Member Info for Phrontist

Chartman, you risk your reputation ….

Icewine-2 2017
Icewine-2 2018
Winx-1 2019

Phrontist-1 2019 Summer, Lateral HRZ Well

Can I do worse....?

P

I feel like cracking on with the work myself, maybe a collection of us shareholders....

Need to buy shovel, pickaxe, electricity generator, water pump and long pipe (ha ha 12K ft), errrmmm, dumper truck, few cans of petrol, spanner kit, ummm sure something is missing...tent and sleeping bags....

So trips to B&Q, ToolStation, Tool Hire, Camping shop, etc.

Ah, just remembered, need an Upgrade to Vertical Well with Horizontal Drilling Kit. No problem, just make a stop at Houston DIY Shop in Texas.

So, catch plane from Gatwick to Houston, then on to Dead Horse.

Ah, need to hire ENORMOUS tanker for all this oil flowing up at over 1,000 bpd he he.

Who needs Tier 1 guys, we can do it ourselves.

Phrontist

Farmee must be straining at the leash to get working on Site.

P

Make PB's dream become reality....

P

I asked DW 4 months ago if Conventional FO could develop to include Unconventional FO under same contract.

He said it was not part of current process but 88E were open minded about this.

That was about 5 months ago now.

If preferred bidder is an existing experienced unconventional production company, then it seems likely they would be interested.

Test horizontal wells on Icewine 2?

Phrontist

Also note a financial point.

Farmee under FO contract could spend $50 million to $75 million on 3D Seismic, computer processing / analysis, drill rigs.

OK some people may think SP will only rise to 1.3p but some think steady rise to 5p during 2019 is quite likely.

Yukon, Winx and unconventional aside.

Phrontist

Note that announcement of Conventional FO could still be any day, any week....

I have decided to not risk being without 88E shares.

The large oil production companies really need sites like our Central North Slopes. It offers them a single vast site to develop and operate for 30 years.

With Highway and TAP they have proven existing infrastructure to get machinery and workers in / out, and oil Out.

We are on dry land in secure country, important for large company to just get on with long term exploration and production tasks.

Yes, they seriously need this site. It is one of the most desirable sites in USA.

Phrontist

Those of us that are still here in Q4, will look back with barely a memory of the FO timescale.

Originally hoped for 6 months but it stretched to 11 months.

Such is life when little firm deals with giant firm. They have technical investigators, planners, lawyers, financial controllers etc etc.

I feel 88E / BEX have put in long solid work that will bring in results.

At any time before a contract is completed there is some uncertainty. DW has shown as much as possible at this stage.

For me, probability of FO Contract completion in April or May seems very high. I am still hanging onto my 88E shares.

Phrontist

The report is in past Presentation style.

Progress is solid as are finances.

Conventional FO should be agreed during Q2

New HRZ open during H2

No specifics on Icewine 2 technical issues

Yukon making good progress, aim for FO and drill 2020/21

Winx being studied for possible Winx-2

This is likely good for steady SP growth with events spread throughout the year.

Unsaid but the case, progress should be more positive if/when Conventional FO is signed.

SP should make small progress meanwhile.

Phrontist

My feeling is, these guys are going to pull off a blinder.

When, who with, nature of deal - no idea.

DW was the motivation to explore for conventional. This FO is his baby.

Next market opening is 1am our time Monday morning.

Which is about same time as start of 88E AGM.

It could just be the moment for FO announcement.

This would give AGM a fabulous boost....and SP a big lift...

Phrontist

GrumpyScouser

It would be great if that happened.

At the moment I feel like GrumpyPhrontist…..

I do not blame DW, like some people do.

Reason, if he is 20th Shareholder in size, he and The 88 Team will be working their socks off dawn till dusk to help Bidder to SIGN....

Phrontist

Beancounter, how many shares are you selling?

It sounds as though the ripple will travel from City Stock Ex to Perth, and knock down all Exploration Company HQ's!!!

P

The Conventional FO Contract has become an enigma.

A Production Company engages in a bidding process. Many personnel must be involved, particularly on Data Room analysis etc. They bid so hard, all other bidders are retreating from the competition.

Then, there suddenly it appears, they are unable to complete Contract Signing because of...WHAT?

Surely if this 'WHAT' is so problematic, 88E would have known about it BEFORE making them 'preferred bidder'.

The situation just does not make sense to me.

And surely, 88E / BEX went out for Bids to commence work by a given date. If a Bidder cannot start by that date, then again they should not become 'preferred bidder'.

We are in danger of losing the July 2018 to xx 2019 period entirely. And starting a new Bidding / FO Process this July 2019.

A year lost. Just like Icewine 2 (not retaining technical advisors a year earlier).

