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On a like-for-like basis, using identical methodologies, an 88E barrel in the ground is currently valued at 22.3p v's a higher classification PANR barrel in the ground being valued at 12.7p.

This is as stark a pure value arbitrage as I have seen in my whole career.

If you are comfortable buying 88E shares at 0.365p right now, it is mathematically indisputable that you should be comfortable buying PANR up to 52p (v's 30p at time of writing).

Arb traders - where are you?!

Troughsnout/Brevarthan - it seems to me the good folks over on the 88E lse forum could do with reading your classically-trained prose. I can only imagine the welcoming garlands which will greet you as you share your, ahem, technical expertise with this cohort of expert practitioners. A truly special group of fundamental investors.

Do let us know how you get on, won't you? As an intellectual puritan and campaigning knight of truth-telling, consistency surely demands you contribute your analysis on that forum post haste?

09:12

Hi Selangore - PANR outstanding balance on its convertible bond is US$27m. When undertaking the comparative valuation calculation I fully dilute the SOI (at a 10% discount to the prevailing price as per the CB terms), swapping debt for equity.

88E has a US$5m debt facility from a Texas bank. 88E has not made it clear if they they may only draw down from the facility to finance work on Longhorn or if cash may be used elsewhere in the group.

09:22

SeaHawk - I note your argument. The comparative valuation is still applicable as you can make the exact same point about 88E's capacity to fund itself to full development. It truly is a like for like exercise, no question about that.

If an investor/trader believes 88E fair value to be 0.35p right now, this very minute.....then they should be comfortable buying PANR all the way up to a minimum of 50p.

At 0.35p, each 88E recoverable barrel in the ground is being valued at 21-22p. Each higher classification PANR barrel in the ground is currently valued at 11.9p.

This is, IMHO, as clear a valuation arbitrage as I've ever seen.

08:07

DavidWK - sounds like you have it all planned out. Trouble is that drilling a long lateral well of 5k - 10k feet, completing and fracking it, placing the well on a Long Term Production Test will cost at least US$20m-25m and won't happen before next winter unless a different location is chosen.

That means another 10 billion new shares to be issued. As a shareholder, are you happy with that? You ready to stand your corner?

07:36

DavidWK - this is a completely false statement. The ASX was not affected by technical problems in today's session. 88E traded at AU0.5c for most of the day and finished at 0.6c, equivalent to 0.31p.

Gman93 - instead of the personal abuse, how about providing the forum with your valuation model? Or is it simply that you already acknowledge your sole strategy is to rely on unsophisticated, naïve, credulous newbies to be sucked into believing the "to the moon" nonsense, unsupported by any facts or the truth?

Gman93 - is it safe to presume you believe it's irrational to value a downdip, Dmax impacted, lower classification barrel in the ground at a higher value than an updip, advanced classification barrel in the ground in the same reservoir?

In that case, by applying PANR’s implied value of 11.3p per recoverable barrel in the ground (as at cob on Thursday) to 88E, then 88E’s fair value should be no higher than 0.2p when it opens in the UK in a few hours.

To be clear, the 88E fair value of 0.2p assumes the second flow test at Hickory-1 (the SMD horizon) is also declared a success in a couple of weeks. This value arbitrage will not continue into perpetuity, it never does. PANR is massively undervalued v’s 88E ***or*** 88E is massively overvalued v's PANR.

If you disagree with the above so vehemently then instead of personal insults why not inform the forum, using accepted scientific data and industry valuation methods, why it is you earnestly believe an 88E barrel to be worth 50% to 200% more than a higher classification barrel in the ground.

It makes no sense and the vast majority of this forum's members know it to be true, or at the very least suspect/fear it may be true. Has anyone thought that the Aussies are the clever ones and that they've caught on before the UK and US?

Dear All - please see updated model below.

Assumptions:

- GBP:USD = 1.25

- 88E management guidance on CoS for the upcoming SMD flow test is 81%. I'm going to increase that to 100% so the calculation below *assumes both flow tests at Hickory-1 are a complete success*.

At Thursday's closing price, a fully-diluted (adding SOI to account for CB balance) PANR recoverable barrel in the ground is valued at 11.3p

If we apply that identical valuation to 88E's Project Phoenix barrels in the ground *and* we assume both the SFS and SMD flow tests are 100% successful then the net value of 88E's share of Project Phoenix is worth £42m. Add on £2.4m for Namibia and £6.3m for Longhorn and 88E's fair value is £50.7m, or 0.20p per share.

