Member Info for Moleinahole

Morning fellow Long suffering LOG holders.
I think Newall will have a much better appreciation of the impact of news on the market.
The hand he is dealt is very much with those who are doing the operations.
The question is really one of what flow rates and what in time they think the realistic reserves would be. The drop back in gas pricing means the hedge will have done well but now they need to be able to replace the lost gas from Blythe and Elgood issues. Hopefully we won't see the protracted delays we saw connecting for first time last year.

Happy new year all the regulars.
Can't be far off news now on this very important drill at Southwark. Damage has been well and truly done in 2022 so we are due a change of fortune so we can revisit the suspended well with no further issues.
In terms of share price IOG having previously allowed shares to land with institutions and LOG heavily discounted now we have the added dynamic they were trying to avoid of having regained Pi holders who have picked up heavily discounted stock at low prices as a result of the Oct crash IOG managed to create. So any rise has even more headwind than before. Gas price weakness simply adds to the pressure.
I doubt volume indicates bad news in itself but with IOG bad news is what they have gained a bad habit of producing on a regular basis.
Fingers well and truly crossed.

SP CalE got a very good deal in the farm out in respect of cost. Phase 1 contribution is caped at 60m and 65m phase 2. So with all the cost over runs it's highly likely they eat into IOG profit and not CalE. The question I'm asking is exactly that is this a continuation of phase 1 or is it outside scope phase 1 and hence 50/50. The extra costs due to delays will be IOG. How the extra work at Blythe is viewed I can't tell from the RNS. I hope your right and it is shared rather than part of the capped costs bucket.

Maybe Elgood was producing the condensates which is the other fluid handling issue they have had. But that was supposed to drop off. Maybe it's to let it regain a bit of pressure to maximise future production.
But I agree it seems very odd to be producing Blythe with water but not Elgood unless the idea is to run Elgood on its own while Blythe is worked on past Southwark. That was also one of my main takeaways from last RNs. The other open question I would have is whether CalE are having a free ride on phase 1 and IOG are taking the hit for the extra cost of Blythe. The new well is the right decision but timing wise it means it's ahead of other prospects.
Anyway happy Xmas to all the regulars it's been a very testing year for IOG and not what I was expecting at all from the performance of the operations and phase 1 production. Southwark if they have fracced they will have an idea of how commercial it is and what is flowing but there will be a clean up period which we should now be in. They have said very little about Southwark to date in terms of resources. Shareprice seems to have priced in sub optimal results but we will have to wait. At least the result can be used to inform any modifications to the 2nd well before it's too late.
Not the best Year 2023 has to be better operationally as at the moment we are simply funding contractors and still have not accumulated enough to fund future development and exploration or settle the bond which now looks more likely to be refinanced.

Jack getting to first gas was painful enough what has happened afterwards and the odyssey that is the Southwark drill is something else. Anything that can go wrong has gone wrong over past 18 months. If your a recent buyer on the crash you have been fortunate to benefit from a series of events you could not imagine was possible post first gas in your most pessimistic thoughts.
IOG now carries a significant credibility discount that needs to be closed by progress on the operations. The board have done nicely out of the self inflicted dip with their sub 10p top ups but need to work a bit harder now on the minimum targets for their easily achieved executive bonuses.
The lack of TR1 since 'that RNS' is intriguing. This side of 20p they have little incentive to sell. But it seems all the trading in the drop was by PI holders. Next news not far off but they have said very little about Southwark to date so the outcome of the frac producing gas without excessive water or saline or excessive condensate would be a good start even if it needs a bit of time to get to a stable production row. Would be nice if we have turned a corner and get some good news for a change and we find they have drilled into a sweet spot this time.

We will see if the 'new' management are either more lucky or better.
Rupert is hardly new - but he has more of a grip of the corporate side hence the better RNS. But to be fair they used the drilling update Southwark RNS as a bring out your dead RNS and put all the bad news out in one go hence the steep drop.
Dougie is new and hopefully can start to cut out the errors and drive the operations better.
The pipeline hit is behind now but the Blythe bad news on liquids handling was not new bad news but reporting Blythe was also compartmentalised is now known. Southwark now looks more firm on Q4 with a return to the second well planned in. So progress has been made.

