Member Info for Phrontist

My Christmas Present hoped for is:

SP= 4p

based on belief that:

at least one Farm Out contract will be signed

3D is complete and shows excellent conventional resources

The Expert Report on Icewine 2 shows a beneficial future for HRZ, how and why etc

Any more suggestions on SP predictions?

Phrontist

I see various names can apply:

guessing
estimating
predicting
speculating
should be ...by...
analysing possible future movements

etc. he he.

What is wrong with speculating on SP values and movements at various times and events in the future?

SP movement is the principle reason why we are here!!!

And now some posters say we must not do this ….!?!?

Well, any person (literally) can legitimately post anything they like so long as it loosely relates to 88E business.

If someone does not like a post, pass it by. Simples.

Phrontist

Agreed, the Australian rise of 9.1% to 2.6c seems strong. Times 0.55 exchange rate encourages LON to meet parity at 1.32p. maybe more? Phrontist

catsize

That is an interesting article on Tangiers times before switch to 88E.

I do not have to search my soul to realise my belief in 88E is based on my belief in Paul Basinsky.

The tie up between his company Burgundy and our company 88Energy was an unusual situation for me to realise. In fact, it took me a while to understand the connection and relationship between BEX and 88E. I was misled early on as an 88E shareholder. I still do not fully understand it, but I accept it for whatever is was and still is.

I feel very happy that Burgundy is essentially a Texas based business with contacts and experience from that amazing oil soaked region. I am pleased the two companies work closely together just as before PB fell ill.

I hope one day (soon) we will have a chance to meet Michael McFarlane, the President of Burgundy. I imagine he was very good friends with PB and also a well matched business partner. It would be beneficial to UK based LTHers to hear his views and aspirations for our joint project. And to have informal chat afterwards at the Globe.

We have met DW many times, this has been invaluable to my mind. And Stephen Staley several times.

It would be nice to meet Michael Evans (non-exec Chairman) and Brent Villemarette (non-exec director) on a London visit as well. And also to meet Eric Opstad with his unique insight into Alaska oil business.

The sun is out, I am going for a walk. Best wishes to all LTH, Phrontist

Blingybird, this is true.

BoD can sometimes get tracked into their own Agenda and not inform shareholders of opportunities on the way. I am sure many short term shareholders would snatch a cheap deal to make 'double your money'. Shareholder voting on an offer does not have a right or wrong decision. It has a 'grab the money now' or 'be patient to realise full value' decision.

My guess is that 88E BoD and BEX are regularly (every week) talking to interested parties. Some looking to buy a small slice of the action. Some after a big kill at rock bottom value. etc.

I feel confident they will track this for a very successful outcome during 2019.

Losing a year has broken confidence of many potential investors to leave our SP in a stupidly low place.

Diversification does focus potential investors minds on liquidity issues when they should be focusing on oil flow issues. One could suggest this has been a mistake by BoD. Equally, one could suggest the North Slopes Project needs 5 years to reach best business objectives.

Some shareholders cannot hang on for (another) 5 years. Yet so far there have not been any visible suggestions to change BoD. Clearly LTHers truly believe that HRZ will work for us to become a stunning success. Yes, I still feel, a stunning success BEYOND IMAGINATION.

Phrontist

Brom, lets hope everyone has an open mind, analytical and diverse thinking. So, why does LeMajor suggest mixed messages is odd. It is normal part of conversions and progress over time.

Fact is, BoD with DW and BEX have to operate much of current actions on a discreet basis. Then make announcements after the event. It is tough on shareholders, but necessary in all businesses.

Brom, I notice you also went through the Quindell QPP heaven and hell scenario. We all believed in the founder who turned out to be a rogue and should be struck off, even in prison. Lies, deceit, siphoning cash out using clever share based dodgy transactions.

The company was on verge of complete collapse, shareholders would lose everything. One non-exec director turned the business round. All other directors resigned knowing their sins are forcing this. He sold largest section of the business for almost $1b (or so), and did capital refund. Shareholders left with only small losses.

The company lives on as WTG with the remainder of small businesses not sold. Over three years it has failed to excite the market, but it has remained solid and well financed. It no longer has interest in original primary bussiness. The secondary bussinesses survive but fail to grow.

