George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Todays RNS that seems to have been regarded as "good news" by most seems to have pushed the SP down to its lowest since May. How very strange. Hope we don't get too much more "good news" - I don't think my nerves will stand it.
Thanks again Rabito, I suppose after all these years of continuing disappointment its natural to go looking for straws to clutch.
I never really got the hang of breathing under water - who was it that managed it ? Jaques Cousteau ??
Thanks Rabito. When I read of the well locations enabling work to continue through the summer months I foolishly thought we might, just might, see some kind of production this year. Oh well we still have Texas - dont we??
10/07 I read and enjoy posts by both Scot and davidblack on advfn - both of them are upbeat about the upcoming prospects. I would welcome (as a LTH here) their and anyone else opinions as to the dates or likelihood of any substantial cash flow from anywhere in Alaska this year.
Old age brings on many problems. One of the many is a failing memory. But I do seem to remember some talk of a place called Texas and if I recall - many promises of jam tomorrow and cracking a code and oil wells which were almost certainly going to reinstate the share price to its £1.80 levels. Even though at the time when the share price was in the 30p region and my average was £1.26 I was so pleased with myself that I had backed a winner called Jay that I invested enough to get my average down to .62 --- who's a clever boy then.
Of course it now looks like Donald Trump in his wisdom has closed down Texas because there is F? all happening there ( please forgive my language). and we are now being told that the long term plan is too produce something called shareholder value. Give me a break Jay. PLEASE tell us what's going on. Is there going to be a closing down sale in Texas 0r was the code cracking statement some you picked up at the comedy club?
I post this with the greatest of respect to all persons and families mentioned. Over the last year I - like many more have lost friends - business colleagues and loved ones - some with almost obscene haste to the ravages of time and illness. If this has taught me anything its the fact that none of us knows what's round the corner. With the loss of Bobby Grey I would have thought that Jay might have seen the need for some some urgency in the development of the Texas side of things - no one wants to leave things undone and it would appear that with a bit of effort we could have moved forward with a little more speed. As a LTH as I have said before - the funds I have here have been written off at an average of more than 3 times our current price - but like most I would dearly love to see my long term patience rewarded.
When I posted Scots post I tried to think who might post the most responses - silly me - instead of backing Rory Mcilroy to be the top european player in the Masters- I should have backed George - he ran away with it with no less than 35 posts at 12.54 against the rest of the world at a mere 26. If it hadn't been for Whitace adding 6 for the ROTW team in the last 1/2 hour it would have been an even better result - well done George ???
"These two projects will now likely be part of a single development plan, favourably located adjacent to the Dalton highway and TAPS pipeline." 3) So am I arguing the share price should be trading at 28.3p? You're damn right I am, at a minimum. Look what shareholders are getting "for free" if you accept the logic of my calculations above? Answer: ALL of the East Texas assets in Polk and Tyler (and remember there's some production there, not much admittedly for now, but still.....), CASH on the balance sheet including the possibility of Halliburton writing PANR a cheque for c.$6m, AND $80m of 3D seismic across 1000 sq miles AND between 12 and 40 identified prospective targets on the 250k acres of leased acreage in ANS. 4) What are the short term catalysts which would see the above scenario playing out via share price appreciation? Well, we've been told to expect, "The better than expected results in the zone of interest will also impact the pre drill P50 Technically Recoverable Resource estimates which will be assessed in the NEAR FUTURE" and "The Company will immediately set about reworking and analysing all key data from our Alaskan programme which will include reviewing the pre-drill conceptual development plans on Alkaid as well formulating plans for future FARM OUT discussions. ......The Company will update shareholders as to timing expectations once analysis has been completed." I therefore anticipate an incoming RNS detailing the advanced analysis on the successful flow test of the Brookian in the Alkaid sector and to hear of the implications to the Alkaid and Phecda P50 recoverable resource estimate. We're also been told to expect guidance on the potential sidetrack or re-drill of VOBM#1. Putting my broker hat on once again, it would seem to me highly likely the management will seek to engage with the market over the coming weeks to explain the recent results from Alkaid, to outline why the Alkaid results alone underpin the current valuation of the company and to describe their plans for operations in Texas over the summer AND farm out plans to advance their Alaskan project. Yes, some may very well wish to wait for definitive guidance to be published via an RNS, for news of a farm out, etc, etc but I believe the company has already released sufficient signals indicating the direction of travel to allow shareholders to discern, in advance of the wider market, if the stock is cheap today, or not. GLA
