Member Info for Phrontist

Nice one Moda, crude $/b is of key importance to our SP, obviously.
So, Goldman Sachs predict $52.6/b in 2021. We are $26.6 now. Both for Brent Crude.
If we take the GS prediction as mid-2021, then a guesstimate slope is +$2/b/month.
So, Brent Crude could be $68/b by end of 2021.
However we look at this, crude oil looks to have consistent rise as the world economies recover fro coronavirus.

Phrontist

LearningtoInvest
I hope to be correct in saying, the whole of 88E's Central North Slopes business is transacted through Accumulate Energy Alaska LLC. AEA is wholly owned by 88Energy Ltd in Australia. Joint CEO's are David Wall of 88E and Michael McFarlane of Burgundy (private company). Burgundy and 88Energy are tied together by contract.
So, presumably, AEA Alaska own all our CNSs leases and assets. They should own all of the Intellectual and computer based property resulting from 88Energy shareholder investment (CR's).
AEA's CNS own partially de-risked conventional and unconventional oil assets by the millions barrels.
The companies early ambitions were 'cream the curve' and '100 bagger'.
OK, we have tried hard, had so misfortunes and some bad luck.
I think the BoD have been competent over the years.
There is not (yet) a magic wand to wave and discover light crude oil by the billion barrel at nice pressures and easy access.
88Energy, using AEA, have really tried.
Is it time to put AEA up for Sale?
This is a great long term opportunity for the right production company.
$billions is possible.
88E will be left with plenty cash, Jukon, Winx, and a positive continued future explorer in North Alaska.
What is there to lose?
We should be trying to MAKE MONEY, not for ever reasons to SPEND MONEY.
Phrontist

It seems to me that proposed XCD purchase process is:
The biggest 88E single share issue transaction since founding.
Likely the biggest Board re-arrangement since Tangiers failure.
The lowest capital return into 88E coffers for share issuing transaction.
The least likely project to move in our ever growing portfolio of projects that need money...

DW says something like, financial disasters bring opportunities as well as problems.
Agree.
So, why not wait 3 to 6 months on XCD, since their position is likely to falter and 88E position SHOULD have improved.
This is the worst time in 88E SP history to be spending money with little prospect of early return.
And yes, swapping 15% of 88E shares is spending money, otherwise needed for Capital Raising to survive.

Phrontist

Thank you, Brom.
Does Item 3 mean, only 10% share issue is permitted this year without voting, compared to usual 15% in the past?

As DBeres just asked on HotCopper regarding this XCD business....

sorry, maybe I missed it .... but what is the outcome here ?

I have no idea what 88E and DW are doing.
Is XCD being forced on us for 15% share swap, regardless.
Or will shareholders have some voting say in our biggest company takeover proposal since Tangiers / 88E founding?

Phrontist

I think there is a standing annual arrangement that the BoD can issue up to 15% new shares without recourse to shareholder approval.
This 'facility' is intended for Capital Raising. Historically the only way that 88E can successfully raise cash. Without this, the company grinds to a financial halt. Like XCD are doing now.
Regarding DW's proposal to 'buy' XCD, he has proposed a 15% 88E share swap. Without putting this to shareholders for approval.
Does this mean, this 1 Year Term of 15% of our shares are being utilized for buying XCD company?
Which means, we have no automatic New Share facility to raise ongoing cash. Unless a Cash Raise goes through a shareholder approval process.
This is NOT a safe way to run the business.
It is classic AIM route to financial collapse.
Phrontist

Interesting comment WAussie. So who did make all these decisions? Is DW the leader or a puppet?
My guess is, there is much communication and DW takes a concensus direction.
He is a business man foremost. Working with accountants, project managers, field authorities, geologists, several flavours of computer experts, global events advisors, and
it seems local Perth entrepreneurs, and more.
Meetings with suppliers and potential customers.
Clearly decision making is not easy.
A criticism of DW is he has not yet succeeded in getting revenue. Meaning oil revenue?
But $23 million for Charlie-1 is a phenomenal amount of revenue. Could DW be an FO guru?
I think this coming few months will be eventful and positive. Maybe a few squabbles, but still positive moves forward.
My dream is for us to implement our first horizontal drill program. There are technical / practical / costing aspects we are not familiar with, yet. But the horizontal drills following on from a vertical drill seem to achieve high Oil Flow Rates, in the 1,000+ bold.
Phrontist

