The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
The convoy arriving this morning was ancillary equipment. Not the actual Conductor rig.
The large pipes are the conductor casings - which will be fitted into the first 80m of the well by the conductor rig. Then that rig will be demobilised & the drill rig will be mobilised to site.
Rathlin have posted the process on their website if anyone is interested.
Persimmon,
Thanks for your reply there.
I'll have to disagree with you there on "any other than a huge find is the end".
And the reason is as you & I both know; they've a discovery at WNA; between 211 & 269BCf of Gas and 146 to 283mmboe of liquid hydrocarbons (oil or condensate but not water). This was in the RNS 11th Nov 2019 so if this is misleading the FCA will come calling.
So the WNB drill will either add to these numbers; or keep them at this level.
Either way - this is a stellar OIP / GIP for a c.£40mCap company.
If that's the end you refer to - then waht a way for it all to end. Stephen & Sachin have always made it quite clear this is a finite lifespan business - so you are clearly a well researched; pragmatic investor.
Good luck with your investment here & I'm pleased we share a similarly positive view on the huge resource already proved upa at West Newton. More to come hopefully.
The way I see it is they initially started off to develop a multi-asset business; £1-2m raise here & there and look to develop a mix of drill & produce assets (cali) and drill & flip assets (corallian).
And during this process they suddenly hit the jackpot in June 2019 at WN with a huge OIP find. And suddenly they go from a £1-2m raise to boom - £23m raise. So the questions I asked were:
1. Why raise so much cash for 1 asset - it must be huge as it's basically dwarfed the other assets
2. Who is giving a jnr E&P that amount of £ in a weak capital market (it was & still is) - they must have something v special.
3. What about the rest of the portfolio?
1&2 are answered by "because it's huge" & "the ii's seen the drill data"
3 - they've pretty much "forgotten" about the rest of the portfolio. Certainly California. Nothing happening / no numbers. Great ammo for the "nay sayers" as it's been left to it's own devices.
Along the lines of my previous post - I could be wrong but if you add up all the tell-tale signs; RBD is a WN play. Simple as that. I understand the other UJO assets but since the additional Rathlin investment in 2019 (and the subsequent Humber deal) I still don't understand PI's avoiding RBD & piling into UJO: which they quite clearly are if you look at the SP's. I'll take 56% vs 16.66% any day of the week. If Cadeby is proved up (bit if I hasten to add but they aren't drilling on a speculative punt) it will be a historic discovery & the PEDL will be v valuable.
Jsut my 2penneth - enjoy.
CB - i feel the clear difference here is:
UJO - Their shareholder register is 95%+ PI's & DB spent his entire career running / promoting micro E&P's to PI's. Good luck to him.
RBD - run by city / institution guys for institutional investors. But because S&S had no direct leadership experience they had to "build up" RBD by using PI's coupled with institutional investors.
Now here comes the really interesting bit for me...........
Since the £23m raise in October - they've shut down on retail investors; don't do any PR / Turner Pope evenings, etc. Any PR they do is v staged under their control. Why?
Because (IMO DYOR) they have the major project now; and they've got the ii backing they need to operate at the scale they wanted. That's also why (understandable but inexcusable) they've "forgotten" about Cali (read vague numbers, slipping timescales, general malaise).
These subliminal messages all indicate what it's all about - and that's West Newton.
They've gone "all in" on WN - which I know isn't to some peoples' tastes - and that's understandable - but they've had a huge slice of fortune here. They've (again IMO DYOR) struck gold on the one asset they needed to make the reabold project a success.
I've positioned ahead of the first deal here.
April presenter talks about first deal in the £20-300m bracket funded by a mix of equity / debt.
So I forsee a likelihood of 2k-20kboepd - which the team can then spin out through infill drilling / life enhancement projects.
Very exciting potential here. Stellar performance at Faroe & unusual to get the opportunity to get in at sub IPO price over these last few months. I've taken the opporunity to reinvest sizeable gains from RRE & the model here is very similar. Low risk / high reward.
I feel Covid will have slowed things up a little - but deals starting to move now.
Guys,
Interesting conversation here but a dose of reality.
Who raises £23m+ to drill further Wells? Guys who think they are unsure whether it's gas/condensate/water?
Or guys who want to differentiate between 10mmboe and 300mmboe?
From a company previously raising £1-2m a time. Suddenly jumping to raising £23m?
