Member Info for moneyhawk

Just wondering if this may be an indication that the Icewine farmout is on favourable terms to us? We’re leading on winx as the operator and largest wi share, and reading rmp’s rns there’s a possible plan emerging for another drill in the 2020/21 season with new seismic being acquired this quarter.

That’s all going to cost money. Seems unlikely we’d be pushing ahead with expenditure on winx if the icewine fo would require us to fund a share of drilling costs. Given our current mcap, it must be doubtful we could raise enough for both a share of icewine and winx costs during the next 18 months. And then we’ve also got Yukon where we’ve initiated discussions with other lease holders.

So it rather points to DW is expecting to have cash, and if a fund raise isn’t a realistic source, it’s suggests to me the farmout is a free carry at icewine plus cash. Can’t see any other way we could be pursuing all 3, current cash wouldn’t cover it.

The thing with quarterlies though is that they are intended to be a report looking back on what has been done in the previous 3 months and the finances for those 3 months (in this case up to 30th June). Since DW is pretty good at giving updates as things happen when he can, we generally don't learn much new from the quarterlies here.

So I think unlikely the farmout news will be in the quarterlies. No reason why it couldn't all come on the same day, but if that were to happen it may be more likely we'll see 2 separate announcements, one for the farmout and one for the quarterly report.

Quarterlies are due by the end of the month, but unless farmout news hits before then unlikely they'll say anything substantial that we don't already know, and I'm not sure that an important announcement would be combined with a routine financial report for the previous quarter.

Last two years we've had them before this point in July, so perhaps they are being held back to be released after the big news? Although in 2015 and 16 the quarterlies were released in the last few days of July, so maybe can't read too much into it.

Think more likely to be posts being reported than a fault with LSE. Not sure if a reference to another junior oiler and how its moved on news would breech posting rules? Not directly relevant, but not exactly ramping another share either, and probably of interest to quite a few to see what other similar companies are doing at the exploration stage. If someone popped up saying buy XYZ because of the great prospects and its certain to rise, that would be a little different.

But I know I've had posts removed before where I mentioned farmout deals at other companies and what the terms of their deals were.

Strange though that posts which only refer to deals the majors are making or exploration they're carrying out never seem to disappear. ;)

Bridgedogg, news reports here:

16th June:
http://www.petroleumnews.com/pnads/42282314.shtml
“We’re proceeding ahead with permitting. We have most of the operational permits in place, but we’re working on minor amendments and updates to those permits as a result of refinements of the well location. The ice road to a location was originally permitted last year prior to completing interpretation of the latest 3-D shoot, but those results have allowed us to refine that original location,”

And 26th May:
http://www.petroleumnews.com/pnads/113235900.shtml
"Permitting is in place to drill two exploration/appraisal wells in the winter drilling season of 2019-20."

I didn't see anything in this mornings posts that would cause them to be deleted?

Just a thought on a potential limiting factor for the farmout for the first drilling season coming up, it may come down to how many rigs would realistically be available. e.g. there wouldn't be much point having a farmout for 10 wells to be drilled this winter if rigs are only available to drill 2 with this length of notice.

We never seem to have a problem getting a rig, but then we've only been drilling one well at a time. Unsure how many rigs are up there suitable for arctic conditions, but I doubt there's much excess capacity and there's lots of exploration going on.

You can always ask him yourself, unless someone here is one of his pseudonyms you might have better luck finding out:

https://www.lse.co.uk/profiles/aberdeenman/

Its only taking a worrying amount of time if you worry about it.

Less worrying to assume its taking the normal amount of time for the farmout partner we're dealing with and the deal we have with them.

I don't believe we can hope for that much in back costs as our costs have been pretty minimal for the conventional. Some 3D and interpretation, and maybe they can allocate a proportion of the lease costs to the conventional, but its not going to be a huge amount.

To our advantage for what someone may be prepared to offer instead of back costs could be the historic wells on the acreage which show hydrocarbons present where the 3D says it is. And you never know, our FO partner may be someone who drilled one of those wells, and has now realised what they missed with the benefit of modern 3D and other recent discoveries on the north slope.

