Member Info for Scot126

18:16

Enough of the personal abuse, chrisev1. Where's your considered response to the *facts* highlighted in the posts? What about your suggestions for tweaks to the assumptions in the calculations?

If you don't have the evidence to make a logical rebuttal then are we to assume you agree with the content? If that's the case, how can you possibly encourage other forum members to report or abuse me when you, yourself cannot identify a single error or miscalculation?

taximan57 - you wrote, "One final point, as a LTH I don't want to be told what is wrong with my holdings, I just want to chat with like minded holders who all hope one day to actually make money. No lectures required."

I understand what you have described. It's completely unrealistic but I can see that's what you would like,

In turn, I want to chat with co-owners of a shared asset whom all wish to arrive at a consensus understanding of the *facts* of the investment case. Thereafter what we choose to do with our own investment funds is up to us.

[Part 3, continued from Part 2 below]

(viii) Using Friday’s closing prices of 0.225p for 88E and 32.6p for PANR, please find below an updated comparative valuation of both companies.

Assumptions:

GBP:USD = 1.237

88E SFS CoS = 50%

88E SMD-B = 81%

[In light of the recent flow test results, I assess most analysts would lower significantly the Chance of Success for the SFS and SMD. For the purposes of this exercise, I will retain management’s guidance. However, I will re-calculate the comparative valuations below using, I suggest, more realistic and downgraded Chances of Success.]

PANR CB outstanding = US$27m

SOTP for 88E: Namibia £2.4m (acquisition cost, insufficient empirical data, option value for now); Longhorn £6.3m (revalued from total investment of £12.1m due to underperformance of asset); Leonis £1m (insufficient data, option value for now); Umiat & Peregrine £0 (stranded and poor quality asset).

A downdip, lower classification, questionable commercial 88E Phoenix recoverable barrel in the ground is valued by the market at 18.2p.

An updip, higher classification, fully diluted, commercially confirmed (management and Schlumberger) PANR recoverable barrel in the ground is valued by the market at 13.8p.

[Revised value per 88E barrel using *downgraded* CoS for SFS (from 50% to 35%) and SMD (from 81% to 40%) due to disappointing flow test results would see each 88E Phoenix recoverable barrel in the ground valued at 24.9p. Note that I am not using olderwiser’s Netherland Sewell “shrinkage of BFF” logic as a readacross. Had I applied olderwiser’s analysis, an 88E barrel would be valued well in excess of 24.9p. I have kept the NSAI BFF P50 estimate at 102mmbo (net of W.I. but pre-royalties.]

Bearing in mind the disappointing flow test results and 88E’s demonstrably dangerous cash position, I cannot justify an 88E barrel in the ground being valued at any premium to a PANR barrel, never mind a premium of 32% - 80%.

Happy to discuss the contents of this post. /end

[End of Part 3]

[Part 2, continued from Part 1 below]

(v) Despite investing in producing assets in Texas (Feb ’22) to deliver dividends which would then be applied to funding future exploration and drilling activities, Project Longhorn has clearly underperformed all expectations. The initial investment of US$10m has seen a further investment of c.US$5m (in new acreage and workovers) and production is approximately the same as when initially purchased. There is a plan for 88E to invest a further US$3m to drill two new wells in H2’24, with a US$5m debt facility available for same.

At time of writing, and despite the redundancy of 88E’s COO on 29/4/24, 88E’s dividend from Longhorn does not even cover the company’s G&A + leasing costs never mind contribute a single dollar to exploration and drilling activities. By any measure, Longhorn has been a poor investment.

(vi) Previous management, supported by the previous BoD, invested >US$60m in a flight of fancy which saw 88E a) buy *at a premium* another ASX listed Alaskan company in which ex-MD Dave Wall was the largest or second largest shareholder b) raise large sums of fresh equity capital to drill two wells at a location that, even had the results been stunning (they weren’t), the asset would have remained stranded for decades or forever c) issue billions and billions of new shares such that there are now 25.12bn SOI and the current BoD is understandably considering a share consolidation in the near future.

Without a share consolidation, noting and accepting the common consequences thereof, the company will have great difficulty recapitalising the balance sheet to permit them to pivot away from operating in Alaska and to shift the primary narrative towards Namibia.

(vii) The rationale for undertaking comparative analysis of 88E and its direct peer, PANR, has illustrated accurately the risk/return inherent in the investment cases of both stocks. The premium value 88E enjoyed when comparing a Phoenix barrel in the ground v’s a superior (geologically) PANR barrel in the ground has decreased markedly.

