Member Info for Sageman

Rusty, you have clearly never run a business. Debt comes in many forms. If you want to see an example of a company with many structures check out Tullow oil. Some debts are fixed term interest only but all the debt to pay at the end, some capital and repayment, some just an overdraft. Either way it needs paying. I was just trying to help regarding the fall in the price of gas and the impact on cashflow - whatever you do with it - debt repayment, dividends, other business ventures. Either way when what you are selling tanks in value it is bad news. Hence the sp.

Hi Ocelot, HITs estimate was circa 20m .

Rusty, I think you will find that the debt comes in a number of different structures perhaps you could read some RNS’s yourself and decipher. I think you will find that GL has been less than transparent.

HITS and Ocelot, your numbers are better than I feared. I was factoring extra costs of failure to meet hedge and sidetrack delays & piping . If our debt is as low as 15m I will be very happy but I suspect HITs will be closer.

Rusty, you pay the debt back a lot quicker at 200 per therm than you do at 55 whether it is 20m or 30m! Actually much, much quicker due to the debt repayment occurring only after the B/E point.

Rusty, if you ignore the derivatives liability I believe that actual debt is between 25 and 30m . No PI knows the accurate figure and it is just my best guesstimate. If I am wildly out I am sure someone will correct me.

Proton, the answer is very simple. The price of gas has fallen dramatically. GL forecasts based on 200 vs current prices back in the mid 50’s. Massive impact on speed of debt reduction. If you believe that prices will rise this is an excellent entry point.

BV, I so wish you would stop ramping. With have debt and interest to pay as well as the new pipeline. IF we get a bounce in the oil price this could happen more quickly than currently feared. In the meantime adding to the debt pile for expansion or funding it with a rights issue at this sp price would hardly be commercially sensible.

The issue is very simple - the price of gas. Today it is 57 per therm. It has fallen sharply in recent weeks just as we got the side track producing. Earlier this year GL was projecting at 200 per therm. Hopefully prices will rise but I know of several of my clients who have cut back by 20%. GL's delays have proved to be very expensive. This is now a much de-risked long term hold. GLA

OMG 0.06p. I sold out at circa 1p but keep this on my watch list. So SS aka Billy no shares the great diluter and destroyer of wealth is still at the wheel and laughing at PI’s who he sees as gullible providers of free money. This share is uninvestable. Sell whilst you can…

Being 100% honest I did not expect to be at 1.2p post sidetrack. My B/E is 2p but this is only 0.5% of my portfolio. I expect 3p within 12 months . I will double my holdings but the trend is your friend so for now I will defer buying. GLA

B.V., to be clear I was saying that I would rather GL had hit his deadlines so we had sold gas into the spike and be debt free , profitable and in a position to pay dividends with a far higher NAV and sp. In contrast you are saying that it’s all ok because the losses and debt payments mean we won’t pay tax for a while. Well excuse me but I would rather be in the former situation and an sp 5 p plus than in the current world but each to his own!

No mention in the RNS as to what extent waxing continues to reduce production and whether the new high pressure system will cure it. The company must have an expectation for increased flow. Typical of Art that he has not communicated it.

BV personally I would rather earn 500k PA and pay tax than £12,500 and pay none. Guess that makes me a numpty and you a genius for preferring to be paying off debts that should never have been incurred, lol!

BV that debt will need servicing and will need paying off. I would be prefer to be debt free, making a profit and paying tax, lol!

Output data is fine. The issue is that GL missed every deadline, landed us with debt and missed the gas price spike . The weekend newspapers were full of electricity price falls and the reasons why, hence the sellers. We now have a long haul ahead to reduce debt and sort out the pipe line. A de-risked play from here with 2-3p possible by year end. We need another oil spike...

Sold 250,000 shares at 16k a week or so ago. Just used the 16k to buy 320,000 shares. With these shares you normally have to trade.

It occurs that every question we are asking a potential JV partner would be asking too. RBL (what is the resource, what is the potential resource?) how fast can the oil be extracted (is the waxing issue a perma problem?). The potential is obvious which is why we invested but accurately assessing the commercial reality must be nearly impossible. IMHO that is why the JV partner can't tie the knot...yet.

If Art really has invested over $1m then whatever we feel he must feel it too which gives me a level of satisfaction. But why is the JV taking so long? I guess the weather didn't help but it must be hard to assess the quantum due to waxing etc. A £ in 100 years is worth less that a £ today. What a JV does is massively speed up extraction so that the 100 years becomes 10 years and the NPV goes through the roof (as well as suppling money and expertise). But how do you do a deal with waxing issues and an o/s RBL? I have a B/E here of 20p and still expect to do Ok but this 1000 to 1 consolidation makes me shudder.

Gas on tap , I suggest that you look up gas prices per therm on tradingeconomics.com. Price has gone from 100 to 73 in the last month. GL missed the spike precisely as I forecast last year (the posts are on record). We need to hope for an uplift. We made our hedge provider very wealthy and then ramped up production just when prices fell. Thus this is now a long term haul to turn around debt etc.