Then there's the last Yukon update, which said "Discussions have been initiated by the Company with nearby lease owners to optimise the monetisation strategy for existing discovered resources located in the vicinity of the Yukon Leases. "

So why would we be initiating discussions if we don't have anything to bring to the table? That announcement would probably have been made after the FO cash element had been agreed, so DW appears to be expecting to be able to do something after the FO

We might not need to get oil flowing first before IIs start buying in. If our MCap goes comfortably over £100m that could be one criteria that's met for some IIs. And then if our farmout partner is a major (maybe even a supermajor), that would be a huge vote of confidence in what we have and could be a derisking element for fund managers.

Just what I was thinking Jonah, Sable was previously operating on the basis of transporting material long distances, so guess its possible. Not sure if that would have been by road or rail?

Will depend on whether there's money to be made from it after transportation costs and if it works out more viable for XTR than building a plant there. Does seem a long way though, perhaps too far to be viable?

I do wonder if the trading halt process will be used this time when they’re eventually ready to release news. Volumes are so low on asx at the moment would it actually be necessary, that market is almost behaving as though it’s on a trading halt already.

Brom 18.08 - I doubt that we've a lawyer working on a 'no win, no fee' basis, so yes I should imagine they'll be winners whatever the out come of the deal. And the sooner the contract is all signed off, the sooner their billable hours will reduce, so there may not be much incentive to speed it up on their side!

Looks to me that the next news will be about copper. If we're going to be producing copper during the 4 months from end of July for Phase 1 at sable to be completed, the material for that has to come from somewhere. So unless there's a stock pile included in the sable deal or the plan is for CB to empty his piggy bank into the plant to produce some copper, it means we've another deal about to be announced.

The issue is whether that deal will involve an upfront cash purchase, how much it will cost, and if it will involve any dilution or can be funded from cash. If we can get this next deal without any dilution involved, then that would be a huge step forward.

Possible that the absence of further news so far is just down to lawyers checking and amending the wording of the contract in fine detail before its signed.

This recent farm out case from 28th June could have a bearing on how much work the lawyers have been able to create for themselves:

https://www.oilandgas360.com/oil-law-contract-language-outweighs-industry-custom-in-farmout-case-texas-supreme-court/

We're producing chrome concentrate rather than chrome, and typically we are getting in the region of £100 per tonne. At 5,000 tonnes a month, this would be revenue of £6m a year. Until we get to see the figures from it, its difficult to judge what kind of profit margin we're getting on that.

Still good though, DCM is our first and smallest operation in the tailings business. This is an additional £6m revenue from tailings that until now would have been ignored by the industry as we've already extracted course chrome concentrate from those same tailings.

Apply the same to Platcro chrome, where we have greater capacity and keep 100% of earnings, then it starts to look very good indeed.

Neverlearn 8.46 - I don't think what we're experiencing is really that slow by industry standards, but its perhaps slow in terms of some investors expectations.

As for finding a huge reserve and drilling it within months, here's some analysis of farmouts:

https://www.westwoodenergy.com/news/will-the-farm-out-market-shift-from-promise-to-performance/

"With a median duration of ~330 days between an opportunity coming to market and a deal being completed, and then a further ~250 days before an exploration well is drilled, the quality of today’s farm-in opportunity set will not become fully apparent for at least another two years."

TT, difficult to tell if they mean it will be copper tailings or fresh ROM ore. No mention of any upgrades or modification to the existing copper infrastructure, which I would have thought would be necessary to run previously processed tailings to get any meaningful quantities. Maybe they're confident that the existing Sable plant is efficient enough to process other peoples tailings and still get a decent extraction rate.

And sounds very much like it will be commencing anytime from August onwards, after handover of the refinery by the end of July. So that could be when we get the announcement about a copper project, and could be very similar to the Platcro Chrome deal where we start to generate earnings from it straight away.

Interesting mention of copper production during phase 1. Not sure if this will be ongoing after all the zinc/lead/vanadium upgrades are complete?

But the main piece of info lacking is where is the copper coming from? Could this be related to our first copper/cobalt project?

Good update though, no financial figures, but they've already advised these will be on a 6 monthly basis going forward, which would mean the annual accounts in November for the next figures.

May take a little longer than 2 years to pump all the oil out. Not withstanding the practicalities of pumping that much oil out of the ground in a very short space of time, the Alaskan pipeline can only carry a max of 2m barrels a day, and its serving all the operations on the north slope.

20-30 year operation is more likely imo