Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Tricky one. Shorting itself isn’t the problem. And there is an argument that it actually helps to keep an orderly market and a lid on hype etc. It’s targeted, aggressive, co-ordinated shorting that’s the issue - i.e. where a group with financial muscle can use their power to influence a share price negatively way beyond what is justifiable in order to profit from the situation they create regardless of any smaller PIs who happen to be invested in that company.
Re: the acid, I'm not convinced they know that for sure. As Penguins has posted it's a working hypothesis. If it is down to the acid pure and simple, or something else consistent that has caused the issues that they have identified and that can be fixed then game on. UKOG would then be in a truly advantageous position when it comes to the Weald. I’m intrigued as much as anything by the cause or causes, but I’m not sure it’s straightforward. Dangerous just to blithely assume SS and co fully understand the geology at this point.
The niggle for me is why Angus would completely abandon ship at Brockham if it was just a case of re-drilling minus acid. That said, the whole narrative at Angus around the Brockham drill sounds like a shaggy dog story.
Likewise, I don't mean to suggest that the KLs in the licence areas are not commercial, but as things stand, from the perspective of the market, they are until proven otherwise. There was a period where the market was less sceptical – i.e. after HH drilled and flowed the KL layers and when more oil-rich layers were initially discovered at BB.
The recent issues at Brockham have thrown up some interesting points that relate to UKOG.
Initial tests have indicated oil bearing layers within the KL layers at all four of the areas tested to date – of good quality and consistent API range, providing a good indicator that the KL layers are connected across the Weald basin and going some way to proving up the hypothesis that they are effectively one big reservoir.
However, while Horse Hill has flowed, Broadford Bridge and Brockham have both been deemed non-commercial without fracking, and the test at Balcombe is inconclusive at best. So, is there something unique to Horse Hill – e.g. the faulting that was mentioned at an early stage – that allows the oil to be extracted, or there a key difference in how the HH well was drilled and tested compare to Broadford Bridge/Brockham.
While the current UKOG market cap is (just about) underpinned by Horse Hill, the Brockham result does make the company’s current strategy – securing and exploiting licence areas within the Weald basin with a view to targeting the KL layers – look a little more shaky. The fact that SS and co now seems to be treating the KLs with real caution, despite them having flowed well to date, is also a concern.
On the plus side, I was expecting a much bigger fall in share price in light of the Brockham duster – given that UKOG’s long-term strategy is based on the Kimmeridge layers. What that says to me is that the market currently places little or no value on UKOG’s licences beyond Horse Hill, so if SS and co have effectively "cracked the code" in terms of how to approach the Kimmeridge layers then the share price still offers a LOT of potential upside from here.
Three thoughts in light of today's pretty crushing Angus RNS:
1) I was expecting a much greater fall in the UKOG share price, given that a bad result on the KL layers at a neighbouring licence could correlate to wider issues in the Kimmeridge across the Weald Basin (even though it flows at Horse Hill). My take-away from that is that the current valuation, and likely potential, of the wider Kimmeridge (as the market sees it) is a small percentage of the UKOG market cap. This leaves the share price a LOT of potential to increase if the KL is proven up longer-term.
2) Given that oil is obviously present (and in sizeable quantity) at both Brockham and Bradford Bridge but seemingly resistant to extraction in both wells drilled, is there something unique to Horse Hill – e.g. the faulting that has been mentioned before – that allows the oil to be extracted? Or is it something that was/wasn't done there that needs to be replicated for all Weald drills?
3) Have SS and co "cracked the code" in terms of how to approach the Kimmeridge layers? Judging by today's UKOG RNS it sounds like they are treating the KLs with real caution, but it's hard to know whether that's a positive or a negative at this stage.
Sitting tight on my shares for now to see what happens.
Maybe Lister Daniel is building a stake!
It’s not shorting per se that’s the problem. It’s naked shorting and co-ordinated shorting of companies that causes issues. In essence shorting is legitimate in situations where a stock is overvalued and the stock is available to be borrowed, but it’s not legitimate when the shorted stock doesn’t exist or it’s a co-ordinated attack by groups with big leverage to reduce the share price of a small cap company to an unjust/artificially low value purely to make money with no regard to its private investor shareholders. It’s a pretty easy distinction - though I’m sure every post that follows will say it isn’t that simple...
How does it affect us if we go for legal action with the EU but Brexit happens just before or halfway through etc. Presume the legal framework is there for any country dealing with an EU country regardless of whether they are also an EU country, but that would turn a farce into a legendary AIM farce.
I wouldn’t mind the fact that I’ve lost so much cash in AST, but I’ve also lost around 50% of my investment in Vodaphone ever since Colin recommended it as a safe bet. Can I sue him for bad investment advice?
Let's just hope he's not a very naughty boy.
Still closer to New Malden than Madagascar
Uncle Steve said we’d be in the Bahamas by 2019 not Madagascar
That definitely sounds like they’re looking for a bigger fish... :-)
Is posting again lolz
Often wondered if his "Soviet vassall state" comment was a genuine clanger or one made accidentally on purpose.
So that would be a no then!
Jury's out for me... It wasn't accompanied by loads of ramping and there's been some strange stuff going on recently (e.g. offers going to NT), in between weeks of utter inactivity. And a bit strange that the company has offered no comment. I thought they'd be duty-bound to.
Not sure either way what's going on, but the MC is so cheap now, it's virtually priced to go bust. As unloved as it is, it does have the "potential" to turn around quite quickly... I guess it will all come out in the wash.
...Or just another pump and dump?
Leaky leaky. Speeding ticket coming?
Some fantastic research. The indicators seem very positive to me, though I agree it will be a nervous, if exciting wait.
I only have just over 1.25 million shares, which is chicken feed compared to some, so hope it comes good – especially given the length of the wait. Good things come etc. – though I wasn't expecting to be here still after 11 or 12 years invested...
Do you honestly have a share portfolio of c.£8m value, plus your wife’s 6m UKOG shares..?