An explanation provided by analysts focussing on the fundamentals of the asset suggests this is due to 88E shareholders belatedly confronting the data-supported, scientifically-consistent assertion that the downdip portion of the shared reservoirs is negatively affected by the effects of Dmax in an already tight-ish formation.

[End of Part 2, see above for Part 3]

Let’s summarise the 88E investment case after a consequential week.

(i) Both flow tests conducted at Hickory-1 were, at the very best, ambiguous. More realistically, they were disappointing. Of note, the SMD-B data relayed collection of only four stk barrels in the tank. Some posters on this forum think that by endlessly repeating the word “successful” it will somehow transmogrify into “commercial”. The company has definitively *not* declared commerciality of their downdip acreage in these stacked reservoirs.

(ii) With the exception of Dr Staley, not one 88E executive or board member has invested a single Aussie dollar in 88E shares. The most recent opportunity to support a fundraise was at 0.23p in November ‘23. No-one within 88E thought that was sufficiently attractive to invest their own money. Illuminatingly, MD Ashley Gilbert elected to a) take his first bonus in cash v’s shares b) sold his £200k worth of performance rights in early 2023 and c) was presumably the owner of some or all of the 84m performance rights sold in January ’24.

(iii) I am delighted to be informed/corrected but I am having tremendous difficulty recalling a listed company having to issue two further ANNs/RNSs in response to multiple legitimate, fact-based enquiries requesting greater transparency, to which shareholders are certainly entitled. This reflects poorly on the 88E BoD and executive team. Attempting to obfuscate and divert attention away from empirical data collected in the field serves only to undermine confidence.

(iv) Cash position. The company informed the market they expect to complete payment of costs for this winter’s operations at Hickory-1 by the end of June ’24. 88E’s next payment to the Namibian partners is US$900k, due to be paid by 1/6/24. Unless 88E’s 25% Working Interest (W.I.) partner, Burgundy Xploration, pays all or part of their percentage of the costs by the end of June (US$3.625m) then 88E will, by my calculations, be insolvent. I contend that the combination of the disappointing flow test data and Burgundy’s obvious difficulty in sourcing funds for their share of *last year’s drilling* of Hickory-1 suggests a high probability they will default, with their W.I. reverting back to 88E.

At time of writing, I am unaware of any other funding options open to the 88E BoD except to execute a steeply discounted equity fundraise. I contend a significant discount to the current SP will have to be offered to potential investors in the fundraise because they will have taken note of the flow test results and will be aware 88E’s only field activity which is financed is shooting 2D seismic in Namibia in H2’24.

[End of Part 1, see above for Part 2]

01:34 then 02:21 then 03:40 then 03:43 then 05:53 then 06:10 then 06:17 then 06:26 then 06:50 then 06:57 then 07:17 then 08:54 then 09:22 then 13:24

After my exhortation to stop abusing olderwiser and for forum members to "read the information contained in his posts; interrogate the content; investigate the veracity of the information; follow the subsequent conclusions and acknowledge there is always more to learn from sector veterans" let's examine how the forum responded.

02:21 – reject the personality, no interest in the facts of the 88E investment case.

03:40 – attempt to damage credibility of me and olderwiser without straying into the facts of the 88E investment case.

03:43 – rejects chrisev1 inappropriate response.

05:53 – reply to fact-based point by Rabito57 is met with anti-science interpretation seeking to reassure himself, without a scintilla of evidence, of the robustness of the 88E investment case. Evidence-less explanation used to reject Rabito79’s factual content. Polite vote of thanks.

06:10 – 75% of the post discusses other posters and the remainder is a repetition of more anti-science nonsense.

06:17 – message to another poster.

06:26 – message to another poster.

06:50 – personal abuse, no interest I the facts of the 88E investment case.

06:57 – agrees with personal abuse.

07:17 – not interested in the facts of the 88E investment case, only the content of other posters.

08:54 – criticises everyone, lol. That said, doesn’t on the face of it express any interest in the 88E investment case?

09:22 – personal abuse, no interest in the facts of the 88E investment case.

13:24 – personal abuse, no interest in the facts of the 88E investment case.

The usernames don’t matter. Look at the content. This is a deeply unserious reaction to genuinely consequential news from 88E this week. You haven’t seem Olderwiser or Rabito79 or me behave in that manner. Respond to our content by fact-checking us, going through the scientific conclusions, going through the working of calculations, asking for sources or citations….quit the personal abuse please.