Olderwiser
Good point but the PMO decision is likely to be based on a number of factors, not just Charlie-1 preliminary results.
The global combination of coronavirus and Russia-Saudi dispute has wrecked the economics of the oil industry in an unprecedented way.
PMO are successful oil producers with four strong revenue sources. The weekly funds receipts must have taken a big dive causing them to re-think their business plans.
The potential value of Area A, B and C became insignificant compared to ongoing costs.
Adding to PMO's financial stress is their prior promises of their debt reduction combined with the HK hedge fund lender / shorter pressure.
In summary, the PMO decision probability had little to do with Charlie-1 results. More to do with consolidation on existing projects and revenue streams.
PMO withdrawal from 88E FO Agreement following payment in full is viewed by me as a massive benefit to 88E. The detail of this benefit will be revealed by Lab Results over next month or so. And the BoD's interpretation and plans.
Obviously DW / MM can see a variety of possible deals that we have no idea of at all at this moment.
Long live 88E, Phrontist
Phrontist

Bling, I am sure there will be a few more RNS's relating to the XCD proposal.
And I notice that XCD SP on ASX dropped 12.5% to be 30% below DW's suggested Offer value.
My feeling is that very small companys on ASX will have a problem with BUY/SELL of their shares, worse than AIM. With up to ultra wide 20% Market Maker spread.
It is interesting to read LSE for ASX:XCD. We are like kids from two schools squabbling before big Rugby Match .....

AIM can also have similar problems to ASX, but still, AIM will be much more liquid than ASX.
What I am suggesting is, XCD shareholders are gaining a BIG opportunity by swapping their shares for 88E shares.
Particularly when XCD is flat on future plans, but 88E is bubbling with expected interesting RNS's on hoped for progress from Lab Results of Conventional AND Unconventional.

We should remember, our SP has been over 2p, over 3p, even over 4p for short while. Based on HRZ Unconventional ONLY.
We are in that position now. Charlie-1 HRZ wall scrappings are extending findings of Icewine 1 and 2.
AND, this is basis of further derisking many billions barrels of oil.

OK, today with have Global Virus and Very Low Crude Oil price.
But we are planning for HRZ FO Deal leading to Oil Flow test in 2021.
Can we re-open Charlie-1 and add Horizontal for Flow Test? Any experts here?

Phrontist

HSBC posted a BUY for me at 0.2485 p
And on another company trade, used 5 decimal places.
P

Buzz, I think computers at trading level manage with many decimal places.
But information distribution software was written with lower levels of accuracy, making some situations seem a little weird.
Try ft.com....
Phrontist

Aim4, thank you for plenty of emotion.
Daily information, analysis, varying opinions, market conditions enable me to adapt accordingly.
I qualified my change of opinion by saying, OK but not 15% of new 88E shares, a lower figure of 5% is appropriate.
Phrontist

There is more to XCD share swap than meets the eye.
It seems a valued FO Deal is likely at some stage, similar terms to Charlie-1.
Shareholders have made their points to DW, including less than 15%.
Lab Results for conventional aspects of Charlie-1 possibly next week.
And Lab Results for Charlie-1 HRZ likely during May.
(What else has 'the Lab' got to do.....?)
If the HRZ is successful the SP should be 2p+ (yes, two pence plus...)
Meanwhile, by end of trading tomorrow, likely SP of 0.4, in my humble opinion.
88E has stooped, but not fallen. Serious May Bounce Back is on the cards.
Phrontist (happy Holding to LTHers)

Rabito79, I agree with what you say.
My position is/was:
OK, look at conventional on North Slopes, we share in almost half a million acres of it already.
It has got us a second site hit on HRZ as well. Great.
The Central North Slopes based Charlie-1 was excellent planning, negotiating, execution.

But avoid investment of time and money further afield:
Yukon Gold, Western Blocks and now XCD.
Has anyone thought about gravel road costs, new Drilling Pads, pipelines / pumping stations etc.
We are spreading ourselves too wide.
These smaller projects cannot support the expenditures required.
Overcome one problem, oh there is another problem.
Money money money.
We need a skillful resolution of one thing that achieves commercial Oil Flow.

Phrontist

Suppose our limited information BoD negotiate all AIM shares for the XCD ASX shares.
Then many / most of prior XCD holders can dump their 88E AIM holding and crash our 88E SP - again.
Again, DW says 88E will not be paying for further developments on XCD land.
I guess he means another FO Deal, which is excellent idea.
Unless that work proves unsuccessful.
The XCD shareholders are gone and 88E shareholders left holding another WINX style drop.

DW says, you must take risks to make progress, that is business.
AGREE.
But we have not resolved our first RISK yet, 5 years past and still going.