They say, we should learn from our mistakes. Let us suggest shareholders do not make mistakes as such, just poor or unlucky choices. But we should still learn.

There are uncanny similarities between QPP/WTG and TAN/88E.
We should raise concerns.

And, there are favourable differences.
TAN was not corrupt, it was unlucky in exploration situation.
WTG stayed with misserable secondary bussiness.
88E took on a major new project, a complete break from past.
The fundamentals of this project are exceptional for an AIM company.

We all hope that it is 88E / BEX that realises these fundamentals for shareholders.
That the business is not forced to sell on due to weak business decisions and failing cash flow.

Look at the upside AND look at the downside.
Remind yourself, why are you here?

Phrontist

Sorry, seen first error already:

LeMajor, mixed messages???

Of course, but with one constant.

I always click Strong Buy, most others including you have "no opinion"

Yes, I have strong opinions about how this business is run.

It has similarity with supporting football team. I support Chelsea since small child. Some years are excellent, some years make you cry. Some decisions within the business are amazing, some decisions are frightful. But I still support them.

My strategy for the company has been their own stated strategy from start of 88E.

Unconventional is primary objective.
Conventional is secondary objective.
On the land we directly lease.

This means efforts on the primary always come first.
If a secondary or even tertiary expenditure causes the primary objective to be slowed down, then I object.

Yes, SP is grossly undervalued.
I wrote a Post a few weeks back presenting a scenario that we decided to sell AEA with Leases for US$ 1billion.
Of course, this is ridiculously low. But lets look at it.
88E gets 60% approx. = $600m
88E retains 10% approx. for ongoing business development = $60m in bank
That leaves SP=1p based on Cash alone, then plus Yukon and New JV
Lets say new SP=2p

Capital Refund is $540m
This is approx 10p per share cash pay back.

So, Fire Sale value TODAY of 88E is 10p + 2p = 12p per share
Stock Exchange price = 1.2p

Undervalued by 10 times.

Why? I will be happy to hear your answers HERE and NOW.

Some may say, Icewine 2 progress is bad luck with unknown problem.
I say we did not put in best expertise soon enough (from Q2 2017)

Some may say, HRZ is too risky, maybe it cannot yeild its oil.
I have agreed with company, it is oil soaked - see picture during 2016 from Lab

Some may say, we are getting into a pickle. Too many balls in the air. Loss of business focus. Endangering liquidity by diversification before primary objective is met.

This is a forum to air such views, not a forum for small minded self elected clique attempting personal criticisms.

Phrontist (errors and omissions accepted on quick calculations)

LeMajor, mixed messages???

Of course, but with one constant.

I always click Strong Buy, most others including you have "no opinion"

Yes, I have strong opinions about how this business is run.

It has similarity with supporting football team. I support Chelsea since small child. Some years are excellent, some years make you cry. Some decisions within the business are amazing, some decisions are frightful. But I still support them.

My strategy for the company has been their own stated strategy from start of 88E.

Unconventional is primary objective.
Conventional is secondary objective.
On the land we directly lease.

This means efforts on the primary always come first.
If a secondary or even tertiary expenditure causes the primary objective to be slowed down, then I object.

Yes, SP is grossly undervalued.
I wrote a Post a few weeks back presenting a scenario that we decided to sell AEA with Leases for US$ 1billion.
Of course, this is ridiculously low. But lets look at it.
88E gets 60% approx. = $600m
88E retains 10% approx. for ongoing business development = $60m in bank
That leaves SP=10p based on Cash alone, then plus Yukon and New JV

Capital Refund is $540m
This is approx 10p per share cash pay back.

So, Fire Sale value TODAY of 88E is 10p + 10p = 20p per share
Stock Exchange price = 1.2p

Undervalued by 17 times.

Why? I will be happy to hear your answers HERE and NOW.

Some may say, Icewine 2 progress is bad luck with unknown problem.
I say we did not put in best expertise soon enough (from Q2 2017)

Some may say, HRZ is too risky, maybe it cannot yeild its oil.
I have agreed with company, it is oil soaked - see picture during 2016 from Lab

Some may say, we are getting into a pickle. Too many balls in the air. Loss of business focus. Endangering liquidity by diversification before primary objective is met.

This is a forum to air such views, not a forum for small minded self elected clique attempting personal criticisms.

