Member Info for KeithOz

Folks are asking if HE1 also have a 'string of pearls'.

Short answer - Yes.

Long answer - May I remind you that the original HE1 plan (2019 - 2020) was to drill 3 prospects in the first season: Itumbula, Kasiku & M'buni. Itumbula is a rotated extensional fault block, creating a 3-way dip closure with a fault seal in the 4th direction trap style (as is Tai), while Kasiku & M'buni are both BMF trap styles. Section 6.1.4 of the original SRK CPR gives lots of interesting (well, interesting to me!) detail on the different trap styles.

Figure 6.7 in the same document suggests to me that the following HE1 prospects & leads on the SW side of the lake are all BMF traps - Kapenta, Nyati, Mamba, M'buni & Kasuku, while the BMF traps on the NE side of the lake are Crocodylia, Tilapia & Kiboko. Other documents suggest two additional potential leads adjacent to Crocodylia, and possibly one or two others along the NE side, all BMF traps. So yes, two strings of pearls.

The HE1 licences are all positioned in the goldilocks zone for lateral helium migration - not too close and not too far from the driving mechanism, which is the Rungwe Volcanic Province, SE of Lake Rukwa. For this reason, I suspect that HE1 has a greater chance of making a helium discovery than does NHE, and the helium concentration is likely to be higher. The HE1 BMF prospects generally have a larger area of flat land to drill from, potentially making them easier and cheaper to work with. With a wider land margin between the surface expression of the BMF and the lake shore, there is an increased chance of hitting deeper targets abutting the BMFs - which slope inwards towards the lake, meaning that NHE deep BMF targets may actually be under the lake.

Of course, all this is still theoretical without that bl**dy drill.

@theyknowitall. I'm a serious investor, so already done all you suggested before I posted, looked through all the accounts, news releases, etc. Lots of talk, absolutely no substance. Your reply suggests that you agree that there is no serious research that can be done on this company - no hard numbers are available anywhere - red flag #1. The fact that they could only raise money at a 33% discount is another red flag. They have a horrendous performance from real estate investment, which is hardly a reassuring background for a move into a totally unrelated area. I can't see anything to suggest that this is anything other than a blind gamble, and you have not been able to allay that concern, so good luck with your holding.

So, folks here consider this to be a 10-bagger. In order to make such a forecast, you presumably can answer the following:

* In what time frame will this become a £70M company?

* What level of sales do you expect from Acuity in order to reach that market cap? New/repeat?

* What margin do you expect on those sales after accounting for development / sales / marketing costs?

* What is the fixed cost for Acuity & the rest of Drumz?

* What are the relevant numbers at the point of acquisition?

* What multiples of sales / profits are you using to get that valuation, and using which companies as comparators?

* If the potential is that great, why has the Acuity done so poorly over the 15 years it has been in existence?

* Why did the vendors sell out?

* Have you looked at the competition within this sector, and how much they spend to achieve market share?

* Do you have any practical business experience in this sector?

Just asking for a friend.

...and the NHE share price went up 20% in the first hour of trading, with relatively high volume.

@rpg, peut-être pensiez-vous à:

"Jugez un homme sur ses questions plutôt que sur ses réponses"

ou,

"Plus un homme en sait, moins il parle."

ou, plus j'espère pour Predator:

"Nous sommes à la fin de tous nos ennuis, et au début du bonheur."

Imo some points from the last few points that should enlarged upon:

* The increase in total reservoir volume i.e He + N, is huge.

* The reduction in He concentration is puzzling - presumably they are only allowed to quote the actual figures from the LBF. However, that looks nonsensical when they assume the shallower reservoirs have a higher He concentration than the deeper reservoirs, and both have a lower concentration than the gas bubbling up through the Itumbula spring, and elsewhere.

* Each of the formations are given only a 70% chance for source. How do you get to that conclusion when there is He bubbling up everywhere on the hyperspectral satellite imaging?

* Some of the other factors seem to have a very low rating - so the determination of overall 14% gcos looks very much on the low side.

