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07:16

Here's your answer based on the fundamentals, NomOreBashers.

On a lfl basis (gross, pre-royalty, no gas, liquids only, P50/Best estimate) 88E's contingent resource of 136m barrels is approx 14% of PANR's 963m barrels of saleable liquids for the Basin Floor Fan. 88E mkt cap = £77m, PANR = £240m. Maths?

Report received from Netherland & Sewell.

1) If 88E shareholders wish to conduct a lfl (like-for-like) then they should use the P50 gross number for oil/NGLs for the BFF Lower. That's 136m barrels of saleable liquids to 88E.

2) I note the gas numbers but until there's a formally confirmed route to market then the likes of PANR, 88E and the rest of the North Slope operators can't place any value on gas. Equity market analysts won't ascribe any value to the gas, put it that way.

3) The reason I said 88E shareholders should be comfy with the gross numbers, as opposed to the net figure is twofold. Have a read of the two paragraphs below:

"Further, the certification of a Contingent Resource for the BFF reservoir allows the Company to focus the hickory-1 flow testing on the shallower reservoirs (SMD-B and SFS), with any further testing of the BFF reservoir optional and contingent on JV funding and approvals.

"The forward-work program to assess the feasibility of the commercial development of the BFF reservoir, either in isolation or together with the shallower reservoirs, as well as assessing each of the contingencies, will occur subsequent to the flow testing at Hickory-1 which is scheduled for the upcoming Alaskan winter operational season. "

That's 88E management once again preparing shareholders for news that Burgundy isn't going to be able to satisfy the cash call for Hickory-1. Thus, the whole acreage is very likely to revert back to 88E. As predicted correctly by olderwiser and me, the BFF was always going to the flow test most likely to be sacrificed. We could see it coming a mile off.

Again, if shareholders are seeking to do a lfl comparison for 88E and PANR for valuation purposes, then the 100% gross P50 (or Best Estimate) for saleable liquids *without the royalties subtracted* will give the most accurate comparison.

4) So what to think of the professional troll Oilman Jim/Louis10/Cat33. Yep, he was active around the bulletin boards and his own blog saying that 88E could be granted a larger number for contingent resources for their share of the BFF v's PANR's. Last week and today he was busy fluffing up the 88E shareholders when just a couple of weeks ago he published the following deceitful anlysis: "Few understand the geological differences between the two companies’ land tracts and, other than PANR enthusiasts, fewer are going to explain it..." (15/10/23)

If this forum wishes to place any faith in the false reassurance of a man who seeks to attract naïve marks into the trades he recommends, only to sell those marks his own stock, then that's your call. But don't say I haven't given you concrete proof from the horse's mouth that this greedy dissembler lies, lies often and lies completely.

OK, so what of the lfl figure? As I said, 88E shareholders should be comfy using the gross Best estimate for the BFF liquids, so 136m barrels. PANR's equivalent number (gross, pre-royalties, no gas) is 963m barrels. Do th

Reply to Redbeardoil2; part 3)

6) I note you ask about the flow tests and the risk of Burgundy not coming up with their share of the costs => inevitable curtailment of flow tests being planned and/or a cash raise. Let me be crystal clear again, I massively want 88E to complete a full suite of flow tests. The more data the better, no question. However if I was in Ashley's place, I've already told my shareholders the SMD and SFS are my primary targets *plus* I know the BFF data from PANR's nearby Talitha #A well => then cutting the BFF flow test from the program looks like the most obvious decision. I don't want everyone on the 88E forum whinging that I should have warned them about the BFF being the flow test most likely to be discarded when that's what I thought immediately having read the 88E qtrly report on Tuesday.

Could 88E do a cash raise between now and mid-December to make up for the Burgundy shortfall? I suppose it could be tried but the recent rights issue only saw a 25% take up so I wouldn't be overflowing with confidence on that score, would you? Regardless, if Burgundy doesn't come up with their share and even if the BFF flow test is discarded, 88E are going to be running on vapours at the end of this coming winter season. And you reckon drilling a US$40m well at some point in 2024 is a possibility? For the record, I don't.

