Member Info for ps200306

Ktf's market cap projection implies a share price four times that of SOU's own broker.

So it turns out 0.5p/share was too optimistic after all. What a clusterfark. Instead we get 5% of profits if Larry sells something he doesn't even own. Something which he has no incentive to pursue -- he can milk Barryroe for the tax writeoffs anyway. He's not in it for the oil. And given that it took 14 months for DECC to approve a minor survey, the chances of Barryroe getting developed or sold within 10 years are zilch even if LG pursued it.

Actually, I'd say 0.5p per share is optimistic. Some of Larry's money will be spent on the restructuring process. It's not like the existing shareholders have a whole lot of leverage. All they have is suspended shares in an insolvent company so crumbs from the table is their best hope. I guess it all comes down to how much Larry wants the tax write-off money which, let's face it, is his only interest -- this talk of a new renewables company is mostly fantasy as there is literally zero other reason to put his money in Barryroe instead of a new vehicle. Yes, there's a fair bit of value in the tax write-offs but Larry didn't get where he is today by being flaithiúlach with his own money.

A bit disappointing from SOU. Looks like the Phase 1 timeline is substantially behind schedule. "Our contractor and its sub-contractors designing and constructing plant equipment for delivery to site late 2023, early 2024". That is a very vague estimate given that it's only a couple of months away. I would imagine there is a lot of on-site work involved in installation, assembly, testing and commissioning. "Phase 1 LNG delivery scheduled to commence in 2024". The fact that it says 2024 and not Q1 2024 speaks volumes.

Some of the payments to ItalFluid are tied to the go-live date, so are presumably not a problem. But the bondholder amortisastion payments are every six months starting in December. Looks like SOU will have to stump up for at least one additional one, and maybe two, before Phase 1 revenue starts flowing. Not to mention keeping the lights on without gas revenue for possibly an additional year. When SOU start getting handwavey about deadlines that are ostensibly only months away, precedent strongly suggests that they will come in a mile behind schedule.

"trying to get this anywhere near a respectable share price in the next few years would be like trying to tread water with a grand piano strapped to your nuts"

sundance, on a thread which has precious little in the way of light relief you're the only poster who regularly makes me laugh out loud :-)

"At some point this will recover strongly. There's just too much news inbound, not to mention revenue."

ktf (who doesn't read my posts) has been churning out comments like this for years. Read his posting history -- he has made specific predictions about the impact of specific news items, always wrong. We may still be on the Wild West of AIM, but as a production company SOU's value will be based on revenue, not arbitrary "news". And we know from SP Angel that the net impact of Phase 1 revenue on the share price is zero. Phase 2 revenue is several years away and it remains to be seen how much further dilution reduces the target sp of 4.6p.

As I've always said, creeping dilution is the issue to look out for on the way to SOU's first production revenue. None of this is very complicated nor top secret -- though you have to read the RNSs as Graham isn't in the habit of trumpeting it in publicity statements. SOU has been living hand to mouth for the last several years. As recently as June they were paying their financial adviser in shares in lieu of cash for god's sake, and not for the first time! The convertible notes and associated warrants represent a high single digit percentage dilution and keeps the lights on until December -- which in Graham's recent interview caused him to declare that "the financials for once in my three years are not in bad shape". The mind boggles as to what being in actual bad shape would look like! The Calvalley deal of course comes with another massive giveaway whever it comes to fruition.

Phase 1 revenue will just about keep SOU's head above water. SP Angel have never made any secret that they value it at zero. It's still all about Phase 2 and it remains to be seen what value is left for shareholders over the intervening couple of years. I took a negative view when I largely sold out more than two and a half years ago but even I am shocked that the SP was 50% higher then than it is now. This is more than just the share price "drifting between news" as there has been plenty of news between then and now.

Tincan: "Well , I fell for it & i am embarrassed for failing for it , can’t say how many, but it’s a lot , 10k buy @ 80 p was the worst!"

I feel for you. It's probably no consolation, but I was in for nearly two orders of magnitude more than that. All water under the bridge now, I've had plenty of time to reflect on how clueless I was and blame only myself. There was a time when the received wisdom on this board was that SOU's share price was underpinned at 53p! It was based on a misunderstanding of a management statement about "the value of a Tcf to SOU", and a seeming assumption that the gas could be got out of the ground for free. I do think those misunderstandings drew a lot of people in over their heads. A correction of the management misquote halved the value, the subsequent 3x dilution divided the potential sp by 3, most recently giving away half the asset has halved it again. It's more complicated than that, but it'll do as a trite description of how we got from 53p to the current target of 4.6p. The problem is some people imagine that the valuations of yesteryear are somehow still achievable, when we are several years away from any prospect of SOU even attempting to drill again. I still stand by my June prediction that we won't see a sustained SP above 2.5p for at least 2 years.

