Member Info for RNSTranslator

Humber were distressed, but UJO were not the only potential buyer, and I didn't use that $1.6 per bbl they paid as the basis of my valuation, I used $5-8/bbl. significantly more. The value of UJO's WN stake to another buyer, is likely between $60mm and $100mm. However there are a number of assumptions in that:
1: The Current well finds some gas and or oil (likely but not certain)
2: The EWT demonstrates that the gas/oil can flow at sustainable commercial rates. (Unknown, and there is a risk it may not)
3: That the group can demonstrate that the porosity and permeability is reasonably predictable throughout the West Newton structure, and that the current in place oil/gas numbers remain where they are and recovery factors are 33/80 oil/gas.
4: As a standalone sale they will not achieve this valuation, they need to agree to sell their interests along with Rathlin and RBD and as such all agree on what value is acceptable to them all.
5:There is more than one buyer at the table, if not they will need to demonstrate they have a plan B to move the asset forward (Finance to develop) otherwise the price will be lower, thats self evident.
6: Don't forget that any proceeds for the sale of their interest in WN is subject to tax on its sale price less costs to date.
7: Once they have the sale proceeds in house and corp. tax paid, how do they get this to shareholders? Dividend? or some kind of capital return?
I expect the share price to rise on the initial results of the well, and then fall back before testing, because this is the big unknown, and a failure in proving commercial flow rates will likely be terminal to WN and the value ascribed to those companies in it.
It may well be successful and demonstrate commercial viability, in which case the price will rise significantly. However investors need to be aware of that the market cap of the company may well exceed the value of the asset to another company, at which point theres a dilemma, do they sell and disappoint shareholders who have driven the shareprice ahead of the value or do they just sit it out?

At the end of the day its not about being "positive" its about being a realist in the face of countless posters who simply want the unwary investor to believe that they know what they're talking about when it comes to oil and gas and that its going to give massive returns. Most don't know what they are talking about and are simply wanting to talk it up for some reason...I wonder why?

perhaps you could enlighten us with some recent onshore metrics for oil and gas transactions for undeveloped and unfinanced bbls and bcf? ...
UJO just bought 387500 bbls for £500k at Wressle. Their numbers not mine. Thats oil thats almost fully developed and financed.
This $1.67 per bbl... I think assigning a value of $5-8 per barrel was quite generous.
I have no agenda other than pointing out the facts to folks who just talk up the numbers with no understanding of how the industry works.

in Oil and gas speak.
500mm bbls is 500 million barrels 500k bbls is 500 thousand barrels
500 bbls/d is 500 barrels per day. (oil production number)
500 bcf is 500 billion cubic feet, thats gas volume.
25mcf/d is 25 thousand cubic feet per day (gas production number).
1 boe is 1 barrel of oil equivalent. Usually used to express gas in terms of oil on the basis of 6000 cu ft gas is equivalent to 1 bbl of oil on an energy equivalence basis, not a value basis. Normally 1 boe gas is worth much less than 1 bbl of oil.

I'm afraid talk of 2 or 3 p per share is simply deluded.
1: Assuming no more shares are issued!
2: at 3p the market cap would be £500mm.
Biscathorpe is worth a few million at best as its not yet been drilled and tested, and can't be without more cash (shares issued).
Wressle throws off $2mm a year at current prices, less the £2mm they need to pay upfront, and its value is probably less than £5mm. They just bought 12.5% for £500k valuing the whole field at only £4mm, they have 40% so current "value" is £1.6mm.
That means 100% of WN would need be worth about £3bn. Assuming it flowed at commercial rates, As an undeveloped field with a base case oil in place of 150mm bbls and 200 bcf of in place gas. Assuming a recovery factor for oil of 33% (high for a carbonate) and 80% for gas. That means 50mm bbbls of oil and 160 bcf of gas recoverable. Of course these are undeveloped unfinanced volumes.
UJO share is 1/6th, so thats 8mm bbls of oil and 25 bcf of gas or 6 mm boe gas their share. Gas boe is about half of oil in value terms, not energy equivalent terms. so that'd be around 12 mm bbls of value equivalent oil and oil. so to get a value of £500mm they'd need some one to pay UJO $40 per barrel of undeveloped oil. Thats just not realistic, a number in the $5-8 /bbl is more reasonable for undeveloped and unfinanced onshore oil and gas. That gives a prospective mkt cap of $60-100mm assuming no more shares issued. Current market cap is $50mm (£42mm). The folks spouting these numbers simply have no clue what they're talking about.

