Member Info for Phrontist

If these types of negotiations are causing delay in Conventional FO Contract signing, then:

1 No blame can be laid at the door of 88E and BEX staff.

2 Possibly no blame can be laid at the doors of Farmee staff.

3 No one, not even President Trump, can state a completion date to be met.

4 This implies a significant FO Contract for 88E / BEX.

So, buy up boys, these 88E shares will become rare items, expensive to buy.

But we don't know when. Phrontist

Thinking a little further, the potential Farmee is likely to be negotiating tax terms.

This will stretch from Anchorage and Juneau in Alaska to Houston and Washington DC on mainland USA.

I can see many reasons why this single item could lead to protracted discussions and negotiations.

There is only one cake, a very large tasty cake (made from crude oil...).

With many parties wishing to have large slices of the production revenue.

Issues on how taxation may vary with a fluctuating crude oil price.

Agreements on Farmee capital expenditure being given tax exemption on Corporate Earnings.

Duster expenditures being offset against pending corporate tax.

It is possible that Farmee will only proceed based on cooperation from USA IRA.

IRA has to ensure special terms that are agreed can be supported to other similar company situations in the future.

etc etc. Yawn. ZZZzzz Phrontist

Suppose you are destitute, poor health, no friends, no place to live.

You are begging on the street, your old hat on the pavement in front of you.

A smartly dressed man of many years age is strolling in your direction.

As he passes you he drops something into your hat and carries on walking.

You pick the item up, it looks like a large uncut diamond! Woowww

Now tell me, will you fail to get a reasonable price for this uncut diamond simply because you are poor?

You will probably get a few valuations. You have plenty of time, maybe 5 or 10.

Then you will sell to the highest bidder that is able to meet your payment method / terms.

Here we are, 88E / BEX sitting on a vast oil reserve. Lets be honest, we don't know much about it. Under our own steam we have failed to raise even 1 gallon of the stuff.

So, 88E / BEX went to the market to see what we can get. About 50 companies showed initial interest. This was reduced to 30 or so credible bidders. Long investigation by each with tentative bids going in.

List is reduced to 5. More intense discussion, research, etc.

List is reduced to one 'preferred bidder'.

IMHO the preferred bidder (Farmee, diamond purchaser) has no real interest in humiliating us (Farmer, diamond owner) into a low bid acceptance. Just because we are poor. If we were rich there would have been no need for requesting FO bids.

Farmee knows, the market knows, what this FO Request for Bids is really worth. Farmee became Preferred Bidder because his mix of price offer, ability to pay, payment terms, deposit, etc were the best.

Some of you seem to suggest that after making his bid, he then sees our accounts and decides to knock down the price.

Professional Farm Out people handle this type of negotiation.

So, what could be valid reasons for preferred bidder needing another 6 months?

I don't think Farmer (us) have suggested WE are part of the cause for delay.

The reason is somewhere amongst due diligence, contract terms, and...ohhh...granting by Government of licences and guarantees to operate on the site as intended or desired.

This would have to go beyond any FO 'timescale to operate' since Farmee will have plans for continued $$$ earnings from their risky FO work early on in the program.

Six months within any government bureaucracy is nothing. Farmee may be asking for 30 year licence guarantee, for example. I am not an oil exploration expert. But there the reasons for delays could be in this tricky area.

Meanwhile, poor old 88E / BEX have to sit and wait.

Phrontist

It is true, the old faithful investors of 88E ARE emotionally involved.

They say this is poor investor strategy. But emotional goes hand-in-hand with DYOR.

The fundamentals of PB's ambitious project are still the same.

An oil soaked layer thousands of feet below ground, 100/300 ft deep (thick), spreading over anything up to 500,000 acres of land.

This is not a dream, it is the hard graft of PB for many years before our BEX / 88E JV was formed late 2014.

From an engineering viewpoint, there are problems to tackle for next stage of Icewine 2.

Over to 88E Presentation 14/04/2019, page 13 (lucky for some...ha ha):
- Initial findings to be reported within weeks

Complete statement is:

Project Icewine captured the HRZ sweet spot in over-pressurised, low viscosity super-critical phase oil:
- Data supports move to horizontal appraisal drilling and further fairway delineation
- Re-evaluation project underway with recommended forward work program planned to be funded via farm-out

Mon 6 May will be 3 weeks. Will this be RNS Time for next stage of Unconventional?

