Member Info for HopefulDave

Fad precisely that.

Even if just get enough to zipper frak the next two in the same formation, you are pretty much guaranteed the start on them, and by the time you have IP’d the first 3 and zipper frakked next 2 you’d be further down the line and able to source the water for the last well. (Assuming haven’t reclaimed enough from flowback and operations to carry out the third)

Ps. Anyone have any idea where we “moved these units” from? Would they have been something we had for dewatering Helios initially / watering eagle?

Sound like handy things to have about. Keep about for WD operations!

Putting another angle on things.

We dropped 5% on an RNS that pointed to lots of positivity in footnotes but everyone thinking no extra revenue until Dec / Jan, Someone even posted “who wants to flowback in December/ Jan, more like April”

And as per usual a certain ****ter poster is posting carp about placings again.

Not only are we due news on Nitrogen, possibly DTU and no doubt WD but I would have thought the only thing negative in that RNS was a delay to ED.

My thought is that delay could be for the last 3 wells only, if they are indeed looking to use flowback water to frak, they need wells flowing back to get it!

Don’t worry I’m chilled out enough, but not enough to switch off from my investments, for they are my route to this lifestyle on a permanent basis! :)

So interesting have been on my sun lounger and re-reading the RNS the other day...

Anyone care try to decipher a couple of points....

1.) Water treatment units to treat production AND flowback water.

So let’s have a think about that...

What flowback water?

If you still looking to frak all 6 before flow-back, what flow-back water are you treating?

And also if you have completed all 6 and it’s December time, why bother to treat it then and “sell it back to the operator”

So we are “Staggering the operations”

Well initially we were doing 3 fraks then 3 fraks, but now “staggering them”..

So we have some water inbound, plus of course we can treat what we are producing. (which isn’t loads / enough to frak with)

So to the main question?

What’s the point?

Why put those water treatment units in, if we still going to frak 3 then 3, then flow-back and IP all 6?

Why say we are going to treat flow-back water?

Doesn’t make sense right?

If then is December, the chances are there will be no water shortage then, and we won’t have any wells to frak so meh... why treat it?

A) Because you need it NOW.

Surely now there is a possibility of them completing the frak stages on the 2 left. (Just 40% left on each) so 44 stages left in total for both wells, to bring the total to 3 fraks completed, and 3 fraks in waiting.

So if everyone is sat around twiddling thumbs waiting for water why not do ***what’s suggested*** in the RNS....

Surely we are looking at flowing back the first 3 wells to generate the water required to frak the next 3. And if you flowing back the wells, you may as well bring them online? - they would need to be online to have produced enough water to start frak operations on the next 3 wells...thoughts anyone?

How can you blame Highlands for a massive water shortage in the area, and they aren’t even the operator of those wells now!?! They have done something about it, but a delay is a delay and the SP reacted accordingly. Thankfully it isn’t our cost being hit to deliver the Frak itself. I am disappointed how they haven’t bigged up the fact they have significantly increased acreage in WD and in Kansas however. Perhaps this is “bad RNS” out the way and then let the good news flow from here?. The acreage increases are significant, but appreciate the “jam tomorrow” mentality that creeps in with it. I know we need more revenue, but one half of what they said they would do in Kansas has already come along, additional acreage. We really need commercial news on revenue from that to come along next. SP disappointing as a result. But at least there is visibility on them doing what they said they would in Kansas and WD with regards to the acreage increasing. Hopefully that WD land acquisition is almost complete and can see permits go in for those soon, and also then any financial partner news associated with it? Kansas has expanded acreage as they said would do, but the SP will react mostly to news on commercial sales I guess, if they announce that soon it will be with that additional acreage in mind, so will take that positive out of this. They can’t be blamed for the weather, and the bigger picture is looking bigger all the time. Just want that $ RNS from Kansas.. to set the ball rolling, until then I guess we will keep treading water.

Has anyone covered (or was it on the call) the possibility of income from Cibra over the course of our build?

If they have a $500m turnover, I wonder what their profit is, and how much money they have provided to their parent company over the last few years?

I was wondering if we could “expect” or be hopeful of any form of dividend / income payment from them with our 30% holding and if this would simply result in us drawing down less debt / be used to go towards other components (conveyor shortfall / mine expansion etc) if so?

Haven’t listened to the call yet so not sure if anyone asked those questions or indeed if anyone has posted anything so far today on the subject, on hols and sporadic internet today...