Yes, you all read that correctly. Even if the impending SMD flow test is also labelled a complete success, 88E is overvalued by 20-30%.

"But, but, but......an 88E barrel in the ground should be valued more highly than a PANR barrel in the ground!!" I have a one word answer to that plaintive cry. "Why?"

Why should an equity investor or an O&G company pay more for a downdip barrel than an updip barrel within the same reservoirs? Why should an equity investor or an O&G company (on a relative basis) pay more for a 'negatively impacted by Dmax' barrel in the ground v's a 'positively impacted by Dmax' barrel in the ground within the same reservoirs? Why should an equity investor or an O&G company pay more for a lower classification barrel in the ground v's a higher classification barrel in the ground within the same reservoirs?

The answer to those questions is that no equity analyst or O&G company will make that assessment. Not one. Fact.

If anyone reading this post genuinely believes PANR is fairly valued then they should also acknowledge the fair value of 88E is no higher than 0.2p as soon as it starts trading in the UK later today.

If anyone reading this post thinks the fair value of 88E after the SFS flow test news is, say, 0.4p when it opens later today in the UK then you are acknowledging that PANR should open at a minimum of 57.7p (v's close of 26.5p on Thursday).

Newcomers to this forum who don't wish to play a financial game of pass the parcel should think about the message in this post.

Dear All - delighted to read 88E's ANN in Oz confirming light oil flow to the surface from the SFS horizon at Hickory-1. Great news for 88E but even better news for PANR.

Cue howls of outrage from those who don't understand the shared asset nor the investment cases of both companies.

Fact 1: PANR does not have a single barrel for the SFS in its guidance. We know the SFS exists in an updip location within PANR's Ahpun oilfield so it is entirely accurate to state that PANR is now pregnant with an upgrade to its recoverable resources, with an upgrade to contingent resources to follow once the 88E IER on the SFS is received.

Fact 2: we know from the most recent Proactive interview with CEO Jay Cheatham that PANR's guidance does not include the acreage immediately to the "north of the boundary with 88E". I do not know the extent of this exclusion. Happy to be corrected but I don't think we've ever been told by PANR management? We *do* know that Hickory-1 is located 150m south of the boundary between PANR and 88E. We also know PANR management has used the Talitha #A data as a *base case* for their guidance on resource volume. I'm not certain, and I'm delighted to be corrected, but I *seem to recall* Talitha #A is located 5-8 miles north of Hickory-1? *IF* my memory is correct then PANR is now also pregnant with an enhanced upgrade over and above the simple inclusion of the SFS into its guidance.

Fact 3: 88E's unequal share (in quantity and quality) of the shared reservoirs are downdip of PANR's portion. All else being equal, there is no O&G analyst in the world who would insert in their model a higher price for a downdip 88E barrel in the ground v's an updip PANR barrel in the ground. And yet this is how the equity markets are currently pricing the two companies. This will not remain the case into perpetuity as many 88E shareholders believe. The fundamentals always out in the end. Always.

Fact 4: The scale of 88E's portion of the shared reservoirs is far smaller than that of PANR. For simplicity, I'm pretty comfortable using a ration of 1:10, 88E:PANR. If you wish to be conservative when doing your own calculations then perhaps use 1:8, but there's *no empirical evidence* to suggest the ratio is any higher than that, 88E:PANR.

I suggest not permitting the volume of non-researched 88E social media advocates to divert folk from remaining attached to the fundamentals. I will shortly update my model but ***even after*** the SFS flow test result of today, 88E shares *should* be trading at a *lower price* than the closing price on Thursday last week (0.26p). That's if you use the price per barrel for PANR's acreage of c.11.5p.

It's *possibly* too early to be sure but the muted reaction to the SFS flow test in Oz (unch at AU0.5c at time of writing) suggests the market is waking up to 88E being overvalued.

Dear All - delighted to read 88E's ANN in Oz confirming light oil flow to the surface from the SFS horizon at Hickory-1. Great news for 88E but even better news for PANR.

Cue howls of outrage from those who don't understand the shared asset nor the investment cases of both companies, lol!

