Member Info for MozzaBezza

I agree, Paul.

I think the one thing we can all get behind is that, thus far, their attempts to deliver "significant shareholder value", or what ever they call it in the RNS', hasn't worked.

I'm fairly surprised they haven't put out an investor meet yet, but maybe they know it'll be met with a lot of rather negative questions...

I have emailed him this morning. I doubt I'll get a response that's any different to the ones others have had, but I think it's important to make sure he knows the pressure is on.

The volume is large enough that it suggests some IIs have decided to sell down.

The thing is, I would average down a bit more, but with no known catalysts on the horizon until Q3 of 2023, that seems a bit foolish for the time being.

The question I have is, at what point will the BOD pull theit finger out and actually deliver something cash generating?

They've had a while now since finding Kveikje and that seems to be the key trading chip for now, so if there was ever a time to act quickly, it was now!

That's the thing! They may well think that these count, but the fact is, the market doesn't, and that's what actually counts as far as creating shareholder value comes.

It does sound like they're getting another Investor Meet ready - but unless they're going to sign a production deal at the same time, I don't know what they'd actually have to say.

I think that it all went wrong when they didn't get an initial production deal. The market cap has been too high for any of these discoveries to be geared enough to give us a big move in the share price - had we stayed at the £10m market cap level, when the initial exploration deals were done, it would be a very different scenario now and ironically, we'd probably have a higher market cap then we do closing trading today.

The current strategy works on the basis that we get a massive strike, which we just haven't had and TBH, probably never were massively likely to have.

I would recommend anyone who has an opinion/suggestion emails the BOD with it, so they know they can't hide.

Can you imagine if they tried to raise money for more exploration now? I can't see it going well.

Production would be a big improvement, because I guess they could use a reserve based lending process to get the size of any raise down, but let's face it, it hard to be particularly optimistic with their current progress in "creating substantial shareholder value".

Here we are:

Well test results at Oswig. Potential further
volume upside at the South of the licence
• The Oswig sidetrack well encountered a gross gas/condensate column
of ~100 m in the Jurassic Tarbert Formation with no gas-water contact.
This suggests 100-215 mmboe of in-place hydrocarbons.
• A DST in the Upper Tarbert Formation yielded average flow rate of ~2.1
mmcf/d of natural gas plus 280 bbl/d of condensate (total rate of ~650
boe/d). The gas is of excellent quality (only 5% of non hydrocarbon
component). The flow rate suggests recoverable volumes of 10-42
mmboe, which is at the lower end of expectations (90 mmboe pre test).
This reflects the properties of the reservoir at this depth.
• The field would probably need to be developed with multi laterals,
horizontal or stimulated wells with higher individual flow rates.
• Pending further details on next steps, we have changed our target price
to £1.20 per share to reflect the lower recoverable volumes estimate.
Reflecting on the positives from the well
There are multiple positives from the well test result. (1) The well flowed at
a reasonable rate; which confirms that Oswig is a discovery. Even with a
smaller volume, Oswig could potentially be developed through the nearby
Tune field (most likely option). Note that the company carried out a
successful mini frac highlighting that the wells can be stimulated. This could
have important positive implications on the flow rates for future
development wells. (2) The results of the flow test highlighted a very well
defined and confined structure. This suggests a much simpler potential
development than Egyptian Vulture which covers a much larger area. (3) The
Oswig discovery could extend into an area south of the licence. The volumes
associated with this extension are not included in the resource estimate. If
this extension is shallower than Oswig, the reservoir in this area could have
better characteristics; which could result in higher individual well flow rates.
The extension is not believed to currently be captured in Longboat’s existing
acreage, however, we believe this sits on open acreage which is likely to be
awarded to the joint venture without additional work commitment in the
upcoming APA licensing round in February 2023 as is normal practice in
Norway.
Valuation and new initiatives
Our Core NAV based on the value of Egyptian Vulture and Kveikje is ~£0.35
per share with a ReNAV of ~£1.20 per share. Key upcoming catalysts include
Longboat’s monetization of the Kveikje which is underway and the Velocette
exploration well which will be drilled in 2H22 (~£1.50 per share unrisked).
The company is also actively pursuing new opportunities in-and-outside Norway.

It's not all bad though guys, because Auctus have a £1.20 target. Lol.

Now, do we think we'll get an investor presentation this week or next week? I think we'll be due one fairly soon now these results are out and I would encourage everyone who agrees that monetisation is key to voice that.

