Member Info for RNSTranslator

NOFKINCLUE
why do you care if I’m invested or not?
Price at the end of the year...well that will depend.
I believe that the sidetrack will encounter gas and probably “black condensate” based on log interpretation (it’s not going to be oil in the true sense)- I’d put the chances if this at 75-80%. The price will rise on the back of this news because most mug punters think that finding hydrocarbons On logs and in the drilling mud equates to “success”. They will then need to decide if they want to test based on this info (and core if they’ve taken any). Can’t see how they can’t test as there’s now nothing to lose (no testing equals failure = price Armageddon). The testing will be the critical element tof everything going on at WN. The flow rates will need to be commercial (the condensate zone will have to be tested first) and they will want to see rates in the 100s of bbls/day, but more important than that will to understand the pressure response if there is a significant pressure decline (or it’s very slow to recover) then it suggests a small connected volume, not one large interconnected reservoir.
So it could flow at “headline” 1000bbls/day, but if the pressure declines rapidly then it’s not going to fly commercially. Of course it’s debatable how much of the critical technical info they will put in any release - there is a tendency to talk about column heights, high flow rates etc red meat for the uninformed.. So to cut a long story short..
Price at year end if they announce they’ve got gas and condensate then 0.7/0.8 (can’t see how they won’t test)
If they’ve started testing and the usual rabble can see “flames” then it’ll pop up to 1p ...perhaps more.
It’ll be January before the real result comes in, and it will depend on 1) did it flow commercially and sustainably then it may get up to 1.5p, if they announce it flowed well but suggest further analysis of the data is required and they won’t be testing WNA then it’s damage limitation time and it’ll fall off a cliff (probably terminal decline) as they’ve got nothing else of real value...that enough for you..?
I make good money playing these small oilers because I don’t have blind faith in the fluff they usually put in their PR and RNS’s, it’s what they don’t tell you that’s the key....and no I don’t short...

Quantifying the gas and oil so we can book it... Its the testing that is critical not just the presence. FACT CHECK: you can't book it unless it flows at sustainable commercial rates otherwise its not a Contingent Resource its just stuff that will stay in the ground. You can't book it as Reserves unless the development funding source is clear (i.e. FID).

"Truth, I think people has misread your posts and I agree entirely with you about Corallian. We are talking 11,666 barrels of oil per day or oil equivalent with 4,300 barrels net to RBD per day.
Theses figures are superb and what you would expect from an offshore producing well."
Perhaps some facts may be helpful.
The well only flowed at 9mmscf/day on test, so its only an unproven estimate that it might flow at 70mmscf/day in reality.
1 bbl of oil is equivalent to 6000 scf of gas on an Energy Equivalence basis.
6000scf of gas is 6 Mscf of gas
1 Mscf of gas is approx 10 therms.
So 1 Boe of gas (60 therms) is worth
At Novembers gas price of 38p is £22.80, or $30/bbl.
At Mays price of 9p is £5.40 is $7.20/bbl.
So if you think producing gas at an equivalent in VALUE terms of between $7 and $30 a barrel is "Superb"...then perhaps you might want to reconsider.
At 35p a therm the project loses 85% of its NPV (their word not mine).
Of course NPV10 is not a realistic valuation given the risk profile, nor is it even close to what it is worth in the real commercial world.
These are all FACTS, not speculation and bias.... feel free to present facts not half truths, wet dreams and BS.

Deemule:
Write it off?, that'd be a sign of failure, admitting that they've spaffed millions of £ of shareholders money on a company with 3 dry holes behind it. Its a case of "look over here, look over here, a new shiney opportunity,....Colter?, nah never head of it!"
What makes you think they haven't already tried to offload the Corallian stuff ? perhaps there were no takers (Mugs)

Saseefeldt:
No I'm not although I'm watching the WN situation closely, I still have a few UJO shares left as they at least have some sort of backup if WN goes T*ts up (i.e. Doesn't produce at commercial sustainable rates). Its clear to me from reading the release and looking at the online presentations and reading the CPR that the WNB well came in low and with untestable Kirkham Abbey, hence the sidetrack to a better location.
Rathlin are applying geological understanding based on a Canadian Reef Model to the Zechstein in the UK , and I'm afraid it just not the same and I suspect they too may realise that now..

Persimmon: Thanks for the advice...I'd be happy to defend anything I've put or even take differing views on the Economics of small stranded gas fields as long as they make a logical case... most of the gamblers on these Boards think that when a company gives them an NPV number, that it must be worth that amount... at best it's a deliberate ploy to suggest unrealistic valuations to attract the unwary punters to the "undervalued" shares..

