Member Info for KeithOz

I can only get satellite data every 5 days. There was no flaring on 20th Oct, 30th Oct or 4th Nov. Thick cloud on 25th Oct. Next pass is due later today, I will let you know tomorrow.

This is what the post stated: "news - Liberum is hosting corporate access roadshow for HE1 this week (7-11 Nov 22) Would expect a private capital raise to secure multi-drill exercise next year. Naturally, would come with dilution." No indication at all of where such 'news' originated, so unlikely to be reliable info.

OK, I'm calling Bullsh*t on this. Northcote Energy (LON:NCT) changed its name to Mayan Energy in August 2016, to concentrate on its waste remediation services in Mexico. Mayan later changed name to Attis Oil & Gas to reflect new projects in O & G. Management was pretty much the same.

While this was happening on the other side of the world, Helium One was already operating in Africa as a private company, managed by Neil Ritson. In 2017 Solo Oil took a stake in Helium One. I was interested in this, and bought a small stake in Solo. In 2019 Solo changed its name to Scirocco, still retaining its holding in Helium One. Around this time, Attis had in effect become a shell company, and neither it nor its predecessors had any connection with Helium One, as posters on here are falsely claiming.

Solely as a cheap way of getting a London listing, Helium One transitioned from being a private company by a REVERSE TAKEOVER of Attis in December 2020 and raising cash via an IPO. At that time, I sold my holding in Scirocco and bought into Attis. A couple of weeks later, Attis changed its name to Helium One Global. No Attis management, staff or projects were retained in the new company. Neil Ritson and other directors left to found Helium Ventures, and David Minchin moved in with new management.

Therefore it is either complete unresearched ignorance, or deliberate misinformation with the intention of deramping, to suggest that the poor performance of Northcote & Maya are of any relevance to Helium One. I repeat, Helium One was already in existence as a successfully operating company at the time Northcote & Maya were going down the pan, and at that time had no links with either of those companies.

As for alleged "Can’t stand the rampers who continuously post ‘nothing to worry about’ in leyman (sic) terms and unrealistic share price expectations without providing their calcs. Disgusting how they’re trying to catch out amateur investors and influence them to purchase, they have know (sic) shame." Interesting that no concrete examples are given - classic deramping behaviour to make vague, unsubstantiated negative claims. I have always been at great pains to provide my detailed assumptions when making forecasts of any kind, and find it very curious that none of the professional deramping team have EVER posted any reasons, let alone hard numbers, as to why my suggestions might be incorrect.

As @Prae and others have pointed out, the intensity and shrillness of these posts increases shortly before a critical announcement. Last week I posted this on another board (PRD): "When I see over half the page of this, or any other, bulletin board appear in green (i.e., people I have filtered) it is a good indication that positive news is imminent. This is the Troll Density Forward Indicator." For PRD that critical (positive) announcement came yesterday. The TDFI here is starting to flash positive.

@Jimmy. The Jurassic carbonate reef structure at MOU-NE is continuous with the structure drilled at TAF-1X (now TRF-1). As Wacky mentioned in his post below, that hit oil-bearing carbonate with leached porosity development (vugs). I assume the palaeogeography of what is now Atlantic offshore Morocco was not conducive to reef development, unlike the Guercif graben which at that time was the core part of the Rifian corridor linking the Mediterranean to the Atlantic. Also, even if there were reefs in the extreme west of the Rharb basin, post-sedimentation conditions were very different, since there was not the repeated tectonic submergence and uplift seen at Guercif. Groundwater circulation would also have been very different, so leached porosity could develop in one geological environment but not the other.

Curved drilling tools can be used to initiate a sidetrack bore as planned, or for an unplanned sidetrack around a broken string. TSX performance strongly suggests it is the former: Closed at 73¢ (= 47.1p), +17.75%, on volume of 800K, almost double average volume.

Former company names, former management, former owners, former projects. Sorry, this is of no relevance.

Thanks BRV, but I do agree with Caterham that this relates to different rates of taxation payable to the government for areas that are at different stages of development - particularly since it specifically states "FISCALLY ring-fenced". I will have a closer look at this tomorrow.

A serious question - is it actually possible to sell / farm out just a small geographical part of a licence, rather than all or a financial part percentage? I can't recall this being done.

Less serious - in a couple of hours there is a total lunar eclipse in Taurus - I'm told that is a bullish sign (pun intended).

Even less serious - I understand that the 4th high pressure wellhead is for GRH's stockbroking account.

@Bob - I'm sure Mrs Bob will be happy with the 'money for nothing' bit, but what about the 'and your chicks for free'?

I hope everybody will stop moaning now, and start marinading their sports bras as necessary. Happy Christmas, and an even happier New Year.

@Rionel. Good question, but I don't think there is a simple multiplying factor. The perception of value of Prospective Resources will depend on geological chance of success, so if already a high g.cos, then less change in value. Also, a Contingent Resource is exactly that - contingent upon a workable and profitable plan for extraction, so the costs of developing a Resource into a Reserve will also have a bearing on the rate of change of a valuation.
I'm afraid I simply do not have enough information or knowledge to give you a sensible idea for this particular opportunity - this is why there will be a whole team of different specialists in the data room for a few weeks.

It is my lunchtime, and I have "helpful" people leaning over my shoulder telling me where I have gone wrong. I hadn't gone wrong, ignore my last post, the numbers I used were already based on the 50% attributable to ECO, not 100% of 2B, so back to the £3.73p per share. That's it, no more changes.