Phrontist (errors and omissions accepted on quick calculations)

Nice start to the day. Let's hope it exceeds 1.3p today. Even so, grossly undervalued. Phrontist

How about a stab at the date for oil flow from Icewine 2H:

by Valentine's Day 2019

Phrontist

Brom

Nice document from Dec 2014 as Tangiers Oil.

It reminds one what happened to the previous project. 100% loss of shareholder funds.

It states conventional is a secondary objective. Quite clear.

De-emphasising a Primary Objective for a dash into secondary objectives was not part of the company remit.

It is clear from that document, unconventional is a massive resource and THE reason why 88E is on the North Slopes.

I am hopeful that this expert team will crack the riddle of Icewine 2 over the 3 month or so period they are working on it. This investment is ensuring HRZ can still produce success on a massive scale. Great if the vertical can be made to flow. And great if a Farm In company can move in with lateral piping and high Flow Rate.

I am also very hopeful that a very credible and powerful company can be selected for the Farm In contract circa November 2018. Being on the TAP and Roadway, rapid deployment of equipment and labour will occur.

It is 50% chance (always seems to be 50%) we can extract oil from Icewine 2 during early Q1 2019. No ice roads to worry about. But can a horizontal be installed and commissioned during winter time?

Phrontist

Spinefx

My personal position has always been to focus on Icewine 1, lab results etc, Icewine 2, Flow Testing.

This was the only objective of the company when I first invested.

After 4 or so years this objective has not been met.

Three new objectives have been added.

In my opinion lateral well should have been addeed last summer.

Investment in other projects should not have occurred until Icewine 2 had proven itself.

We should all remind ourselves of the colour picture of some HRZ rock a few months following Icewine 1 core extraction. It oozed and dripped oil.

If it was dry of oil, maybe extracting oil could become a protracted problem. So chasing other projects as backup is a possible route to survival.

But the HRZ has easily accessible oil within it. So the risk of focusing only on Icewine 2 until Flow Rate is very low and the reward is extremely high. Just the right experienced staff, test equipment, etc to fathom why that well is not offering oil in abundance.

So, mm, I want the professionals to get on with it - Icewine 2. I think we have some expertise working on it now but they should have been on this over a year ago.

If new Western Blocks drill is dry, well who are the mugs? For small fry reward by comparison. And risk assessment of worse than 30%, lower than 50% on Icewine 2. Here we are with 100,000's of acres of the oiliest land in the world (many people quote this) and we have to go and work on someone else's land. Haven't Great Bear hit bad times through a series of dry wells?

Phrontist

Spinefx

I have never said 88E's main objective is to become an oil production company.

At some stage this company must receive revenue.

How, when, where?

DW often says, we keep our options open until the time comes. Very good.

But it should not mean we go from year to year of shareholder expenditure without clear cut targets.

The situation with Icewine 2 is in danger of becoming a disgrace. No oil is produced, no targets are set, no objectives are identified.

I understand why, Ice 2 mysteriously failed. Reason not known.

Now an expert team is examining etc. But the cost, end date, report date, objectives, etc have not been identified clearly from my viewpoint. Dates. Then Farm In contract Date target.

We know, and hope, BoD are working on many objectives. But shareholder funds are running low. It should not be a game that BoD suddenly drop another Call for Cash. It should be on a better identified set of success and objectives etc.

Phrontist

How is this investment business meant to work?

I suggest the model in its simplest form is:

Shareholders put money into the company to develop business over time.

Company produces oil revenue to pay shareholders for their investment.

88E is entering its 5th Year after dropping Tangiers Oil project and starting 88E project in Alaska.

Latest Presentation is excellent in presenting business opportunities we are involved in.

But not one single target is offered for first Oil Extraction with 2-week flow etc

If shareholder money is invested in each of these 4 (which it is) then shareholders should be advised of target dates of Oil Extraction for each one.

Target Dates can change, that is life. New reasons may require change such as Ice 2 failure to flow oil this summer. New target dates can be set.

But the focus is on extracting oil and this presentation does not give a target date for any of the four projects.

So, today the SP rises, then falls, then rises etc. It is just the usual collective of short term players and MM having their fun at our (LTH) expense.

The BoD have to attract large longer term investors. They are failing to achieve this.