Most shares a tightly held by long term pi and institutions. The exaggerated drop shook out some for traders fed partly by LOG releasing some just before the drops.
The drop from 40 to 20 to 10 then 7 was always well overdone. Let's see whether those who sold and didn't re enter ( assuming they want to ) drive it back to 20p or whether the profit taking begins to hold it back. It was 40p with 2 producing fields. Today it's 2 producing fields and a 3rd a month away.
RNS follows recent Rupert pattern of considering what you say and when to help not sink the share price.

Sailor I'm more familiar with onshore trading. I'm guessing offshore is similar but different. So it's possible they have completed the frac on the well and won't be coming back till the next well!
But Sailor given history here it's best to either wait for an RNS or watch the share price for a leak.....

Dunder that's my read they closed early at profit.
That's interesting for 2 reasons.
First it shows Someone at the top has got the calculator out and done some risk based sums. Second the extra time I'm guessing has reduced the risk of issues imacting the restart post Bacton shutdown lift and future connection to and activity at Southwark. Down a week or more early means post Bacton there must be a chance it's back soon after.
Time will tell if the new operations guy is able to cut down on the issues but the new CEO has a better understanding of how to present an RNS. He managed to address most areas at least in passing without amplifying any negative for a change.
K3 you've been lucky - I have alot more shares and capital riding on this but at the moment but the last year has been brutal for long term shareholders who have supported the company. Good result at Southwark should see this back to where it crashed from but it's going to take results to push on into the more interesting 20 to 30p range where there are some significant institutional and now PI trader profit points. So far the institutional holders seem to have held. So for long term investors like myself it's going to be a long haul back again hence the frustration.

K3 I hope your right because we have been here before exactly a year ago!

I'm pleased they saw the need to release an update. Confirms what we were seeing on the marine track but with extra detail to fill in the gaps.
Sounds like they switched off early given the shutdown date of Bacton and low gas volume for Oct the only negative I could see in the RNS. The paragraph reads a bit odd but I presume they closed the hedge early and may have actually made money on it due to the gas pricing being lower? Which would counteract the loss of revenue from the early shut down. How do others read that?
The Southwark news is pretty much as expected. The date towards end of year is a little later but not a surprise. The vessel is on its way for the critical frac activity to see what flows Southwark can deliver. A1 well news confirms effectively the rig stays at Southwark and the other prospects can be re-evaluated to choose next move and plan.
Says capex at lower end for a change!
Blythe obviously still looking for a solution for the fluids which is why Southwark needs to delver to give some head room for 2023.
Gas pricng will be important for IOG finances now the super profit opportunity has been missed.
So overal an ok update. Big couple of weeks coming up reconnecting the pipeline and on Southwark.

Dunder offshore when I looked this morning on marine track Hans Rig was still showing as off the well with 2 non type reporting vessels next to the well and the support vessel close but just south south east of well.

But yes GG and Sailor any insight or are you both in shock as well.

So we seem to have activity. Clearly company have decided to say nothing further for moment having passed on opportunity to confirm the shutdown and or commencement of activity.
I'd agree today has seen a few larger trades pull the price down.
Looks like no TR1 then from the October shambles. So institutions held into the drop. I guess they have no choice at 11p. Hence my thinking that it was a mix of larger Pi holders and some of the recent pi buyers who took up the institution shares sold since 1st gas who generated the volume and have now largely departed.

The Joke on windfall taxes is that the majority of BP and shell profits which are used to promote the windfall tax are not UK derived.
The tax is a tax on UK domestic production. It has done nothing to tax imported gas and oil and if sustained would undountably mean UK production which requires risky offshore investment years in advance of being online is less favourable. Why produce UK gas if you can import it from dodgy overseas suppliers in the future.
It's attractive as a political football in short term but not a good idea to make investment in your domestic production marginally not cost effective for medium term. Once in place how long before it's removed if ever as prices drop and it yields less and less?
I'll conceived intervention in a market. They need to be taxing imported oil and gas in same punitive way but they can't. So the easy target is UK producers using the royalty to hike corporation tax to levels that in the 1960 and 1970 caused celebrities to tax domicile abroad!

Yes wolster it's been the theme of the year and why the operational side of the board had to go. Huge missed opportunity and very costly series of mistakes.
Anyway quick scan of marine track shows a bit of activity underway. Hans Duel looks to be off Southwark to me at the moment and a bit south of well with couple of vessels nearby on Southwark.

Hi Gold not seen you for a while! I guess if your holding you have either top sliced or jumped out at some point.
You are of course absolutely right it's been a sorry tale of what might have been over the years. The ghosts of Christmas past, present and future for sure.
Southwark is still in play so fingers crossed as the shut down gets under way we see some action on marine track this week.