37.5m (barrels) x 0.75 x $5 = 19.3p per share. Hmmmmm. d) Another clear message from the RNS date 2/4/19 which hasn't, in my view, been properly digested by my fellow shareholders, nor the wider market, concerns Phecda. Have a re-read of the following excerpts: "....as well as for increasing probabilities of success of other Brookian targets on the acreage, most notably Phecda, the adjoining prospect" and, "In particular, the Alkaid result is believed to have MATERIALLY POSITIVE IMPLICATIONS for the ADJOINING Phecda prospect which is now UPGRADED and considered a step out APPRAISAL from the Alkaid location." Short of the directors hitting us all on the head with a hammer, I would argue this is another clear signal the data from the Brookian formation in the Alkaid sector has been sufficiently positive that the Great Bear team believe it has immediate implications on the OIP/RF/P50 recoverable resource estimates for Phecda. Let's therefore have a look at the existing published numbers for Phecda. OIP is 345 mmbl, RF is 10%, P50 recoverable is 34 mmbl and PANR has a 75% W.I. As we've been informed, "These two projects will now likely be part of a single development plan, favourably located adjacent to the Dalton highway and TAPS pipeline". I'm happy to stick with my $5 per barrel in the ground valuation. Using the same formula as above to examine Phecda with an RF of 10% and one of 15% gets me to a range of implied value for Phecda ALONE of between 17.8p - 26.6p. Phecda hasn't been flow tested so what Chance of Success (CoS) ought I to attach to an upgraded STEP OUT APPRAISAL of the the selfsame Brookian formation in a contiguous acreage? Shall we say 50%? Is that fair? That gives an implied valuation for Phecda ALONE of 9p - 13p. e) Putting all the above together, 19.3p + 9p = 28.3p Meaningless number? Perhaps so. But go through all the variables and see if you disagree? $5 per barrel in the ground.....not unreasonable IMHO. RF factors increasing from 10% to 15%? Not unreasonable when re-examining the language in the 2/4/19 RNS and with the added knowledge this formation has a RF in excess of 40% elsewhere in the Alaska North Slope, again IMHO. Is it fair to add Phecda's numbers into this exercise, which remember is to imagine the company shutting up shop overnight and doing a quick sale of the readily defined asset base? I'd say so, bearing in mind the language used in the RNS which pointed out,
c.18% since the Oil Search transaction was announced. Let's be conservative and not grab that full appreciation and increase the the price per barrel by c.10% to give us $3.40 per barrel in the ground. Moves the implied value to 8.8p per share. b) Is value of a barrel in the ground situated 2 miles away from the Dalton Highway and TAPS likely to be higher than the value ascribed to a barrel in the ground situated 45 miles away at Horseshoe? I would argue yes. Sure there will the the economies of scale argument for Horseshoe but I contend they would be more than matched by the opex + capex "savings" from Alkaid's proximity to infrastructure. I've been in communication with a couple of Alaskan veterans who together can justify a price per barrel in the ground of closer to $10 per barrel for Alkaid but, like Davidblack, I'm content (for now) to move it up to $5 for the purposes of this exercise, thus $3.40 in paragraph a) moves to $5, which moves the implied value per share calculation to 12.9p c) Potential upgrades to OIP, Recovery Factor and thus estimate of recoverable oil. It is in examining these variables where I firmly believe the market has not properly appreciated the positive implications of recent events. Regular readers will know that throughout my career I was involved in writing and interpreting hundreds, thousands of RNSs. The vast majority are written with real and genuine care and attention, I promise you. It is my contention the management of PANR are giving us shareholders as clear a signal of impending upgrades to these numbers as they possibly could. Have another read of the following excerpt from the RNS dated 2/4/19: "The Brookian ZOI Is estimated to have 400 feet of gross pay and 240 feet of net pay. Flow testing and data received exceeded expectations and have material positive implications for reserve and production potential for the Alkaid project..." and "The better than expected results in the zone of interest will also impact the pre drill P50 Technically Recoverable Resource estimates which will be assessed in the near future." I would contend that the initial interpretation by Bob Rosenthal and the Great Bear team of the flow test results on the Brookian has given them more than sufficient confidence to inform Jay Cheatham and Justin Hondris that there is a high probability the OIP and/or RF numbers are going to increase. It is my belief the language used in the RNS was specifically chosen to indicate to the market to expect, in all likelihood, an RNS upgrading the P50 Technically Recoverable Resource. I don't know when that analysis will be completed and announced to the market but I now believe the stock is pregnant with an upgrade to come to the recoverable number in the coming days/next few weeks. We shall see. Let's just plug in an increased RF of 15% to my calculations: 37.5m (barrels) x 0.75 x $5 = 19.3p per share. Hmmmmm. d) Another clear message from the RNS date 2/4/19 which hasn't, in my view, been properly