And for the umpteenth time, just because someone like Olderwiser writes content which has a negative bearing on *your* chosen investment does *not* mean he is lying or making stuff up or indulging in schadenfreude or working in a boiler room conspiracy.

I can promise you that the professional fund managers, analysts, corporate brokers, corporate financiers, bankers do not behave like the vast majority of posters on this forum. Maybe ask yourselves why that is?

23:48

chrisev1 - here's an idea for you. When you see "olderwiser" is the author of a post, just swap in your mind his username for "magpie5" and read the content, taking it at face value. Open your intellectual curiosity to reading the information contained in his posts; interrogating the content; investigating the veracity of the information; following the subsequent conclusions and acknowledging there is always more to learn from sector veterans.

On the presumption you're not a dentist, chrisev1, your conduct on this forum suggests you'd fancy undertaking your own root canal treatment! C'mon man, away from this forum you will surely have recognised many occasions in your life when you were in the presence of an expert in a specific field? An expert who made you realise your knowledge of the subject matter was amateurish in comparison?

Think, chrisev1, think. How many times has a listed company had to publish a slide pack and a "further transparency" RNS within a few days of the initial announcement? olderwiser spotted something didn't add up within a couple of hours of the SMD-B results. And if you don't think his analysis didn't prompt a veritable tsunami of questions to 88E management from shareholders around the world then you're being wilfully naïve.

Please stop abusing olderwiser and others. It's contemptible behaviour. Just because you don't like him relaying facts which challenge, and in many cases demolish, your poor understanding of the 88E investment case does not make him the bad guy. I continue to be amazed at the vitriol displayed towards him when your anger ought to be directed chiefly at Dave Wall, Erik Opstad and the previous board members, and secondly at the current bosses for trying to spin like whirling dervishes the disappointing data from the two flow tests at Hickory-1.

Https://twitter.com/88EnergyLtd/status/1781158508148437292?t=lv4T20JORZzvgVD7twZ3HQ&s=19

And there it is, ladies and gentlemen, the switch of narrative to Namibia.

*Opinion* - 88E has drilled its final well in Alaska as operator.

I can only imagine the avalanche of requests for greater transparency around the flow tests which must have overwhelmed 88E management to compel the company to issue this latest clarification.

IMO, 88E continues to gild the lily by describing the flow tests as "successful". Ambiguous at best? Underwhelming is what I'd go with.

The market is rightfully concerned about the implications of the flow tests and the company's cash position once the. Hickory-1 bills are paid.

This RNS offers no succor to shareholders on either front. You know what's coming.

20:05

Redirons - whipping up a campaign to report me and others like me is deeply unethical. I have not breached any of the lse rules. I don't abuse anyone. I don't disseminate false or misleading information - ever. I provide citations and links to source documents. Any calculations I post, I show my working. I am honest and ethical.

Just because you do not enjoy reading my content does not make it untruthful. You have no reason whatsoever to report me except that you're down on your investment in 88E and upset with my content. How can you possibly think it ethical to ban me when you have not identified a single instance where I have broker the lse rules.

If Admin do indeed investigate your supposed report about me, why don't you refer them to a post of mine which has been dishonest or untruthful or inaccurate? You won't be able to because I have only posted facts and shown all my working on calculations.

If you make an accusation, you have to have evidence. You have none. Fact.

Here's an idea. Why don't you volunteer to collate questions from forum members and promise to contact the company seeking answers on their behalf?

No-one forced you to buy 88E shares, did they Redirons? It's past time you took responsibility for your own investment decisions. Instead of lashing out at folk who clearly have done hundreds of hours more research than you have, how about asking pertinent questions of 88E management to answer your concerns.

19:01

For the record, Brombarb is 100% wrong. For the umpteenth time. I seek price discovery....no more, no less.

That said, what a fascinating post.

"....were we to go broke or at least have to decide between Alaska and Namibia...."

My oh my...I wonder if the sentence above is the equivalent of Brom admitting, several months after the fact of course, to selling into the social media, US OTC punter inspired spikes of 2021 and/or 2022.

Brom is a capable fellow and admits to having clear communications lines with 88E management. If he disagreed with my Longhorn calculations posted earlier this afternoon, he would have fact-checked me.

