Member Info for HopefulDave

Lol. Maybe nobody has taken a 1.5k haircut.

Maybe not all the shares were taken up so PB were left with £100k (or more and still more to come)

So distinctly possible that approx £51.5k (or more) had already been sold above 8.75p in tranches and they have now broken even on that £100k or even made a little.

PB would have got a fee and it would be more than possible since the deal was announced to have sold a fair few at 8.8p or above via broker arm.

IMHO likely that there were some not taken up and left with them and they have been flipping them.

Any more left - who knows. Could be it, could be a fair chunk more to go, you just don’t know.

I would think that’s far more likely than a PI bought £50k then thought oops and sold them at a loss, would they even have the shares to sell yet? Still be stuck in PB land wouldn’t they?

Anyway. No point worrying about any of it. Once it has churned away and goes freely without any overhang it will be able to climb again.

And before the usual suspects call ramp omg he’s at it again.

I just said it could be done and dusted, or there could be more. You just don’t know! It’s all just guesswork.

“How does a owner of the facility ‘cease its operations’ when full completion of the site isn’t till 2020?

Because they are referring to cease growing cannabis.

Cannabis and hemp cross polonaise = not good.

Plants being removed.

New soil (as per RNS) being sourced.

Our new plants growing indoors in April.

Aiming to plant 20 acres this year outdoors, aiming for 100 acres planted in 2020.

So cease operations is effectively not growing cannabis, removing cannabis from the site, removing anything else that is not remaining in the site for us, nothing overly complicated.

Perhaps, as they saw the results of the gas mix, they have done the best thing for them also?

Perhaps the best thing was a partnership?

I said a while back it would not surprise me if we forged a closer tie up with them, again I did not expect quite this scenario.

As it is they can now grow the crops with the gas mix, gaining up to a 30% yield. The trial was 50 plants, tried against the entire control of the entire remaining crop. The average yield across those 50 plants was a ~30% increase. I guess that was just pure luck huh? Did you see the video? The plants were side by side control, gas mix, control, gas mix. It’s as conclusive a trial as you could hope for. It’s also a proven scientific process.

The staff / owners from District 8 now have a chunk of HNR. They didn’t get a bucket of cash...They will only benefit if HNR and they succeed. They can gain the benefits of both their own growing operation, and gain from future gas sales, ED revenue, Helios, DTU any of it.

The hemp operation can provide revenues for HNR, and can feed into HNR’s other projects, so those revenues can then grow and expand a business they now have a stake in.

Win-win situation for them.

The losers, anyone holding shares *now who needs to sell them, now*

The SP had fallen to 11p and we needed a revenue stream, and a decent additional one, to come online before the year ends, to set us up and keep us funded and able to expand next year.

ED would have kept the lights on for 2019, despite D14’s ramblings.

I get the PB placing is a swift kick in the nuts, but the positive aspect is, usually the pain goes away.

I can understand the negativity and the pain, but the SP was not going to magically lift off without:

More wells in ED - although revenues would come later and possible delays as we have seen.
Gas sales / revenues from Kansas
WD being monetized - clearly taking time.
DTU - not going to move on until more $ available / we can transport gas (although we will have a truck now..)
Helios - a long term play, even if can dewater for free.

So this can deliver revenues, in 2019 and beyond, year on year, and maybe that’s the motivation for the D8 owners team?

You seem as positive this venture will fail as you were earlier in your assumption Robert invented DTU, but I’m simply suggesting it’s possible this is a good deal for D8 staff, HNR and *ultimately* the existing shareholders if this is the easiest and quickest path to profitability and expanding revenues, even if the SP now smarts a bit.

No it’s not canned absolutely 100% it is not canned.

They wouldn’t still be pushing patents through for it if it was rubbish.

It is at this moment in time with $ we have better to persue other options with our gas.

With a little more $ in bank and the N2 (Just N2) being processed I would expect them to use it.

Eski - Not only addressing what I want. Funny you say that as anything sensible written about anything such as why do something else for the gas and its values is 100% ignored by JJAL and just switches onto something else and then attacks that with zero acknowledgements of a single thing written.

Christ, even Diamond and I are on the same page with this.

"There is no point discounting the sale of Nitrogen to fund the DTU project due to the small income for each well. It would be much better to ignore DTU and sell the Nitrogen to other markets without any discount and earn considerably larger revenue and thus profit with considerably less effort"

I agree completely 100% with that. Make the most of the gasses you have which is what we are doing.

If the N2 can be sold and bring in significant revenue by itself continuously to a facility to process it then you will have a revenue stream established from that.

At this point, should you wish to pursue DTU you have the N2 cheaply at your disposal and revenues in which to assist the pursuit of it.