@Jimmy. There is clearly something anomalous immediately below 1350, but I am not sufficiently competent in seismic interpretation to say that it is definitely gas. It looks quite small to me, maybe a cross section of a channel of higher porosity / poorly consolidated material within the turbidite fan - I will have to rely on Paul's vastly superior subsurface expertise :-)

@Dai -well it was a new spud for the drill, if not for the hole! I was going to re-phrase this in terms of human amatory activity, but I don't think it will pass the censors :-)

@Clemdave. 2D will never give as complete a picture as 3D. 3D is very expensive, and takes a lot longer to perform and to interpret. If you are drilling offshore, with individual drills costing 00's of $M, then you have to do 3D to get it spot on. For a large, shallow, onshore prospect such as Tai, you need to balance the much lower cost of drilling against the much higher cost of 3D. NHE's prospects are much smaller in area than Tai, so I understand they need to make sure they are drilling into something worthwhile, maybe they also need the more detailed data to convince a potential partner to hand over $20M.

@skittish. Too scientific? OK I should have said Tai-1 was a canine's ante-meridional repast.

I have been short on time this week, so here are some comments on the Tai CPR, albeit a little late :-)

* Tai-1 drilling was a complete dog's breakfast. As well as losing the drill string, logging while drilling was only carried out on a small section, and this was sadly incomplete. Nothing was done on the Lake Bed Formation, since logging equipment was not ready in time. No porosity measurements were taken - critical for reservoir estimation. No water saturation measurements were taken, since the equipment was incorrectly calibrated - even if we knew the porosity, it wouldn't be known how much was filled with gas, or with water. No drill stem tests were performed because of hole conditions. Lastly, the mass spectrometer was broken, so helium/nitrogen levels were only partially measured. In summary, I have never seen such a poorly executed drill.

* ERCE have had to make a lot of guesses about the reservoir potential. If you look at the Y-axis of a seismic chart, you will see ms - this is not metres depth, but milliseconds two-way time (TWT), the time taken for a seismic pulse to travel down to a horizon and bounce back to the receiver. Sound waves move through dense rock more quickly than through soft rock, so you have to estimate the subsurface rock density in order to convert TWT to actual depth. This is particularly problematic for the LBF, which has interleaved beds of mud, sand, and other guff, all of unknown thickness. There is therefore an unusually wide range of interpreted thickness and areal extent for the Tai prospect - see figs. 2.6, 2.7 & 2.8.

*Porosity & permeability were not measured in the first Tai drill, so ERCE has estimated based on a very wide poroperm range seen in historical nearby hydrocarbon drills. Also important is the net:gross ratio, which is the %age thickness of a rock column which is likely to be reservoir e.g 100m of rock with 10m of likely reservoir is a 10% N:G. The figures for the LBF were: porosity 25-30% (excellent), permeability 10 -1000mD (cr@p - excellent), N:G - 25 -70% (good - excellent). For the Red Sandstone, porosity 15 - 20% (good), permeability 10 - 1000mD (cr@p - excellent), N:G 20 - 80% (good - excellent). No data for the Karoo.

* Helium concentrations in the original CPR were 4.4%, compared to surface readings of up to 10.6%. I was more than a little surprised that low/best est/high figures for Karoo & Basement were 0.5/1.1/1.75%, and for LBF & Nsungwe 0.1/2.1/3.25%.

In summary, this looks to me to be an extremely conservative CPR, with potential for much higher helium volumes due to low assumptions for reservoir thickness & areal extent, porosity, permeability & helium concentration. In particular, the assumptions by NHE are a lot more positive - but please note they do NOT have an independent CPR. I don't invest in resource companies without a CPR.

All my own opinion, do not invest based on my comments, read the CPR, make your own judgement.

Liberum has just released a new HE1 research note - afraid I am prohibited from copying it, try a google!

Line 4 should read - "in practice market cap is usually at a discount to NPV". Sorry, trying to cook dinner for the girls at the same time as typing.

@Aimster. Perhaps you are not familiar with the term NPV. Net Present Value is the value of an asset TODAY, after accounting for capital costs, ongoing costs, and the time value of money. In an ideal situation, the market would value a company at its NPV, since that represents the discounted future stream of cashflow. In practice, NPV is usually at a discount to NPV to account for execution risk. On discovery, I would expect an initial market cap of perhaps 25% of the NPV, which just for Tai is clearly a lot more than the current market cap. The market cap should then increase in line with reducing risk as the project progresses through development to actual production and cash flow.

I repeat - this is just for Tai. There are many more prospects.