To remind the forum of Brom's ability to be transparent when he chooses: "“I too have my doubts about some of our projects, Longhorn has been a slow burn despite the relatively high POO , when first announced Jan 2022 the wells were producing 300BOE per day, despite plenty of investment in workovers we are not producing much more today and nothing like the projections of 1300 BOE given as a medium term target.” – Brombarb on lse; 30/1/24 @ 16:58

I'm also certain that if Brom or any of the other prolific posters disagreed with my cash calculations, which in turn led me to question 88E's solvency, he would have rebutted my numbers.

Direct question for you, Brom. After that post at 18:13, you deserve it. Do you agree that if Burgundy doesn't pay 88E some cash before the end of June then, all else being equal, the company will be in danger of going insolvent? Therefore, do you anticipate 88E will have to source fresh equity capital imminently?

Oh, nearly forgot. You never did get back to the forum with the answer to whether Erik Opstad is still employed/retained by 88E? If not, why not?

I'm sure the forum looks forward to your response.

05:59

Taximan - your post timed at 05:59 is correct.

"Munnie, Dr Stephen Staley holds 14,342,717 shares, and all directors have share options outstanding."

The trouble is that he's the only 88E employee who has invested a single Aussie dollar to buy 88E shares. There are other very concerning signs that 88E insiders are not remotely aligned with 88E shareholders.

For example, MD Ashley Gilbert elected to take his first bonus in cash rather than shares. He then sold £200k worth of performance rights in early 2023. Worryingly, after Hickory-1 had been drilled and logged, cuttings analysed, etc in 2023, a further 84m performance rights were sold in early 2024 prior to flow testing activities commencing. Reading the Annual Report it is difficult to construct a scenario where Ashley Gilbert wasn't the seller or one of the sellers.

Standing back and looking objectively at Ashley Gilbert's decisions since joining 88E, it hardly paints a picture of confidence in 88E's assets or investment case, does it? And the BoD has hardly enforced a remuneration structure which ensures the executive team is financially aligned with external shareholders. Not good.

Something else really struck me at the time of the rights issue in August '23 and the November '23 fundraise. Dr Staley invested £4757 in the rights issue but no-one else associated with 88E invested a single dollar at 0.31p per share. Worse was to follow in the December fundraise. Not a single employee or director thought 88E was worth investing in when the new shares were priced at only 0.23p.

During my investment banking career I mostly dealt with instos rather than PIs. During fundraising roadshows for SMID cap corporates, there was rarely a meeting where the fund manager didn't enquire if management was supporting the fundraise and if so, what was the amount of their intended investment.

I wonder whether forum members will look back on 88E insiders' personal investment decisions and wonder if they should have paid more attention to the message being sent?

18:20

Stockraiser - that's odd, you didn't mention you wished one word answers when you posed the questions directly to me. Rude or just forgetful?

That's all very well Scot, but what prompts your strong reaction today? Q1 Report

Did you find this mornings RNS negative? Yep - see my posts on cash and insolvency.

Do you really think 88E are bust? Will be by end of June unless Burgundy ponies up (they won't IMO) or the company raises fresh equity capital.

Can you see any positives? Superficially, I quite like the look of Leonis but I am not armed with sufficient info to make a definitive judgement. Other Alaskan assets are stranded or low quality. Texas is lame and underperforming massively. Namibia - too early to say, they haven't even shot the 2D seismic yet.

TIA SR

"You're a real funny guy" Goldwater!

17:51

Thanks Goldwater, very thoughtful of you. In turn, I am very worried about your inability to do very simple maths. I'm sure a forum member will gladly volunteer to set up a Go Fund Me campaign to pay for a maths tutor for you. Best.

Go on then, amuse the forum. Why would PANR merge with 88E? Can't wait to read that thesis. Too many folk watching "Wolf of Wall St" and "Billions" on this forum, not enough reading of RNSs!

07:43

Hi Ramboraven - yes, you are correct that 88E management's new strategy is to seek a farm in partner(s) for their Alaskan assets, including Phoenix. But you have misunderstood the content of the Q1 Report if you have come away thinking they're seeking a a farm in ***rather*** than a capital raise full stop.

I accept the 88E BoD may have decided to transition away from Alaska to focus on Namibia and they now no longer wish to apply any large amounts of capital to their Alaskan assets ("Rather than a capital raise to fund [Phoenix]") in the future. My calculations suggest that once 88E pays its Alaskan bills for this season's operations, 88E the company will have run out of cash entirely. Thus my strongly held judgement 88E will have to raise fresh capital at a steep discount in very short order. Hope that makes sense.

