Member Info for London69

Hi All,

Where did all the new faces come from?

This post is predominately aimed at the LTH's, and as we have discussed previously, the lanuguage from the company changed from the summer to stating that EMS-1001 was "complex" and they did tone down the bullishness relating to this well by continuingly to refer to Tapi Aike. Also discussed on the board, was why Fiona left when she had so many options because she was giving up a small fortune if EMS-1001 were successful and in truth, I didn't quite reconcile the whole leaving for personal reasons rhetoric.

I don't think anything has really changed forme because I've always believed Tapi Aike is the game changer, and for LTH, the short-term share price means very little.

However, the real risk is the equity raise required to fund Tapi Aike because that could have a material impact on the SP given its low level, and number of new shares required to fully fund the drills

I know management have disappointed but patience is required and this share is definately not for traders.

London

Cervelo,

Excellent.

I knew someone would know.

Good luck all.

Paul

Hi All,

Parking EMS-1001 aside for moment, I have a question about the Tapi Aike licence, which expires 31 December 2020 (+1 year for tight gas).

We won't have much time until the end of licence, if we discover a significant amount of oil/gas say by the middle of next year. Would we have an automatic right to extend the licence? There must be some mechanism, otherwise why would companies invest huge amounts in drilling if they can't benefit fully from their discoveries.

I'm sure someone wise on this board has the answer.

Thanks
London

Good afternoon all,

I have posted for a little while because I’ve been waiting for some actual test results before commenting further but couldn’t resist because it’s great to see some new investors on the board, particularly 250SWB, who although extremely bullish, does back up his thought processes with facts.

However, to reinforce WT’s opinions, if Fiona, who is closer to the numbers than any of us, thought the SP would be £1 in the summer would she have so easily given her role up as CEO? In such a scenario her options would be worth literally millions of pounds (I appreciate should still holds a lower number).

Hopefully not long until the EMS-1001 results….

London

Hi WT,

Does your response imply that you are disappointed with Echo's reply that they will use trucks as opposed to a new pipeline?

Good afternoon all,

I’ve got very little to comment on this week but did think that the RNS release was positive and reaffirms the email from Fiona, that EMS-1001 remains “potentially material”. I’ve seen discussions about buying rigs in order to accelerate testing timetables, however imo, it doesn’t make sense for a company of Echo Energy’s size, and given the importance of preserving cash at this loss making stage in the company lifecycle.

The share price started this week at 8.30p and finished at 6.80p, and it’s almost impossible to call the level at which it bottoms out, however this should not concern LTH’s.

I’d also like to thank Fiona for replying to my email and I’m looking forward to a significant couple of months ahead.

Good luck all.

Hi

I asked Fiona about EMS-1001 earlier today.

"Actually down in Argentina with our partners at the moment on a very rainy day. As you say we can only reiterate what is in the public domain and the effectiveness of the reservoir can only be determined on the mechanical stimulation of the reservoir. If that works as we hope it will we will be very happy".

Let's all be positive.

Hi,

Thanks, I've just emailed Fiona and I'll let you know if she replies.

Enjoy the rest of the weekend everyone.

Good afternoon all,

We’ve had little news, therefore my post today is somewhat conjecture and I’d welcome all views.

In the interview this week, she refers to the “high impact Tapi Aike” asset but doesn’t refer specifically to EMS-1001, when she previously called this “transformational” and I also don’t recall her speaking enthusiastically about this asset since her statement a few months ago. This is purely conjecture, but it does imply to me that EMS-1001 is not as significant as previously thought. WizardTaffy had previously posted, that the lack of news could be the result of the strict Argentinian reporting rules.

I’ll continue to buy at these levels with free cash but only because of the high impact Tapi Aike and existing production. I’ve pretty much discounted ELA-1 and EMS-1001 and anything from these assets would be a bonus.

I’d be interested to hear what others think?