Gwyneth: If you're going to give us updates, at least make sure the information is up to date.
You quote: "Importantly, with in excess of £6.2 million in cash and no debt, Union Jack is funded for all testing and drilling commitments for 2020."
That's way out of date. They announced on 11th of May that as of the 1st of May they had £5.5mm in cash.
Since then they spent £500k on more of Wressle and £115k on more of Biscathorpe.
Factoring in other spending in the 4 months since the 1st of May its probably now closer to £4.3-4.5mm.
We also await the further announcement of a planned debt facility to pay the £2.08mm owed on commencement of Wressle.
production.
There will be no further ability to fund West Newton C D or E , Biscathorpe or Keddington anytime soon...there has to be a placing before Christmas. I suspect it'll be before testing if the WN well shows promise.
Why?, If the well doesn't flow at commercial rates then the whole WN game is over, Biscathorpe and Keddington will need funding regardless of the outcome of WN, so why take that risk, which would means raising at amuch lower price when you can get the funding for these projects away at a post well pre testing share price premium? If you don't agree, then explain why not, with a reasoned argument.

Its simple, folks have ridden up the price ahead of the drilling commencement. .15 placing to .3 is 100% return.
There's no real news for 6-10 weeks, so folks sell and the price falls back..closer to the expected well results you buy back in sending up the price.. then you either hold for the initial result, which will likely be "we've found evidence of gas +/- oil, exciting exciting etc etc" now were off to test it, price will rise on announcement and then fall back before testing results are out, because testing is the one bit thats not yet been done...if the rates are low, or there's a significant decline the story will be over, if its positive and confirms commercial rates, you'll make even more... you take your pick on what you expect...nothing has yet confirmed commerciality, thats a simple indisputable fact.

Was trying to block you and seen this. Have you seen the contractors. Why could Humber not sell. Why did RDB get first dibs.

They didn't get first dibs, , no-one else made an acceptable offer.

"You would need to understand how the contracts are put together.As far as I am aware any sales have to be agreed by all partners"
This is completely incorrect. Each member of the Joint Venture has a right to sell their share or part of it as they see fit. They do not need permission from the other partners, nor do they need to offer any deal they may have been offered to the others.
Any offer for the assets will be made initially to the operator, Rathlin, this is the key role. Rathlin would of course consult with its main shareholder RBD and agree whether to sell Rathlin as a company outright (it only has one asset) or sell the asset and keep the cash in the company, almost certainly along with RBD's direct 16.66% JV share as they effectively control Rathlin. Any offeror would make a decision about whether it wanted the entire 100% (in which case RBD would approach UJO to become a party to the sale) OR whether it wanted to play hardball and just acquire Rathlin and RBD'd 83.3% stake (essentially joined) and then subsequently burn off the minority partner, through accelerated spending and development activity.
So the route that is taken is controlled by the company making the offer...not the partners. No one has a right to block any sale nor any right to participate in one.

Wessex, thanks for the link about the offer of 10p from Total. Which was followed by this announcement:
"As previously announced, having completed the initial shareholder consultations, the Board are of the view that the approach of 10 pence per ordinary share undervalues the Company and was inadequate to secure their support for any offer which Total might consider at this level."
Bramhill was the Chairman, 2 months later he left.
What can you tell me about Osceola/Bluebird and Nighthawk?

Its pretty obvious that the gas was sour (H2S) nearly all gas from the Zechstein is.
H2S is lethal and that's why they were shut down before they completed the testing programme, as it was probably unexpected, it may or may not relate to the underlying "oil", which is likely to be a condensate, which is a positive as it'll produce better, and has higher value than oil.
Of course non of this is a production issue if you install the correct kit, which they probably have had to do before they got permission to restart.
What it does tell you though is that they had to terminate the test early and so the commercial producibility of the gas is as yet unknown. Until a proper test and analysis of the drawdown and pressure decline is done this is not yet established as a commercial find... despite what everyone wants to think. It may be, but there is a possibility it may not be commercially producible... don't believe me, just look up Egdons Kirkleatham field history to see what happens to Zechstein gas fields if you get it wrong.

has David ever sold anything before?