Clearly horizontal is desired next step, fracking oil works best this way.

But this costs money. Possibly waiting on Conventional FO signing as 'shareholder booster' of real progress being made.

Investigations (not much details available....) have been going on into HRZ, fracking, Icewine 2 for 10 months now.

88E SP low value really indicates shareholders are down to the 'hard core' (pun intended) of Long Term Investors.

So, DW, send someone down to Franklin Bluffs with a rubber pipe and large tin can.

Look at pressure gauge....

Turn on tap. Use hose to flow oil into large tin can.....

Phrontist

Can you imagine what would happen to 88E SP if Icewine 2V flowed this summer?

Even a little 'ol 80 bopd would be amazing.

After all, this is a test well not a production well.

Phrontist

Looking a little further.

The excess water / proppant may have all become steam and forced its way into rock surrounding the vertical pipe. Continued to soften up the rock, release more oil over a much larger volumetric space.

The nitrogen for added pressure last summer was possibly all dissipated and released in the final attempt to extract excess water / proppant.

But the oil is like a vapour / gas under extreme pressure and high temperature. This stuff just wants to get out. Up and out through the pipe is only way to go.

As it rises, temperature drops, vapour becomes liquid. The 2016 samples indicated low sulphur for excellent liquid flow up the pipe.

Are we sitting on our very own oil gusher.....Icewine 2?

Phrontist

Icewine 2 must be feeling very ignored by now.

This well was shut-in last summer. Another year of Soak In.

Massive pressure 11,650 ft down there. A lot of our water has joined the mix. 120C temperatures to create high pressure steam forcing its way into every crack and cranny. There must be a lot of swirling around, loosening up, water and oil swapping places.

How much would it cost to revisit this Vertical Well and check some pressures?

It may be that Icewine 2 has sorted itself out. Ready to push out remaining excess water/propant.

Then do an Oil Flow Test.

Phrontist

LeMajor

you say, '...we could find DW sells all 3 companies to Bex on Tuesday - we don't know what we don't know (sure I heard that before, somewhere?).'

What? Where would BEX get the money? This project has stretched them just like it has stretched us.

Phrontist

Interesting comment Brom.

Repsol, BP and ExxonMobil are just as able as CP.

All are Global, strong in Alaska, conventional and unconventional.

Repsol created an incredible opportunity with Brazil Government.

They produced two massive fracking multi-horizontal wells off-shore from the capital.

Quoted a few years ago as delivering 16,000 bopd per well.

I imagine all these companies deal with Alaska Government at all levels AND our very own DW / MM Team.

We have no idea of the reality of the Conventional FO negotiation.

Nothing has leaked at all regarding possible Farmee or Contract details.

In respect of the lack of leaks, I respect DW immensely. We know NOTHING. It is painful, but alternatives can prove dangerous. Just like Wobbly Winx!

My impression about Perth is 'they' are all flying around having meetings and chats about everything going on.

Just look at that fatal SP drop on Red Emperor the day before the deadly Winx-1 RNS.

Leak? That was a gusher....but information not oil.

And not from 88E sources.....from another Perth source.....

I look forward to another London based shareholder meeting with DW. After the Conv FO situation is resolved. And hear his personal take on the whole negotiation from July 2018 to June 2019. Assuming all is resolved by then.

Meanwhile, we are into another month, another quiet weekend. It is possible the only mistake DW has made is, to say the Conventional FO will take 6 months. Perhaps BoD felt this may hold SP up compared to saying FO deal will take 12 months.

How long did Repsol negotiate with Brazil Government? No idea, but years....I know Brazil really needed the taxation money, government was in dire straits. And Alaska is in similar position.

Is our Central North Slopes of Alaska right 'up there' in the circles of power? With DW/MM negotiating deal.

Or are we being bypassed by 'the big boys' based on weak de-risking information?

Oh well (excuse the pun...) another weekend, another month...

Phrontist

LeMajor

Why do we or Farmee need more 3D on 500,000 acres and only one well planned?

Jiddy, asking seriously, when do you think:

'I think that most investors will bale around the 3p mark.'

will happen?

(Not the baling, just reaching the 3p mark).

Phrontist

There were McDonalds Franchises here (not far from 'the border' he he).

