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....you're new round here aren't you?
Unfortunately it takes on average over 10 years from the award of a licence though to production.
In between that you have to do Seismic, a CPR, exploration drilling, analysis of exploration well results, appraisal drilling of any discovery, analysis of appraisal, field development planning (FDP), riding of (expensive) production equipment, development drilling, sorting out export of hydrocarbons to market with associated infrastructure....TEHN bank the cash and make 'disgusting profits' while people are starving and polar bears are dying etc etc
ALL of the above steps are subject to planning permission refusals for arbitrary reasons (see West Newton) and inspection/scrutiny of engineering and operations.
Millions and millions of pounds, on the off chance you might discover oil/gas and someone might then let you produce it, then someone might let you sell what you produce, then if you're lucky someone might let you keep some of the money so you can start at the beginning again with another exploration licence.
Simples. Licence to print money innit.
Compare cash balance on 22/4/22 (£7.05m) with the balance in the results RNS 9/5/22 (£7.55m) and you get how much?
How much in just SIXTEEN DAYS?
RNST always tries to point out that the cash balance is only up by 'only' £500k for every $1m dollars earned, thereby conveniently glossing over the ongoing requirement for capital investment out of that cash flow (to enhance future production/cash flow i.e. what is colloquially called 'a business').
He'll probably now be trying whining that the past few weeks haven't has capital expenditure therefore it doesn't count.
Notice in that interview this morning, DB said the company would have DOUBLE DIGIT income this year in MILLLIONS of POUNDS?? That was no slip of the tongue, and it was the bit that caught my ears the most.
Anyone else wonder why RNST spends so much time here putting the most negative possible spin and conflating fact and fiction to suit whatever bull**** narrative he's spinning today, when he holds no investment interest allegedly? Single issue obsessive stalker?
Don't be fooled by the rock that he's got, he's still Jenny from the block.
Take out the 1 MILLION BARRELS per day that the USA is still foolishly releasing from its STRATEGIC petroleum reserve (SPR) and things look MUCH tighter. The US production is plateauing and the rig count barely rising in the shale fields as their drillers are NOT pursuing reckless drilling and CEOs are making a virtue of 'capital discipline'. The SPR oil isn't great for US refineries and diesel production as well I understand, so the 'pump price' that transfixes poiliticans will be harder to massage down.
Anyone who thinks that OPEC has any significant spare capacity right now, or that Venezuala is able to increase capacity with its crumbling and decaying infrastructure is mad. The UK Continental Shelf (in onshore) will struggle to flatten its own production decay curve without shale.
Only Guyana offers a new province coming on stream in the near future.
Combusion for transportation is an ever small demand driver for oil as a proportion, with fertiliser going to be a huge worry in the next few years and the petrochemicals that are needed for anyhting remotely to do with 'stuff' we all depend on probably a concern too.
In the meantime, in under a month the value of the next million dollars has increased by £50,000+. With UJO's costs in pounds largely, then that's a non-insignificant bonus sum that covers the operating costs of the company (not including capital or project investment expenditure). UJO is a great personal hedge on the weakness of the GBP and rising energy bills. Ironically, if we loose on UJO is suddenly everthying is awesome and didn't turn out to be a fiat Ponzi scheme resulting in falling energy, inflation and a rising pound, we'll all save/make more on a lower cost of living and economic growth than we lose on UJO.
The trump card in a situation where everyone is liquidating assets for cash, is a company sitting on piles of cash and making fistfulls more every week and a plan to distribute the cash to shareholders. UJO is possibly the least risk thing I own right now.
Nice
RNST talking the usual ****** I see......extrapolating one off capital/operating costs for Wressle/WN et al (assets in development) as recurring monthly cash flow reductions.
Personally, I'd like to see a dividend equating to 5% yield at SP of 30p (about £2m) annually AND an initial buy back of £1m. The important thing would be the information imparted with it. A caveat about the dividend being proportional to profitability and free cash, and the forward 'buy back option' setting a floor at a certain price e.g 30p is a level at which the company may choose to but back shares in addition to the dividend.
That should put the floor under the SP at about 50p IMO.
Meanwhile, the US Dollar has strengthened against the pound by 5%+ in the past week........
UJO gets income in dollars, and has most of its costs in pounds. Nice little bonus equivalent to $5 per barrel, or over a grand per day.
Not only that, 28 days production at an average of $105 per barrel (finger in the air) equates to Wressle doing 850 bpd.
This is compared with the previous statment that the well could 1200+ bpd in the future......which would be 50% more oil and the gas producing some revenue as well.
Add in the strengthening dollar to the pound and the very real possiblility of higher sustained oil prices against a worldwide chronic depletion vs capital investment issue, and the chickens have come home and have got their pyjamas on.......