Fact 1: PANR does not have a single barrel for the SFS in its guidance. We know the SFS exists in an updip location within PANR's Ahpun oilfield so it is entirely accurate to state that PANR is now pregnant with an upgrade to its recoverable resources, with an upgrade to contingent resources to follow once the 88E IER on the SFS is received.

Fact 2: we know from the most recent Proactive interview with Jay that PANR's guidance does not include the acreage immediately to the "north of the boundary with 88E". I do not know the extent of this exclusion. Happy to be corrected but I don't think we've ever been told by management? We *do* know that Hickory-1 is located 150m south of the boundary between PANR and 88E. We also know PANR management has used the Talitha #A data as a *base case* for their guidance on resource volume. I'm not certain, and I'm delighted to be corrected, but I *seem to recall* Talitha #A is located 5-8 miles north of Hickory-1? *IF* my memory is correct then PANR is now also pregnant with an enhanced upgrade over and above the simple inclusion of the SFS into its guidance.

Fact 3: PANR's unequal share (in quantity and quality) of the shared reservoirs are updip of 88E's portion. Therefore, all else being equal, there is no O&G analyst in the world who would insert in their model a lower price for a PANR barrel in the ground v's a downdip 88E barrel in the ground. And yet this is how the equity markets are currently pricing the two companies. This will not remain the case into perpetuity as many 88E shareholders believe. The fundamentals always out in the end. Always.

Fact 4: The scale of PANR's portion of the shared reservoirs is far larger than that of 88E. For simplicity, I'm pretty comfortable using a ration of 10:1, PANR:88E. If you wish to be conservative when doing your own calculations then perhaps use 8:1, but there's *no empirical evidence* to suggest the ratio is any lower than that, PANR:88E.

I suggest not permitting the volume of non-researched 88E social media advocates to divert folk from remaining attached to the fundamentals. I will shortly update my model but ***even after*** the SFS flow test result of today, 88E shares should be trading at a *lower price* than the closing price on Thursday last week (0.26p). That's if you use the price per barrel for PANR's acreage of c.11.5p.

It's *possibly* too early to be sure but the muted reaction to the SFS flow test in Oz (unch at AU0.5c at time of writing) suggests the market is waking up to 88E being overvalued.

Brevarthan/Troughsnout - increase your short, I beseech you. Tell Tom and the rest of the unresearched cabal to do the same.

Now then, the whole lse PANR forum awaits your apology and formal withdrawal of your "research" note, dated 26/2/24. A veteran industry professional, olderwiser, has brutally dismantled the note, identifying multiple errors of fact and interpretation. If you retained an ounce of integrity and honour you would have, at the very least, replied to his fact-based rebuttals. But greed, eh? Can't beat 'em, join 'em? The City didn't reward my intellect and classical education so to hell with probity, I'll cheat my way to my rightful financial reward. Ha! You have so much in common with Tom after all. Makes me puke.

Just think, Brevarthan, had one of your former sellside employers published your note they, too, would have had to formally withdraw the note from circulation. Yikes! How you have fallen....a finance professional to amateurish troll.

Big change to the business model.

1) Previous guidance was requirement for 1 Gas injection well for every 3 production wells. If the gas pipeline gets the go-ahead (and it sure looks like it to me) then project capex could reduce by c.US$7bn. That will have a MASSIVE effect on the NPV of the asset. Equally importantly, for potential partners, the IRR will improve markedly.

2) Maths. The guidance given on the sale price of the gas equates to a daily revenue of US$500k. That is a meaningful amount which when viewed in the context of a 40 year offtake agreement will surely be of interest to financiers.

The PANR project has been significantly de-risked today. More The stock should be miles up. Full health warning - I bought another 100k shares on the open!

Holy guacamole!

1) Gas offtake. The jungle drums were too loud on this one for it to be hot air. I must admit I thought we'd be giving the gas away for free to nullify the requirement for hundreds of rejection wells....but to hear we're hoping up a gas revenue stream for the next 40 years...wooshka! And looks like I'll have to investigate the Helium market also?! Will the SoA or Alaskan banks or Alaskan utilicos offer a finance package to PANR based on a 40 year offtake agreement? I'd have thought that is certainly possible?

2) I know we didn't get the names of the oil service firms but as JH said last week, "negotiations are live". They've described what a deal or deals would look like so let's see what happens.

3) Sounds like the KODIAK updated Netherland Sewell IER is being finished off and will be with us in next week or two. Fine - a few days delay is no biggie. Jay told us to expect very, very substantial upgrades in the Proactive interview of last week.