There is already the legal precedent under EU law of Rockhopper vs Italy, under the ISDS (investor-state dispute settlement) system, which allows companies to sue governments for introducing policies that could affect their future earnings. There at least four companies (including PRD) with a solid case against the Irish government. This is no longer us arguing with a single intransigent minister, but a seriously large compensation claim against the whole government. The Irish Cabinet will have to take and act on legal advice, and Ryan will be over-ruled. This may even bring about his resignation / sacking.

Wow, just wow!

From Steve Boldy, CEO of Lansdowne Oil & Gas:

"It is with great reluctance that we must now resort to legal proceedings in relation to our investment as we would much rather have moved forward with a Lease Undertaking and appraisal drilling, for which funds had been sourced, to advance Barryroe toward development for the benefit of all stakeholders.

We believe we have a very strong claim against the Irish government and the Company will be resolute in defending and protecting the rights and investment of our shareholders."

Surely there is a case for all potentially affected companies to club together to pursue either approval or compensation. Lansdowne, with a small stake in Barryroe, estimate a claim in excess of $100M.

Am I in conspiracy theory land when for comparison purposes, I try to retrieve the HE1 Prospectus/original CPR, the Hannam 2022 note, and the NHE Prospectus, and find they have all been withdrawn? I just get Error 404 -Not Found, for all 3.

Makes for interesting reading - best (most likely) estimate of 2.8 BCF just from Tai, with an upside of 7.1 BCF -and those are net helium figures, not total GIIP. That gives an in-ground value of $1-3 Bn just for Tai - obviously not all that can be extracted, and getting it out of the ground takes time & money. A quick calculation of a 10-yr, 10% discounted NPV still gives a value of several hundred million $.

Together with Nble's announcement that rig contracts should be finalised within a week or two, we should see the start of something interesting from today :-)

I will go through the full report and add some comments later.

@Vegas - thank you for confirming what Paul actually said to you face-to-face re sale & valuation. Hopefully this clarification will knock some of the speculation on the head.

@Micktrick - Oil & gas from the same hole can be run through a separation process, but that's not an ideal situation. If oil was confirmed in the Jurassic, I would expect separate deeper oil-only production wells would be drilled (not by PRD).

@GRH - re. genders - a good rule to follow is: if you can't tell the difference, you shouldn't be interested.

@Pageofcups - as Jimmy has said, you really need to go through the presentation again, but in summary:

* They are aiming to save on mob & demob costs by running back-to-back drilling & testing. So MOU-1 will be tested as MOU-3 is drilled, MOU-3 will be tested as MOU-4 is drilled, MOU-2 may get a 2nd chance somewhere along the way.

* Funding is in place for MOU-1 & -3 testing & drilling, and MOU-4 materials. More money will be needed for MOU-4 actual drill time and testing, but this need not be a placing since Moroccan industrial customers are lining up to pre-purchase gas once it is proven in MOU-1 & -3, or else Reserves Based Lending will become available - PRD have already initiated RBL discussions.

* No, not 34% gcos for MOU-3. MOU-3 is an appraisal well for Contingent Resources, so isn't allocated a gcos. Similarly, MOU-4 is an appraisal well for Contingent Resources, so no gcos for the overlying Neogene turbidites, but it is positioned to also penetrate the underlying Jurassic carbonate reef structure for minimal additional cost - it is just the Jurassic that has been allocated a gcos. At a later date, many other wells will need to be drilled into the 125km² structure, not just right in the middle, but they will each cost $3-5M plus testing, so that is for another day.

* The interesting thing about the Guercif graben is that the faults do not reach the surface, since they are synsedimentary - thus they act as conduits for the gas from deep source rocks into well-sealed traps. Some of us believe this presents outstanding prospectivity over a very large area, and that the MOU-Fan is just the beginning.

* Yes, this guy (Paul) is for real - confirmed by his being the largest shareholder, and many other shareholders on this board having relevant industry and/or finance experience.

Hope that answers your questions - Keith

This bit is interesting: "With the benefit of new amplitude-preserving processing, the Mbelele 3D depth volume is now clearly demonstrating multiple, laterally persistent, horizontal amplitude shutoffs in Neogene sediments

within the BMFC ... Such seismic responses are consistent with independent gas-water contacts at multiple levels".

In more understandable language, their sophisticated geophysics confirms there seem to be multiple stacked gas reservoirs in the Lake Bed Formations and underlying sandstone - which is what we believed to be the case from the initial drilling at Tai. imo this increases the chance of success at all types of trapping formations, not just their precious 'string of pearls'.