Member Info for Phrontist

Thanks SeeVee

Anyone know where Dave Wall is this weekend?

Houston, ha ha?

I wish you the best of luck, anyway.

Phrontist

People passing this weekend with low or none 88E shares could miss the best 'gamble' on AIM this year (ever?)

Phrontist

In summary:

BEX / 88E Central North Slopes assets in Alaska must look like delicious morsel for CP.

And they have everything required to:

- want this FO deal
- and handle this task.

Next time DW is in town (London), we will be showing utmost respect...….

I'm buying him the first pint....

Phrontist

Part 2 - Conoco Phillips: HQ – Houston, USA – essential DYOR

Observations:
Resources are under 50% liquid vs over 50% gas (not great)
Focus on Alaska growth
88E Conventional FO can increase their oil reserves by 45%
Massive capital expenditure budget of $6.1b
CP is big operator in Western North Slopes, Kuparuk, Prudhoe Bay of Alaska
CP has every resource our FO Project needs, proven and available
DW would fit into CP corporate structure very nicely…..
My guess, this deal could contribute to right downs on significant corporate tax
The price of crude oil is right time for CP to deal NOW

88E Conventional FO must be right in CP’s gun sights……

They could negotiate to buy Accumulate Energy Alaska Inc from BEX / 88E

Phrontist

Part 1 - Conoco Phillips: HQ – Houston, USA – essential DYOR

SP 10-year history:
SP around $67 listed on NYSE as COP
10-year low $20 at 10 years ago
10-year high $86 mid-2014, almost 5 years ago
Last 10 years – climb from $20 to $67 – 335% growth
Outperformed Gold & Silver by 20%
Last 3 years – climb from $33 to current $67 – 100% rise
Last 6 months – drop from $80 down to $67 – 16% fall

Similar curve tracking to NASDAQ indicating much is based on wider economic issues, likely price of crude oil and LPG are factors.
But COP is slightly ahead over 10 years.

Annual Report dated 19 Feb 2019 for 2018 Year –
http://static.conocophillips.com/files/resources/2018annualreport.htm#2
This is an amazing document to read. I gasp. Highlights:
Higher than targeted production growth
Debt reduction of $4.7b ahead of target
35% payout of cash from operations as dividend
$3b of share buybacks (this raises SP and sign they are cash rich)
Portfolio enhancements through exploration success and acquisitions in Alaska
Year end reserves of 5.3 bbo equivalent, but down 20% over 2 years
Delivered safely and sustainably
2019 has $6.1 capital budget (woowww…)
2019 plans a further $3b share buyback
2019 focus on per share growth following $36b 2018 Sales
MC = 2.5b shares x $67 = $167.5b
2018 net income over $6b against 2017 and 2016 big losses
Cont

We are on the last working day of March, last of Q1 2019.

Oh dear, it seems that those in power cannot manage or control tasks defined by them, and agreed by 'the people' (voters, shareholders).

Which of FO and Brexit will complete first?

Will either or both succeed, as in intended outcome?

History is in the making.

This Conv FO can provide the momentum to complete a successful Unconv FO.

A good result soon will enable BoD to manage and develop 88E projects in predictable and successful manner for years to come.

My vote says 88E / BEX have managed a solid Conv FO negotiation.

Result could be anytime. Even later today during USA daytime. After ASX and LSE have both closed.

Phrontist

cont....
In 2018, 88E decides to become a senior partner in a new JV and be the field operator to commission Winx-1 in East downhill part of four Western Blocks. My early opinion was 88E should be sorting out Icewine 2 issues exclusively and not spending money on another risk. A new risk at 33% chance success against an old risk at 50% chance success. Ummm.

Winx 1 failed based on high water content and clay content. What happens when rain falls on hills over a million years? Water and silt flow to the lowest area. DYO thinking.

The best place for Winx-1 is to the West, nearer to the successful Nanushuk well as possible, which could have been half the distance from Horseshoe 1 well. And uphill not downhill. If horizontal had been added to winx-1 it might have been possible to frack the clay sludge/rock DYOR here.

Winx failure damaged 88E’s reputation and bank balance.

Conclusion. BoD are a great field operators company. But BoD level need to consult and listen to work and words of relevant experienced geologists for rig placement, and oil well designers before sinking a well.

I suggested halving DW’s salary but supported by bonus. And hire a full time board level geologist with unconventional experience and Alaska knowledge on a similar salary / bonus. Maybe 60/40 in DW’s favour. IMHO.

Phrontist

csw12 - you have strange opinions about people and what they write. (((

Most people consider a wide range of issues about a topic, in our case 88E a lot, Alaska some, BEX a little, price of oil some, etc.

Within these many issues - individuals DW PB etc, companies 88E, BEX, CP, etc, areas of exploration we have in Alaska and others have etc. Much to talk about IMO.