If Neth Sewell too busy to do the Ahpun IER by end of Q2 then fair enough to look for other firms. Sounds like that'll mean we get updated Ahpun IER and contingent resources before the end of Q2 so I'm happy with that.

Good stuff. Stock goes up. I wonder if we'll hear news from the Alaskan authorities over the next few days on the gas pipeline going ahead? I'll be keeping an eye out as PANR will easily be the most leveraged way to play that "new news" v's all the other Alaskan O&G operators.

Excellent stuff.

09:33

Hey hillbilly1 - be a clever chap and tell the forum where 88E's primary listing is located? Then ask yourself if access to the internet is limited only to people in the UK.

Jeepers. And for goodness sake, man, discuss the *facts* of 88E and not what time zone someone is located in. Get a grip.

[Part 2, continued from Part 1 below]

“In my opinion they will recover it without loosing nothing and also seems more like an equipment for producing than a drilling equipment.” Once again, nope they will not be recovering the associated gas. The gas will be flared. That is why a number of commentators have been actively questioning whether drive-by photos or satellite images show signs of gas flaring. like others, the absence of proof of flaring already alerted me to the probability the operations were running quite far behind schedule.

Well, I guess we ought to congratulate the reddit poster for getting something right in a paragraph of made up drivel. Hickory-1 was drilled *last winter* season (winter 22/23) and only flow tests are taking place this winter season, 23/24. /end

[End of Part 2]

00.00

A few thoughts:

1) I agree with those who feel the company had to update the market on the timing of the flow test. Perfectly understandably, expectations had solidified around a Monday morning ANN in Oz. Had there been silence the speculation would have been awfully loud.

2) For the less experienced folk reading this forum, "flow back" does not automatically = "oil is flowing". It is normal, nay expected, for the fracking fluids to (water, chemicals, sands, props) to flow back to the surface before the ratio of hydrocarbons (hopefully) increases as the mix turns towards the reservoir fluids v's the frack fluids. There may very well be hydrocarbons mixed in with the fluids flowing back in the early stages but that does not necessarily mean the data will end up supporting a commercial flow at the conclusion of the test period. It might, it might not. Therefore please discount as lies or miscomprehension any posts which suggest this. Whether you elect to attach any weight to what I post, or oldwiser or Rabito79 post, people who post such nonsense about "flow back oil flowing" are not to be relied upon. Equally, those who declare they already know "it's a duster", or words to that effect, are not to be trusted either. The truth is that no-one knows yet.

3) There's now zero question in my mind that there's been some sort of issue with the well/equipment/availability of contractors/completion services/frack services. To be clear, I don't have a scooby which issue or combination of issues has caused the delay ("in *part* by the weather") but 88E is now waaaayyyyy behind schedule. Expecting to be on site until mid-April was definitely not in anyone's plans for this season. Doesn't mean the news is going to be bad/inconclusive/good, but I sincerely hope that both flow tests are able to be completed this season. I note the company has sought to reassure the market about moving on to the SMD-B flow test *immediately* following the completion of the SFS test.

19:35

Redirons - the post you have copied over from reddit is complete, unadulterated gibberish. It makes no scientific sense whatsoever. Let's go through it and dismantle it so you don't un/intentionally misinform anyone on this forum.

“$EEENF they know that there is 100% gas, this is the quantity that they are testing to know the value." Nope, gibberish.

"They do not need to flaring the gas and waste it." Gas is absolutely anticipated to be produced at hickory-1 with any liquid hydrocarbons. However, as with all other exploration/appraisal wells in Alaska, the Dept of Natural Resources grants the operator a license to flare associated gas. Why? Because there is no means to collect, transport or use the gas on site. And it goes without saying there's no nearby reinjection well to reinject the gas back into the formation. So this sentence is gobbledyg00k.

[Part 1, see above for Part 2]

An fyi: like the LSE, the ASX is closed on Good Friday and Easter Monday.

20:01

10am Sydney time.

PS. The Pantheon mention is around 5min 20sec.

Finally! The Governor of Alaska, Mike Dunleavy, name checks when discussing major developments in Alaska right now. Willow, Pikka/Horseshoe and "Pantheon Great Bear". This is progress and will increase PANR's profile substantially.

hTTps://ceraweek.com/video-gallery.html