That tells you all you need to know. The BoD and ii know.
AJ,
My position is the SP at any moment in time is purely what the market attributes it to be. Its often completely detached to fundamentals (both under & over). The SP is only relevant when entering/exiting a position. But I'm a contrarian fundamentals LTH investor. I've learned success in this game is about understanding your personality & having a clear strategy which you stick to thru thick and thin. IMO way too many people get all emotional about a share price. That's why there's so many conflicting views in BB. I'm very confident things will play out favourably here - there's been no change in fundamentals to cause me to reconsider my view.
Chris,
You and I (and everyone else here) knows that S&S have no real interest in the retail shareholders. They think they are hard work. They used both their initial ii and retail to get the thing up & running. Now they've the WN project & the finance to take it to a conclusion they've no interest in communicating with retail. That's a fact. They communicate with their institutional investors through meetings face to face. That's all they feel they need to do. I personally have no issues with this. The radio silence says it all. They know what they have & they've the money to execute the plan. This is how good management work. Unfussy execution. Plenty are ****ed off by this approach but to me it speaks volumes. It's what's not said rather than what is said - which really tells the true story in these kind of situations. I'd be completely different if (say) a drill was ongoing. But we are simply waiting for the next phase of activities to start. Hence there is no news. I've been holding strong here for well over 2yrs. Quite happy with the situation - the SP at present is largely irrelevant to the real situation.
Mildly interesting morning of RNS.
Corallian - clear pathway now with IPO target Q2 2020. That will facilitate monetizing those assets. Some new expo drills mentioned which I can't see RBD being involved in (too risky) albeit Curlew is an appraisal drill of a discovery. No mention of Colter but I reckon still life there patience needed.
Danube - increasing % on the back of ADX struggling for cash. Already hit gas and IM-2 drill to come. Intelligent deployment of capital.
Miton - can anyone shed any light on this? Miton were c.8% holders in Aug but says they've come from sub 3%.
I'm somewhat surprised /bemused there haven't been more TR-1 but perhaps they are in the pipeline.
Piper - I also got diluted down (did hold 0.7% SII now down to 0.44%) but I trust S&S and 39% of today's numbers is a significant asset.
We will only truly know the value of the extra Rathlin equity upon monetization; however things do look good.
I'm quite happy with things as they are excluding any further HNW equity swap with Rathlin shereholders. I can't see it happening now but who knows.
I'm somewhat surprised /bemused there haven't been more TR-1 but perhaps they are in the pipeline.
Piper - I also got diluted down (did hold 0.7% SII now down to 0.44%) but I trust S&S and 39% of today's numbers is a significant asset.
We will only truly know the value of the extra Rathlin equity upon monetization; however things do look good.
I'm quite happy with things as they are excluding any further HNW equity swap with Rathlin shereholders. I can't see it happening now but who knows.
So - volumes up from 70mmboe / 189BcF to 146-283mmboe / 211-265BcF. Sensational numbers in anyone's eyes.
And it's an onshore asset.
Volume today 5x normal but SP sideways
I read a mix of 5m ii sells (maybe Miton maybe placing) & disaffected pi's unhappy at the raise wanting out & new pi's / HNW taking / growing existing positions.
Clearly significant volumes churning at present - will the SP move anytime soon?
Certainly I can't see another UK listed O&G E&P with as much scope as RBD considering the asset portfolio.
As a LTH with a significant holding I was disappointed with the dilution event in Oct; but 40% of the numbers quoted above just in the KA formation make this a superb hold & wait to play out situation. Excited for imminent restart of EWT & 2x WNB drills Q1 coupled with imminent KA CPR.
Miker.
Spot on here. That's the big takeaway. Good enough for me too. If anyone has any holding wobbles between now and monetisation of WN watch this video back (that is if you trust S&S which I do)
0.9p not ideal but it's a huge amount of money to raise on AIM.
To put it into context - it's £20-24m to go from 25% to 50% of an asset that's quite possibly worth $1Bn.
Ultimately - whether this has been a good / bad deal we will only know on monetization of WN. But it could be £400m vs £200m for a £24m investment.
3x tweets today - all after market closes. 2 tweets in previous 2 months beforehand. How very odd?
Either an enthusiastic social media intern only allowed to work after hours - or a mischievous indicator.
I'll go with the latter. Fits the profile of RRE acquisitions perfectly.