Oh, so you pick on 'the board'.

Overall, I think the BoD are between average and good. They could turn out bad.

I have suggested before, we know less than 1% of what they know. There are things they knew 2 or 3 years ago that we still do not know today. We have not had enough information disclosure. Of course not 100%.

But more information should be provided. Shareholders today are only here on PB history, a song and a prayer. Because we have not pulled a pint of oil, yet. But the resources so far de-risked are over 4bbo. Potential is double that or more.

We are only part way through what seems likely to be an 8-year run from Jan 2015, IMHO. I am sure 88E will have many things on the go after then, but the Central North Slopes story itself should be complete by then.

With PB events were picture perfect from 2014 to 2016. He is a proven oil specialist geologist, being also BEX founder. Most (all?) early investors believe in his work which he started many years before 2014. He worked for Conoco Philips for over 25-ish years, mostly on Eagle Ford and fracking. Then following retirement, he took up an interest in possibilities 10,000+ ft underground on the Central North Slopes.

PB formed a business JV relationship with 88E for us to be BEX’s field operator. 88E had failed as Tangiers Oil with one director replacing 3 past directors with 3 new directors including DW as CEO and SS.

Essentially 88E did what PB had postulated, that is de-risk HRZ unconventional using his lifetime fracking experience.

Icewine 1 in 2016 was successful. Discovery of two layers of HRZ that subsequent lab tests indicated were excellent for fracking and oil extraction. A light, sulphur-free crude oil for excellent viscosity (flow rate).

PB became ill, details unknown to me.

Icewine 2 went operational mid 2017 and failed to extract oil.

PB designed a well shaft that catered for vertical operation followed by horizontal flow. 99%+ fracking uses horizontal wells. 88E decided to cut costs of Icewine 2 design by omitting the horizontal test. DYOR.

Icewine 2 was re-opened mid-2018 and failed to extract oil. Horizontal was still not implemented and tested.

Monday is start Q2 2019, and no-one (publicly) knows why Icewine 2 failed after 2 years! When the rock analysed in 2016 from Icewine 1 indicated oil flow could and should be successful.

In 2018, 88E decides to become a senior partner in a new JV and be the field operator to commission Winx-1 in East downhill part of four Western Blocks. My early opinion was 88E should be sorting out Icewine 2 issues exclusively and n

And a significant question for shareholders:

How much $$$ will the contract state for pre-contract costs?

That is a contribution to our exploration costs on conventional exploration.

Phrontist

I think it is important to suggest, no ANN / RNS tomorrow should not lay negative vibes at DW's door.

Support can often help at times like this. There is plenty enough stress in this exploration business without us adding to it.

Of course, we all wish for a successful outcome tomorrow, next week, by AGM, etc.

We all have a few moments to reflect on this FO negotiation.

Go Ahead, or Drop Out? Beneficial terms, or Screwed to the Wall terms (pun not intended)?

Should I hold no 88E shares, some shares, large heap of shares???

Will another 88E / BEX event squeeze in before FO completion, or at same time?

Surely HRZ unconventional announcement is imminent? Invitations for FO and opening the Data Room.

88E and BEX have put in a vast amount of work behind the scenes since last summer and the Icewine 2 drama. Many people have been involved with specialist expertise on both FO negotiation and data processing of Seismic results. In fact the 3D Seismic on conventional has been on the go for a few years now.

Phrontist

Am I crazy? But….

It seems even more likely to me that the ‘contract’ has been signed, or at least ‘an agreement has been reached subject to contract’.

This latter term is standard in large negotiations. Invariably the client (Farmee) is walking the ‘contract’ through various departments getting sign-offs etc for the many aspects and implications within such a large organisation taking on such a large task.

Remember Central North Slopes is approx. 500 square miles. We have taken 3D Seismic on about one quarter, part in West and part in East, I think.

DW said to me last year after Presentation evening, that a Tier 1 company would do latest technology 3D Seismic of the entire site as first and main task in 2019. This would include re-doing the 3D Seismic areas we had already done. Is this a clue???

USA companies have this expression – NIH (not in-house). In this case, they will re-seismic the whole site to create a 100% new and monolithic digital data file. Then commence computer processing on Supercomputer systems due to the massive amount of calculation, iteration, interpretation etc required. Produce the strata models, analyse to find the best spots for first well locations.

I suspect that a target of ‘some wells’ early 2020 is still on the cards. This is only possible if the re-seismic and processing is nearing completion by late Autumn. Then plan and implement ice roads, pads, etc similar to the Winx-1 field procedure.

Once a contract is completed by both sides, the Farmee has commitments to tackle. Resource planning and organising can be quite significant. Money will be passing hands…..

DW and 88E staff can do little at this stage other than to handle question answering and modifications to final contract based on Farmee company internal requests.

