Member Info for Phoebus

Yes, all of them.

From the 2019-05-02 results RNS:

https://investegate.co.uk/echo-energy-plc--echo-/rns/final-results/201905020700048230X/

'The cash balance of US$15.6 million will be used to fund the Tapi Aike seismic acquisition programme, progress towards drilling and our other working capital requirements.'

'Management estimates that each well will cost approximately US$2 million to US$5 million net to Echo.'

'The La Vanguardia x-1 well will be the first of a proposed four well drilling programme on the Tapi Aike asset...'

'Echo have committed to spend US $7.9 million on the acquisition of seismic data over the Tapi Aike permit.'

As of end 2018 ECHO's net current asset position was current assets $15.6M - current liabilities = $13.4M. Minus off $3.4M for 8 months admin costs since then and $7.9M earmarked for Tapi Aike seismic means they should have only around $2.1M remaining before netting off any additional costs incurred since end 2018.

They also appear to have around $16M in longer term debts that will need to be repaid though not within the next 12 months.

It appears that despite already being highly geared ECHO will require somewhere between $15M and $25M in funding to get through the upcoming 4 well Tapi Aike drilling campaign, which is roughly 1-1.5 times the current market cap. Given this is exploration drilling I expect this will be done via a placing. Is this how others are interpreting the current financial stituation?

4-5p is very likely on funds arriving IMO. The SP and investor sentiment has been beaten to death repeatedly the last 12 months and funds will be utterly transformational. Even bye-bye APEC and a fundraise for 1-2 drills would still unlock massive SP upside here. GLALTH

Quote and deal is a no go and even limit orders are slow to fill. No problem getting a quote to sell though. Very good sign this is heading much higher. GLA

Given the huge debts here the MCAP is a canard. You should look at the enterprise value which is debt + market cap - cash, which works out at £866M. The net debt of £826M dwarfs the market cap and with the global economy about to go into recession and the deterioration of the banking sector the precipitous SP decline suggests the market is starting to price in the possibility of a debt for equity swap and NOG shareholders being dilution to oblivion. Not to say it will happen, but risks are beginning to mount.

instead.

Tony's salary should be suspended completely and be replaced with warrants at a strike price of 15p, 20p, 25p and 30p.

What are PET's licences again? Irish deep offshore with no dicoveries where their FO partner appears to have walked from one of the licences, a licence application in Ghana that has been pending for many many years and non-projects in Iraq/Islamic State. Even if the APEC deal is terminated at £7M market cap LOGP looks extremely cheap for a 69 MMBOE share of a 345MMBOE 2C field. One way or another this will get sorted.

I read that statement as they will reassign APEC's 50% back to PVR and LOGP and take additional action for failure to implement the agreement. I seem to remeber MATD getting a $10M odd payout from Shell when they failed to follow through with a farmout agreement a while back and I assume PVR will be pursuing a similar damages as compensation.

How much to self fund two wells? This isn't my area of expertise so any suggestions are gratefully received. However I note that day rates for jackup rigs are currently around $75K.

https://ihsmarkit.com/products/oil-gas-drilling-rigs-offshore-day-rates.html

Even at 100 days for 2 drills plus $2.5M for mobilization a 2 well campaign would only cost $10M on a 100% basis. Am I missing something, because that looks peanuts. Given how little we actually got out of the APEC farmout, this might actually be a blessing.

I agree. No cash, deal is cancelled.

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Looks like the plan is to kick out APEC and go ahead with a 2 well self funded programme. I suppose drilling costs are nice and low now, which makes it a much more realistic proposition than a few years ago. Expect it means a placing for both LOGP and PVR. Given the funding track record and the behaviour and position of the major shareholders my guess is 1p.

PVR down 6% and we get the shaft. Their RNS is the one talking about emergency funding, money needed just to keep their lights on and make redundancy payments yet were the ones getting shafted. LOL

80% of 345 MMBOE 2C plus other licences is not worth zero so not quite S or bust.

Has Dorian not made a turn for the Celtic Sea?

'My focus has always been on the 75% COS of Heron, RD was always a bonus.'

I agree Lockyer, in fact I've assumed RD would be a duster and only invested based on Heron and the other northern drills which are more than enough to totally transform MATD. If RD comes good it's a bonus, but I'm only holding to results here on the basis of the northern drills and I'm sure I'm not alone in this assessment.

Personally I would have liked it if MB had focussed on the 'appraisal' drills this year and booked some reserves before chasing RD and other wildcats. That said if the RD result is out of the way first we can then focus on the main dish.

I have not seen an official COS for RD, but assume 20%, which seems about right for a wildcat of this nature. I have used 75% for H and G, which I remember reading somewhere a while back. Any specific COS references would be gratefully received. [Red Deer] 43 MMB P50 x 20% COS = 8.6 MMB risked, [Heron] 23 MMB P50 x 75% COS = 17.25 MMB risked, [Gazelle] 12 MMB P50 x 75% COS = 9 MMB risked, [Total] 34.85 MMB risked. So in the lead up to results RD should only account for about 25% of what's in the price for this year's drilling campaign. If the recent drop is due to RD then it looks way over done.

Have a great weekend.

Always expected Red Deer might be a duster, but Gazelle and Heron look odds on to be a huge success. Go look at the seismic and prospect map. Heron in particular looks to have little geological risk whatsoever and should more than underpin a much higher SP. I'm confident this will be much higher in a week or so. GLA

Good chance it's just folks derisking ahead of results in what is a fairly illiquid oil share. ECO sold off for about 5 months and was sat a multi-month low right before the massive discovery RNS hit the other week. At least we only have a few days to wait for two well results. GLA

Didn't expect we'd be below the Feb high at this stage. 37% drop on no news looks way overdone. 23 MMB P50 recoverable at 75% just for Heron at a measly $5/B equates to 14.3p/share. So the way I see it, regardless of what happens at Red Deer odds are this will be significantly higher in a week or so.