But for WHAT, it is about time shareholders were advised of the details on this FO Bidding process.

Now we have imminent AGM.

But they cannot discuss something that has not been ANN / RNS'sd first.

Catch-22

Phrontist

This is last full working day before AGM in Perth on Monday 15 April.

Technically it is possible to issue ANN / RNS's on Monday prior to meeting, but unlikely.

Phrontist

I asked DW some questions relating to conventional and unconventional to which he replied on 8 Nov 2018.

Majority of his answers said answer is Confidential or subject to RNS. Crossing the line “clarification of existing information”. Fair enough, I tried....

But he gave a covering statement in capitals:

THIS PRETTY MUCH ANSWERS MOST OF YOUR QUESTIONS – I AM SURPRISED YOU ARE NOT AWARE OF THIS AND HAVE GONE DOWN SOME STRANGE RABBITHOLE IN TERMS OF WHAT A DEAL STRUCTURE MAY LOOK LIKE
FARM-OUTS ARE PRETTY VANILLA TYPICALLY – SOMEONE COMES IN AND SPENDS MONEY ON THE FUTURE WORK PROGRAM SO YOU DON’T HAVE TO – THEY GET PART OF THE PROJECT IN EXCHANGE

Me thinks - if FO's are so simple why are we taking over 9 months and counting?

I guess much time is taken examining drilling reports, Lab reports and Data Room information.

But his comment last year was that bidder(s) requested more time.

Well, not much conclusion can be drawn from this, except Farm Out Contract itself is simple.

Phrontist

Opened with a rise back to 0.8p - phew

Still not any information leaks....

Are we sitting on a vast asset about to start giving up its riches?

Or a pup....?

Phrontist

Will there be a pre-AGM release of any kind?

Presentation
Q1 Report
2018 Accounts

Phrontist

and....

A contract to sell AEA would require shareholder vote for acceptance.

Terms of contract are disclosed for public scrutiny.

There is not time to arrange this by AGM, it takes months.

Normally commenced with Buyer issuing a Letter of Intent (to buy) subject to contract.

CP, for example, have issued the $amount expenditure on acquisitions in 2019 within the 2018 Accounts delivery. These accounts are (have been) approved at AGM by shareholder vote (standard practice). So they will not need further shareholder approval to proceed on AEA acquisition.

All very clean. Just agree the price. And let Buyer complete an Audit of AEA.

I went through this process as shareholder of another AIM company. The negotiation to LOI took about 9 months. Then obtaining shareholder approval and finally paying out CapRef took another 5 months.

But wow, was it worth - definitely.

Phrontist

I have often said, sell AEA (Accumulate Energy Alaska LLC).

Yukon and Western Blocks are each in a separate 88E subsidiary.

AEA is 88E's first subsidiary. It is USA Registered company based in Alaska.

AEA is the holder of the Central North Slopes leases.

So, a production company buying AEA will have all the leases without needing sub-lease or re-assignment complications.

They will have conventional, unconventional, even gold if there is any!

They are taking over all the risk alongside all the assets. But large corporates like it that way. No middle men.

The downside? Cash up-front just like buying a house.

All the Tier 1 majors can afford a few $billion no problem. I have been looking at 2018 Accounts. They would probably raise mortgages against the assets to mitigate the full once off payment.

...of a few $billion.

A few years ago many thought $10b could be target. But we have not de-risked the HRZ fully, yet. Though, this figure was before conventional became a player for 88E.

Shareholders would still own their 88E shares, no changes here.

90% or so of the money is likely to be paid to shareholders as a Capital Refund.

88E would carry on, still own Yukon and Winx (part), be cash positive. Quite frankly, 88E would be ultra low risk share with high opportunity.

Phrontist

Plenty Bed & ISA movements but low trading otherwise, it seems.

I doubt the FO Contract will complete during April, somehow. The depressed SP suggests this possibility is already built into the price.

Last year DW suggested to me that a Tier 1 company would do and re-do new 3D Seismic across the whole region we lease. Then process it to find most appropriate places to drill.

Then 2 or 3 wells in Q1 2020

The movement from End 2018 contract to start May 2019 contract may not adversely affect the Seismic Plan too much.

Meanwhile, for use at AGM, a lot of good information can be presented in:

2018 Accounts and Report
2019 Q1 Progress Report

I would imagine the AGM date was set to accommodate this.

And if BoD is able to give a specific reason for stretched timescale to FO Contract, this can soothe our nerves.

Fact is, the oil resources under Central North Slopes are not going to disappear. Modern technology methods and equipment are for ever improving, to our benefit. Companies like CP, BP, Repsol are up on the leading edge. They have knowledge, experience, funds, facilities that will make our little problems vanish.

Phrontist