Reason? The BoD in their 5th year are still unable to offer target dates even though shareholder funds are being spent in all directions.

How can we hold BoD accountable when BoD have no commitment to 88E simple business objective?

Say when first oil is produced from each project.
Say when the target date is for revenue from each project.

Meanwhile, we sit on a vast oil asset. If BP, CP or other were running this, they would have project plans, expenditures and targets for every project. Managers and staff would be accountable for timescales and targets.

Phrontist

Brom By "produce" I mean the well is showing itself to be commercially viable. 2 weeks at respectable flow rate. Minimal pressure drop. Quality light crude oil. Secretly, I still have a hope Ice 2 can be first. A specialist team are working on it. 6 week's work done, 6 week's work to go. It could be like repairing a car. It took lots money and team to build. But if faulty it could take an hour to fix, or a few weeks to repair. In theory the Team Remit is to produce a Report for Farm Out negotiation. In practice a nice surprise could be sprung on long suffering LTHers. Phrontist

Brings everything up to date. MC should be US$250m at least. When will we pass this figure? When the company produces it's first oil!!! Which is ....? Phrontist

SaintAnthony

I noticed that before and do not know what the significance of it is.

What does opening the data room mean?

That reply does not seem like DW usual style of language.

Phrontist

But what could RNS be?

3D Seismic progress statement seems most likely. This has some influence on all our conventional work.

Or H1 2018 Results with more general details on Forward Planning.

It seems too quick for unconventional Farm In (as stated in 2 July RNS).
But a Progress Statement on “forward work program to present to potential farminees” would show Icewine 2 lives on.

Conventional Farm In negotiation likely late Q4 2018 since it requires completed 3D Seismic data.

Any plans on Yukon Gold also likely Q4 2018 following 3D Seismic completion.

Progress Statement on New JV (Western Blocks)? This is newest Project, may be too soon for Progress Statement.

We have not had an RNS for 4 weeks, other than expected Q2 2018 Report. There is a lot going on, so an RNS tomorrow morning seems very likely.

Phrontist

LeMajor, the answer is "I have never beaten my wife". Yes and No were not part of the Love Plan.

The BoD'sw job is to run the business on behalf of the shareholders. 88E is unusual in that over 95% of the shares are owned by non-institutional and non-employee people - us.

Voting on "Sell AEA" or "change CEO" will be by shareholder sentiment.

What we must avoid is another Tangiers scenario.

My opinion is that 88E had this in the bag. And now they have lost it. Horizontal upgrade to Ice 2 is looking like a pipe dream now. But it was part of the Original Plan as laid out by PB. It is why we are here.

We are not here to buy Yukon, make friends with Great Bear or even to succeed in conventional discovery. These were added by BoD without shareholder opinion being sounded out. But these should only added AFTER unconventional success.

DW once said informally, several years ago at the Globe, that 88E can raise money easily. Shareholders, banks, bonds, Alaska Gov, etc. Just an array of people keen to thrust money into our hands. Now is the test.

Remember the old joke about asking bank manager for a loan? He says NO, you are too risky, you have no money. You answer, but Manager Sir, if I had money in the bank, I would not be asking you for a loan. He smiles but says nothing.

The rich get richer and the poor get poorer.

My gut feel is that Burgundy may hold the answer to our Great Escape.

Phrontist

So, no serious RNS since closing of Icewine 2.

Of course BoD are working their socks off, my faith in this teamwork is as strong as ever.

But business requires decisions to be made.

One is to focus on first task until success, then diversify with new wealth generated.

Or, diversify to mitigate against long term failure of original plan.

None of us today KNOW the best answer.

It is a personal decision - focus or diversify. (mm gets emotional here and wants me to sit on his knee. Weird man)

I hope, and believe, that in time we will discover which the best route is.

Meaning, lets hope for a Farm In company on unconventional. Then we will see if successful oil flow is achieved, the expense it consumed and how long it took.

And alternatively, we can watch progress of conventional, Yukon and New JV and see cost of progress and when first revenue is produced.

I have no doubt we will get there. But what will the cost be to existing shareholders? Another 15%? Another 30%? At this rate if we strike oil, the SP will only rise to 3p instead of 6p, or some similar comparison.

Phrontist