But they voluntarily shut down and moved further West in Ukraine.

They just completed final part of election for President yesterday. Everyone is calm, happy, with outcome. They have been an amazing good example to electioneering, voting, democracy, new people taking over from outgoing people. Not a shred of corruption or violence.

And yes, three coffees for about £2.50 in a very nice establishment.

P

Newanda, thanks.

We could have drilled the horizontal on Icewine 2 2017 if pre-planned and executed regardless of vertical failure.

AND we could have done both again Summer 2018 following a year of study, research, consultation, etc.

I am sure as can be, this double whammy in 2017 and double whammy in 2018 would have resulted in much oil flow with good pressure.

Thinking particularly of the horizontal, one pipe can stretch out 100's of metres moving away from the problem vertical situation. Even 1000's metres, but I do not know the time it takes for each horizontal 'drill, frack, flow' session.

88E must have had expert opinion on all this. We may be 'newbies' but there are many old heads with many opinions and facts. PB knew a chap about 90 years old, with key data from about 85% of all fracking wells drilled in USA and a few abroad. Cannot remember his name now, But I know how to get his name and number....

If and when the Unconventional Flow was achieved with good success levels, then some secrecy is required. To buy up surrounding land....ha ha. It is all in the planning.

In years gone by, we had a small joke. The problem is fixed. By Burgundy who own the 'knowledge database' (?). 88E kept in the dark, so cannot issue RNS. Until eventually....it is discussed and agreed. Booommm.

I am sure DW and MM have cards up their sleeves. I sure hope so. Legitimate. Discrete until final position is reached. There really has been so much shareholder investment.

Phrontist

I can accept two projects running in parallel, but find it hard to accept four. Particularly when we are also buying up land and not receiving rebates in parallel.

Any discussion inevitably includes item cost, risk, start time, duration, nature and amount of gain, and more.

A good plan that works to fruition leads to a debt free growth, reduced risk (the worst is past), ongoing gains and developments without continually asking shareholders for more money.

If the Unconventional was a good plan and the only project then IMHO Flow Rate tests would have happened last summer 2018.

If this meant that no extra land was bought, no Yukon Gold, no Western Blocks, no Conventional Seismic then this approach would DEFINITELY have been worth it.

SP would be 4p to 8p, say, 10 months ago. Capital for ''creaming the curve' of three more wells parallel to the TAP could comfortably have been raised. With those three horizontal wells going in this summer.

The Sweet Spot is a massive underground plane of HRZ facilitating a known repeat process of wells across the 500,000 acres of land producing oil for over 20 or 30 years. It would have sold for US$7b minimum.

This was the plan, this was the target. This was exactly how PB wanted to raise US$1b for his charity project.

There is no known technical reason why this would not have worked, including resolving Icewine 2 issues, even if that meant horizontal only. Vertical is not that important to oil production in the long term.

A lot of information (regarding HRZ) is held secret by 88E/Burgundy for Commercial Confidentiality reasons. But lets be clear here. If the 88E BoD knew HRZ would not work for technical reasons then they must RNS that information.

Much work has been carried out on HRZ analysis and Icewine 2 non-workings. I am sure by some sources unknown to us as well as the more recent Baker Hughes work.

Still nothing significant published. Three years Spring 2016 to Spring 2019.

To my mind this is saying, there is nothing to prevent HRZ and Icewine 2 working as per Single Project focus originally proposed by the company.

I conclude, going off the Single Project focus is the reason Unconventional lays dormant today. And other projects cannot be brought to fruition because funds are spread too thin.

I do not like to criticise without offering a solution to the position we find ourselves in. But we the shareholders are given too little information to make fuller analysis of the now diverse expensive unproductive business we are funding. We are not privy to why Unconventional after Icewine 1 was made second fiddle to Conventional. And subsequently why no exploration well was sunk on Conventional in preference to more land, Yukon Gold and Western Blocks.

Phrontist

Conveniently ignoring decimal numbers, the 88Energy Market capitalisation this beautiful Easter Weekend is Aus$ 88 million.

P

sbrown36

Amazing, I had coffee with two female friends this afternoon and the bill came to 88:00 hryvnias.

P

Hello Newanda, good points.

Well, we were 1.5 or more years into unconventional expenditure before starting expenditure on conventional.

