Member Info for Sageman

Newlunar, I think you have missed the point. There are no figures that are more "realistic". There is no CPR, No known extraction rate and no JV partner. One is thus left to make certain assumptions. Any one assumption can massively change NPV and therefore sp. It is why the institutions are not investing yet as they don't know what to pay.

Using the calculation below the reason why a JV has such an impact on NPV is that a) it provides expertise and funding but also b) It increases the speed of extraction. When doing an NPV one typically discounts the value of each barrel by circa 10% per annum. Thus slow extraction has a massive impact. I have used $1 per barrel as being ultra conservative. Clearly if a JV occurred and production was expediated a much higher NPV and therefore SP would apply and it is for this reason that others have produced far higher mcap with resultant SP. Again I hope that this is helpful. People are not ramping when they come up with £1bn plus valuations it is all in the assumptions but the upside is crystal clear.

I don't do fantasy numbers but in terms of commenting on this subject I would refer posters to calculations based on IRR and NPV. The whole exercise is designed to work out the current value of the assets taking into account costs of extraction and how fast. The lower the costs and the faster the extraction the higher NPV for the same size of oil reserve. Since much of the above is unknown an accurate calculation is currently impossible which is why the big boys will only play post CPR. But I would simply say this. Our MCAP is currently circa £60m. If we have 1bn barrels confirmed recoverable and then assume our share is 50% that is 500m barrels. If each barrel is valued at just 1$ in terms of NPV the company would be worth $500m which is £375m. Thus even taking what is deliberately a very conservative basis the share should 6 bag post CPR. One can come up with different calculations but this was my most pessimistic calculation on which I invested. I hope it is useful

Totally agree Sasa. Sadly some people will have gone in balls deep to start with and have had no opportunity to average down. I have been here for 5 years and got my average in the 3's but had placed this in the bottom drawer. The mine is a major national strategic asset with no access and lots of politics in the way. However, it will get built. The only question is when and to what extent PI's would be allowed to benefit. 7p would allow most to exit profitably but it is a low ball offer with a more reasonable offer being somewhat higher. Time will tell but AMC is now out of the bottom draw and I am daring to see a profitable exit. GLA

I go back to my post before the RNS. This is Russia. A bidding war would be great and I do not rule it out but in practice the board may have little option but to accept. Russia does not play by Queensbury rules….I always expected a JV or a buyout but hoped for the buyout to be at a higher level. Time will tell.

When the Russians decide they want to buy in practice you get little choice. I posted here last year about a case where I heard of a company who were literally given no choice whatsoever other than to accept a deal or face very unpalatable consequences. This mine is a core strategic asset . It will get built but probably not by AMC. A £100m offer is low ball but unsurprising and would enable us to walk away. As a long term holder my B/E is just under 3p so 6p plus would allow for a profitable exit. Not what I hoped for but a profit is a profit. GLA

All USA markets positive finished up - what a turnaround. Lets hope the positive tone extends into tomorrow

lows not loans - bloody predictive text..!

USA is staging a strong rally today from loans Dow was down over 1000 points now circa 150 points. When combined with XOP at 59 we have hope for a blue day. Today was an indiscriminate market sell off so an equally indiscriminate bounce will do me fine!

31.5 now to buy - we seem to have bottomed

It makes everyone nervous when the sp drops because it makes you question why. What have you missed in your research? Is there a placing due? I there a smoking gun? At times like this I always revisit my research and then I do more. I make sure that I have applied a cool sober head and been coldly analytical and accept what the research says and then act. I did that today and bought more! The reality is that people expect shares to be logical and actually they often aren't for long periods since sentiment is a powerful driver. Lastly someone asked about something other than oil and commodities to invest in when inflation bites? The answer is banks. Interest rates are always increased to stem inflation and banks love increasing interest rates as they pay no interest on current account balances. GLA

MrExec, I find myself in the same boat. I have read and read the RNS and done lots of research. I am struggling to see what I have missed and the more I research the more I realise that even without the discovery the increasing production combined with the price of oil makes this a very solid company going forwards. I can't see anything obvious that I have missed so I have bought more and will now just be patient. GLA

I don't think that you can underestimate the power of sell half on a double. Loads of PI's do this especially in high risk stocks. 18p on the 10th up to 36p . Take risk off the table and hold the balance. Even today 32p is tempting for someone who held at 18p since no one knows tomorrows share price. Personally I have done my research and been buying more today. GLA

Wookie, it’s a binary situation in terms of multi bagging. Imagine going out with a metal detector and finding loads of metal that you believe is gold. It isn’t worth much until it is confirmed as gold . at that point you get an instant relate. We have oil but how much is commercially recoverable? CPR awaited.

Monty but commercially it is only a monster if the oil is recoverable. We await the CPR and in the meantime we can all run potential valuation figures and get excited and there is no harm in that.

Wookie read the RNS. We have a potential monster discovery . We have hit the proverbial jackpot but it needs independent validation via the CPR ( competent persons report). If the CPR confirms a billion barrels in situ with decent recovery it is literally bingo.

I said a few days ago that in 35 years of investing I have never seen a share with greater potential and the various projections confirm this. Ultimately the CPR is the game changer we all await. I said 50% potential downside and 30x upside. Others see more upside. Either way best risk/ reward ratio I have ever seen. The drill is done. We just need confirmation of recoverable reserves. It is not an if , it’s just how much. GLA

HFB, funny you mention Exxon. If they do have 1.9bn barrels Exxon would be very interested..JV, buyout . Who knows.

The potential value here is unquestionable and we can all do back of an envelope calculations that show this with no ramping needed. We now need a CPR. How much is recoverable? At what speed and at what cost? When that is known a JV comes in to play. That is when the sp can multi , multi bag. For now it requires trust and a leap of faith but the big guys want hard facts. I have placed my bets and now I just need to wait and see if my faith was justified. I see massive upside perhaps 30x and 50% downside and a timeline of less than a year to know which way the cards will fall. The thing I need most is patience. GLA

I know what you mean - a black convertible Bentley with a linen interior would be high on my shopping list...we can all dream, lol