Member Info for Phrontist

There were only 13 Trades for today, not exactly exciting.

The day was dominated by 4 SELLs totalling 60,000 shares being £30K.

That is 0.07% of the Market Capitalisation.

This could have been a single Trader moving on, on the basis that the Full 2022 Accounts in a few days are now yesterdays news, and unlikely to entice large amounts of new investors.

We need to see the Full 2022 Accounts being the first set since the LSE Listing.

This company has proven its 'product', has substantial growing sales, and good gross margins.

But we don't know little items revealed by P&L and Balance Sheet.

P

Please check yesterday's RNS, but it seems to say:

Yr end 2022 EBITDA profit likely to be £1.0 million

But excluding a £1.1m asset write down and some amortisation

Meaning the Net Income will be negative.

Many investors will not look on this favourably.

Even though Year on Year Growth has 2022 sales doubling on 2021 sales.

And, business growth prospects generally look very good.

Short term investors will take a negative view.

Medium term investors are likely to take a positive view.

My view is, the company is doing very well.

2023 Q1 Trading Update should be out soon, so we shall see.

Phrontist

SMS big mistake was to buy up too many companies too quickly.
Dilutes the shares, creates a debt mountain, staff cashing in and leaving in subsidiaries, failure to exercise tight financial control.
There is likely to be many other problems from subsidiary to subsidiary. It would be helpful to know some employees with true knowledge of the position because the directors are not going to tell.
Phrontist

Scrap all that.
The MC today is A$220m = £100m
It is difficult reviewing this on little mobile screen.

I think that the number of shares in issue today is 2.7 times the number of shares in issue in H2 2015.
This is 7 times 15% new share issues compound per year.
Today the Market Capitalisation MC is £220 million with the SP at 0.6p.
In July 2015 the SP was 0.75p meaning the MC then was (£220m/0.60p shares today) /2.7 (shares 7 years ago) X 0.75p = £101 million.
So the MC today is 2.2 times higher today than 7 years ago.
Over the 7 years 88E have not made any commercial Drill Program's.
For over a year the company has not made any indication that past Drill Regions will be revisited.
The company has not revealed £ revenue from the Texas leases.
So, is 88E worth 2.2 times more today than 7 years ago?
The answer is a speculative answer, not a fact based answer.
But if the MC is only worth the same as 2015 then the SP should be £100 million.
If you rate H1 2023 Hickory success value at 3 times today's MC (£660m) then the SP will rise to 1.8p
Phrontist

One reason for little rise in the SP now is the people that make it clear they are only buying now to sell just before the Hickory-1 preliminary results are announced.
Just an observation.

Brom that was almost 7 years ago, when I bought my first 88E shares. Unbelievable ??

Well spotted Keefy.
Why was such an early Drill Program possible?
I can only think:
1 the concrete pad had been created years before, no cost or time delay to 88E
2 The pad is drive on and off with the Dalton Highway

PANR have been cautious and meticulous yet still the magic words 'commercial oil' have not been uttered.
Now their SP has dropped 6 times or so from their peak.
88E have struck oil 6 out of 6 times - all abandoned because none are commercial.
So, for Number 7, just be a little cautious.
It will take time.
A commercial find is possible.
But proving out is not 'instant' like Saudi Arabia.
Hickory could take another two years to reach a commercial level maybe adding horizontal pipework like PANR are testing now. Just drilling and testing a single hole is a bit hit and miss.
Phrontist

88E has never worked on a Drill Pad in H2
Weather ?

Lemming, S4 (SMS) still on the naughty step....
Well put.
They bought far too many businesses far too quickly.
What percentage of the staff remained within S4?
And, do not underestimate the Debt Mountain.
Interest rates have risen and still rising.
When will first net profit be declared? March 2025
When will past accumulated losses become an accumulated profit? 2028?

Is it correct to say, flow test results for Hickory -1, pending good results in March/April 2003 drill program, are not until 2004...?

True NigeCo, I was a strong believer in SFOR from many years ago. What has gone wrong is a good question?
The core reason for failure to make profit is the expansion by acquisition program over the last three years or so.
Too much too quickly. Shareholder value diluted. Borrowing increased. Management control of over 30 subsidiaries was stretched. Accounting went into disarray.
We have no knowledge of the business performance of any of the subsidiaries. There were indications that key staff in new subsidiaries were leaving with their new found wealth. Shareholders have no idea how much each new subsidiary cost - were they all value for money?

PANR has fallen to sub 24p from over 140p a year ago.
Reason is a disappointing oil flow on Alkaid.
This implies the chances for imminent 88E drill have to be rated as very low. 88E are lucky to get sight of PANR's results of a drill so close to us, that is a benefit.
But should 88E go ahead with a drill program this year based on PANR's results? Would the money be better spent on the new Texas acquisition which has proven oil production?

SFOR hasn't made a profit in the previous 5 years and is unlikely to make a profit this year. Will they make a profit in 2024? We won't know until into Q2 2025.
A USA listing on this basis is a pipe dream.
The company has built a substantial cash borrowing which will incur unexpected and damaging interest costs.
Out of over 30 subsidiaries how many have made a profit ever as part of SFOR? Shareholders don't know the answer to this important question!

My impression is S4 are going to make a trading loss. This is what matters.
EBITDA = Earnings before interest taxation depreciation amortization.
If they can't cover what they borrow and spend, then serious trouble ahead.
Net profit is what the company actually makes. And so far they haven't made any.

Maribs you have missed something:
Longhorn - what are sales and profit?
Per Quarter, per Half year, per year?
What has been progress with new drills / oil flows?
P

When PANR finish with the drill rig, it comes down to 88E for them to use.

Let's hope the PANR blockage does not evolve into an Icewine 2 blockage conclusion. Similar situations but not identical in depth or rock mineral type.
These unexpected situations are scary, they seem outside the experience of PANR or 88E.
Phrontist

Over the last day an unidentified flying object came into Canada from the north and flew towards Alaska. A USA F22 shot it down with the wreckage landing near Dead Horse.
We can expect increased USA military activities in the area to find and retrieve the wreckage.
At this moment I am unaware of cessation of activities instructions from the US government, but something is possible.
Phrontist