If this was a 'plan' based on conventional being lower risk and start-up cost compared to unconventional, then why did we not start 2015 with conventional first, unconventional later?

As for deciding which horizontal layer, let the geologists work that out. My answer, do both.

I often think about the risk profile of unconventional. Was PB suggesting something too far for 'little 'ol 88E'?

Then I remind myself about Icewine 1, extracted cores, lab tests, beakers with light crude clear oil, rocks on workbench dripping oil.

And the answer is - HRZ Icewine unconventional is low risk.

In fact, with Icewine 1 level of derisking, I would suggest horizontal on Icewine 2 is Zero Risk. It is just a question of acquiring the right drilling expertise and right geophysics expertise.

Because, Eagle Ford have been pulling unconventional crude oil for 30 years.

There is no magic here, just correct levels of observation and competance.

And focus of effort and expenditure. Not unqualified random projects elsewhere.....

You cannot say in hindsight, at this moment in time, diversification derisked our company. It has done the opposite, bringing us to our knees with projects everywhere but not able to complete on a single one.

Phrontist

Good afternoon WAussie.

Yes, I hope 'the FO' comes off too. But what is it? No one knows. After 10 months.

The BoD are not performing according to early company strategy statements. If they has stuck to our original plan the company would be strong today, then able to diversify from position of strength.

In theory the BoD and staff have 'got what it takes'. In practice they spend money too easily, lose focus, and lack problem solving skills.

I am at the stage where I think BoD should move over for more appropriate staff, whether Conventional FO is successful or not. I say this because it is increasingly likely that this 'contract' will be lightweight compared to the scale demanded by our supposed oil assets and lease size.

I have always been positive and I still am. The oil is still there. But this team are not the right people to get it out of the ground. DW was moving towards conventional on the slopes at the presentation that was PB's last attendance in UK. This meeting should have been 100% unconventional focused. Methods, risks, timescales, technology, geology, HRZ comparisons, endless details on the reason why we were there.

Instead DW presented Conventional with plan for Seismic field work and computer processing of these data.

Great idea, no complaints. But wrong time, too soon, adding to our risks before we had pulled our first barrel.

Classic AIM mistake. And ASX companies too I imagine. (I think of Slater Gordon here...…they had it all and threw it away within a few months, now years to recover.)

I agree with well planned and implemented diversification. Not just diversification for the sake of it. And at the expense of the founding project.

Phrontist

Did someone say it has not gone wrong, really?

Early 2016, Icewine 1 produced excellent results, better than Eagle Ford.

Three years later we have not produced any successful continuation from this.

With $110m of Capital Raises of which 90% has been spent.

I invested in 88E because the ONLY plan it had was to discover and develop the unconventional HRZ resource.

The company got too big for its boots with diversification on more land before existing land is proven (oil flow), on conventional Seismic with processing, on buying Yukon Gold old field area, on joining Winx / Western Blocks project.

How much has been spent on this lot? My guess $40m,maybe more.

The Conventional FO is at what stage now? No one outside 88E knows. We don't even know what we are negotiating for in relation to business terms. But it seems the money spent to get this far is not proving to have produced a desirable 'Plan B'.

Icewine 2 2017 failed due to lack of focus on this project. The horizontal option designed by Burgundy was removed by 88E. To save money spent on what?

Then following this failure on the vertical shaft, 88E just sat on it. Instead they should have engaged the experts immediately so that Icewine 2 2018 had chances of success with vertical, and chances of success with horizontal.

Why was this not carried out? Did not the beakers of oil in the laboratory in 2016 speak loud enough? Surely success is guaranteed with Icewine 1 rock samples being better than Eagle Ford, largest unconventional oil field around. And the seat of PB's work experience.

So, the wasted US $40m, could have comfortably covered the Icewine 2 with Vertical AND horizontal TWICE.

Today SP would be 4p to 8p or more based on oil flow tests. We would have money in the bank. And this point would have been last Summer 2018.

Unconventional FO would be complete by now, Spring 2019. And Conventional Seismic would be on the way.

CR's would be popular because productive use of money would be based on plans declared to shareholders. And the % of shares issued would be much smaller AND cash raised higher.

Instead, we seem to be arriving at Stale Mate.

Phrontist

Moda

640 acre = 1 square mile

P