Hi Trellis,

To reply to your comment, I don’t think most people are ignoring the politics and economy in Argentina. In my opinion, it was likely the decrease in share price a three months back, was in part, a result of the significant deterioration in the macro environment in the country. However, if anything, this has stabilised over the last couple of months and I would say that this is now most likely priced in, subject to further downturns, say, if the President doesn’t get re-elected late next year. As evidence, President Energy’s share price, an Argentinian explorer and producer, has increased by 10% this week on the back of a good set of numbers, which shouldn’t happen if investors are completely fearful of investing in Argentina.

Ultimately, the price decrease is a result of a lack of inherent demand, which is being driven by the absence of any kind of significant news. For a LTH, the simple strategy is to be patient and wait for news relating to EMS-1001/ELA-1 later this year or Tapi Aike next year.

Also, please keep posting because you generally have contrarian views which I find particular useful, because it's never good to get complacent with any investment, and one should always question whether the initial reasons for investing remain.

Good luck all.

Hi,

Apologies WizardTaffy but could you clarify the paragraphs at the end of your post;

The SP will follow as and when the newsflow comes, for the moment in my opinion it is no more than a buying oportunity for those who can.
But there is a very perceptable downside as well, and if that happens, todays price with 20/20 hindsight might have been a terrific chance to bail out.

Do you mean that this is a buying opportunity for those that can but there are very perceptible downside risks or did you mean, this is no longer a buying opportunity because of the very perceptible downside risks?

Thanks.

Hi All,

The share price today is irrelevant to long-term shareholders and the price 12 to 18 months is of far more significance.

However, as Abzzba previously stated, it’s terribly unfortunate for investors that are unable to hold for such a long period and with the benefit of hindsight, I think the Board probably wouldn't have been so bullish in the interviews undertaken in the spring/summer, particularly given the realisation, that EMS-1001 is more complex than previously thought.

Personally, I see little benefit on commenting on day to day movements in stock levels, however I will certainly be buying at these levels with free cash (pay day tomorrow).

Good luck all.

Good morning all,

A positive RNS, which by my calculations increases our working interest from circa 1,000 to circa 1,060 BOD (happy to be corrected by more knowledgeable investors on this board), reinforces the floor on the share price and should assist in limiting the downside risks.

However, to be clear, this stock is long-term play and I would caution anyone if they think this share will move materially on this piece of news, which is very minor in this 5 year project .

Have a good day everyone
.
Paul

Hi Bigideas,

The RNS released this morning further affirms your statements.

Well done and good luck to everyone this week.

Hi Bigideas,

Also, forgot to ask and I appreciate this is a difficult question to respond to, but were you able to gauge the general mood of the Echo Management Team because of the recent decline in share price?

Echo have always stated that this a project over a number of years and I would hope that they would ignore short-term fluctuations because the price will rise with positive results from the drill bit.

Thanks,

Hi Bigideas,

An excellent post that is both informative and has balanced opinions.

I agree that the Tapi Aike block is the ‘Jewel in the Crown’ for Echo but EMS-1001 and ELM-1004 are hugely important to the share price over the next few months as they could generate significant cash-flow. In the absence of success, potential new investors will probably wait until nearer the time of the seismic results before buying.
Also, I’ve always assumed that a rights issue would be required to fund the Tapi Aike drilling, so it would be great, if it could be self- funded through generated cash-flow but let’s wait any see.

Completely concur with your Argentinian comment and we’ve all been a bit unlucky to see the country decline as quickly as it did.

Let’s hope for a positive RNS tomorrow about EMS-1001 and a speedy monetisation of this asset.

Thanks again for the post.

Good morning all,

I completely agree with WizardTaffy, as I’m not sure what more we can expect of management because they can’t control Argentina’s economic climate.

This share will rise on the back of reasonable production increases from workovers or if they demonstrate a clear path to monetising EMS-1001 or ELM-1004.

