Member Info for InJamesweTrust

Escargot
They are a bit like Broker Dealers but with a greater degree of influence on the final transaction terms. They match buyers to sellers (and vice versa obviously). They make money by transaction flow so it is in their interest to generate this but if there was a stack of buyers above 60p they'd not be dragging the price down into the 40's.
However, if there is little traction in an ask of 59 versus a bid of 54 the price may come down to meet the bid as ultimately that is what is on offer to the seller. Nobody is forcing them to sell at this level, we as PI's are price takers both in buying and selling.
On the flip side, when buying recently I placed an order via a buy limit and had the order filled mostly 5% below the upper limit I set. If MM's were on the take (the stock was up and down and hit the upper limit) they could have gouged me but did not.

Jahylock
Glad you're Back on the up.
Curious about the reference to the posts on this board?
Compared to some boards it is an oasis of calm.
Agree if we are thinking about valuation of the same SE.

Bigspike
Great post, really informative.

Exxon probably doesn't need to have independent CPR's to the same extent smaller operators like ourselves and even Tullow do. So in terms of confidentiality who knows but there is probably some sort of expectation about furthering the study of geology which will see them into the public domain at some point.

There may be a need for Exxon to share Hammerhead-1 info depending how much this discovery has in common with Latuk. Be interesting to know the usual convention here.

Be good to see Gil getting out there and explaining what you've said to ensure this is well understood by the market - presume they will be doing so with analysts, if they didn't already last week and thus the rise!

Its you
I was just doing numbers in head while typing. We're not too far apart. Start drilling and they change significantly.

Happysparrow
Think $5 a barrel is at least a year away, as there needs to be drilling to get these.kind of values. Not withstanding Hammerhead goes a long way to doing that for Latuk.
Given the Exxon success a value of 25c -$1.00 per barrel is more realistic. A TO now would not nullify the TOTAL option.
As the seismic continues to be interpreted to incorporate info from Exxon activity then the value moves up the curve. However, it is a highly successful area so if you take your $5 value and apply the Cos (22%) you around $450-500m. Or about £2.50 per share.
The CoS is very conservative due to Exxon info not being included and the size of the prize is also conservative due to a number of prospects not yet mapped/reviewed/interpreted.
As well as taking their.option - there must be a lot of value for TOTA in taking us out early because if they don't a financial player (SICCAR for instance) easily could.
Presuming successful drills in Namibia and periodic updates to CPR as further targets are processed it is reasonable to think any TO will only get more.expensive between now and drilling.

Haven't read yet but someone mentioned Latuk has 642m barrels assigned. Cos not yet reflective of Hammerhead-1 info which is very strongly indicative of oil presence.
15% (post farm in) gives ECO 96m barrels in ONE prospect that has in some respects already been drilled. Compare this to JoG MCaP with 12m barrels from Verbier so far and valued at c£40m versus £75m for ECO.
Lots of value to be unlocked.

There is a saying that big fields get bigger. 2.5bn barrels P50 and 2.4TCF is no mean feat (look at Sound Energy value on 2-300bcf not fully proven). From an original 700-900 m barrels being up to 2.5bn is cracking and with the oil in place it is easy to see that number climbing as more info becomes available.
Dare say there is still much read across to Exxon data to be done but they wanted to get the CPR out having guided on it.

My understanding is ECO have shot a further 400km.sq of 3-D seismic extending from LatUk area into Exxon's block to show the read across to our own prospects. Very sensible too as doubt Exxon would readily share. Believe the seismic shows distinct commonality between Latuk and Hammerhead-1 to the extent much doubt is removed on presence of oil in Latuk formation.
In HUR LanFax (Lancaster and Halifax fields which may be a single accumulation) are 40km top to bottom so 7km is nothing between friends.
The other read across will be around the traps we are looking at as targets and info on what type.of traps Exxon has drilled and been successful in. The potential for direct read across of Exxon success is pretty decent.

Not easy to get a quote for me either. Sheesh.

Ps I've had much worse levelled at me than most views on here when heading down to the Borders to play rugby as the weak chinned big city soft lads (I'll not repeat the exact words used but a bit more colourful than this). As prop/2nd row you'd need to.put up or shut up.

Don't mind being in the minority. Ricfle think your sentiments are spot on, the BB should seek to be collegiate in sharing opinion and info as we get more out of it and others who may otherwise be reticent but have a fundamentally.importsnt view not otherwise aired may not wish to post for fear of the response. The poll though I think is light hearted- I've mentioned the reasons for my concerns and it is for others to think what they will of those.

My main bugbear is the complete lack of (realistic)info on plans for GLA and the cashflow it is expected to produce. This may be as simple as working to the end-H1 FOIL timeline which is not what was strongly hinted at AGM and in other interviews.

However, it may be there are actual material discussions on going relating to GLA and consequently including anything immediately material TO SP on GLA plans just isn't possible due to knowledge of actual discussions to the contrary.

Short of these I don't understand the glaring absence of meaningful reference.

