Member Info for Sageman

Just watched the Proactive investors interview with Arthur from the day of the discovery announcement. Great to hear the honesty in that he admits pure dumb luck. Also that they have spent time validating the find prior to the announcement as he says "the oil is there". Very reassuring. GLA

Essentially we have a cap and collar on 75% of production this year and 50% next. $55 min and $78 max so we now only benefit in terms of oil price rises on 25% of our estmated output. Great post Jimbob67

Thanks for the clarification. Much appreciated

HITS - serious question but why are you here? You don't own any shares and all you do is state the bleeding obvious. The price is at this level for all the reasons you state - which we all know about. The only questions are when will they get to gas production and will it be before the hedges bite and the creditors get antsy. This can still come out fine for some shareholders with a low B/E due to sheer dumb luck (gas prices) but the incompetence of the BOD is shocking.

Baron, unless I have read the RNS wrong its because 75% of our production this year is hedged at circa $55 so we only get to benefit on 25% of our production on the uplift in oil prices. In 2023 only 50% is hedged. You have to remember we were in dire straights with massive debt and those hedges were needed to keep the creditors happy and to protect us. There was no guarantee that oil would rise. If we get a new phase of Covid that is super deadly those hedges may be very necessary. GLA

I get the day trading but persoanally I am happy to hold knowing that as each day passes with oil at these levels Tullow gets stronger and the strangle hold that debt had on us lessens. I am looking towards 2023 and 2024 with no intention of selling in 2022. GLA

SFB is very clearly a complete management failure that will be rescued by sheer luck regarding the rise in gas prices. The cost of bringing it into production have far exceeded all forecasts and that is ultimately management incompetence. Costs are predictable. The rise in the price of gas was a complete stroke of luck. The entire board should hang their heads in shame. I get the feeling though that bringing this into production is the only way to get any shareholder value. The interested parties seem more akin to vultures wanting to profit from a fire sale. Time will tell..

Today I sold the very last of my shares here having held for circa 6 years. I sold the bulk a while ago but kept 2m just in case. The last straw was the RNS from COPL on Monday. A company with a similar dismal ride with confetti for shares that needed a 100 to 1 consolidation. They are now in production and have just had a major discovery. But why sell now? Their CEO has just invested £225,000 of his own money in the company post discovery clearly indicating his confidence and that he intends no further dilution. I then thought about the walking 4 letter word that runs U DOG Sando AKA Billy no shares the great diluter and destroyer of wealth. He never invests but sometimes it takes the actions of someone else to make it really hit home. Billy will continue to lie , over promise and under deliver and treat share holders as a free source of money to fund his hubris. Well Billy this train has left the station Choo choo!

It is very difficult to maintain discipline when the risk reward ratio is as exceptional as it is currently here. I have broken my 2% portfolio rule but only to 2.56%, that is enough. Any more and emotion clouds judgement. I am new here having purchased post RNS discovery but those shares are now in very sticky hands. GLA

Wise words Jiddy, I never invest more than 2% of our portfolio into any share and usually sell half on a double. I thought I recognised your name from the 88e board. I got of of 88e in profit last year having sat underwater for years. The one that bit me was UKOG but I sold out last year. I made the mistake of believing Sanderson,lol!!

Hi Jiddy, I don't actually think that this stock is speculative (compared with say 88e or Matad). We are an oil producer and the current SP barely covers what we already had prior to the recent discovery. It is by definition at the higher end of the risk spectrum but when the CEO puts in 225k of his own money and oil is at this price it bodes well. In terms of risk/reward I have rarely seen a better opportunity. GLA

just bought 56980 at 35.1 for the Mrs ISA..I told her she should have done it last week!

FWIW, I have Matad and 88e both making me good money . Both bought for this years drill hype. I also have a far larger amount here. I am still at a loss why people persist in this either or argument. I have all 3 and am enjoying the trip. The difference is I will trade 88e and Matad whereas I am here for the CPR and JV. GLA

FWIW I want to change my car. Last week I invested an additional amount here being the purchase price of a used car. The question is will I keep the old car? Now what I really want is a new Bentley convertible.... here's hoping for multi bags. GLA

I am not sure why posters here feel the need to DIS 88e. The opportunity here is all we need to focus on. I am invested in both and enjoying the ride, making money on both. Investment is all about diversification so it is actually healthy to have your fingers in a number of pies. GLA

I have a very different view of the current BOD than many here in that I am very pro them. They manage a company with high debt and at one stage with oil at $20 we were in serious issues. The hedged production combined with the recovery in poo has driven the sp up from 7p and virtual bankruptcy to our current position. Yes I was diappointed with the recent statement and the amount of hedging currently in place and with 20/20 hindsight I wish we could sell all our oil at current price per barrel. Yes I am disappointed by the recent pullback but I am not selling. The company is far more solid than when I invested (yes I bought my first tranche at 7p..by sheer dumb luck getting the bottom) and I see a bright future. For me this is an investment not just a short term trading position. GLA

Hi Doug, perhaps I should clarify. MM's can manipulate when there is low volume and we have all seen that. My point was that when the big money arrives demand constrains their ability to do so. My post was written to explore the reasons why the big money is yet to arrive because having read the board it is clear that many just don't get it. I hope I also got the message across about the importance of a JV to NPV and therefore the SP. To best understand this one needs to consider this . What is the value of a barrel of oil today? Answer $88. Next question how much would you pay me today for a barrel of oil that I will deliver to you in 5,10,15, 20and 25 years time? The market typically discounts the value by circa 10% pa thus is the JV speeds up extraction by a factor of 3 or 4 the impact on the NPV is considerable .

I am not one for conspiracy theories about MM's etc because if volume was huge demand would pull the SP higher. So why hasn't the sp re-rated? Firstly I think that there is distrust due to previous failures and dilutions but also because we have a tiny mcap and no CPR. PI's are happy to invest there own cash and have no one to answer to (eg a BOD or investors). In contrast an oil major needs actual numbers to justify a JV and similarly an analyst at an institution needs numbers to analyze. On top of that it needs to be worthwhile for the institution and typically an institution would not hold this type of share for anyone except very high risk clients and would not want more than 5% of the stock for liquidity. Assume the institution is investing £1bn and 5% of a £60m MCAP is £3m. It quickly become obvious that this company is too small to be worth consideration for most companies. Then let us analyze what we know about the new find The company expects that they have 1.25-1.64 OIP under their land and will own 55-85% of it. However, OIP is very different to having confirmed commercially extractable oil. One can take a punt (and PI's do) that a reasonable amount will be commercially extractable and that is the basis on which I have invested but oil companies and institutions do not take a punt they wait for the numbers. Thus if you believe the CPR will come out good you have an opportunity to load up before the big money arrives. I actually think there will be 2 main rerates 1) on CPR and then 2) with a JV. The relevance of a JV is that it brings about finance and expertise which accelerates the rate of oil extraction. The faster the oil can be removed the less discount that is used when working out the NPV. I hope this is helpful. Basically if you believe the CPR will come through good then you just need patience and be comfortable that increasing production will in any event be supportive of the SP.

I don't think so, being a discretionary fund manager myself I think that I can tell when a Bhoy is simply all at sea !

Devilboy, you clearly know bugger all about how intuitions and large oil companies work when it comes to investment! A PI plays with his own money. He has no one else to answer to. An analyst at an institution invests following robust analysis. They are investing other people's money and are accountable. It is not a whim. Similarly a JV partner would be investing very heavily in a project - several £m. Do you seriously expect board approval for such an investment with no CPR, no IRR and no idea of cashflow and NPV. What a dick!