Member Info for Krok

Nickel, so far we are nowhere close to 55p and, yes, resolution of VAS issue will not be sufficient to get to 60p. Even 55p is a stretch. I think it will be close to 50p, in reality Need something else, on top of this, to move higher If CAD is eventually a takeover target, this can be a trigger

VAS is 23% of production and a just a few per cent of 2P reserves Even if it’s 23% of total value, 43p/77%=60p In reality it is less than 23% So 55p seems to be a maximum we can get

Because there is a very good chance that additional oil will be produced, reserves booked, etc I haven’t said the will will be dry, highly unlikely. There will be some output eventually, it just will not be what some people anticipate. Largest discovery on AIM, lol Option value, if you know what I mean In absolute terms, the SP increase is nothing, have a look where this stock traded in the past You have been looking at it for the last few days, I know the asset for almost 10 years I am heavily invested in other Ukrainian independents as well. My investment in Regal, for instance, is 25x times what I have invested in Cadogan. JKX is 8x times. So I know this stuff I don’t care too much about CAD as a stand alone investment

As I said, I have invested when cash was $40 mn and mcap was $20 mn Production is at break even, gas trading earns a little bit Wells work in progress So the idea was exactly this that sooner or later they will find something. Bit obviously not 200 meters net pay))

Obviously, I might be completely wrong But I think they will eventually announce that a major part of this column has oil saturation below what is required for commercial production Seen this many times, both in public and private companies And they don’t lie, core samples indeed show there might be oil And the share price speaks for itself, the market does not believe

One more thing, the whole license area is only 26 km2 And on this small area there are three other wells producing from the same formation at a miserable rate

Could potentially be oil bearing - again, this wording is nothing When you are in the middle of the developed oil province your whole license area could potentially be oil bearing. It is actually, don't even need to drill for that But it has nothing to do with recoverability Would be glad to be mistaken, obviously, but there are no miracles in this part of the world

Their three wells there have a combined production from the same formation of about 250 bopd. Peanuts Around the field there are plenty of small, mature fields, some producing for several decades. All small, if my memory serves me the maximum total production from one field is 22 mmbbl, that’s for a long period No way there is a huge discovery, simply impossible geologically But any discovery is a big positive for CAD Bought the stock when it traded at half cash. Then almost half cash gone to Italy. Now time to deliver

GKP’s dividend yield is incomparable in size and it has a large issue with the approval of the development plan, hence the share price reaction VGAS is very relevant, same issues as Regal has Regal is not pursuing a growth strategy. One well in 2019, which will take 9 months to drill, is embarrassing It will not buy anything in Ukraine, except maybe UGD asset from Smart Energy, but that would be a distribution of funds to the largest shareholder It will not buy anything outside of Ukraine because they don’t have expertise and team. Smart Energy are not fools to allow wasting money No liquidity for a share buyback So dividend is the only viable option Pay $30 mn, 16 will go to Smart, 9 to Pinchuk, not bad Would still have over 50 mn by year end, more than enough for a few wells in 2020

Raising the divi question again Cash-rich independents tend to return excess cash to shareholders BLVN in Cameroon, GKP and GENL in Kurdistan and lately VGAS in Russia, just to name a few Volga Gas is the the most relevant for Regal - similar size, similar gas vs other products split, similar financials. A large controlling shareholder (BVCP) running the company. So pretty comparable indeed It just announced it would pay 75% of free cash flow as dividends. For 2018, that’s 12.5 cents per share, 20% yield on the pre-announcement share price, 15% yield on current price The share price is up from 46 to 64p Regal, you know where to find a clue!

ArlyBarley, if I may, what do you do for a living? When I read your posts, I have the same impression I had at philosophy classes in high school. All words individually seem to be known and understood but the overall meaning slips away

Fibdahappyplace, don’t get me wrong, Regal is my favorable and most profitable investment in the last 18 months I love it with all my heart. But I expect it to reciprocate. Last few weeks it doesn’t;)

If one piece of shit is combined with another piece of shit, it is still a piece of shit, though a larger one)) This comment mostly relates to CAD;)

Cadogan more than doubled in the last two days on latest well news. Have a small holding there as well That’s what we need from Regal, come one, great company with large reserves and growing cash pile))

RPT, not ROT

I have a small holding of 90k shares at Cadogan. Been a disappointment for a while, great performance last two days Look at ROT and JKX, these will give you an idea of potential upside If the well is a great producer expect 2-3 times SP growth from current levels

Why sell now when I know it will be more expensive? Even if it’s 60p in 1 year from now, it’s still 50% annual return. Not bad, as there are not many stocks providing that level of return with such a good downside protection That said, obviously doing 3-4 such trades per year with 40-50% return on each would be much better Regal is not worth more than 55-60p, by any valuation metric. It does not mean it will not grow to 60p. It did three times in the last 6 months, that was unreasonable in most cases but so is the market. Easy money Looking forward, maybe the VAS license is fully restored sooner than later. Maybe Pinchuk tops up a bit again, say to 29.9%. Maybe there is a 60-65p takeover. Maybe Regal buys some shitty asset in Ukraine with reasonably good reserves on paper (only such are left but that would be sufficient for twitter-type investors). I don’t know which and when, none of these can be predicted but one thing for sure - Regal’s share price reacts favorably to such news flow Just one piece of news, enough to make some pretty good money. 50% return. In my case, over $110k this time. Again, with some good downside protection If not, ok, the winter will come. High gas prices, new well in 4Q - something will be another growth driver, sooner or later Badmouthing? I am just being realistic and don’t buy b/s. I haven’t said anything wrong about Regal, vice versa, everything I said turned out to be true. Unlike dreamers posting nonsense in circles and having no clue what they are talking about

60p plus soon - when and on which news?

4p dividend would cost Regal less than $17mn, just over a quarter of the current cash balance Would be 10% yield on the current price, could support it No capex this year, cash balance of over $80 mn by year-end (without divi) Why not share with the shareholders, given that the oligarchs will get 83% of total payment

Looking dull My plan has been that somebody big starts buying on “unexpectedly high” cash balance, 1.5-2.0 mn shares trade in 2-3 days and I happily exit Then would wait till it’s 40p again Didn’t work Risk of losing 23% of production, declining production next 9 months regardless of VAS license, low gas prices, record high volumes in gas storages, political uncertainty, sellers who bought below 30p on VAS news - all have some negative impact on the share price Not sure what’s next. Arbitration re VAS order can take months