So, tomorrow is still possible. To me, tomorrow is likely.

But note, Houston and Alaska are on USA times. Their Friday starts about our early Friday afternoon. So, no ANN for ASX is possible. And no RNS for LSE is also possible.

Announcement timing is generally at the client’s consent. And they could release it UK time Friday evening which means ANN / RNS on Monday.

It is also worth remembering another thing DW advised me about in the same private chat. 88E / BEX had engaged professional person / company, specialist in oil farm-in/out types of negotiations. They could be offering first Press Release on behalf of both companies, on USA Friday afternoon.

There is a lot of detail in these things. Just ‘sign and announce’ is possible but unlikely.

Phrontist

It appears to me that the contract and terms are agreed.

As in, negotiation is complete.

We are waiting for client company to say YES, go ahead.

Or NO, it did not receive internal approval.

Phrontist

There is 100% information lock down (no leaks) on this project.

Not at 88E, or at BEX, or at Client company.

At 0.8p, the SP has not given a clue as to FO result.

The client has not dropped out, we would know pretty quickly.

This looks healthy.

The Farmee client should make vast amounts of cash out of this.

Phrontist

If there was going to be an extension into Q2 2019, this would have been requested, agreed to, and us informed in RNS last week or week before.

Therefore, only Thursday and Friday to go....

Beyond that, we have absolutely no idea, other than DW's voice interview words a few weeks ago.

IMHO those words showed positive promise.....

Phrontist

Jiddy123, like you, I believe there is a great deal of positive energy in DW's statement, which I repeat:

"The progression of the farm-out process to the preferred bidder phase is encouraging but no deal is done until it is done,” said Dave Wall, 88 Energy chief executive."

I have spent many years in large contract sales. The client negotiates what he wants...then ….they have to get the whole thing agreed in-house. Including rubber stamped at Board Level.

So Supplier has to wait twiddling his thumbs for weeks, months...

And this could be a very large contract.

It is usual for the client to finish with contract signing following this internal company work. I cannot remember a case where the client changed their mind at the end. A lot of business planning by client company would be going into this throughout the 9 months so far.

Quite frankly, this would have taken the client company a lot of staff a lot of time and cost a lot of money. No one does this for fun and games. To be at this stage means client company wants to complete. And they usually do complete.

DW and Company have done their bit. His comment 'no deal is done until it is done' in this case is very true.

All things being equal, etc, I have a good feeling about this contract.

I wish all of us well, including DW and 88E staff, and BEX people.

Phrontist

Art

Icewine 1 found two substantial layers of HRZ in 2016. The rock / sod was extracted and tested to be so, with excellent oil content and properties. On the existing Franklin Bluffs pad.

It was not a false economy.

The reason for failure to achieve oil flow has not been discovered yet. At least, if it has, shareholders have not been advised.

IMHO failure by BoD to discover and/or advise us on this is compromising ASX / LSE Rules relating to disclosure responsibilities.

HRZ is the prime asset shareholders were sold on and invested in. 88E have not provided serious technical information on this project since PB's illness.

Why? Any answers?

Art, I can appreciate your comment to try new unconventional drill elsewhere. But until the Icewine 2 problem is understood (publicly) we should not fund anything on this project.

Many (me) feel horizontal wells upgraded on Icewine 2 will resolve the problem and gain oil flow. But gut feeling is not enough. As discovered on Winx. (Don't puddles and silting occur on lower sections of a slope? Where was Winx-1?)

PB's original well design included ability to operate horizontal and vertical. If this had been implemented Icewine 2 may have achieved oil flow in 2017! 88E dropped this feature to reduce cost.

Was this the worst economy decision ever made?

Phrontist

Thinking of conventional FO.

A negotiation has occurred, Data Room has been investigated.

A bidder will only undergo such efforts when they are extremely interested.

CP are a dynamic oil production company (assuming for the moment they could be preferred bidder...).

The company that goes ahead with FO will be immediately deploying money, time, staff, resources to the Central North Slopes.

It is a big decision, no question.

I imagine that there is little more DW can do.

Equally, the bidder has a responsibility to make a decision, Yes or No. Not hum and ha, sit on the fence for infinite time.

I think there could be a decision this week.

And there will be a decision before AGM.

50/50 ha ha? We know nothing....

Phrontist

Jiddy, I know why FO contract with CP may fail.

DW is asking for too much $$$$$

He says to them - 'guys, each of you only has one family to feed. I have thousands of wailing shareholders to keep happy. Have you heard of the £1 party...?'

Phrontist

Pain of Winx is behind us.

Possibility of conventional FO contract signed.

Possibility of unconventional investigation complete, data room open, start of FO negotiating.

Both by 15 April for positive AGM ?

Phrontist

Brom

That is excellent bit of information about Elizabeth Pottillo, I am really pleased to hear it.

Phrontist