Our latest Investing Matters Podcast episode with QuotedData's Edward Marten has just been released. Listen here.
I wouldn't wear length of share ownership as a badge of honor, particularly with CLON. Anyone that's been holding here for years despite nothing whatsoever going on is probably best ignored for having terrible judgement and wasting the time value of their own capital. Long term holders are also often the most resistance to accept that the investment thesis has changed for the better, which is understandable. The stale bull phenomenon. Poster that have suddenly turned up may well have been following this company for years waiting for a moment exactly like this before putting their capital to work.
Actually, I think people's positivity here today is premised on the fundamental value suddenly on offer following the announcement. Dismissing it as a P&D looks very short sighted in this instance. The reason for the SP weakness is likely no more than selling into an opening spike in what is a very risk off market today. Give it a few days to consolidate and we'll see where we are. Fundamentals win out over erratic SP movements in the end.
Re-post from ADVFN board.
"This would be one of the biggest oil and gas wells drilled in Australia by a junior in the last 20 or 30 years," Glovac said. "The upside is huge. It's permitted, it's significantly de-risked, all the capital's been raised, and it's fully funded." At this point, the only risk to it is exploration success.
https://stockhead.com.au/energy/global-oil-and-gas-inches-closer-to-drilling-onslow-sasanof-prospect-with-equipment-on-its-way/
The Mentorc field (green) almost touches the Sasanof prospect (purple).
https://cdn.offshorewind.biz/wp-content/uploads/sites/6/2021/12/29173509/Sasanof-amplitudes-on-merged-3D-seismic-showing-Mentorc-Field-and-Western-Gas-Sasanof-Prospect-outline-Source-Western-Gas-1024x582.jpg
The Mentorc field forms part of the Equus Gas development project.
https://www.westerngas.com.au/equus-gas-project
CLON was basically dormant until this transaction. They had oil licences in Peru that became impaired a long time ago, but appear to still be on the books. They also applied for a block offshore Ghana several years ago, which is still yet to be awarded. They also have a recent MOU for acreage in Chad, but that too is outstanding. Clearly they want to operate in the oil space, but have lacked an active project until today. This explains their website and underscores how transformative this deal is for CLON.
The market has waited a long time for them to do something and they have picked an excellent looking target to finally get the ball rolling. The fact that Western Gas with 52.5% is the operator and not CLON makes CLON's experience of operations or lack thereof a moot point. I for one am delighted they have used their listing to make this exploration opportunity available to UK investors.
From 3:52 in that presentation. 'This means they had an internal assumption of 74% COS... '
Slide at 5:37. 'The liquids rich, low CO2 Mentorc Field is the eastern fault block and is filled to spill into the updip Sasanof Prospect.' Very nice.
I found this map on the Australian Government's geoscience website and have annotated it in yellow to show the approximate size and location of the Sasanof Prospect. This is clearly a prolific area and the target compares well in size to the larger discoveries in the basin.
https://i.ibb.co/C2W0Qkx/CLON-Sasanof-Location.png
I found this map on the Australian Government's geoscience website and have annotated it in yellow to show the approximate size and location of the Sasanof Prospect. This is clearly a prolific area and the target compares well in size to the larger discoveries in the basin.
https://i.ibb.co/C2W0Qkx/CLON-Sasanof-Location.png
Australian Government page on the Carnarvon Basin.
https://www.industry.gov.au/data-and-publications/2019-offshore-petroleum-exploration-acreage-release/northern-carnarvon-basin
Notes all the huge number of fields marked on the licence maps.
https://www.industry.gov.au/sites/default/files/2019-acreage-release/2019-acreage-release-area-maps-northern-carnavon.pdf
That's a pretty good COS for an exploration well and companies at this stage in proceedings are generally at valuations per BOE that a multiples higher even after taking the COS into account. Think several $/BOE risked. CLON is $0.30!
The COS components are charge 100%, reservoir 80%, trap 80% and seal 50%, so the risk is essentially the seal. Given that the operator has already made 15 discoveries from 17 wells on the adjacent acreage, that's a 88% seal success rate. If those odds continue the COS would be 56.3%.
Won't name the company on here, but they've farmed in for 136.7 MMBOE net 2U at 32% COS in the hugely prolific Carnarvon Basin which is to the SW of the Chuditch area. Market cap is only £10.7M valuing the company at only $0.10/BOE unrisked, $0.30/BOE risked, which is bonkers cheap considering the adjacent discoveries and the rig mobilizes next week. DYOR
Very strange SP reaction. Don't think the market has quite grasped the magnitude of this deal. CLON has gone from a dead stock to just weeks away from a potentially gigantic discovery in a prolific area in a single RNS. You would expect a several fold increase on news like that for a company of this size. Currently priced at a microscopic $0.10/BOE unrisked $0.30/BOE risked, which is laughable.
Even more major discoveries just to the East of our position. This is a prolific area.
https://www.industry.gov.au/sites/default/files/2019-acreage-release/2019-acreage-release-area-map-northern-carnarvon-barrow-sub-basin.jpg
It really massive is, isn't it. And in a very prolific area. This is one of the largest exploitation drills in a long time on the LSE and is huge for CLON, but at 7.8p/BOE the shares are priced like a wild cat explorer in the middle of nowhere with no cash, no farm out partner and no drill. Huge valuation gap. GLA