Pduk, I'm guessing ktf sold a bunch of shares at a large loss somewhere along the way. That's the only way he could semi-truthfully claim his average is near today's price. He had an average near 40p this month five years ago. To have an average of 1.5p now (which is higher than I think he's claiming) he'd have to have had no more than 10k shares back then, and then to have bought no more until he suddenly bought 990,000 more at less than 1.1p. Maybe it's true, but it would be kind of hilarious if one of the most prolific and rampy posters on here held only a pittance in shares back then, all the while extolling the company and saying he was invested because he trusted JP. (Mind you, reading back over posts from then is an eye-opener in multiple respects -- people believing that the sp was "underpinned" by SOU's assets at >50p and that TE-10 was being intentionally delayed because a lucrative liquidity event was imminent. The level of clueless BS is startling).

@kylie75, not only are there many who don't understand the risks, there are many who will respond belligerently whenever they are pointed out. This board has always been a hype train.

Goodman's existing green business has nothing to do with fossil fuels. Last time I checked there were no waste cooking oils in Barryroe. The plans he is talking about don't sound like blue hydrogen generation or indeed any kind of hydrocarbon extraction.

So if you were going to start a renewables business, why would you start with BEY instead of just starting from scratch? Only thing I can think of is a large tax write-off opportunity. And obviously the other thing that will be written off is existing BEY shareholders since the plan “will require a recapitalisation of the equity structure of the company, with the introduction of new equity fund and/or a change of ownership”.

It very much looks like there is no plan to seek any kind of redress for the Barryroe lease undertaking refusal. With no assets, BEY is worth zero and it's pretty clear that's exactly what Goodman intends to pay for ownership of it.

BEY never *had* a lease. They held a standard exploration license which expired in 2021. Prior to its expiry they applied for a petroleum lease undertaking. If the lease undertaking is granted the license moves onto the next stage. If it is not, then the license remains expired. So Ryan didn't cancel any lease. He simply didn't grant the lease undertaking which leaves the license expired as of July 2021.

All that said, a company could expect to progress a license through the various stages as long as it meets all the criteria, particularly as regards carrying out any agreed work program. There's a case to be made that Ryan applied unusual and unjust criteria. However, the legislation leaves everything up to the discretion of the minister.

The problem is that there has always been an assumption that the government would be supportive of anyone looking to progress a license. The supporting (but non-binding) documents accompanying the legislation say as much. It was true until -- with Ryan -- it wasn't. It leaves the whole thing in a very grey area.

We are 200 days into 2023 now, and ktf has more than one post per day on average for every single one of them. What's funny is that he has made some quite specific price predictions all along the way, also predicted which news events would trigger a significant rerate. Just look at his posts for January alone. He's been wrong. EVERY. SINGLE. TIME. The share price is lower now than it was in that first week in January.

None of which is to say things can't get better. They can, and will. You'd just think someone who's been wrong so often might introspect a little more before preaching to others about how they're being too negative. In any case, based on what he has revealed he's a pretty smalltime holder so god bless his enthusiasm, I suppose. :-)

"This Sinn Feiner has instigated a legal case against the Government to declare unconstituional the ECT legislation. "

You mean the Sinn Fein that you were adamant were going to form the next government and give Barryroe the green light? That Sinn Fein?

"Does this mean, when Ryan is for the birds with his Greens in the next government, Barryroe could fly once more?"

From the 2022 Policy Statement on Petroleum Exploration: "Since June 2020, the Department of the Environment, Climate and Communications (DECC) has no longer accepted new applications for new petroleum authorisations. In addition, there will be no future licensing rounds. Holders of existing authorisations are not affected by these changes and may apply to progress their authorisations through the licensing stages towards a natural conclusion – which may include expiry, relinquishment or production... It is expected that the overall number of authorisations will continue to decline as authorisations expire or are relinquished – with no new authorisations for new exploration replacing them. However, as holders of existing authorisations may apply for successor authorisations, it is possible that the number of lease undertakings and leases could increase over time as the amount of exploration licences declines."

So, no. Because no follow-on petroleum lease or lease undertaking was granted the SEL 1/11 license ceased to exist in July 2021 and the government is prevented by legislation from resurrecting it.

"I still find it hard to see why we are not 3-5p right now"

Maybe because it has been officially valued at 4.6p WITH all of the potential good news factored in, some of which has yet to come to pass and is several years from fruition?

"PS I think you are being a little disingenuous. Only a few weeks ago SP Angel had a target price of around 7.6p and now it’s 4.6p. This reportedly on the basis of the Calvalley deal. Well a deal had to be done, this was known. Are you trying to tell me that the earlier SPA valuation was based on Sounds finances being plugged by a magic money tree?"

We don't have to speculate about it. We can hear it all from the horse's mouth in this video linked from Sound's website (which I posted last week):

https://www.youtube.com/watch?v=G4uYygXCfkI (https://www.soundenergyplc.com/investors/research-notes/)

This video was posted in between SP Angel's two most recent research notes. At the time the issue of how SOU would finance the Phase 2 development was still an open question and that is exactly what is discussed here. The possibilities were vendor financing, equity raise, industry partner taking a share. In the latter case the share of the concession that SOU would give away was unknown, as was the amount of funds the partner would bring to the table and/or what costs they would cover. SP Angel obviously used what they thought were sensible numbers to cover these unknowns. The fact that they have had to considerably reduce the target share price tells you that the deal that SOU has cut falls short of their assumptions.