17:34

Hi again Stockraiser - ok, your question is in earnest. Best idea, IMO, is to click on my username and you can read my reaction to the recent flow test results and the implications for 88E as an investment. It's also worth clicking on olderwiser's username and reading his posts.

If you wish a comprehensive picture of what I have researched and analysed then keep going back a few weeks. My message has been entirely consistent. Best.

17:09

Hi Stockraiser - your question suggests you may not be a regular reader of this forum? If that's the case, you will be unaware I have, literally and repeatedly, been begging forum members to google "Dmax" and "updip/downdip". I have urged them to apply that knowledge to 88E and PANR. I repeatedly urged them to look at the depth of burial of the stacked reservoirs in 88E's downdip acreage v's PANR's updip acreage.

If they didn't fancy educating themselves about the geology of the asset 88E had directed US$30m of investment towards in 2023/24, I provided a comparative analysis of 88E and its direct listed peer, PANR. At various times and mathematically irrationally, a downdip, lower classification 88E barrel in the ground has been valued by the equity market at a 25% - 200% premium to an updip, higher classification PANR barrel in the ground.

Astonishingly, an 88E shareholder can today sell their 16.3p per 88E barrel shares and buy PANR's 14.1p per barrel shares. I fully admit to being amazed at this situation!

Oh, and before 88E began its flow test operations this season I warned the forum using very clear language that 88E would be running out of cash after it paid its bills in Alaska.

[I fully appreciate that your post, if read through the lens of sarcasm, could be a rather humorous post. All the same, I've chosen to take it at face value!]

09:27

Fact check for Sharebel? False, big lie, massive lie.

As pointed out correctly by Tuffers, this post contains two huge lies. Sharebel states that 88E has made two "COMMERCIAL OIL DISCOVERIES".

This is a lie. Read the RNSs which describe the flow test results. Read the slide pack. Read the Q1 Report. At no point does 88E state that they assess the discoveries as being "commercial".

Buy/sell/hold 88Ebut please do not base your decisions on the content in this post timed at 09:27 today.

Sharebel goes on to allege his usual fantasy about market makers conspiring to damage 88E. Made up conspiratorial nonsense.

17:00

Ayecuramba - why bother with facts and maths when dreaming is so much more comfortable, eh? Pathetic.

16:39

Fact check for Sharebel? Falsehoods, and lots of them.

1) Cost cutting. The COO is departing on 29/4/24 so some action has occurred. Sharebel - what do you calculate is 88E's G&A, listing costs plus annual lease fees? Do you agree that these costs are the bare minimum required to keep 88E listed and active? What is your assumption for 88E's annual dividend from Longhorn. What is your assumption of 88E's future investment commitments if it is to execute its currently declared strategy (Longhorn wells and Namibian investment)? Are the cost-cutting measures sufficient such that the Longhorn dividend covers the costs of keeping the company going?

2) "and have now got a strong balance sheet." That is clearly made up gibberish. Look at the facts published today. Management's own guidance suggests 88E will run out of cash by the end of June. How you can describe 88E as having a "strong balance sheet" is beyond me, and I hope everyone else on this forum.

3) The data received from the flow tests of the Alaskan discoveries are indeed transformative. But not in the way you describe. The flow test results will result in 88E effectively withdrawing from Alaska as an operator. They're already prepping shareholders for this by referring to farm outs and 88E retaining W.I. v's continuing to be the operator.

4) You frequently accuse some forum members of spreading "FUD". Oddly, you never appear to quote example of this FUD, proving evidence these posters' content is demonstrably untrue/inaccurate/made up nonsense. It's about time you quit the angry shouting and bullying and started providing evidence to back up your allegations. Hint - I predict crickets.........

16:30

Taximan57 - I realise that's what you understand but it's not the complete picture, I'm afraid. I've done this this type of work since 1994. A company facing the cash difficulties 88E is currently facing can ask its shareholders for permission to restructure the company. Yes, the rules you quote are the day-to-day rules of the ASX and what companies can do with their share structure. I submit to you that 88E needs more serious surgery than you imagine. I submit they will need more radical restructuring than is permitted by the ASX rules you refer to. Any proposed restructuring will, of course, require shareholder approval but by that stage there are normally very limited options available if the company is to remain active and/or listed.

I know you don't attach any worth to my input, Taximan57. You haven't even bothered to thank me or even acknowledge the work I undertook to explain how 88E is affected by Longhorn's performance and how to calculate a boe and its revenue. So why don't you ask Brom or some of the other prolific posters if the content above is factual?