Member Info for Phoebus

Great job Fernan. Perhaps we should also deduct current liabilities of $0.67M as at end 2021 and another $2M for Q3-Q4 G&A expenses as Gazania results won't be until Q4. Assuming $20M cost for Gazania would leave ECO with around $5.3M post drilling. I haven't seen a cost estimate as yet for the next well on Orinduik, but Jethro-1 was originially forecast to be $7.6M net to ECO although I think this figure was revised lower in the end.

https://www.investegate.co.uk/eco--atlantic--o--38-g--eco-/rns/replacement---eco-s-2019-drilling-program/201812051313125575J/

Unless Gazania comes in under budget and Orinduik is drilled PDQ then ECO looks like it will need to raise some funds ahead of Orinduik drilling. Not a huge issue, but not ideal in the current climate, hence my recommendation to farm down Gazania to preserve some of the cash pile. That said, if we are lucky at Gazania, then this is all moot. GLA

According to p117 of the latest CPR, the official COS of Gazania is 34.7% and Namaqualand is 37.1%.
https://wp-ecooilandgas-2020.s3.eu-west-2.amazonaws.com/media/2022/03/AIM2022CP-ECO-Report-final-3-22-2022.pdf

On the flip side, now that the JHI deal has fallen through, ECO won't get access to JHI's $20M odd cash pile, so if Gazania-1 is a duster there won't be much cash left. Not a nice thought given the dreadful market backdrop.

Having waited for so long, the timing of this market meltdown is incredibly frustrating. Longer term ECO should be OK, but the risks short and medium term have increased considerably IMO and I see little upside into drilling for ECO or any other drillers until market conditions improve significantly.

At least the placing for Gazania was done before JHI walked or we'd be in a right pickle.

Best course of action for Gil right now IMO would be to farm down Gazania for as close to free carry as possible to guard against things getting too bumpy.

GLA

I believe the Orinduik drilling commitment is already fulfilled for the current period ending 2023-01 and the next well is due by 2026-01.

It's good to see the rise here, but I remain cautious. Appetite for exploration and appraisal drillers seems abysmal at the moment despite the high oil and gas prices, which is both perplexing and frustrating. Same picture with small cap miners. Last 12 months has been a real grind. If only I'd bought that EFT of US listed oil producers instead of doing some careful research and getting fancy, I'd be partying at Ace's Bar already now. Catalysts look good, so hopefully the market mood turns around. This time next year Rodney.

I wish. I bought in as soon as the acquisition was announced in the 0.50s as the fundamentals were extremely compelling for an exploration drill. Unfortunately the offloading of placing shares and dire wider equity markets have stymied the SP stopping me out for a nice loss on Tuesday. Fundamentals of the drill still look excellent but rule number one in investing is always look after your capital, set your limits and act accordingly if things don't pan out as you expected despite what you might think.

Perhaps I should refrain from contributing futher to this board if nobody finds it of use.

Has anyone confirmed the number of barrels net to CLON at Sasanof-1? I was under the impression that as per the CLON acquisition RNS, Sasanof was 7.2 TCF gas plus 176 MMB condensate (P50), which equates to 1,376 MMBOE, and that as a 10% stakeholder CLON's share was therefore 137.6 MMBOE.

https://investegate.co.uk/clontarf-energy-plc--clon-/rns/acquisition-of-10--of-sasanof-prospect/202205090700056935K/

However, page 3 of PRM's May 12 news release states that although Sasanof is 7.2 TCF plus 176 MMB condensate (P50), the proportion net to the WG519 licence in which PRM has a 25% stake is only 4.131 TCF plus 100.4 MMB condensate (P50), which equates to 789 MMBOE (P50). This appears to be due to some of the prospect lying beyond the licence boundary as confirmed by the accompanying diagram.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02520989-6A1091459?access_token=83ff96335c2d45a094df02a206a39ff4

As far as I can tell it looks like CLON has also invested at the same licence level as PRM, which would mean that CLON's share of net barrels would be 78.8 MMBOE and not 137.6 MMBOE (P50). Can anyone confirm which is the correct figure?

Nevertheless, even at the lower resource size the current market cap equates to only $0.50/BOE risked (P50) which still looks cheap compared with other recent and pending drills.