Just looked at the Corallian website.
5 of the team are ex Texaco and this is an old Texaco discovery.
You can't help but think that they maybe feel an ownership of this discovery from their past lives at Texaco.
The other two are Sachin (investment manager) and Dave Hanley as project manager.
The words may lead you to think Dave was led the development of Tullows Jubilee fields, his Title according to some old Tullow material from 2011 was Ghana Sub-Surface Manager, so he's not a project development guy he's a subsurface guy.

"Maxwell - are they lying about the amount of gas that's there, their share of it or the current price of the gas - what have I missed ?"
I'm sure they are correct on the volumes there, or at least the potential range of volumes.
The issue is simply commerciality and risk. From their own presentation its clear that at 35p a therm (assuming a 2% annual increase) 85% of the NPV disappears, look at their graph of historical gas prices and draw a line at 35p...
Quite simply this is not a credible commercial proposition, putting aside the issue of how is it actually going to be funded.
You won't get debt financing for a non producing company with one development asset (there is no security)
Equity markets are closed for this one trick pony stuff.
The obvious answer then is that they sell it...
In which case the economics are even worse because someone has paid to acquire the asset which means their capital at risk is even higher so they need higher gas prices to get the same return as Corallian would have in their economics.
As you say S and S are investors not field development and oil and gas economists.
I can't comment on the directors, but the first things you'd ask is "have they done this before", "have they ever delivered value for shareholders"...whats the track record they're selling to give shareholders comfort they know what they're doing and can deliver on what they say.

Rubey: "Don't forget, as it's a private company, the owners will entirely control who they employ. I can't see them giving jobs and paying for anyone out of their own pockets, unless they think they're worth it." trouble is its not the directors own money, how much have they put in recently (other than RBD putting in some of their shareholders money), as I understand it the Corallian model is that the Employee Directors gat options over a significant proportion of the company as it raises more money they get more options...these cost nothing, and they lose nothing if they never have any value, in the meantime they take a salary.... now look at your answer and ask if they're paying out from their own pockets.

Missing info...
This is an early development plan (see HUR if you want to see how that can go) and no mention is made of how much they expect to get from the Eastern panel, in terms of recoverable resource.
Without this number it’s difficult to see how much revenue they have to repay the loan of 83mm plus 8% annualised interest. If the plan then becomes a full field development then where do PVR get the cash (other than the 8% non loan cash which is probably to keep the lights on) to do that phase ? you cant see how much excess cash over and above they can accrue from the EDP as they haven’t said (as far as I can see) what volumes they expect to produce....The usual release that seems to say a lot but key info to make a measured assessment is missing.

The fact that directors have been buying means that all material price sensitive information has been disclosed in the RNS's both the WN and Wressle release - thats just fact and the Nomad has agreed. Everything you need to know is in them.
The Wressle one is self evident: Egdon are out of money and UJO chose to bail them out with Wressle as security.
The West Newton one is also clear:
Fact: Cadeby not a reservoir here, as they had hoped.
Fact: There were hydrocarbon shows in the mud gas readings, cuttings and based on the log interpretation.
Fact: They have chosen not to test the KA here as was originally planned, they have chosen to sidetrack to a different location which will also penetrate the Cadeby again, not a horizontal well just in the KA as shown in some presentations.
RNS: "..further appraise the Kirkham Abbey formation at a structurally higher location.."
Fact: The KA was found structurally lower than expected, so they now need to get to a structurally higher location to test, otherwise they would have tested at this location.
RNS:"..with characteristics anticipated to be similar to that at the West Newton A-2 location"
Interpretation: why mention the new location will have anticipated characteristics similar to WNA2 if thats what they've already found in this well? , this very strongly suggests that the KA characteristics at this location were not the same as A2, and supports the reason not to test here, despite hydrocarbon shows.
RNS:"The WNB-1Z location is believed to be suitable for a subsequent flow test"
Interpretation: This also suggests the KA in the current well was not suitable for testing, and given the previous statements strongly suggests it came in low, it found different rock characteristics in the KA.
Perhaps Mr Scott could ask Mr Bramhill to confirm that this is what happened, cant see why he couldn't confirm this as all material price sensitive information has been disclosed on the WNB-1 well, thats why he could buy shares....
The other questions to ask would be,
1: has Rathlin changed their view on the geological model for WN in the light of this well result?
2: Are they comfortable that if Wressle only flows at 250 bbls/day rather than the anticipated 500, they will get their money back?
Of course as folks have already pointed out, it'll be answers to previously provided questions... not ones that could actually be helpful in understanding what is really happening...