Noodle I rush posted that as taking off. Im not sure if it said zero capital outlay, and I meant as in on drills / fraks as opposed to initial ( current ) lease acquisition, permitting etc.

So of course we spending money on it. I mean hopefully not on the wells themselves. The planning permission analogy I used before....

The figures are more likely ~ $600,000 in the first month after IP (imho)

5000 bopd *.8 (royalties / state) * 7.5% = 300bopd to us.

As a free carried interest there would be operational costs to come off that *but zero capital costs* it’s not based on overall well profit and loss but ongoing p&l as carried free interest kicks in after capital costs and when wells are in production.

The gas should all get sold down the pipeline so, with ~65 a barrel received and a few dollars per barell ongoing operational costs hence my $600k figure for IP month + gas or higher open costs offset by our gas revenue.

That will then decrease based on the decline curve of the wells, over time. Sharper at first, and then eventually slowing down, at a point in the future when it makes sense the wells would be refrakked and figures would increase sharply again and then begin the decline curve once more.

As a revenue stream it will produce for a number of years. Even when the wells are all down at 200bopd. (1600 bopd total) it’s circa $175k a month ($65 oil price). They will If mirror the first wells hit that in 10-11 months
from IP,but in the months prior decline from $600k towards that figure.

However. As a revenue stream they will keep pumping money in for years. Even if left ticking away at $150-175k a month that would pay for an Eagle well drill in a month? Mostly pay for a Kansas well etc.

It’s clear we want more revenue generating assets. We have plenty of potential for them. The SP is where it is at because at this moment with the negotiations and developments ongoing, there is no 100% black and white RNS stating we have sold X at Y cost for Nitrogen, or Helium or as yet extra ED wells online, or WD wells online.

However. WD upto 48 wells. (And with 100% lease likely to retain much higher %)
Kansas wells have serious potential for close revenue stream
Helios has insane potential for big revenue stream (but higher risk)

We are where we are as people want to see more revenue.

Fact is news on that additional revenue sources could come anytime.

Kansas could deliver it.

WD could deliver partners funding wells and us free carried interest at 15-20% of up to 48 wells.

It’s not a case of just potential. The models are there and proven. Kansas could be super big.

But people like it *IS* super big.

That’s what you invest for here. The potential for super big, one RNS with a deal on Kansas Nitrogen sales and acreage and we could be flying.

WD could produce steady big revenue stream with zero capital outlay on drilling / fracking etc. Others could spend $240m+ of capital to develop those wells which we could keep ~15-20% maybe a little more after reversion of the oil and gas from.

There you go JJAL. A Balanced message form a long term *investor*

Off on my hols now!

The wells will flowback and IP on time. Don’t worry about that!

Frak won’t be much longer and then drilling out the plugs on each well will happen and flowback will commence.

We will then get the revenue from these over the winter months.

In the meantime we will be planning further the West Denver play, hopefully permitting that and getting plans in place to drill those in Spring with luck. Having the surface agreement in place (and discussions I had with Robert) it’s pretty clear that they know where they want to drill, so imagine winter will pass us with oil flowing from ED whilst we eye up and hopefully partner up with WD.

The actual Frak process won’t be that much longer, they have committed to starting it ( and well into it ) with the crews there and already doing it so they won’t be stopping, more cost effective to keep on going now the equipment is setup and crews are there!

Not the first time I’ve said that Blue. :)

LL - the market has priced in uncertainty, nothing more and nothing less right now!

But 100% agree that it will be a completely different ball game with the $3bn debt done compared to the current situation.

Totally agree. Acreage is no good if you can’t develop it.

That said. The economics of that Nitrogen well is pretty clear to see in output V cost.

I’m hoping if acreage comes, it’s big and with someone who will also work with us to develop it.. keep our own patch for EOR. Big clues in the we believe we have enough for DTU already, and working on acreage expansion and sales?

Meh. It’s a day closer to revealing whatever they are up to in Kansas.

Fadec.

Nitrogen and Nitrogen marketing.

Remember they are (as per presentation) happy that the Nitrogen they have should be good for our EOR plays but also they were looking at extra acreage options and marketing.

So it’s possible to hear we have a) acquired more acreage and b) as a result entered into a deal to sell it. :)

Andy I wasn’t aware a completion bond was dilution. Please do not talk in absolutes when absolutes are not known.