At new 52 week lows now on a discovery (albeit under the expectations), doesn't look good. We're probably trading under cash levels too.

I would hope that the institutions left are taking them to task.

I agree, Paul. There's always the bit about "creating shareholder value", but the fact is, that only happens when the share price goes up and there's a good way for that to go with most of our averages being higher than here.

Even with my gentle averaging down every couple of months, my average is ~72.8p.

I think however, that using their own figures of $5/boe, Kveikje could be swapped into $14m at the low end of the numbers, or $24m at the high end. I know there's some quibbling about if they could get more than $5/boe, but I won't believe it until I see it.

Even at the high end $24m, would get them about 350 boepd looking at the figures paid in the recent Suncor Norge transaction at $318m for (4000 boepd and exploration/development) fields) - tricky numbers to use because of the extra fields, but using say KISTs $165m for 6000boepd, they could get say 850/900 boepd.

With hydrocarbon prices where they are, a mix of oil and gas at 900 boepd, could generate ~$50m in revenues per year, which right now would make a big difference.

The thing is, we need action, and they don't seem to do a lot quickly at LBE.

I don't really think a placing is right around the corner. I know it's what people jump on when we have something disappointing, but I can't see it.

We know from our last set of results that we had £22.5m in cash, 15.7m in drawn debt, but then we're set to receive £21m in Q4 from the Norwegian government as a tax rebate. So once that arrives, its actually still looking OK. Even if you factor in more expenses from the DST, thr cash levels should be fine.

What begins to complcate matters is that we know they want more business development activities and for that to have any scale to it, they would need to raise cash, debt or swap assets.

The thing is, right now, i'd actually rather they maybe lose a marginal 10% in a transaction and get one done quickly for Kveikje, for flowing BOE ideally.

I think that's probably a fairly well balanced view, Paul. I certainly agree that where this went wrong was in putting out too much information pre the DST results, which has then disappointed now the results are out.

As far as I see it, they were working on a basis of 93mmboe potentially recoverable, with a 36% chance of sucess. Multiply the two to get the pre drill number of BOE recoverable, that would be 33.48mmboe.

The thing is, we have found the hydrocarbons, but still comw in under that recoverable figure on average with a range of recoverable resources between 10-42mmboe gross.

Monetisation is the key now, either of Kveikje, which seems closest, or this, which no doubt will have some interested as it will tick a lot of boxes even if right now it's sub expectations.

The issue is that they've never seemed that keen on doing anything quickly, so I won't hold my breath for a monetisation in quick succession.

Unfortunately, I'm not particularly surprised, because the range of recoverable resources is wide again and once you scale down for LBE's net share, on those numbers it isn't really anything to get wildly excited about.

Don't get me wrong, it's great to add another discovery, but I think the market had basically priced in that there was something recoverable from the field, but with the expectation that it would be at a higher recoverable range.

Feels a bit like another Egyptian Vulture in so fsr that the initial picture looked better than what has begun to materialise.

That being said, maybe someone would buy it off them, because I can't see them wanting to wait for the development period.

Mixed bag there. Let's see what the market thinks.

I hope so! We could really do with some concrete numbers to be excited about here!

I wish, Paul!

I think that you both make good points. Seems nuts not to keep drilling if they can while the equipment is there, esspecially if it helps answer questions re. the lower formation size.

We had some decent late trades come through yesterday that made me hope we might hear something today, but alas not yet.

That being said we're 39 days since the initial DST RNS, so they said 6-8 weeks and we're at about 5 and a half weeks in now, so it'll be fairly imminent.

I don't know how long they usually take to plug these things post DST/drill - but new tech seems to put it at 3 days and older tech at 10-14 days, so it could be anytime really for us to get results, as I think the majority of the work is probably done by sticking numbers into spreadsheet formulae.

I've dripped a little more in today. Nothing massive, but it's nice to see my average gently decline.

I think, Ash, that the well isn't a duster in the traditional sense. I.e. We know there are hydrocarbons there. The bigger question now is: "is there a functioning reservoir?".

The DST should answer this. The thing is, it's much harder to guess based on ship times, etc with this bit, because there's no proper documentation from OMV to compare against.

Fingers crossed we get something soon. Feels like it will be this week based on volumes, but equally that's just guess work from me.

I wonder if that £17k buy is the start of those in the know taking positions before we get results. Fingers crossed!

Many thanks!