No: Its not enough to see Egdon through, they will still have to raise cash.
Of course its a safe loan...if Wressle doesn't perform then Egdon can default and settle the debt with 25% of an underperforming asset...
This deal tells you a number of things;
The equity markets are closed to Egdon.
The normal Debt/Quasi Debt markets are closed for this type of asset (UJO discovered that).
UJO have just amplified their Wressle risk....
Calculating Egdons first year net revenue for Wressle at different production rates:
Egdon Net revenue at 30% oil at $44
bbl/day Net Revenue opex/bbl
500 - £1,785,000 - 10.0
400 - £1,323,000 - 12.5
300 - £861,000 - 16.7
200 - £399,000 - 25.0
100 £(63,000) - 50.0
80 £(155,400) - 62.5
Looks like they need a minimum of 250 bbl/day gross to generate sufficient income to just to repay UJO in the time.
Cashflow negative at 120bbl/day or less.
Regardless of rate (and this reservoir only did 80bbls/day on test) then its not going to deliver cashflow to do anything else near term.

the spread is 1.4 -1.8 (28%) - tells you all you need to know.
Someone trades £1000 worth of shares 1.6 and everyone thinks something in the air...
Results are late, probably awaiting first oil , going concern statement, and announcement of funding of the £400k.

"They did publish the intention so side track many months ago.", this is correct, but this isn't that sidetrack.
Look at their website under 'our projects - West Newton'.
The cross section between WNA and WNB... it is clear from this that the KA formation was supposed to be shallower at WNB than WNA, and the sidetrack was to be one drilled entirely within the KA.
Todays RNS states that the sidetrack was going to be to a " structurally higher location", so it came in low to prognosis. The sidetrack "will provide an additional penetration of the Cadeby" i.e. its going down into the Cadeby and so it is NOT the sidetrack that was planned. They almost certainly mispicked the seismic and found insufficient reservoir to test (probably because they came in low) so they need to get back to a place where the KA is structurally higher. Whilst this does not necessarily have a material impact on size, it will suggest to some that they still cant map this accurately or demonstrate the reservoir continuity as well as they might have you believe.

First look at this presentation, its old but does show their thinkin.:
hxxp://unionjackoil.com/wp-content/uploads/2018/10/UJ_RathlinOpportunityPres_Oct2018.pdf go to slide 9.
The WNB well ("next well") is shown as a straight hole, we now know that it was a deviated drill.
Todays RNS says re the Cadeby: "within the targeted slope environment"
So we know that it targeted the Cadeby slope deposit so was deviated to the right as you look at it on the lower seismic display. To reach that it looks like you have to go through or very close to the "KA slope deposit" above. It could be therefore that the KA came in low to prognosis and was part of this different type of KA formation and they're now drilling to a location thats more like the vertical grey line in the diagram, which is perhaps more like the WNA reflectivity.

I do, I'm not sure you do tho'

The RNS is very telling .
1:"..Kirkham Abbey formation indicated a hydrocarbon charge based on wireline logs, cuttings and mud gas readings": They got shows and log responses of Hydrocarbons (probably gas as they mention elevated Gas in the Mud, oil would've been mentioned if present)
2: ".Cadeby formation contained insufficient reservoir development"..Cadeby not developed as expected, non reservoir.
3: ".on a structurally superior location": Obvious conclusion, The KA came in low to prognosis, so they need to sidetrack to a structurally higher location, otherwise they would have targeted that location in the first place.
4: "targeting enhanced reservoir quality": The KA was not as well developed as a reservoir as hoped, but did have hydrocarbon shows.
5: "..on-trend with the previously discovered Kirkham Abbey" .. the result was not "on trend" with previous WNA wells, i.e. unexpected.
6: ".provide additional data to inform the optimal locations".. This location was not optimal so we need to find out where is.

My own take, an unexpected result and so they're having to sidetrack to a less risky location, which should hopefully find shallower KA with better reservoir characteristics, my personal view is that the Cadeby is a non starter - Non reservoir in all penetrations so far..

Manwell02
If its a mechanical sidetrack then might not get the Z.
If its a geological sidetrack it almost certainly will...

Snaffleman...in anticipation of your answer, and for some others.

Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms or supports one's prior beliefs or values.[1] People tend to unconsciously select information that supports their views, but ignoring non-supportive information. People also tend to interpret ambiguous evidence as supporting their existing position. The effect is strongest for desired outcomes, for emotionally charged issues, and for deeply entrenched beliefs.

"I accept that you are technically correct but in the end if they do NOT hit gas or oil based on what they know from the previous drilling there will be a lot of questions to ask."...
What are those questions Snaffleman?

Some sensible suggestions from Manwell02 on the RBD board:

The kit they are using actually has a few names zip bails or dolly links and it’s used to run small / skinny pipe. If you look carefully you will see a small elevator hanging off the larger elevator with the zip bails (yellow bits) in between.
1. Could be running a kill string (but only if at well TD & the 7” liner been ran) don’t think it has been thou according to pics.
2. Running a cement stinger to set a plug & sidetrack
3. Could be a cement squeeze job
4. Well 4 is not good & we don’t want it to be that!"