7) You also state that ideally you'd like to see 88E go it alone, "invest in personnel and equipment". With what, Redbeardoil2? 88E will be out of cash by April '24. You've already done more work than 99% of your fellow shareholders by working out that Longhorn doesn't even cover G&A + listing fees + lease fees. Absent a farm in, I just can't see how the investment you wish is going to happen, can you? And why would someone farm in to 88E when PANR is larger in scale, has better reservoir characteristics, possess years' more data and cheaper on a per barrel basis than 88E? It just doesn't make sense, does it?

8) After your fact-seeking questions, you go on to speculate the 88E SP could go to "1.5p, maybe 3p on good news"? Why? Why would that happen? The US OTC punters/nutters aren't coming back, you must surely accept that? 1.5p equates to £330m, 3p equates to a mkt cap of £660m. If PANR can't get there with a Netherland Sewell report confirming 963m contingent barrels of saleable liquids with tonnes more data than 88E, tell me why such SP moves could happen to 88E?

(End of Part 3, see above for Part 4)

Reply to Redbeardoil2; part 2.

3) [continued] Ref. share consolidation. Dave Wall was on record saying that he would not initiate such a corporate action. Just wait until the casino players arrive for their annual game with 88E. I swear to God that a share price moving from 1c to 1.1c is viewed far more favourably by the OTC ingenues than a share price moving from $1 to $1.10.

4) Your point about 88E being attractive to PANR one day? Personally I doubt it. PANR will look to qualify the updip "chimney" of Kodiak before spending a cent 88E's downdip, lower quality portion of the reservoirs. Why wouldn't they chase the chimney where the best quality characteristics are located, 37% of which is classified using traditional criteria as conventional? You'll also perhaps be aware of my strong contention that I cannot, despite using my most generous assumptions, value 88E using the declared fundamentals at anything higher than 1/7th of PANR's mkt cap on any given day. But that's your call.

5) You ask about the perm and porosity ranges. I am comfy enough taking 88E at their word and that the ranges published are accurate. The trouble I have is 88E's historical record with obfuscation, eg. using Pmeans to boost the recoverable resources figures on every well they've ever drilled. So a range of, say, 9-12% may indeed be accurate but there's an exponential relationship as the % rises to the quality and recoverability of the reservoir in question. Does 88E management tell 88E shareholders that, say, 90% of the reservoir has a perm of 9%, 7% of the reservoir has 10% perm, 2% of the reservoir has 11% perm, and only 1% of the reservoir has 12% perm. I just painted an extreme example of course but do you get my point? The range may be correct, but the greater the proportion of the reservoir with 12% perm, the greater the value we can ascribe to it. But 88E management don't give ever give that granularity, which makes me uneasy.

That wooliness combined with 88E's history of poor disclosure *plus* the effects of Dmax *plus* the clear explanation given by PANR about the BFF reservoir characteristics diminishing south and southwestwards from Theta West-1 to Talitha #A in the BFF (see PANR webinar) should, IMHO, be ringing alarm bells about the Hickory-1 BFF number (is it c.350mmbo?) within the c.580mmbo being targeted in this winter's flow tests.

(End of Part 2, see above for Part 3)

Hi Redbeardoil2 - Your post prompted me to recall that I owed you some answers to some factual questions you have posed.

1) For 88E to construct a roadside gravel pad, drill a 10k ft lateral (into which horizon?), install surface treatment works....yeah, maybe US$40m is a reasonable guesstimate. Three massive problems I discern which make this activity exceptionally unlikely in the timeframe you describe.

(i) What to do with the attendant gas? Quite rightly, the State of Alaska won't allow flaring into perpetuity. I guess 88E could reinject the gas into Icewine 1 or 2 but that would involve a pipeline. Cost of construction? Time taken to construct? Would such a pipeline be permitted as it wouldn't be a piece of permanent infrastructure if/when a larger development occurs?

(ii) Cost of trucking and treatment by Hilcorp prior to 88E's crude entering at Pump Station No 1 wipes out any profit; refer PANR's Alkaid-2 oil produced by the LTPT. QED, your idea doesn't make economic sense. Certainly the data collected by a LTPT of, say, the SMD or SFS at Hickory-1 would be valuable but will the 88E shareholder base see it that way if it doesn't deliver a profit?

(iii) This may lead to gnashing of teeth on this forum but I have seen no evidence of 88E's ability to raise US$40m+, have you?

