Member Info for IAmNotAnAnalyst

Regarding the WM theory - I would have thought the soil/rock analogue would be a little to far distant to the fractures...after all we're not talking about a continuous depth made of many many 'bits' of soils but solid hard rocks which cannot self organise large to small.

However, it did provoke some thoughts in my mind in relation to depth. As with depth comes age of the rock and higher pressures/stresses which would drive more breaking if the rock and hence smaller prices.

Those are just my thoughts for what they are worth as a non oil expert and non geologist...and as my name says not an analyst (which somehow means anal passes the filter!)

I was interested to read about Dr T's dismissal about the water cut question. Personally I felt the awkwardness of the exchange and thought Trice was a bit harsh. But the defences are correct, if the information was out there already why should he answer the question? And what kind of analyst had the balls to ask the question without the self awareness that it would likely show you up as someone who hadn't read the documents the company publish? My final conclusions was that Trice was right but could have handled it better - it's generally better to be magnanimous in victory and I don't see why that wouldn't have been the case here.

All said about the CMD, although not perfect I think it was a great day. I don't expect these guys to be perfect sales people, they are tech experts and in Trices case a true technical CEO first of all and that shone through for me.

Yes interesting indeed progress at HUR!

I think I'll put a buy order in for <£17 to see if I can get some more shares at below cash in the bank values. Then I'll probably reduce a bit later if >£20 (dependent on prospectus and PoO of course)...but that's just me and I've lost plenty!

I think we can all safely make a few rope jokes tonight, what a day!
Some of the grey has been cleared away, those big possible downsides have been shut down...and the upsides are looking more likely. What a turn around from the last few weeks with some questioning and concern.

Totally understandable for Wulbert to clock out...the BBs are very interesting but also a bit addictive, I'm reading them at all hours to the detriment of other parts of life.

Thank you all for the information which has kept me invested despite some shaky moments and we'll done HUR and the good doctor!

Yes lucky indeed. It's the best share in my portfolio too, TBC dependent in the listing price but highly likely to be true!

TICK TICK :D

Are you thinking next Monday is the big day now then?
I was hoping for this week but now expect next Monday.

The Fed not dropping rates is good medium term for PoO.
A strong growing economy is the reason to not cut = good for oil.
A maintained, not reduced, interest rate means debt costs aren't reduced for fracking companies = good for oil.

Carrot, what are your thoughts on the $275m OM claim? I don't think you've mentioned it since those links have been shared (which are much appreciated).

Don't worry, he'll be back as soon as it drops 0.5%

And thanks for sharing

Wow Mogger, how do you know where to find this stuff?

News about the EPS but also data, showing what they've been doing commissioning and testing the wells and why that might mean all is as expected. I'm not saying an in depth technical review but a few graphs showing actual pressures vs expected (I'm sure I've seen that before in HUR literature) or whatever else is deepens appropriate to prove the longevity of the asset.
Geological insights might be helpful to arrest the recent falls in the share price but we need those other drill results really to add anything meaningful.

Exactly, and the sp wobbles on short term sentiment and the latest news...the stock market prices arent based on what people believe to be true, they're based on what people believe other people believe to be true (the quote goes something like that I think). This is a long term project and we're getting closer to answers.
That grey blob is going to become clearer and that's what we're here for!

It's not binary, but it has two extremes and a big grey area in the middle. Sometimes the potential upside gets reduced, sometimes the potential downside gets pushed up...then there's a big grey blob of possibilities in the middle.

It's different with conventional wells though, there just aren't as many fractured basement examples around. Compared with what maybe a century of more conventional oil well drilling. How many wells producing from shale and for how long did they produce for, for the majors to start to take enough notice to open their chequebooks?

We never really talk about there being an oil price floor. If shale is the activity setting the PoO by dragging it down from where OPEC try to put it then it's break even price will be the bottom. From what we know shale really struggled with WTI at $40-50. That past experience suggests the floor of Brent was at around $50. However, considering the well documented shale expenditure exceeding income in the last year or two suggests Brent of $50-60 is more like the floor. Add to that the number of shale wells now sitting not in production means the majors, and others, know which side their bread is buttered and are trying to resist killing the golden goose.

Even if all that's true though there's the estimates of the shale patch plateauing but also CAPEX and OPEC costs dropping and pipelines opening. These will chip away at the floor price but I still see it as somewhere maybe uncomfortable but at least safe for PMO. We have additional production coming which will help pay the debts.

I'm thinking more longer term now and for me the best is either we sell Zama for a lot and develop some assets or shale production struggles and oil goes to $70+...the potential for a big ecomonic slow down generally is the externality which worries me, the yield curve is inverted in the US, giving a 30% chance of recession based on imperical data. We are due one, but maybe it's different this time? Also, where the pre-recession oil spike?

The point of the CMD is that we will have approve 3 months worth of information on the wells and pressures and so on. Of the 6-12months required to 'prove' up the resource this is a massive milestone. There really should be some early indications if things aren't going well (that'd be difficult to hide in any presentation) or are going exceptionally well...anywhere between those two extreme outcomes might be hard to tell, but everything progressing as expected incicates the model is more proven and that would be a big positive.
The unsuccessful drill was also a other milestone of sorts, although indirectly connected to the EPS long term performance projections. It told us that predicting these resources isn't without risk. But that's something that has been true all along, whether you acknowledged it or not. There are no sure things in the world of the stock market.

Remember though although the well was P&As, what was the CoS, 70% that's 3 failures in 10? And it did 100% have hydrocarbons so they weren't completely off with the predictions. However, the question remains - are there sufficient hydrocarbons to support long term production over a large area/reservoir volume(s)?

I don't think the bet has changed too much:
If it all goes wrong we're looking at a significantly overpriced company. Producing 20kbpd on a field with a questionable lifespan - that ain't worth almost a billion.
If that was just a hiccough on the road to success then we have short term likely expansion to 40kpbd and some massive oilfields to exploit with the cashflow. That makes a company worth way over a billion.

Let's hope the SD timescale is accurate - otherwise the SP is in big trouble.
It's drifting down as it is...when will it stop? I can't see anything immediate except SD online, and with the contingency and no progress noted so far I'm not filled with confidence things are on target for both budget and timeline.

It would be weird if they were so ambiguous about the second payment, my interpretation is that we are only ex-div for the first.
The second will be announced with a timeline after the half year results.

DBNO makes about 15 predictions a day, almost all of which are about oil dropping. They're bound to be correct occasionally. I'd like to see a run down of the % accuracy of their predictions, I suspect no better than chance!

As you said yourself is from a UK overseas territory. Particularly one which is costing quite a lot in military resources to defend.