It could be dilution.

It could be dilution of a $400m raise against a $3.4bn total raise.

It could be dilution of a $600m raise against a total of a $3.6bn raise.

It could be that we get $100m of completion bonds to offset it so we need $300-500m

It could be that we secure $200m of completion bonds and $100m of unsecured (non equity) bonds leaving $100-300m outstanding.

It could be that we get (end state project dilution) in the form a Royalty deal. The impact of a big name player, and the lack of any shares being issued at ST2 could provide the biggest rise we have seen to date however.

So STOP talking in absolutes.

There is no guarantee there will be any raise.

There is no guarantee it will be $400-600m being required IF there is a raise

Nothing is absolute here.

The markets don’t like uncertainty and they don’t like oopsie moments like our tunnel is actually a bucket load bigger than before and is going to cost more.

What the market *COULD* like very much is confirmation in Q4 that the commitment letters are there.

It then *COULD* like the figure that’s outstanding $400-600m

And it *COULD* like limited or no dilution.

Right now if it turned out that we could cover a few hundred million in completion bonds and only needed to raise a couple of hundred million dollars alongside a $3.4bn finance package, those shares would be fought over tooth and nail.

So stop talking in absolutes with regards to dilution as there *MAY* still be none...

Don’t know either way if will or won’t.

Cranleigh. Something many posters have chosen to ignore, but still possible for a part if not all of the overspend as you say. Many still upset and spooked by the overspend and rightly so, but as you say it’s in the RNS and an option so even if not used for all the contingency funding requirements it could still account for a fair chunk of it.... More convenient for many of course, depending on their positions, to keep using the dilution word and chucking crazy panic prices out there, before no doubt coming round to the idea it’s a possibility when their positions change... Still. It’s the weekend. It can’t go down any more for the next two days at least. Hopefully after two more days rest people may have had time to reflect more on the positive as well as negative aspects of this. Storms hopefully over, choppier waters perhaps lie ahead now than we would have had, but let’s hope that’s the worst of it, and we can look forward to TorPs, guarantees, debt mandates, and maybe even some completion finance deal(s) along with construction continuing and our mine getting built. It will get built, and it will make us money, despite the doom and gloom and panicking. 13-20% of the overall raise required to be found, and *IF* any completion finance can be arranged that number could drop further still or disappear entirely. I could live with another year without dividends from this if still gets built with 0 more dilution!

Try not to get run over when you bend down to pick it up....

Andy your negative stances are getting even more negative. Now trying to state the tunnels will be slower. The contractors expect to be able to deliver based on 17m a day each TBM, but expect they can go a bit faster. I’m sure they want their pound of flesh and put enough headroom in there so they can come in on time or before to get their maximum cut... If anything, they are more likely that ever to deliver the shafts and tunnels on time or earlier now. One thing creating panic about placinga that might not even happen yet and another to start questioning the contracts which the lenders want to see. They want certainty of delivery to lend, that’s why they want these expensive contracts, but they should buy us protection from delay from the stated rates and dates as that’s what the contractor is getting paid for...

Indeed. Whilst others are shutting down wells ours are going ahead...

The deal with Gina is going fine we haven’t been told otherwise so it’s still on the table.

You don’t want a deal like that as it would mean 0 shares hitting the market and screw you now you sold out!

Long term it would potentially not be the best thing but short term would finalise ST2 with no more shares on the market.

If you create 15% more dilution then that’s 15% less in share growth and dividends.

If you create 5% royalty you get 5% less in sales to 13Mtpa and another 1% to 20Mtpa in production.

The sort of investment only the super wealthy can make. But if that happened the short term impact would be ST2 is done and no shares on the market.

That could still happen yet. Not that far fetched a scenario and if it did most people would be over the moon as the SP would fly.

If you still had some shares that is.

I’m not saying that would be the best long term solution by the way, and might make the final project economics less attractive (depending on %) but if they have

1.5bn on table already.
Gov deal for 1.5bn secured debt.
And a royalty deal of $400m with or without equity to partner..

The SP would fly as there would be no more shares and the mine would be being built...

As much as the market wants it’s pound of flesh it may be easier and more preferably (depending who they are) to have another royalty partner / strategic investor.

You’d be super pi%%ed if you sold out waiting for news of a placing then, as you could be looking at a monster re-rate on that sort of news, which is distinctly possible as opposed to a placing..