Look at the costs of the DTU tests. Last time we got 50/50 from the operator we performed the test on, that still cost us a fair chunk of change.

We do have N2, but transporting vast amounts of it without it being liquified is not easy, especially over distance.

So we could maybe do what 10 DTU tests, over all the time it takes to do them, set them up, get peoples wells ready etc for the money we have put into this initially.

Would take a fair bit of time and logistics to do all that.

Or you can bring in an entire team, including its facility and grow a big new revenue generating arm of the business.

DTU doesn't go away, might still do bits in this space but that development will take more time than delivering revenues from the gas using our own growing facility.

IMHO once we can sell N2 and have it liquified, we can certainly then bring online more wells, and could definitely pursue DTU more actively.

None of it is dead, it's just making the most of what you have with the easiest and quickest path to revenue generation.

Have already posted numerous times about WD and what happened there, so I have no need to continue to bring it up.

N2 paid for DTU. $9-11 an MCF. + a DTU royalty fee.

“We could sell the gas at a few dollars a litre”

1MCF = roughly 40 litres at ~24.5 cubic feet to a litre.

A few = 2-3.

Price therefore 80-120 an MCF?

Hydrogen concentration via PSA requires roughly 4000ppm to be concentrated to 8000ppm.

So therefore 2 parts our gas stream to 1 part our fertilizer mix.

So 1285MCF of fertilizer mix.

1285MCF of N2 which is a by product with no hydrogen which could still use for DTU later.

“Make the most of the gas you have”

Urm. Which one is worth more?

And can still have N2 for DTU.

What are you saying JJAL. We were told we were mining for silver, but we found gold, so we should not mine the gold?

“HD anyone can grow weed” Indeed they can. But organic is a benefit. There are always people that want organic produce. Having your own gas you can supply instead of buying your own fertilizer is also a benefit. Having a gas which is organic and gains 30% yield is clearly a positive, you seem to give that zero credit. None of the above is a ramp they are all facts. This can start growing in 12 days time. Now if you don’t believe them and think it’s all bull that’s fine you have your opinion and I have mine. I’ve stated plenty of times if we used the shares I thought it would be in a strategic placing, or partnership. I said I didn’t think they needed cash (for purely operational keep light on reasons) and they didn’t. I said I never thought any of the shares would end up in public hands / a public placing as I thought they would use them in JVs or partnerships or like when they obtained the section 15 lease. So as I said I was wrong on that, but likewise Diamond was not correct on a “money run out 5 months ago public placing call” either. None of this placing just gone is to keep the lights on HNR running costs. It is for the “new” but as mentioned mostly established business in terms of facilities, people, training etc it’s all there. Plant and grow and harvest. I’m simply stating I think it was done quickly for the reasons I outlined before, basically because it enables us to grow now and get a first harvest in a few months and get the best initial returns on our Kansas gases. The industry is growing, we have got an established growing facility and the people to grow it. Wholesale pricing is realistic and profitable, additional products of course will need brand establishing and may or may not take off. But as said we have the staff who grew D8’s brand working for us which is a benefit. At $3 indicative wholesale pricing and the yield expected it’s a good deal, and if any of the branded products take off that will yield bigger returns. It will also showcase the gas on a grand scale. If you don’t like what I’ve posted that’s fine, can agree to disagree. PS Diamond we never ran out of money to continue as we were, and we won’t this year either, ED will fund our overheads. The proceeds of this raise all go to the startup of our new business. You were still and always will be wrong about that. The warrants for and incentivizing the new staff only run until June this year and will also bring in ~$550,000 on top of the $1.68m this placing has done. So assuming that comes in that’s more than $2m for start up, and profitability is expected this year for the new operation. We don’t need to drill any more Kansas wells unless get a deal to sell N2, which would bring in $ in itself. We don’t have any other projects that need our own capi

Nuba.

We are covered operationally by ED revenues from the oil and gas being produced not from cash already in the bank as stated, so we couldn’t unfortunately bring forward 4 months oil and gas revenue and spend that now. Hence the placing.

Other reason for speed of the placing is obviously you inherit the staff, facility and costs of it straight away, plus the other start up costs so need some of that kit.

As far as the indoor growing is concerned. It’s the same facility so will repeat it can start up quicker.

Cannabis products were restricted to Colorado sales due to federal law, whereas the Hemp and products are not.

With the initial money, and all the gas the bugs can eat, we can start growing pretty much straight away, and expand into this space.

The big difference is organic growers aren’t that common. And those that are have expensive costs. Our own gas gives us that ~30% growth / yield improvement and it’s our gas so our fertilizer is to all intensive purposes as good as free (just the cost of extracting the gas and taking to site)

Also note in the RNS. The staff will be incentivized with shares, not just shares of the growing facility and business that they were in, but a business with the other assets we have as well.

