a benefit to all the operators in T&T. PB on the T&T budget - Increased deductabilitiy of SPT to 25% from 20%, well received. Field-level netbacks are just below 30USD (this is considered the breakeven cost). Why haven't management bought more shares? They fully participate in purchases once a year. PB has been buying it for 3 years. Summary - Coho-1 test results end of this month and Cascaudra-1 depth at a similar time. PB hopeful can strike a new deal with Heritage on the development side - this will be RNSd. Nov 13th - Q3 figures are out.

From ADVFN. Credit Tektonik:

My (sloppy) notes before I accidentally disconnected and missed some questions: Looking at bringing in a different rig to drill Royston, but can potentially now use the existing equipment so could save both time and money here. Funding for development of the Coho-1 well - Finance this 3.5km pipeline. Assuming testing comes in line with expecations. Revenue could be generated by Q2 next year on this well. Rig at Cascadura - spudded last Friday - drilled to surface casing at 1800feet this morning. Will be drilling out next section of hole 3-4 days from now. Should be a TD at the end of the month. No RNS about Cascadura-1 because they view this as a programme, a press release will be out after test releases and other news worthy material, e.g. logs, production, financing. Cascadura is a full well programme (oil target). Produced 27k barrells of oil, aiming to move up the structure to test to around 8100feet - deeper than what was drilled previously. Thicknesses could be up to 400ft. Potential to have a lot of oil if the team have got this right. PB considers this as an appraisal well, and have been given contingent resources for this well by the independent consultancy. Drilling this to prove up a concept to generate another 10-11 development wells - therefore consider it as an exploration play. "you can see this is an oil and gas fairway we're drilling on" First week of November - Cascaudra and Coho results due. Move rig to Chinook-1 after Cascadura. They'd love to perforate the results to add them to the year end reserve report. Chinook-1 - was originally a 3 well campaign - now it's a 4 well campaign. Seperated from Cascadura due to them being entirely different structures and therefore prospects. Chinook-1 came along after the team understood this a bit more. The team "likes what they see" on the logs. Potential oil in the core but higher risk (no previous oil recovered). Team needs to be a bridge to reach this site across a river - it's more of a "creek" - cost c.380k USD. It's as exciting as Cascadura, thickness slighty thicker than Cascadura. Chinook-1 - Same rig used to drill Coho and Cascadura - similar target depth - Herrera sands, turburdite deposit in the oil window. Budgeting - company is cashflow positive at this stage, but the team intends to drill this within existing resources, but will require board approval if we get deeper into Q4 (as cash will be low). Can latch onto existing infrastructure here. Pipeline connection at Cats Hill so nearby. Royston-1 - "the monster target". This is a much deeper target and will therefore need a much bigger drill rig - Looks similar to the Carapal Ridge structure. Gas well. 50 years prior to Carapal ridge - could be the same size as this but drilling off an existing well. 10,500feet (2000feet deeper than existing wells). What the team are finding now that the rig the team have there's a possibility they can tackle it with the existing kit.

"Taking 2x off the table is never a mistake no matter what happens next. Leaving money on the table is one of a traders most common mistakes".
Yep, a lesson I have learned the hard way. Watched stocks going up, and thought 'this is going well, a bit more would be nice', only to watch them go back down again.
Gaslady gave some excellent advice a while back - "Don't forget to take some profits".

Aminex is still the 'Operator', so presumably this cash advance (and it is just a loan, really) is to allow AEX to progress some prep work while they wait for licence / transfer approval so APT can takeover?

I think the interesting bit is that the BOD has managed to renegotiate the terms so that the payment comes sooner, and ARA is keen to crack on. The advance also means no more placings to keep the lights on while we wait.

Repayment of debt increases equity. Investment in capacity driving down unit costs and increases asset value. Increased revenue stream from delivered monazite project. Reported price increases. Plus there's the aquaduct, education, and the roads. But apart from that....??

Looks like. Sustained interest is a good thing for us LTHs. The big questions is...is there knowledge of something in the offing, or is it just speculation that things are now progressing in Tanzania?

I must admit to having topsliced some of the shares that I bought as a topup at 0.69 for 1.26 this morning. So I have increased my share holding overall, at no cost to myself. I remain confident in the long term prospects (hence why I didn't sell all), but felt it prudent to take some profit, as there isn't actually any news as yet. I suspect there are others in a similar position and mindset.