Member Info for Nozzleblast

I wonder if the flow test RNS held back for reasons of consolidation needing time to take place in investors accounts. It wouldn't be right if the news dropped and some accounts couldn't trade.

So, the level of this board is semi-literate, which can't count to two, reliably. OMG.

As per Oak Securities report, the risked price is 6.4p after the consolidation (i.e. current price x2, or about £30 million MC).

However, they use highly conservative assumptions. If the well does indeed flow commercial gas, then it is not impossible for the company to be worth £150 million, i.e. ten times what it is valued now, or even more, if oil becomes an unexpected revenue stream.

Helium is a hot commodity.

The broker note values the company at x2 its current MV. However, the note was out of date at the time of publishing, and used very "conservative" estimates as admitted in the document. If the flow is commercial, then the value of the company is x4 its current MV. This is before any development of the bigger property. So it could be x10, or even more.

You made me chucke here. The Gas Flow Rate is the hundred dollar million question that everybody's waiting for to drop in the RNS any day now.

It is omitted from the report as well as from the interview, because nobody knows it until the well is cleared of fluids and let run for a few days, after which the data certified by the auditors.

The proxy for the flow is the 90% 3000PSI recovery rate (which is ENORMOUS, and very promising), and the fluid uptake indicating connection to the large natural fracture network. Wells in similar geology, down the road gush at 5,000 mcf/day. The well didn't flow originally for the "skin damage" and because nobody cared for the gas, yet it was noted that the pressure rebuild was powerful, indicating a large natural reservouir. Hence the acid, and the frack jobs.

@Hyphae And that is why I refrain from posting on LSE anywhere, because anything you post gets ad hominem instantly. We have an open sewer level of conversation here. I probably will stop posting for good on here.

Sound advice! My initial view was strongly negative, but after about two days' worth of research, it has changed diametrically, i.e. 180 degrees. When facts change, I change my opinion. I sold the stock after they announced fracking. I bought it back after I did my research after the last RNS. And then some. And then some more. I still could be wrong. DYOR.

What I say is relevant enough for good folks here to make up their own mind, I think that's the idea. I only need to be approximately right, precision here is not possible, even at the data room level. Again, I am not advocating for, or against investing here, but understanding what is going on can help make informed decisions, rather than just hope for the best.

No. The rock is still tight, but the well is connected to the natural fracture network, that is large enough to make the well commercial, based on the 90% in four days data. I bought a fair bit of stock after the last RNS.

Disclosure. I trained as a chemical engineer.

There were a lot of risks with fracking an old well and the well being tight. The pressure of the well at 2km down will be slightly over 3100 PSI. After the well was de-pressurised, to build back 90% of that enormous pressure in just four days, you need a vigorous and large natural reservoir. The fact that the company published the 90% data is a flex to the institutional investors who will know what that means. Wells in the same area that re-pressurised so quickly went on to gush 5000 Mcf/day. Curently, the well is gargling fluids and the flow rate is not known even internally, but as the fluids get removed, just as the release said, the flow rate will stabilize and then can be reported. Some risks remain, such as flooding, but the well, as it is now, looks strongly commercial.

"With pressure build-up reaching approximately 90% of virgin reservoir pressure..." - meaning, that after all of the acid stimulation and the fracking, the pressure actually DROPPED - I understand because the fluids pumped remain in the ground, and clog the flow, which is not strong enough to cough it up by itself. This means that at best, after the clean up, it will be a very moderate flow. As the well had a flow below commercial BEFORE stimulation, this is not good news at all.

My final message here before I move on.

1. Lower Leadwille formation was skimmed over, "buried" as they say. It tells me that it was dead. But what is important is the delivery. They KNOW that the investors bargained for the lower formation to be a part of why people invested. Skimming the news is not good form.

2. Fracking a 30 year old well is NEVER planned. As it doubles the cost, and is hugely risky. The 30 year old pipe can simply blow, killing the test. Fracking is violent, and can blow a hole to an aquifier, killing the test. I mean, we are in proper cowboy territory here.

3. Candour. Just tell people the data straght and let people make their own choices. The delivery of the report is what does it for me. Even a hint of "massage" of data and expectations and I am out.

Sorry, guys, I didn't like the sound of the RNS either. The language is very slippery, and I find it potentially misleading. If there is no candour, I am going elsewhere. I will keep an eye on the company, and wish you who remain well.

I feel I need to understand what is going on in order to participate.

Essentially, we have a confirmation that the auditors were right, and the rock is 5% tight, which does not allow for commercial flow.

The company hopes to frack to a bigger fault network, but it is still made in tight rock. As I know, fracked gas wells need re-fracking every few months as the pressure drops.

1. I did not realise that the well was acid-stimulated previously. I thought it was gummed up and flowed at 150mcf/d without stimulation.

2. The release is vague in saying that the fracking was "planned" - as planned before the start of the test, or in response to what they learned? Are they fracking because the well is not flowing because the rock is tight? Is fracking the last hope?

3. "The extended production test has successfully generated valuable reservoir and pressure data which is helping to refine the Company's understanding of the Leadville Formation and guide future development planning. The next phase of fracture stimulation and testing represents an important step towards evaluating the commercial potential of the reservoir." phrase - I don't understand what it means. What does "future development planning" mean? Evaluating commercial potential as viable or not, or as in big or bigger?

The language is vague and borderline misleading.

Long story short - the article says "buy". Serabi have a lot of reserves (and growing), undervalued relatively, and in absolute terms. Gold price is expected to hold and grow, but even if it retreats Serabi will be profitable. Currently trading on a forward p/e of 3. With a new sorting machine, they will grow production from 37 to about 55k oz, expecting to clear maybe $80MM FCF this year, and 100k oz is in sight by the end of the decade.

Risks - the gold price, and the license renewal due this year.

Just sayin. This is the very crux and the hope. This is why we are all here today. I wonder if we have any petroleum engineers contributing to the conversation?

The recent £5 million institutional placing was executed at a price of 0.03p (pence) per share.

To raise that £5 million at 0.03p, the company issued approximately 16.6 billion new ordinary shares, which were subsequently admitted to trading on the AIM market in mid-April.

Market Context:

This 0.03p placing price effectively established the current "floor" for the stock. It is also exactly why the directors' subsequent open-market purchases (at 0.031p to 0.033p) were viewed so positively by retail investors—the executives were buying in at or slightly above the exact same price as the institutional funds.

@Paulb20 It makes no sense for the investors to conduct DD, invest five million pounds and then run, at the same price as they invested at, within a short space of an actual test.

Also, this would constitute insider trading. I am sure they have better things to do than tinker with a few hundred grand here and there, having sunk five million into the project.

No, I think the expectations are high, and so are the chances. They are not 100% tho, and this is what I am trying to establish here, as to what chance of failure we are riding here.

Quantum Helium were APPROACHED and given five million pounds by a "syndicate of "high-quality institutional investors" who were proactively looking for domestic US helium exposure.

Five million pounds, plus the expertise of high-quality institutional investors, will buy them the best of the modern toys and the best brains to ensure the test is a success. They will also have had full access to all of the internal data before the transaction, and would have DD't the hell out of it.