"I do agree that it is highly unlikely that Sound will be valued at 20p per share Any time soon but I also find your valuation of not consistently above 2.5p in the next two years equally unlikely. Sentiment is key and clearly that’s not on Sounds side at present, that doesn’t mean that will always be the case."

Yes, that is speculation on my part. Obviously I consider it more well-founded than other predictions on here which are backed up by no more than wishful thinking. It is based on observing that any impetus in the share price on "good news" in the past three years has been knocked back very quickly, the assumption that there are large numbers of under-water shareholders waiting to dump their shares and get out at every price point on the way up, and a general lack of trust in SOU's timeline estimates (which is still justified, even under Graham). The only time a share price increase is guaranteed is when SOU starts disbursing cash to shareholders as a dividend. I believe that's still several years away.

I dunno pduk, my disbelief in my blockedness by ktf took a tumble when it turned out that he didn't even know about the latest SP Angel valuation. I pointed out the fall in SP projection by 40% some time back, but it seems from his recent exchange with kylie75 that he entirely missed it. Or maybe he was too busy having a "cheeky top up".

Ribbing aside, I agree wholeheartedly with kylie75 that the Calvalley deal does not represent a good deal for SOU (even if it's likely the best they could get). Not only does it give away a share of the production concession but also the future exploration potential (which is not factored into the SP Angel valuation). I simply cannot understand why people on this board just keep on trotting out rank speculation such as "a reasonable rise, perhaps to 5p this year" (which is far more conservative than the wilder estimates) when SP Angel are telling them the entirety of Phases 1 and 2 are worth 4.6p per share. What is it they think they know that SOU's paid analyst doesn't?

Like I said before, and kylie75 reiterated, it will be a long time before any exploration potential is factored into the SOU share price -- it's too far out and too risky for a company with SOU's chequered record and history of delays. Also, SOU's Phase 1 income is entirely committed to debt repayment and adds next to nothing to the SP Angel valuation. Absolute best case is the senior debt financing and the Calvalley deal come through with FID sometime in 2024 and first Phase 2 income is the back end of 2026 (very optimistically). That's when you might see the share price exceed 2.5p. More drilling and results in 2027 if you're lucky.

I know, right? There is literally a big yellow banner across the top of the BB screen saying "This share is suspended".

BEY is cattle trucked. Even before it ran out of cash shareholders were facing 90% dilution by Goodman to get to a single appraisal well. And that was the *best* of all possible worlds. Chances are BEY will be wound up in the next couple of weeks. Its only assets (see most recent Consolidated Statement of Financial Position) are "exploration and evaluation assets". All of those are licenses that will be relinquished when it is wound up, i.e. they are of zero value. Are any of the large shareholders willing to pour another several million down the swirling plughole that is BEY in order to mount a legal challenge? If so, they will certainly expect to own the company, it being a bankrupt shell. Whatever happens, it will be of academic interest to existing small shareholders. Can't understand how people are still envisaging some sort of "rescue". Though I suppose I should thank the optimists for letting me recover 1.5% of my investment in the days before suspension. :-)

"Looking back before Covid in 2019…Sound Shares went from approx 12p with a sharp climb to 30p. Then like every company, Sound shares crashed with Covid…..."

There's shameless ramping ... and then there's totally rewriting history. SOU's last sharp increase was a year before Covid. It was during TE-10 drilling and testing. Upon completion of the drill we were excitedly informed that gas volumes were between 0.6 and 3.4 Tcf. The well then tested at less than 6 mcf/day (about 50 dollars worth -- and 300 times less than the commercial threshold). By the time the Covid shutdown struck SOU had long since been hammered and was already down 99% from its highest point.

"So be strong and be positive and your dreams will come true, in time. You will have a new electric Aston Martin who’s share price soars 10% on EV deal! Time to buy at £3.63.1p…maybe ? However with Sound shares you will make a massive difference and profit at 01.4p to £1.00 !! Sound Buy, Buy, Buy"

¯\_(ツ)_/¯

BEY doesn't *own* the SEL 1/11 license. It's not a question of them sitting it out until March 2025 until someone more favourably disposed lets them exercise the license. SEL 1/11 expired on July 13, 2021. Absent the granting of a petroleum lease or lease undertaking no license exists and -- as Ryan informed them in his rejection letter -- BEY has no rights whatsoever over the acreage. The only way that can change is for Ryan's decision to be reversed, therefore BEY have to challenge him; they can't just outlive him (even in the extremely unlikely event that someone was willing to fund a moribund company for two more years). By the way the lease undertaking, if granted, would also have expired in Jul 2025 so the time to do anything with the license even were it granted would be running out too.