Dunder the reaction has been to price pretty much everything in to the negative side so I'd say it's a pretty extreme reaction if you look at it on a scale. I think it's over done but can see the argument it's not. The problem now is that they have created alot of doubt about the phase 1 assets and hence how they go forwards with the bond (2024) and the next round of development.
There has been no commentary in RNS on the beyond Southwark plans at all. Clearly the model relies on delivering cash generative assets to fund the next and build the business. That is why delivering a spluttering phase 1 has been so damaging. But pushing it to 7p? If they stopped now the cash and run off from phase 1 should cover the bond. Southwark producing is key to the next steps and that is the risk that's been priced in.
How likely is the Southwark single well to produce or fail? We don't have much to go on Southwark as it's been kept quiet. Till it's fracced it's unknown. That's the risk going forward and where it needs to produce some sort of result. Else Southwark runs the risk of ending up like Harvey.
Whether there is some more info on Southwark to read up on might be handy to guage risk.
It's interesting we still have no broker note I have seen. Are they waiting for Southwark as well?
A fundraise I don't see unless Southwark is a total disaster. Even then we need to see the beyond Southwark plans e.g. Nailsworth decision to know whether they can work within the existing cash or not?
So I think we all agree Southwark is key even if not yet a binary situation.

Phanders why wind up the existing business like that rather than just farm out more or pass over operatorship and leave it inside existing structure?
Don't see much sense at a corporate level unless you think phase 1 is now effectively loss making and even then you would want to carry the losses forward as a business and farm out future phases.

It's been exciting enough already! I actually didn't see the investor forum from July but we discussed it here. The wheels really came off post July so whatever was said didn't obviously include some of the minor detail from the half year results and the Oct bring out the dead RNS!
However, I've been invested here for several years so very aware of where we have come from and what should have happened and what has happened and what could yet happen. Very seriously displeased that after all those years they have delivered a 75% share price drop post first gas. They have destroyed not created shareholder value so far. So nice as it is for everyone my holding built up over multiple difficult years is back where we were 4 or 5 years ago. That's how bad the last 6 weeks have been.
It's almost certainly an over reaction but that's somewhat missing the point.

All eyes now onto marine track. You would hope the moment Bacton shuts in then something should have been booked for Southwark or to work on the valve. They don't have to do an RNS but approach to PR from new team will be very interesting. They must have seen how much chaos the free float shaken by the MM has caused when badly sequenced RNS are released and you would hope have learnt something from that as I think they must have had enormous grief from their institutional favourites at the drop! Week on still no TR1.

And back to normal. Low daily volume of trades and posting back to normal as the herd have departed until next news......

Just doing some fag packet calcs.

Day 1 of the induced crash shook out a 75m volume. The main holders LOG with 30% and LO plus the other institutions must be heading to 70%+ of the shares. So 75m was probably 40% of the free float traded which means it was a good mix of buys and sells to do that but they must have shaken out alot of people at @10p down to 8p. Just can't see instructions taking a loss. Day 2 they pushed it down again to 7p prompting RNS2 and we saw 57m volume. Again that has to be a mix of sells early on and bottom fishing. Day 3 23m in total, day 4 11.5m, day 5 4m. So halving pretty much volume every day.
Why no TR1 then well it's still early days but I would guess most of the volume has to have come from PI sellers trading in and out on those days. Normal volume is 1 to 2m. Holders like myself I think make up a reasonable amount of the free float so the crash the MM engineered to 7p has indeed created a short term market but you could be looking at 30 to 50 people trading with any volume inside that 75m and subsequent days plus the momentum chasers.
Today we have no only had volume reducing back towards the norm but the range it's moved in is tightening. So we are settling in for the wait. Notice also the posting pattern on the board. It's going quiet.....again.
So TR1 it's not impossible the volume has been just a relatively small number of smaller holders bounced about joined by traders who have now largely moved off that is the case then this 11p area makes alot of sense.
The lack of TR1 so far might also indicate how angry trapped corporates would have been at this level. I think they were also left holding so rapid was the mark down. Have they hoovered up any shares having sold at 40p to 20p level or covered with a cfd? LO might have and that would be a very positive sign if we do start to get some II buy TR1! The good news if shares have stayed in relatively sticky hands is that on good news here it can easily recover and gap up the other way or move quickly.
So over to you IOG sort out the operations and repair the damage to get it going in the other direction again.