"Site upgrades ongoing"
We (and that includes YOU) don't know the details of this, probably more will be revealed tomorrow by EDR. This capital expenditure is likely to be non-neglible, but will likely lead to a significant revenue enhancement via increased oil production and gas monetisation.
Capital expenditure, funded out of cash flow and not subject to taxation. The new flare stack and the the gas to frid/power infrastructure will several hundered grand capital cost to UJO depending on the solution chosen.
Either way, cash actually increased by 450,000 POUNDS in 28 days. That's the equivalent of £670,000 in 6 weeks net of all expenses and expenditure, BEFORE the oil is producing at max capacity and before the gas in monetised.
""Like ONE MILLION DOLLARS every 28 days....or 1p on the share price every 5-6 weeks in cash."
Not correct, the cash on the balance sheet for every $1mm is £450k that's about 0.4p per share."
Rubbish. This doesn't include the production from the 2 other assets either, which go a long way to cover G&A. Capital investment and development expenditure are not the same as G&E either.
What a bunch of diingenuous crap RNST. You know full well the purpose of a stock market to raise capital for companies to grow and expand, and it is not simply to provide an opportunity for people to fraudulently manipulate the share price for personal gain, or to profit from insider knowledge.
The share price is not the only metric of shareholder returns anyway, especially with al the cash being generated and the near term intention to distribute that to shareholders.
"All good things come to those who wait and wait and wait and wait zzzzzzzzzzzzzzzzzzz..........................................."
Like ONE MILLION DOLLARS every 28 days....or 1p on the share price every 5-6 weeks in cash.
This is my kind of boring.
I remember the debate about premium/discount for waxy oil with the Sealion (RKH) discovery.
Back in 2012 I seem to recall medium waxy Sealion crude was being touted at a non-neglible PREMIUM to Brent.
If you think about it, waxy molecules crack nicely into polymer feedstocks.
There were 32 days between the dates given in the $3m and $4m RNSs. That's an average of $31,250 per day.
So 26 days after the last RNS, assuming the same rate of production and or similar sales prices, another $812k or thereabouts should be in the bank. That's about £620k........in under 4 weeks.
That's my kind of 'quiet'.
Me too.
This board is essentially unreadable given that anything remotely company related to debate stimulating is 3 pages down within 10 minutes thanks to all the puerile nonsense.
There is a great thread on ADVFN if anyone wants to discuss things.....it's moderated properly by Bionicdog so it doesn't resemble this place.
If you look, the US Dollar has been strengthening against the pound for the past year, have dropped from $1.42 to $1.30 per pound. That means an extra £60k per million dollars compared with May 2021 (when the POO was about $70), which pretty much covers the G&A expenses of the company by itself just on currency movements alone!
That means more pounds for each of those monthly MILLION DOLLAR RNSs, which should offset some of the increased diesel costs of trucking the oil all of 45 miles from Wressle to Immingham!
So every 4-6 weeks another 1p per share in cash accumulates in the UJO bank account......so hypothetically if the company did nothing for the rest of 2022 because of NIMBYs etc, it would have an extra 8-10p per share in cash in the bank........but the share price would fall I suspect for lack of news. Bonkers. I could be a £30m company with £15m cash in the bank, but the share price will remain disconnected with reality until we have some institutional shareholders attracted by the dividend and a market cap of £50m.
That's why I favour dividend over share buy back I think, and why a merger with EOG and/or EDR is well worth thinking about (and maybe upping West Newton share to 20%).
Then why is Gas a fraction of the cost in the US?
Their shale gas is 'stranded' and can only be exported as LNG, but that's not the whole story.
The UK has insufficient gas storage compared with Europe, and we can export via pipeline as well as import. If the UK produces more of its own, the treasury gets TAX which helps lower the cost of living by affording tax cuts or lower rises.
The UK could conceivably act as a 'transit' for Norwegian gas to Europe if we use less of it.
Its not just about lowering prices numbnuts, its about 'supply and demand' aka the market. EVERY little helps.
Agreed TAC
UJO is valuable portfolio insurance IMO - in a world where anything vaguely tech-related is valued on price to sales ratios multiples of the UJO price to EARNINGS ratio, it would be rude not to.
I'm also looking forward to Biscathorpe. I assume the drill scheme is long decided and Graham B's been all over it with a fine toothed comb. Its a shame they missed the oil bearing Westphalian sandstone interval found by BP in the 1980s. Its a 'banker' down dip I suspect, but the Donation limestone interval is the new play that has the big potential. If that comes in, then it possibly opens up a whole new type of play onshore, and the EDR/UJO JV will be in prime position to exploit it in under explored PEDLs.