Good work MW93
My last email to DW was November 2018. His answers were limited on the basis of his opening statement:
...almost all of the questions cross the line between “clarification of existing information” to “new information constituting inside information” ...
I appreciate that DW cannot join our discussions here based on ANN/RNS Rules.
But some explanation would be nice on this observation.
Many shareholder complaints have been made over last few years in relation to DW's remuneration level. The suggestion was that rises have been given BEFORE shareholder earnings have been delivered.
I believe that DW pointed out, he does not decide his remuneration, the non-Executive Directors do.
Now we find, a 'deal' is being put forward where our MD DW and a non-executive Director both own significant shares in XCD (Perth also) being bought using a proposed share swap.
There is no clear benefit to a struggling 88E.
But there is benefit to XCD shareholders by swapping their less sellable / tradeable (ASX only) shares for our ASX and AIM listed shares in 88E.
AND, two of the largest shareholders in XCD are 88E Directors and 88E shareholders.
AND, they are decideing the XCD to 88E comparative valuations.

Looking back at WINX and Western Blocks, I said then that the risk was not worth taking.
This was another Perth Get Together Deal.
If successful, clearly some nice gain could be made.
But if a failure, it would destroy 88E already fragile SP value and Drill Reputation.
WINX did fail, it cost us money as in cash, and cost as dearly as in dumped SP and diminished reputation.

Is Yukon another one of these risks? I have no idea.
Is XCD another one of these risks? Again, I have no idea.

Most LTHers bought into 88E on the HRZ unconventional with Sweet Spot concept.
IMHO, Icewine 2 would have been resolved a year or two earlier if we had not become involved in a Parallel Conventional Oil Exploration Company.
AIM companies should NOT diversify until the founding idea achieves a modicum of success.
That success feeds the SP. Then risk assessed expansion and/or diversification may be acceptable.

88E is all over the place. Risks spread in too many places.
If Charlie-1 was clearly defined as Commercial, then XCD could be realistic option.
Charlie-1 is not clearly commercial. I am not blaming anyone here.
But our BoD keeps spending money and taking on risks BEFORE our Mission Statement / Agenda has been properly de-risked.
That is all. Phrontist

And to add to our woes:
Brent is at 18 year low.
End User fossil fuel purchasing gone through the floor.
No end in site.....
P

Morning Mickey, I have been quiet for ages.
This rubbish 'mates deal' is too much.
Massive dilution of shares.
Little realisable assets.
Site miles from any roads and pipelines.
In need of ongoing financial support.
In need of 3D Seismic expenditure for next move.
Going ahead on this deal will drive SP down yet again.
And raise need for another CR in 2020.
With no plans for drilling in 2021.
Please tell me, where is the benefit for 88E shareholders?
Phrontist

DW cannot buy shares in 88E unless he identifies his intended actions to BoD and shareholders.
And he has some spare cash....
BUT he can buy 88E shares with this Back Door route of swapping 88E shares for XCD shares.
Very clever.
And uncledazza, if DW believes 88E has assets about to bloom, why has this info not been identified to shareholders?
I hate to sound like Docmin24 on ASX, but something is not right.
Phrontist

One moment DW announces cuts in 88E staff, salaries, overheads generally - to popular shareholder acclaim.
Next moment he is taking on NEW staff, salaries, overheads and not identifying this cost in the buying process.
The XCD purchase plan has not been identified as beneficial to 88E shareholders, in any way.
But it is self-identified as not beneficial by the addition of costs.
How much is XCD annual lease costs? Anyone know?
Well, we should know, we are buying it....
Phrontist

Low SP has meant low $ raising from 88E share issues.
Now buying a cash poor, zero success company that just happens to be desparate for some 3D Seismic taken with post processing ....
Meaning, 30% 88E share dilution in less than a year.
And, actuall massice 88E SP drop due in part to Charlie-1 failure and in part to Global Crisis caused by coronavirus and Russia vs Saudi oil price feud.
Just one disaster compounded on another.
With only enough cash to pay for staff, offices, leases, Alaska maintenance, Houston technical, etc. for 9 months?
Nothing planned for 2021.
Phrontist

This is not 88E buying XCD.
There is no reason to use 88E shareholder dilution unless our Asset position is visibly improved.
Can anyone see the asset improvement? For 15% or so of new 88E share issue?
No, this is XCD selling itself to 88E with the driving force of our own MD being the driving force of XCD Sale.
As a notable and principle person in West Perth oil exploration industry.
That by chance, as a whole group, is stunningly short on actual oil production success.
And is successful on Capital Raising from AIM, London Market.
Phrontist