Member Info for MIKEY30

The investment is now for the oil. The share price may rise during spud of SL on anticipation for small profit takings. What's more important to understand is the parallel drilling. If we can drill the appraisal wells and confirm oil findings before Wild Horse results you won't see this drop significantly. The strategy being played offers minimal downside and tremendous upside. The funds raised for operations following the placing will $35m. If SL is a duster you've lost 7m + 2m of the 3.5 for G&A for the year. The share price is therefore 4p on remaining operations alone. The extensive portfolio and chance of success on the appraisal wells will (I believe) prevent this from dropping far.

Application will be made to the London Stock Exchange for admission to trading of the New Ordinary Shares on AIM ("Admission"). It is expected that Admission will take place at 8:00 a.m. on 4 July 2018 (at which time the Placing will become unconditional) and that dealings in the New Ordinary Shares on AIM will commence at the same time. (14.06.18 RNS)

The choices made to date for seismic and drill locations have been tailored to meet potential farm-in partners interests. Finding oil is still a gamble. A business decision to fund 2019 drilling and PSC costs are not going to be made on a gamble. In addition the placing was carried out now to utilise the turnkey contract and therefore make both cost and time savings to commence drilling as soon as weather permits.

Sch 123, I've said this before...the cost breakdown and reason for raising the funds now are all written within the RNS (please see my previous post). I'm not exactly over the moon regards the dilution but for long term prospects and reasoning I get it. Let's see where the market takes this in the near future.

The reasons and cost breakdown is in the RNS. The reason to raise the funds now for 2 drills next year was to SAVE on money and time longterm by utilising the existing rigs within a turnkey contract. The costs are more expensive due to the depth of Fox (~4000m) and due to the mobilisation costs from the North of Block XX to Red Deer in the south. The 2019 PSC and G&A costs are also paid for.

Risk is then spread across 5 wells @20% a well. The COS for Wild Horse is this. The COS for Fox will be higher (25%) due to 3D. 2 appraisal wells at 50% to 75%. If SL is a duster then you still have 5 wells covering 760 MMBO.

I personally believe 10p will be the lowest entry point until results for Wild Horse are revealed (unless we receive another fundraise). Once spud at SL has been announced I can see the market waking up to the 12 month programme ahead. If we weren't to find any oil at SL then I would expect the SP to drop but similarly I think we will be a lot higher than we are now. With confirmation of a rig contractor and drilling programme for the appraisal wells to take place this year I see the Share Price rising to ~20p on anticipation of news. This will drop if no oil is found as investors predict the market reaction however there are 5 more drills to take place and the 50% to 75% appraisal wells won't be too far around the corner. It won't drop by 50% if the share price of 20p is achieved as predicted.

Verbier Dave, best way to compare is using the recent fundraising. I cannot see PM bringing im a Farm-In partner before we spud however I agree with an earlier post that we may bring in a Farm-In partner to take over a particular licence on discovery to fast track into production using the IRR and NPV estimates. Let's assume the share price was at 15p during spud (being extremely conservative as I expect we will be higher) over a period of 30 days before placing. Using the same 17.7% dilution provided before this would give a placing price of 12.345p. If we required 50M this would require an addition of 405M shares in to issue. This would equate tp 38% of the total shares then in issue. Why would PM offer any more than this to a potential farm-in partner when they could just go it alone with interactive investors.

SBB1 - 183,253,056 shares were in issue.

I wouldn't say it has killed the SP it took 2p off it. The reason for the placing was to wrap up 2 additional drills within the turnkey contracts. I suspect they required the funding to include Fox into the contract following Wild Horse to include mobilisation and demob costs. They've left it as late as they could in my eyes.

Facts are 6 drills up and coming in 12 months. 3 in Block XX, 1 in Block IV and 2 in Block V. We have 3D seismic on 3 of these wells. We have outcrops identified at Wild Horse and Snow Leopard. We are nearing completion of a second rig contract. With regards to farm-in, I would rather PM go it alone, certainly now the market has been diluted twice with fundraising however the company may want a quick strategy into production in creating cash-flow. Therefore my opinion is this, a farm-in partner was interested in Falcon. PM carried out 3D, theu found that actually the reserves weren't as high as initially predicted. They did however find Fox with significantly more 200MMBO. They have also shown interest in Red Deer (similar to Block XIX producing oil fields). We are now drilling both of these wells. In the RNS a statement has been made that a farm-in partner may be brought in before July. That's 2 weeks away. This makes me question what has been offered to date. PM have carried out testing, found a better prospect and now wrapped up the funding for a second interested drill. I wouldn't be surprised if a farm-in was around the corner and will certainly be the vehicle to take the findings into quick production based on the IRR and NPV calcs. I don't want this. It just appears that the strategy to date has been dictated by said interested parties in the data room.

JnDavid, agree great investment!

I respect Spanish's opinion and it has only confirmed my investment if he has been integrated with the company and CEO and a shareholder for 8 years.

Yes to which question?

Scroll down on the last RNS it has the full breakdown mate. 9M for Fox, 2.9M for Red Deer, 3.4M for G&A, 0.9M for PSC and 0.8M for contingency/well testing.

Found the costs buried, cheers!

Mr P, where can I find the costs for fox and red deer? $20.7M was the Sum of the 4 well costs, PSC (2018/2019) and G&A for 2018 only. The recent RNS shows a total placing for $18.3M (£13.7M). The additional cash I believe will go towards 2019 G&A as 2018 costs came to 3.5M.

Mr P, where are you getting your figures from?

$18.3M not £18.3M

6 wells to be drilled in 12 months. Expectation to drill Fox and Red Deer as soon as weather permits.