It’s a win win all round for them. And once everyone forgets about what is at face value a low SP raise for us, but actually puts in perspective what it got us (put together with our gas) you have up to 290,000 plants in 2020 which have a ~30% higher yield than any other organic growers.

It makes sense, the SP smarts a bit, but we wanted an additional big revenue stream. Look at the numbers, it is just that.

Eski. Because unlike oil wells which require time luck and the weather tonnes of money etc this business is ready to go.

The facility is ready it’s already kitted out to grow, the plants will start growing within days that’s why.

This is a “start up” but it has the facility already. It has the people already. It can start growing in days and first harvest in months.

It’s not difficult really.

Probably a fee.

BS. Good summary.

As I said before. If we used the shares it would be for a strategic reason.

I thought we might do a share swap with D8 and take a piece of each other’s business and form an alliance. This is a little more than that!!

But hey. What’s done is done.

We all knew the SP wasn’t going to magic itself up again until we had further news to deliver it. We needed the projects to deliver additional revenues.

Well here it is.

So it sucks the 8.5p placing. But that’s an overhang that will go away.

We needed another revenue delivering project. This is it. Look at the numbers.

We have secured the lease, secured the staff, have brand building experience and growing experience.

RP isn’t a one man band who will sit there with his watering can growing these. The people who were growing the plants before remain.

You wanted focus.

True are delivering ED for us.

This business is established in terms of a proven facility, proven people, proven kit and now proven gas mix.

The PB placing sucks. But needed to be quick, the place is being scrubbed. We start growing on the 1st day of our new financial year. We will have an initial crop in months.

We are funded for this.
ED funds the group as a whole, this takes over.

The SP might suck. But It was at 11p. It needed something extra to go back to 20/30 and beyond.

Wholesale $3 sales investment and return numbers are great.
% of yield going on other products going at 5* that... oils / smokes etc would be an amazing return.

Can still focus on other projects whilst this runs itself with people onboarded.

Placing sucks unless you wanted dividends in 2020. This can deliver that.

PS the one existing well can deliver all our gas needs for 2020 volumes and still have more to sell...
Anyone see the clue on sales price per litre of gas and convert to MCF? :)

You have answered your own question JJAL.

It’s ONE crop trial. ONE consumer. ONE consumer that is also a distributer. That alone could easily take a $m worth of product from a well which cost $250,000.

The other gasses also have value.

Where do you think the other revenue will come from?

Other crop trials, other consumers, other cannabis growers in other states.

N2 sales / Argon sales / a Joint Venture.

Everyone was recently bitching about Greatland who ended up with a $65m JV.

There are large consumers of N2 in Kansas. Just because something hasn’t happened yet you assume it won’t.

The gas pipeline in ED took over 8 months of negotiations before it moved forward, but it got there in the end.

The resource is there and is undeniable. It’s about options and deals.

We still don’t know about the Argon viability. We await the crop trial results. Either one of those as viable = a monster premium to that of purely N2 value, and potentially unlocks the Helium also. There is still the molecular hydrogen by itself.

We don’t need oil and gas revenues to develop Kansas.

We can generate our own funds to develop Kansas or a JV can come along for Kansas.

At $250k a well it’s not like funding $7m oil and gas wells that take a few years to pay off.

It’s a $250k well which a tiny volume of its gasses can cover the cost of it alone, and more can generate revenues.

Do you think that a successful crop trial would mean D8 buy a bit of our gas of us and nobody else will want it, is that what you are trying to say?

Having applied a conservative choke it would seem holding back the oil and gas will not only lead to Enhanced Oil Recovery (ultimately more revenue over time) but also been a good move as WTI continues to build strength and now around 59. Oil and gas held back and therefore smoothed out over the following months would also seem to now obtain a better price.

Gas also back at 2.87 should indicate we are receiving around $3 for the residual gases and around that $5.5-6 figure for the liquids.

The initial crop trial is due to finish soon. Let’s see if can shift more gas there on this one single crop trial and see what else comes of it.

District 8 can grow thousands of plants simultaneously, not just 50. Scale up the usage and revenues could easily increase significantly. With distribution rights for cannabis and hemp growing it would be interesting to see how quickly things can progress with that.

Either way, other organic growers of other produce will take notice of the results. Additional crop trials could follow.

There are still ongoing negotiations to liquify gasses (N2) from the well.

Additional revenue streams possible from Epiphany.

Monetizing WD to an extent has already been mentioned.

Additional wells in ED could come along soon also, and IMHO might not be the lower sections and might be able to be developed sooner.