In my opinion this is a waiting game, and I’d only email Fiona to vent frustrations, should they fail in meaningful increases in production or they state EMS-1001 is not ‘transformational’ as previously thought.

Good morning all,

In my opinion, determining the market cap of a company, is best calculated by using one of its peers that share similar characteristics e.g.; same jurisdiction, similar production levels etc.

President Energy Plc, an Argentinean oil company, is producing circa 2000 – 2500 barrels a day and has a market cap of £90m. This in my opinion, gives us a good indication of the expected uplift in value, as a result of production increases due to workovers and the potential EMS-1001. A more than doubling of production, would likely move us closer to President Energy’s market cap. Unfortunately, despite recent positive news, this entity has also seen a decline in its share price because of the Argentinean economic situation.

How does this analysis help us? If you’re of the opinion that production increases are likely, then ultimately, we will see that reflected in the share price. Also, any positive sentiment towards Argentina will have a meaningful impact on the market cap, however I would look at this as a medium-term goal, definitely post their elections next year, where we’d hope the incumbent to be re-elected because of his pro-market stance and deregulation policies.

At this point in time, the market values actual production significantly more that potential, which is why I was attracted to this stock in the first place because of its ability to pipe new production quickly into existing facilities. I was also attracted by the existing production, which I believe underpins/creates a floor on the share price, which is why I don’t envisage this decreasing into the 8 pence range. In my opinion, only a significant drop in the oil price could cause such an outcome.

Finally, it’s a shame that Eggonaroll had to sell out last week, but we all have our individual risk profiles and tolerance levels.

Good luck everyone.

Hi All,

In my opinion, a pretty neutral RNS but positive that they'll test EMS-1001. Any thoughts on timeline?

Also, as per a comment below, I've been comparing the statement made from the company in June relating to EMS-1001, which also used the words transformational, to the recent RNS's which caution interpreting the wireline logs as definitive proof of success.

"EMS-1001.....The company will now take the time required to confirm the early interpretation of the wireline logs and design an effective test program with a view to confirming the scale of our new oil discovery"

Todays RNS states:

" As previously cautioned, wireline log results in this complex reservoir may not be conclusive indicators of the well's dynamic behaviour"

I think the big difference is that they've started using the word "complex" and this was absent from anything released in June.

Let's try and stay positive because this share could double, if the EMS-1001 discovery proves to be a successful but who knows.....

Hi All,
As a heads up, this is my first post on this website having bought this share 3 months ago at 16p, therefore bear with me if I don’t fully understand the board etiquette. I like some others here, believe that the deterioration in the Argentinean economy has significantly impacted the share price and has much less to do with management performance. Early in the year, Argentina was upgraded to Emerging Market (EM) status and a lot of funds and institutions had invested in the country prior to this affirmation. However, the EM crisis, has increased the country specific premium and the previous inflows to the country are now in reverse. This is purely conjecture but would explain the decrease in share price to 11p - 12p because the latest rights issue was at 12p. However, typically fund managers, will not want to sell holdings at loss which is why, with the absence of news, we have a floor on the share price and a difficulty increasing significantly. I also think the crisis has delayed the drilling at Tapi Aike until late next year when previously it might have happened earlier, if they could have done an equity raise at a reasonable level (which is difficult now given current climate and the likely low offering required to achieve capital raising targets).

What does this mean for me going forward? I will continue to buy with free cash at these levels because the oil market is buoyant and it’s up to management now try to outperform and monetise assets as soon as possible. Ultimately, good performance with the drill bit and a clear path to monetisation will improve the share price but a resolution in Argentina would certainly help things. This is purely my opinion and like others, I haven’t been impressed with the recent tweet about the workovers and lack of a timely delivery of a RNS.

I’ll also add, I really like Eggonaroll messages because they are very honest and he does make some insightful statements amongst all the noise
.
I’ve got lots of other opinions about this share should people think this is useful.

Thanks all.