The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
It's in all probability uneconomic at 25mmboe - even more so for Equinor. Either Equinor walk away or they need significant more drilling activity and JOG don't have any more than 1-2 drills max in their cash reserves. So I see either an undeveloped block, Equinor sell to another party (which then requires a lot more cash to appraise) or significant dilution for JOG as they will need to raise cash. I sold 50% at 110p at 8.01am Wed; but I liquidated all positions this morning at 80p. Been in here for 18 months. V painful but that's the downside /upside of beta /expo plays.
Listened to interviews 3x times now Sachin saying they've drilled Colter South, then appraised Colter South and there is 3m pay /15mmboe in place. Yet Brian @UOG says they've drilled Colter South, appraised Colter North (uneconomic) but now potential for onshore structure in North West area. Sachin mention nothing of onshore West prospect. Anyone who's listened to this?
https://www.thisismoney.co.uk/money/investing/article-6764211
I5 - spot on any takeover offer would have to be over 65p Considering Kelda were over 28% on 6th Feb it's likely I would say that they are now over 30%. Considering they have been slow with TR-1 don't want to upset the authorities so maybe another TR-1 in next couple of trading days. The rampers favourite phrase could be applicable here: "wouldn't want to be out of this over the weekend"
Brenner - no worries buddy hope the intel there helps.
I'm still no nearer to finding out if ADL have any cash / whether this $1.1m in Results in 31.1.19 RNS is allocated to Colter or is still sat in the bank.
That influences whether they will need to raise?
Brenner - ADL tweeted "Oil encountered in the southern block of Colter. Key risk was closure, which has been proven with Colter South, this increases COS for the main Colter prospect. " https://twitter.com/AndalasEnergy/status/1099971368903471104
Also - UOG CEO BL did a podcast with VOX today & said the same - biggest risk on Colter was the south closure.
The Co-CEO of RBD also did a podcast with VOX today & said the main colter appraisal target is derisked by this result.
I'm no expert - I just digest RNS & information put out by the various JV partners.
Boom - what do you know? Well quite a lot many thanks.
I'm just trying to get to the facts.
I purely invested here to leverage Colter % vs micro SP - but with the curveball I just want to ascertain whether they have cash to fund activities.
IMO the JV have hit the jackpot here - the South flank fault seals up the main Colter formation significantly so "derisks" the appraisal of the main formation - so it's now a 15+23=38mmboe discovery - so 8% of that for ADL MCap is v v attractive - so long as they can fund the activity. I reckon 2wks drill likely £1.4-2m so prob £180k to ADL.
Boom,
So that RNS you quoted was Interim Results dated 31.1.19 - and they had $1.19m cash at hand (as Jace stated Colter farm-in already paid) - so in that case it's an easy cover of costs for Colter sidetrack as they have c.$1m cash at hand?
Am I correct?
Jace,
Seriously?
Buddy - it's a fundraise within Corralean (who are a private company) - of which RBD own 32% of Corallean's shares at the moment.
Corallean are one of the 4x JV companies. The £750k is purely an internal transaction within Corallean - RBD will get a larger % of Corallean's shares as a result - but they are putting cash into Corallean to fund their % of the sidetrack costs.
So - bottom line is - £750k has nothing whatsoever to do with ADL, or UOG, or anyone else in the JV.
Cheers Boom - so $1.1m = £895k; so they are probably at Zero at present as paid out £800k for farm-in & £45k costs.
I'm feverishly trying to find out whether ADL can fund their % of the sidetrack - and so great - if not what's the plan?
Bottom line for me - is this was a 23mmboe appraisal - it's now a 23mmboe appraisal & 15mmboe discovery (which they can appraise from the shore) next to a 100kboepd production facility presently processing under 20kboepd (i.e. massive capacity onsite) - hence my investment in ADL pre-drill.
8% of all of this in a sub £2m MCap company -
This RNS confirms they used the £800k from their raise to pay for Colter farm-in - http://irpages2.equitystory.com/websites/rns_news/English/1100/news-tool---rns---eqs-group.html?article=28032219&company=andalas
so what else is left in the kitty?
From previous experience - any partners can't afford to put in the other JV companies will cover - but the one who can't pay gets diluted - it'll be in the farm-in contract no doubt.
Bitshare,
Where is this £800k? Where is it RNS'd?
Jace86
Where do ADL have £800k?
They did their raise to pay for 10.8% of the Colter well upto £8m (that's £800k) - so that's what they used the raise money for?
Where is this extra £800k?
Also - i've looked at your figures you posted earlier & they make no sense to me.
The £750k RBD have given to Corallean isn't directly related to the costs of the sidetrack. Certainly UOG have a deal protecting them from additional costs (Which I believe Corralean will have to cover) so you can't base a % calculation on the ADL % ,etc
I've asked ADL directly how they are going to fund their % of the sidetrack. I will post here when / if I get a response - but personally I would imagine they would have to RNS this information if they are doing something. It's surely easier to source finance now that there is a quantifiable resource discovered - on top of existing discovery that is now being appraised.
Does anyone know ADL present cash position?
Monroe Swell will spud WC Monday 18th February
Sachin stated in presentation and Q&A Mon 11th Feb @ Turner Pope. I've a contact who was present. GI or 2nd Monroe Swell drill straight after. Relatively short timescales as shallow well so likely news end Feb/Early March.
Thanks fandg2 - checked out your posts from last week (was away) so many thanks for your thoughts.
Sonof
Parkmead refer to Verbier here http://www.parkmeadgroup.com/news/latest_news/parkmead_significantly_increases_its_stake_in_highly_prospective_west_of_shetland_area/