Translation-
"DON’T WORRY we are not Placing but there is always institutions willing to give them money"
literally this means we are not placing (i.e we are not placing as I speak), but I'm confident that even though we are not currently placing that there are folks who would give us money if we did one.
if he'd said:
"DON’T WORRY we will not be Placing" without the but don't worry there's money out there, qualifier, then I'd agree with your interpretation.

It's pretty obvious, trying to talk it up for a higher exit point.

Of course they'll sell it off, it'd be madness not to do so.
I'm simply trying to estimate the amount of further dilution before that point.
Selling assets takes time, and of course a 16.6% non operated interest is very unlikely to be of interest to the larger players, the only ones with cash, which means they have to agree a joint sale process with Rathlin/RBD, assuming they actually want to sell at that point, and not undertake further drilling/testing to increase the value. Add into that the taxation of the proceeds from any sale before it even gets anywhere near to the shareholders and its going to take time and money...
I do hold shares, but don't feel the need to claim everything is just fine and dandy, there is a high risk of further dilution and like any investor I'd like to understand when thats likely to be. Pretending its not going to happen is is either foolish or disingenuous.

The questions was one of a potential fundraising based on the payments due at Wressle not on Wressle itself.
Of course maybe I've pointed out an uncomfortable truth that there needs to be a placing at some point before year end..and I suspect that doesn't suit you're own promotional narrative.

So you're of the view that UJO can happily continue without raising more capital on $1mm per year?
That just about covers overheads, how about the further spending needed on growing the business at WN? Biscathorpe drilling?, Keddington drilling? and all the other projects they point to as sources of growth...how do they fund those?

Clearly you done understand how this stuff works...

There is of course £2.08mm due.
One from the Humber transaction, one from UJO's original transaction with Celtique (Now Calmar)
Even if they can borrow the money based on the cashflow, it has to be paid back.
Can't see how they can avoid a fund-raise before Xmas (after WNB is my guess).
As I said

"So the WNB drill will either add to these numbers; or keep them at this level."
Of course that's generally true as all the numbers being bandied around these are potential hydrocarbons in place calculations.
There's a world of difference between in place numbers and (economically) recoverable numbers.
If the well doesn't flow at commercial and sustainable rates then the in place number may well stay the same but there will be no recoverable numbers and thus no value.
They may well confirm or otherwise the reservoir parameters at the new well location, but unless it flows at commercial rates, and at a sustainable rate (low pressure decline) then folks thats a different matter entirely.
I'd be keen to know what happened with the last well and if they actually achieved commercial flow rates before they had to shut it down... there's very little comment on this by any of the participants that I've found.

Trying to work out if UJO will need to come back to the market before or after the drilling and testing of WN.
To date I can't see any indication of the costs of this programme.
From RBD's releases they say invested £16mm cash into Rathlin, and now Rathlin are fully funded for the WN Drill and Testing.
Assuming that the £16mm covers Rathlins 66.6% share then the total costs of this programme is £24mm, Im assuming that Rathlin did not have any other cash to hand, if they did then it suggests that the programme would cost moe, so £24mm seems to be the lowest best guess.
That means UJO's share is £4mm, and so their statement that they are fully funded seems to hold up.
However they had cash of £5.5mm on 1st May, subsequently spending an additional £500k on more of Wressle, and £133k on more of Biscathorpe.
They have received their share Humber settlement from Egdon, buy that number appears confidential.
Best guess is that they currently have between £4 and £5mm in hand.
The continue to state they are fully funded for "Drilling and Testing", it seems to exclude the £2.08mm due to Calmar on "first commercial production" so my take is that this stuff isn't covered in the fully funded statement.
His latest comment on the video when asked about being fully funding he added.."for now"
Depending on when the Calmar payment is due, he stated Wressle on stream back end of October, and given the timing of WN drilling and testing results "before Christmas". I can't see how they can't raise more cash before Wressle payment due.
Looking at it strategically, I'd say a raise will come immediately after the drilling and before the testing (assuming its positive). That gives them a share uplift , and ahead of the testing....raise the £2mm Calmar money at the same time.