No editing facility!!! ECO have 50% of the licence, so of the figure that an acquiror would be likely to pay, ECO would only get 50%. So halve those numbers per share - sorry, I'm in a bit of a hurry :-)

Part 3.

However, there are two important kickers:

1. The above numbers assume Prospective Resources. They will be worth more as Contingent Resource – i.e., they have actually been discovered. and
2. These numbers exclude the other prospects in the 2B licence, which may double the volume, and of course be further derisked by a discovery from current drilling

Maybe there will be a combined farmout - development for 2B, plus exploration, drilling and development on 3B/4B. It would make sense for a major to be interested in both, and it may be the reason a deal for such a juicy area as 3B/4B has not already been completed. I think this will move very quickly if a decent discovery is made on 2B.

Sorry, that was a lot longer than I expected!

Part 2. Valuation of 2B

There is a wide range of estimates for the size of 2B. Some of the estimates of oil resource appear to confuse oil initially in place with recoverable oil, and the 3 drilled prospects with the whole 2B block. For today, I will stick with the CPR P50 volume, since this provides a well researched base, onto which you can overlay your own more optimistic or pessimistic factors.

The Strand Hanson March 2022 CPR provides a detailed estimate of oil volume. This is no easy task, and Section 5, Probabilistic Resource Analysis, summarises how they have gone about it. Have a strong coffee before reading. The 2B input parameters are on p.112, and the conclusions on p.117. They have examined only the 3 prospects just drilled – Gazania, Namaqualand & Pelargonium – and come up with an ECO 50% attributable P50 (best estimate) of 246 MMBbl, plus 37 BCF of gas. Note that the whole of 2B – including the Northern Graben & the Eastern Prospects – could double this figure. The Billion Bbl number that has been hoped for is possibly a result of SH using a 25% recovery factor: 246 x 4, but unrecoverable oil by definition does not have an economic value.

With the likely continued high oil price, it seems reasonable, but possibly conservative, to assume an in-ground price somewhere between $5 – 10 per Bbl for a Contingent Resource, shallow water, near shore environment, with a supportive, low-tax jurisdiction such as the RSA. In a recent interview, Gil suggested $8 per Bbl. How have people come up with this number?

In the Align Research note of January 2022, they suggested a value of $5.98 per Bbl – from p.31 “analysis was undertaken for a potential project in South Africa that took account of a royalty rate of 5% and income tax rate of 28%, together with highly favourable treatment of costs which allows 200% of exploration and 150% of capex to be deducted. An NPV(12) per barrel figure of US$5.98 was determined, using the same flat oil price [Brent $70], which does highlight that South Africa has some of the best fiscal terms on that continent.” NB Align use a discount rate of 12%, which reflects the higher risk rate applied to African projects, and a long term oil price of $70.

So let's use the above price and volume data – oil only, no account taken of any gas finds.

ECO has 344M shares in issue, today $1 gets you around £0.87p.

So for every recoverable 100 MMBbl, that is worth £87M for each $1 per Bbl value in-ground, or roughly 25p per share. For the suggested Align ~$6 per Bbl, that takes it to £1.52p per share.

For the CPR's P50 246 MMBbl, at $6 per Bbl, it moves up to £3.73p per share.

You get the picture, I'll let you tempt fate by calculating the effect of a higher volume and/or price!

Part 1. Valuation methodology.

While we are all waiting to see if there is anything better than a broken drill string, it is inevitable that thoughts turn to how much could a discovery be worth? There has been some speculation, here and elsewhere, using different oil prices and a wide range of likely resources. I appreciate there are a number of highly knowledgeable folks on this board, so you can skip Pt. 1, but others newer to the game may find this helpful.

After I decided that working as an exploration geologist was incompatible with family life, I joined the business side of things, and spent the last couple of decades in business development, much of it focused on acquisition and divestment. Any major contemplating an acquisition or investment will evaluate the opportunity in the same way, using the discounted cash flow method.

To come up with a valuation, you need the following inputs:

* How many recoverable Bbl are in initially place
* Volume sales forecast – how many Bbl will you produce over what time period, this includes rate of field production decline.
* Start of production
* Price forecast – what will the oil price be over the next 10 years.
* Capital cost of initial in-licence, development & infrastructure
* Ongoing production costs per Bbl
* The cost of money over time – income is reduced by a percentage rate each year.

This is all dropped into a standard spreadsheet, that gives you the Net Present Value (NPV). You will often see this referred to as NPV10 for example, where the cost of money (discount rate) that is applied is 10%. This is the likely amount that someone would pay to take over the whole licence. Adjustments would be made for the likely chance of success – obviously you would get a better price if a quantified discovery has been made, giving definition of Contingent Resources. These calculations will also produce an Internal Rate of Return (IRR), which is the percentage return on the upfront investment – most companies will have their own internal hurdle rate which any new project must exceed.

In the case of a farmout, price will depend on what proportion of the licence is being bought, and what proportion of exploration and development costs are being borne by the purchaser.

Thank you for linking that, Vegas. It should be required reading for every voter worldwide, then they have to score at least 8/10 in a test on it before they can vote.

@TheProphet: Ngethemba ukuthi isibikezelo sakho singcono kune-Jade e-EME.

@Starvin. on the CAN??? I think what you have been sold is not quite the real thing.

@KevinR. No.