Dear All - a few thoughts in no particular order. 1) Full disclosure: I completed another Bed & ISA exercise at 1.09pm today, circa 96k shares....both marked as sells but we know that cannot be the case, lol. 2) As part of my whole investment process throughout my career I would sometimes ask myself the following question: "If the company was to magically wind itself up overnight, what would shareholders be left with in pounds and pence?" I completely accept some may view this approach as a bit naive, perhaps whimsical so feel free to read on or ignore as you see fit. I guess what has prompted me to put these thoughts in writing was when I reviewed the market's reaction to the Alkaid hard data through the lens of the "efficient market hypothesis". I'm sure many of us have raised a metaphorical and/or physical eyebrow when takeovers are announced "at an 80% premium to last night's closing price" or some such eye-watering premium? Sometimes that eyebrow remains raised but more often than not, as the bid rationale is explained by the bidder and Board of the target company, I'm left thinking: why didn't I spot the disparity? What did the bidder spot that I didn't? What did the bidder understand about the asset or the company that stockmarket investors didn't, perhaps due to the technical inability to value the stock OR lack of knowledge OR lack of expertise OR lack of patience, etc, etc? To be crystal clear, I am not for one minute expecting PANR to be bid for in the short term, no way. Having said that, I'm going to have a stab at the "winding up" scenario to which I referred above. Confirmed fact: The Alkaid well is sited approx 2 miles from the Dalton Highway and the TAPS. The Horseshoe discovery is located 45 miles from the Dalton Highway and TAPS. Confirmed fact: When Oil Search made the announcement of its intention to invest in Alaska on 1/11/17, Brent was trading at c.$60 and today it is trading at c.$71. The Oil Search transaction which completed in February 2018 effectively valued each barrel in the ground at US$3.10 The results from the recent flow test of the Brookian ZOI supported Great Bear's seismic and geophysics work leaving the company standing four square behind it's 250mmbl Oil in Place estimate, its 10% Recovery Factor and thus 25mmbl recoverable estimate. PANR has a 75% W.I. in Alkaid (yes, this may move to 100% if Halliburton don't exercise their option for c.$6m but for the purposes of this exercise, I'm content to use 75%). Back of the envelope calculation, employing the price paid per barrel by Oil Search, leads to the following: 25m (barrels) x 75% x $3.10 = $58m / shares on issue (560m) = 8p per share. Variables a) Price per barrel in the ground. The oil price has appreciated by c.18% since the Oil Search transaction was announced. Let's be conservative and not grab that full appreciation and increase the the price per barrel by c.10% to give us $3.40 per barrel in the ground. Moves the implied value to 8.8p per share. b)
Full marks for effort GG, but to be honest I have been here for so long and seen so many false dawns that I have grown a little weary waiting for the "jam tomorrow" that was forecast when we had "cracked the code" way back when.
I live in hope, expect nothing but am sure the sun will come up tomorrow
I agree that 3 sets of good news would be better than 1.
You are probably both right - what do I know? - its been a long long time since we had any sustainable good news - round about the time we were nearing for £1.86 as I recall - so bearing that in mind does ANYONE know what will happen if and when we get good news - after all its a very rare commodity around here.
Sorry to disagree but
From RNS
The Company intends to report results of the well at the conclusion of drilling operations, after each of the 3 prospective zones have been flow tested.
QUOTE
"After EACH OF THE 3 ZONES have been tested" Jay said "after ALL 3 ZONES have been tested".
A subtle but undeniable difference surely.
Am I mis reading this or do the RNS itself and Jays comments appear to contradict themselves regarding the reporting of test results ie
From RNS
The Company intends to report results of the well at the conclusion of drilling operations, after each of the 3 prospective zones have been flow tested. Given the seasonality of drilling operations, it is estimated that all operations will need to be concluded mid to late April.
From Jay
We will report the results after all 3 zones have completed testing. We anticipate needing to demobolize mid to late April to remove the equipment before the spring thaw."