Don't know enough for SXX (SiPP will know more) but from what I understand they are still some distance to achieving cashflow/project completion. With this in mind, there is the potential for cash at hand to be insufficient or a delay to occur and hence a cash call for shareholders.
Company presentations am sure will give more clarity but that would be my concern - HUR seems more news driven.

Analogy is like many offshore investors who paid hefty deposits to buy off-plan flats in London 2yrs or more ago.

Their £1m flat is now being valued at £700k so they either pony up £150k shortfall and the deposit on the purchase price and hope it comes back or kiss off their 150k deposits.They bought too far into the future and are now impacted.

AdUK
Doing Analyst calls is actually quite standard.
The analysts then do their research notes or recommend a change in holding level if there for an investor depending on view.
There is an argument all analyst research should be publicly available as soon as published but then how would the Masters of the Universe get their advantage.

Biffa
I didn't say the company was imperilled by the deal, quite the opposite in fact. I mentioned the organic route can be followed without imperilling the company in event of fall in PoO, the corollary being I can see how the.proposed deal ensures drilling regardless of economic circumstance.

Jaykay1
Mentioned yesterday I think the deal may be down to the BoD having the jitters about global economic outlook and wanting to tie in funding at zero cashflow cost.
That is well or at all explained or covered.
If they are so hot on their fiduciary duty why book the PBLJ for next year and why order long lead items in late 2016 without the cash to cover them. Perhaps fiduciary duty is not a strong point, If PBLJ is cancelled it does certainly raise some q' s.
The kicker in all of this for me is where will the GWA JV be in early 2020 when only $180m has been spent. If the wire lines and resonance images show strong correlation with LanFax they will be in the ownership of another entity most likely.
Proving LanFax works at c.$25-30 a barrel is a massive opportunity to sell and if cashflow is poor relinquish drilling options so as.not to sail too close to the wind.
For the BoD to treat the deal as a wonder we simply a false narrative. There are many other strategic avenues without imperilling the company survival.

JayKay
CapEx is sunk so only Opex comes into play on EPS.

Full Year Operating cashflow is $272M, Dr T mentioned potential of AM being on site in Sept which would have allowed commissioning etc to occur pre-2019. 2019 FOIL cashflow on 1-Jan oil (which nobody seriously expected until now) is estimated at $180M. A delta of $92M or 1.3m barrels which is 80 odd last days - almost a full quarter.

However, there is the small matter of contingency and funding through H1-19 which was part of the EPS financing. Edison have contingency down for $50M and OpEx of probably another $40-50M (based on $ per barrel OpEx @17k bopd).

So $180M plust $100M = 2019 free cashflow plus $272M in 2020 and you have $552M. Get into Q2'21 and you're just about at the full cost of the proposed work never mind the carry value.

The drilling cost has previously been much more quick and dirty jobs to make them cheaper - one thing to be thankful for is this should not be the case under the plan.

My argument is with alternate phasing the same ends can be achieved organically and I haven't seen anyone argue coherently why this is wrong. My concerns are further raised by what appears to be a heavily manufactured Slide 5 that suddenly appears for this deal but is never seen before and the likely cancelling of the PBLJ - why on earth was it booked in the first instance?

Biffa
With a cost of $180m for first 3 drills please demonstrate why it cannot be funded?

Following these drills, I highly doubt any of the other scheduled activity will be required unless EPS does not.prove the Halifax element. In which case another drill and tie back in 2020.
Probably $300m total cost over 2 years.

Biffa

The drilling and activity proposed in the deal is no more extensive than that which could be achieved via cashflow. So why sell 50% of the licence?
In a new presentation it is highly odd little mention is made of what EPS cashflow will be used for - it is not for proving up GLA as they aren't doing anything (by their assertion) until 2021.

As a result, barring a collapse in POO I do not think the deal looks right compared to doing 3 drills as a stand alone.

Even if they phased the interest accrued by Spirit to reflect the value created. Their first $180m may be all they ever need to spend because the lot will be sold by mid-2020 if EPS works and well tests in Phase 1 drilling are successful.
What price then for their 50% $1,2,3 billion plus even as much as $5bn at $5 a barrel for 2C on verge of 2P? All for $180m.
Good deal if you ask.me and they must be ******* themselves.

Wellwell
They do mention a GLA drill but not until mid-2021 which seems ludicrous.
This is where there is a credibility gap with the plans.
Equally with what is happening to cashflow.

Biffa
Patronise much?

If we are paying back CBH debt we are screwed as it means they have not converted so that narrative is a bogus one. Why would they not convert - maturity is not until 2022 when they can be redeemed at par. Buyback is at weighted market price. Interest payments until end H1-19 Are also already in escrow.

My question which you seem determined not to answer - why can the company not fund drilling from cashflow? 3 drills at a cost of $180m? Why did they have a PBLJ option now relinquished?
Why not drill LinWick in2019 from cashflow and tie back then shut in a well on GLA and drill Halifax. Then tie this back.

EPS will have done a lot to prove well characteristics so proving up LinWick and Halifax can be done orgamically by end 2020.

Barring a collapse in Poo what about the above is unrealistic?