Member Info for moneyhawk

dougiek, wouldn't worry about it. It may have been one or two of the replies to your post that caused the entire thread to be removed, not just your post.

The prospects being classed as discoveries may attract a greater valuation at the moment if the deal we have made involves a payment on a per barrel basis. Personally I don't think we can be expecting that much in terms of cash at the moment, getting some test wells drilled and oil flowing to prove the conventional data could be much more valuable. The next deal after that happens is where we'll be in a much better position to get a decent $ per barrel rate.

Brom - Fri 21.46. Yes I did recall both $3 and $1 figures being used for oil search's transatction.

Looked it up and I think the difference comes down to who's figures were used for the resource. Oil Search put the figure as 500m discovered resource, which works out to $3.1 a barrel. Repsol put the figure as 1.2B barrels, which works out to $1.3 a barrel.

Page 18 of this presentation:
https://www.oilsearch.com/__data/assets/pdf_file/0011/15968/171214_Alaska_Investor-Seminar-FINAL.pdf

Also same page says this: "Compares favourably to other pre-development global transactions averaging US$3.6/bbl of resource"

Perhaps not somethings that's impossible or even that far fetched. If we were to work on a sell out price of the $3 in the ground value that Oilsearch paid, we'd need roughly 420 million barrels net to us proved up to get £1B.

Just looking at Icewine conventional we have 2.2B barrels net to us at the moment. Should we end up keeping 30% that's 660 million barrels net to us. Just need 2/3 of that proved up to be on for a £1B value if its sold off. And also bear in mind that the current estimates are based on 3D on just 25% of the acreage, so there's plenty of upside potential even if there are some unsuccessful wells on the current prospects identified.

Then we have the HRZ and Yukon.

Won't happen over night, but the farmout terms may give us an indication of how far off we are.

Neversatisfied, I don't think we can view oil search as the favorite from that. They were looking sell part of their WI and received what they describe as an attractive offer. They then decided in early 2019 not to proceed.

What we can gather from that is that at the same time our farmout bidding and selection process was underway, Oilsearch received offers. I think we can assume from the amount oil search paid for those leases and the work they've put in since, they would be dealing with some major players with deep pockets, and surely an attractive offer would be more than they have spent.

May be purely a coincidence in the timings, but does tell us for certain that there were some major players looking for acreage and willing to pay for it at the same time as we had people bidding.

Purely speculation, but could be possible that Oil Search's bidder, having been turned down at pikka, decided they didn't want to miss out on another opportunity and revised their bid to us to something that couldn't be refused. Or could be that they were our 1st choice, but we had to wait until they had an outcome from Oilsearch before we had the green light they would be going with us.

Had a read through, looks good for the North Slop in general.

Was particularly interested in this bit, top of page 3:
"in late 2018/early 2019 Oil Search received strong expressions of interest from third parties, including an attractive conditional offer, to acquire an interest from the Joint Venture in the Pikka Unit Development project and adjacent leases. The process was suspended in early 2019 due to a change in partner views regarding the upside resource
potential"

'Early 2019' - Could it be just a coincidence that we selected our preferred bidder in early 2019?

TT, the reason Glencore stopped operations at Sable is far simpler - A tax dispute with the Zam government. Selling it to us enables them to save face and get a mothballed facility off their books.

https://www.mining.com/glencore-now-idles-zinc-mine-in-zambia-over-tax-refund-row-42201/11/

LTI, not impossible in my view either. All depends on just when DW believes the right time to sell out is and whether we get the right offer. It could be the the greatest value will be achieved after some of our prospects go into production. But although not impossible, probably more likely any cash generated up until the point of sale will go back into exploration to prove up and/or develop more.

Other possibilities to a regular dividend could be special dividends if our subsidiaries are sold off separately, or maybe a share buyback program.

Shard don't appear to share the same concerns:

http://jubileemetalsgroup.com/wp-content/uploads/2019/03/Shard-Capital-Jubilee-Metals-March-2019.pdf

2021 - Projected Revenue £197m, Gross Profit £96m, Net Profit £41m

I'd rather see an end to the sub penny status through a positive reaction on the farmout terms than have it artificially amended through consolidation.

But does the number of shares really matter that much?

A couple of examples:
UJO - another junior oiler in the news recently - 10B shares in issue.
SXX - 7B shares in issue, £1B MCAP, and still a long way off developing their mine

There is of course another side to the argument, that a wide spread also discourages people to sell and discourages day traders only looking to make a quick gain before moving on within a few hours, neither of which really help the SP.

Interesting though that all the MMs appear to be in almost complete agreement on both the Bid and Ask at the moment.

Seems pretty clear to me that the FO isn't priced in. No one really has any idea who the farmee is let alone the terms of the deal. All we've got to go on is that a company with a board is about to sign on the dotted line and that there will be a transfer of working interest in our leases.

How much WI we are giving up, how many wells are included, free carry or not, how much cash (if any) are complete unknowns, and are the key factors that need to be known to determine the value for us.

Totally agree sumoskier. Just making the point that routine placings to pay the bills and salaries are no longer a concern here.

Always good to see a bit of humour on the board :)

But just supposing there was to be another placing here, it won't be for working capital or funds to apply for licences, so it'd mean another major acquisition. The two this year haven't been so bad, Platcro already making decent earnings and on course to pay for itself within 18 months (or about 12 months from now), and Sable paving the way to £10's millions profits each year.

We don't need just 2 or 3 drills to prove up 500,000 acres. The cost will be substantial, at least 100's millions $ to fully explore and go into production with the infrastructure required. So it would be preferable to have someone on board with the resources to do this. Someone that can only afford to fund 2 or 3 drills doesn't really take us much further forward from where we are now.

MM, I think you're missing the point here. No one is disregarding Star Zinc or information put out by GLR to drum up interest in preparation for the next placing. The fact is that additional ore to run through Sable is just a fairly small extra earnings stream, along with other earnings streams at other projects that are currently ramping up. Kashitu may be of more interest with the potential for vanadium as well, which would make more sense as we can then make even greater use of the vanadium recovery circuit on the plant.

My best guess from the limited info we know at the moment is that the farmee will be taking a small WI % for an upfront cash payment, followed by earning in to a larger WI % by completing an agreed program of works, hopefully involving a free carry for us on a drilling program.

As for the amount of cash and % of WI, very difficult to accurately guess. And of course we don't know if this is for the whole acreage or just some of the leases. But would not be surprised if the final % for the farmee ends up being in the 50-70% region after successful drills, especially if it involves a free carry.

How would NYSE being open affect us? We're not listed on that exchange.

And where are GLR going to get the projected $2m annual cost from for the first year of production, or at least until revenue starts to be generated? But sounds positive, hopefully they'll crack on with the licence application rather than just keep telling everyone they're going to apply for it.

Brom, I don't think WI has to be transferred prior to contract signing, its prior to the farmout terms becoming a binding contract if I'm reading it correctly. Signing (or execution of documents) and transfer of WI read as though they are two separate steps. And also going by todays RNS, its sounds like we will get an update after signing, which doesn't necessarily mean we have to wait until the transfer of the WI.