2) I am glad you acted to protect the 88E BoD from a spill, and worked for them to remain in place. The new management has been handed a very tough job. Dave Wall and Erik Opstad used 88E as their personal ATM machine for years. Ashley has inherited a nightmare. From the looks of things he's doing as good a job as can possibly be done. I don't like 88E's continued use of Pmean stats and I certainly *didn't* like their continued inclusion of the Kuparuk numbers in the Hickory-1 total target = the opposite of transparent. I also believe 88E to be, hmmmm, economical with the data when it comes to apprising their shareholders of the possible/probable implications of the effects of Dmax and phasing risk on their downdip portion of the shared assets, but we'll talk about that later.

I have no particularly strongly held view about a share consolidation. It would appear to make sense to me but the Aussies and US OTC punters looooove the many decimal places in these penny stocks.

(part 1, continued above)

Reply to Redbeardoil2, Part 3.

...to make up for the Burgundy shortfall? I suppose it could be tried but the recent rights issue only saw a 25% take up so I wouldn't be overflowing with confidence on that score, would you? Regardless, if Burgundy doesn't come up with their share and even if the BFF flow test is discarded, 88E are going to be running on vapours at the end of this coming winter season. And you reckon drilling a US$40m well at some point in 2024 is a possibility? For the record, I don't.

You also state that ideally you'd like to see 88E go it alone, invest in personnel and equipment. With what, Redbeardoil2? 88E will be out of cash by April '24 and you've already done more work that 99% of your fellow shareholders by working out that Longhorn doesn't even cover G&A, listing fees and lease fees. Absent a farm in, I just can't see how it's going to happen, can you? And why farm in to 88E when PANR is bigger, better, more data and cheaper on a per barrel basis than 88E. It just doesn't seem viable to me.

After all your fact-seeking questions, you then go on to speculate the 88E SP could go to 1.5p, maybe 3p on good news? Why? Why would that happen? The US OTC punters/nutters aren't coming back, you must surely accept that. 1.5p equates to £330m, 3p equates to a mkt cap of £660m. If PANR can't get there with a Netherland Sewell report confirming 963m barrels of saleable liquids with tonnes more data than 88E, tell me why it would happen?

You say I give "investment advice". I don't and never have done, I'm not licensed to give advice to anyone. You'll either be a gentleman and withdraw that statement or you won't. Let's see what happens. What I have done is share my comparative valuation of these two listed companies who, as Dave Wall confirmed, share unequal (quantity and quality) portions of multiple stacked reservoirs. Redbeardoil2 - did you ever stop to ask yourself why PANR (with 3D seismic for a decade) gave up the lease blocks at its southern border....and why 88E with only scattered 2D seismic at that time, bought those blocks in the next auction? Who do you think knew more about the subsurface at that time? And who continues to know more about the subsurface now, especially ref. the BFF, the largest of all 6 or so reservoirs.

Take your point about 88E mentioning diversification when it can't even guarantee a full flow test program for Hickory-1. Personally, I think it's little more than corporate doublespeak. Sounds professional and reassuring but I can't see how such a strategy can be delivered.

I agree with you about Burgundy. Happy to be corrected but I understand they still owe >$3m from last winter's drilling of Hickory-1, yes? If so, it sure looks to me that they're having great difficulty in raising the capital. They'll have known they required capital for Hickory-1 as far back as summer '22, if not earlier.

Part 4 continued above.

Reply to Redbeardoil2, part 2.

Ref share consolidation. I know Dave Wall was on record saying that he would not initiate such an action. Just wait until the casino players arrive for their annual game with 88E. I swear to god that a share price moving from 1c to 1.1c is viewed far more favourably by the OTC ingenues than a share price moving from $1 to $1.10.

Your point about 88E being attractive to PANR one day? Personally I doubt it. PANR will look to qualify the updip "chimney" of Kodiak before spending a cent on the downdip, lower quality portion of the reservoirs. Why wouldn't they chase the chimney where the best quality characteristics are located, 37% of which is classified using traditional criteria as conventional. You'll also perhaps be aware of my strong contention that I cannot, despite using my most generous assumptions, value 88E using the fundamentals at anything higher than 1/7th of PANR's mkt cap on any given day. But that's your call.