The company has made noises that ED is a primary focus. More wells is a primary focus.

We have a finance deal that is not tied to the lower sections.

Eric stated additional wells is a focus, lots of noise on this. Join the dots...

Whatever happens. Additional ED wells that need drilling would take time, so yes those revenues would not be established for a while, but existing ED will continue to deliver enough.

Kansas can hold its own and expand purely on sales of the nitrogen-hydrogen mix if D8 take up enough, let alone others. An N2 deal there would certainly provide the revenues to go it alone.

If not always a JV to be had there..

Keep nibbling.

Damn spellcheck EUR / EOR

DTU/Enhanced Oil Recovery...

Meh. It’s Sunday. Need Coffee!

Happypennies 5 years is a long time.

The company has some smaller projects and some bigger projects.

In 5 years you could be looking at Helios unlocked, or the C02 fields being developed, dare I say it even the EUR plays (DTU) doing something.

Impossible to think what it could be worth then.

Most importantly right now is development on the near-term projects.

More free carried wells in Denver - Delivered and paid for by partners
Sales of Kansas gasses - Nitrogen Deal, Argon viability, success of the crop trial to look for here.
Development of water business - Epiphany expansion or (later on perhaps) supply of water from Helios.

Also have the possibility of monetizing WD to an extent, and DTU/EUR patents are still going through.

If we can get some of the short term goals over the finish line, we will be worth a lot more than we are now.

If Kansas can deliver more than pure N2 and the hydrogen and possibly argon components can do what we hope they can, I would expect before your 5 years is up you would have earned dividends equivalent to the current SP or more by then.

But as mentioned DYOR.

Plenty of posts here allude to the possibilities of what we have.

Read the RNS’s and then Google will provide plenty of real scientific data on hydrogen crop trials, depleted argon value and investment in water services in the oil and gas industry for starters.

Expecting news soon on crop trial and hopefully more on wells. The team are over for 2 investor events on 27th and 30th, so opportunities to meet them there and talk to them, but I’d expect news could be released before those events.

For clarity, I’m one of the largest shareholders so obviously feel positive about the projects and people at HNR or I wouldn’t be. Have spent lots of time with the team, and visited the crop trial and East Denver with them just 8 weeks ago.

Good luck whatever you decide.

It’s not that big BS, have had some real whoppers over time.

And yes I’m referring to the UT.

I don’t know if anyone here has ever written a business case before? I have been involved in many, it’s part of my job when evaluating new technology and adoption of it.

People are thinking in simplistic terms for the crop trial so I’ll put it in more perspective.

Control and costs associated with it:

1.) The control plants are fertilized - There is a cost associated with that.
2.) The building is a limited size. If you want more crop you need more building - construction and land cost.
3.) If you need more building, you need more light, more power, humidity control, sensors, water pipes, pumps, basically, if you want say 30% more yield all of those costs go up 30%
4.) District 8 is not simply about plants, it’s about finished product. Whilst each plant individually may be worth X by purely itself, once it is turned into one of the D8 Blunts or Spliffs it is worth considerably more. They can only make as many as the plants provide crop for.

So when you are making assumptions on the “initially received” amount for the crop trial, and dividing it by the number of plants and trying to work out viability. Think a bit more.

The calculation for how much value is added to that plant is not as simple as the initial $8,000 / 50 therefore $160 per plant, therefore that plant needs to worth $160 more than before to break even (assuming no additional revenues been received during the trial)

You would need to subtract the cost associated with fertilizing the original control plant with its organic fertilizer used presently.

You would need to factor in the value of that plants finished product (yes there would be costs in making the finished product too, but you can only make as much as you can grow)

You would need to establish how much it has cost to grow that plant in terms of power, space, building etc.

Then you would compare the costs.

This is not a complete breakdown obviously but goes to show it’s alot more than plant needs to be x% bigger to break even, and Y% bigger to make a profit.

For example: D8 would need another one of those giant buildings pictured on Twitter before and everything in it, to get a 30% yield increase in the control scenario, growing as they do today.

If the gas were to deliver that same 30% yield increase. Then you have saved your original fertilizer costs, + 30 % more original fertilizer costs, + the cost of all of that infrastructure, and running costs associated with it.

With a finate amount of land and resources, that’s why increasing crop yields in the same footprint is so beneficial to farmers / growers of any produce.

It’s why any increase in yield is valuable, and the viable range for good, great, and incredible may be a lot lower than a lot of people anticipate!

Are you still out with your trading pot JJAL?

Just interested in case news lands.

Report it. It’s a ban. Keep it quiet for a few days.

Thought it would be too busy eating yet more humble Karma flavored pie after yesterday’s ridiculously childish post..