I believe JHI has cash but no further drilling carry and that cash is included in the $45M Harel referred to. We will only get that once the deal has closed and ECO will have around 440M shares in issue by then.

Placing looks good to me, especially given current market conditions.

The point is though that CLON is on such a low multiple per BOE risked that it could multi-bag BEFORE results and still only be on the same multiple as other recent and pending drills were/are on BEFORE results. Can't remember seeing such a low entry for a scheduled drill.

https://i.ibb.co/HrhwV90/CLON-Market-Cap-to-Risked-Net-Barrels-Comparison.jpg

I use $5.00/BOE in the success case for oil. Someone was using only $2.50/BOE for gas on here the other day, which would give a value of nearly 12p per share in the success case. Currently we are at less than 5% of that for a drill with 32% COS. Doesn't add up. Far too low.

Does this add up?

ECO $213.4M cap targeted 23.5 MMBOE net risked at Joe/Jethro.
CLON $15.6M cap targeting 44.0 MMBOE net risked.

Oil and gas prices are significantly higher than when Joe and Jethro were drilled, yet ECO was valued on 26 x the multiple of CLON. Doesn't add up does it.

Does this add up?

ECO $213.4M cap targeted 23.5 MMBOE net risked at Joe/Jethro.
CLON $15.6M cap targeting 44.0 MMBOE net risked.

Oil and gas prices are significantly higher than when Joe and Jethro were drilled, yet ECO was valued on 26 x the multiple of CLON. Doesn't add up does it.

Does this add up?

DELT $44.5M cap targeting 8.5 MMBOE net risked.
CLON $15.6M cap targeting 44.0 MMBOE net risked.

DELT and CLON are both gas drills in tier one jurisdictions and CLON is in the more prolific basin, yet DELT is valued on 15 x the multiple of CLON. Doesn't add up does it.

Does this add up?

TRP $9.7M cap targeting 6.0 MMBOE net risked.
CLON $15.6M cap targeting 44.0 MMBOE net risked.

TRP has a negative net current asset position, no farm out concluded and no funds to drill, but is valued on 4.5 x the multiple of CLON. Doesn't add up does it.

On a risked barrels (2U/2C) to market cap basis, CLON is currently significantly cheaper than all of these recent and pending drills.

https://i.ibb.co/HrhwV90/CLON-Market-Cap-to-Risked-Net-Barrels-Comparison.jpg

To reach the same multiple as the second cheapest drill, which was CHAR ahead of Anchois-2, CLON would have to reach 1.51p ahead of results. To reach the average multiple of these 9 drills it would have to reach 7.9p ahead of results. I hope that conveys how cheap CLON is on a relative basis for Sasanof-1.

The PRD metric is for the 2021 drill. I have assumed 30% COS for UKOG and 80% COS for EOG drills. Note that risked barrels takes into account the varying COS. I have used peak market cap prior to drill result for drilled wells and the current market cap for pending drills.

On a risked barrels (2U/2C) to market cap basis, CLON is currently significantly cheaper than all of these recent and pending drills.

https://i.ibb.co/HrhwV90/CLON-Market-Cap-to-Risked-Net-Barrels-Comparison.jpg

To reach the same multiple as the second cheapest drill, which was CHAR ahead of Anchois-2, CLON would have to reach 1.51p ahead of results. To reach the average multiple of these 9 drills it would have to reach 7.9p ahead of results. I hope that conveys how cheap CLON is on a relative basis for Sasanof-1.

The PRD metric is for the 2021 drill. I have assumed 30% COS for UKOG and 80% COS for EOG drills. Note that risked barrels takes into account the varying COS. I have used peak market cap prior to drill result for drilled wells and the current market cap for pending drills.

I'm just running the numbers again on recent and pending exploration drills and as suspected CLON is coming out looking monstrously cheap for its share of Sasanof-1. Will post data when complete.

on EV/2U basis. That's incredibly cheap compared to other LSE drills. $0.34/BOE risked for example is like buying ADV at 0.39p on the run up to 5.7p ahead of Buffalo-10 results. If you look at other drills you will see similar mind boggling examples. Market has taken leave of its senses on this one. Should be multiples of the current SP IMO. DYOR and crunch the numbers. Huge drill. Prolific area. Excellent jurisdiction.