You ask about the perm and porosity ranges. I am comfy enough taking 88E at their word and the ranges published are accurate. The trouble I have is 88E's historical record with obfuscation, eg. using Pmeans to boost the recoverable resources figures on every well they've ever drilled. So a range of, say, 9-12% may indeed be accurate but there's an exponential relationship as the % rises to the quality and recoverability of the reservoir in question. Does 88E management tell 88E shareholders that, say, 90% of the reservoir has a perm of 9%, 7% is 10% perm, 2% is 11% perm and only 1% is 12% perm. It's an extreme example of course but do you get my point? That wooliness combined with 88E's history of poor disclosure plus the effects of Dmax plus the clear explanation given by PANR about the BFF reservoir characteristics diminishing from Theta West-1 to Talitha #A in the BFF (see PANR webinar) should, IMHO, be ringing alarm bells about the BFF number (is it c.350mmbo?) within the c.580mmbo being targeted in this winter's flow tests.

Speaking of which, I note you ask about the flow tests and the risk of Burgundy not coming up with their share of the costs => inevitable curtailment of flow tests being planned and/or a cash raise. Let me be crystal clear again, I massively want 88E to complete a full suite of flow tests. The more data the better, no question. However, if it were me in Ashley's place, I've already told my shareholders that the SMD and SFS are my primary targets plus I know the BFF data from PANR's nearby Talitha #A well, then that's the one I would cut from the program. I don't want everyone on the 88E forum whinging that I should have warned them about the BFF being the flow test most likely to be discarded when that's what I thought immediately having read the 88E qtrly report yesterday. Could 88E do a cash raise between now and mid-December to make up for the Burgundy shortfall?

Part 3 continued above

22:18

Hi Redbeardoil2 - I am far from certain but I *think* your post(s) *may* have been collateral damage when the moderators decide to delete an entire thread on a forum as opposed to deleting a single post or single contributor's posts. In this case, it's a statement of fact that lse members from a number of lse forums have complained repeatedly about the conduct of Oilman Jim, known on this website as Louis10. I note that Jim has been prevented from posting the direct hyperlink to his substack (and maybe also his Twitter account?). As a result he now has to type out his suffix as "dot com" etc, etc.

As for your content, seems to be fact-based and/or fact-seeking so I can't imagine the moderators have focussed on your content specifically, can you?

Your post prompted me to recall that I owed you some answers to some factual questions you have posed.

-12/10/23 For 88E to construct a roadside gravel pad, drill a 10k ft lateral (into which horizon?), install surface treatment works....yeah, maybe US$40m is a reasonable guesstimate. Three massive problems I discern which make this activity exceptionally unlikely in the timeframe you describe.

(i) What to do with the attendant gas? Quite rightly, the SoA won't allow perpetual flaring. I guess 88E could reinject the gas into Icewine 1 or 2 but that would involve a pipeline. Cost of construction? Time taken to construct? Would such a pipeline be permitted as it wouldn't be a piece of permanent infrastructure if/when a larger development occurs.

(ii) Cost of trucking and treatment by Hilcorp prior to 88E's crude entering at Pump Station No 1 wipes out any profit, refer PANR's Alkaid-2 oil produced by the LTPT. QED, the idea doesn't make economic sense. Certainly the data collected by a LTPT of, say, the SMD or SFS would be valuable but will the 88E shareholder base see it that way?

(iii) This will lead to gnashing of teeth on the 88E forum but I have seen no evidence of 88E's ability to raise US$40m+, have you?

Btw, I am glad you acted to protect the 88E BoD, and worked for them to remain in place. The new management has been handed a tough job. Dave Wall and Erik Opstad used 88E as their personal ATM machine for years. Ashley has inherited a nightmare. From the looks of things he's doing as good a job as can possibly be done. I don't like 88E's continued use of Pmean stats and I certainly didn't like their continued inclusion of the Kuparuk numbers in the Hickory-1 total target = the opposite of transparent. I also believe them to be, hmmmm, economical with the data when it comes to apprising their shareholders of the possible/probable implications of the effects of Dmax and phasing risk on their downdip portion of the shared assets, but we'll talk about that later.

I have no comment about a consolidation. It would appear to makes sense to me but the Aussies and US OTC punters looooove the many decimal places in these penny stocks.

(part 1, continued above)

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