Member Info for Scot126

Brom - Alkaid-2 lateral measures 5300ft with 30 multi-stage fracks.

Dear All – Canaccord published their quarterly O&G sector valuation tables on 14/10/22. As we’ve become accustomed, PANR continues to be the cheapest stock in Canaccord’s coverage on a risk/return basis. I’ll summarise below PANR’s metrics v’s the peer group of 16 UK listed companies.

PANR’s SP was 99p, v’s TP of 300p and labelled a Spec Buy. Brent assumptions for ’22 has reduced from $100 to $98; for ’23 from $90 to $85; for ’24 from $80 to $77. GBP v’s USD has moved from 1.25 to 1.20.

Upside to TP for PANR is 202%. For both Rockhopper and Southern it’s 179% and for Touchstone it’s 165%. The rest are all <111%.

One stock specific comment: “Alkaid drilling this summer was successful; initial flow test results due soon.”

PANR’s SP/central NAV is 99p/824p = 12%, v’s sector average of 50% and median of 49%.

PANR’s SP/full NAV is 99p/824p = 12%, v’s sector average of 46% and median of 46%.

PANR’s TP/NAV is 300p/824p = 36%. Orca Energy is the closest in that metric with 73%.

Ok, what’s this telling me? Well, IMHO, it shows that *for now* the market is perfectly happy to see PANR valued outside of the standard sector valuation metrics. The sheer scale of PANR’s discovery has an outsized effect on the calculations v’s the peer group. IMO the market is not only sceptical about the commerciality of PANR’s discovery but there’s an added layer of scepticism that the Oil in Place data is also questionable. FWIW the market is wrong about its OIP scepticism.

Whilst that’s kinda annoying for PANR shareholders who have been prepared to invest risk capital *before* the OIP data was confirmed by Theta West-1, AHS Baker Hughes and Schlumberger, it does offer an opportunity for those who are across the investment case when incoming news is published.

How so? If, and I repeat if, Alkaid-2 provides evidence of commerciality then the market will be *compelled* to begin to narrow the discount to fair value by not only re-examining the upside risk as it pertains to recoverable and contingent resources but also the upside risk provided by a re-assessment of the massive >23 bbo OIP declared by the company and its external consultants.

News? I’d have thought it’s possible we’ll hear something this week, maybe the week after? Stand by your alarm clocks! GLA

13:08
Unless there's very strong evidence of a disorderly market, the NOMAD will always advise 7am in the UK, being the location of the primary listing. Alarm clocks at the ready.

Not insulting the initial decision to invest, chrisev1. However, unquestionably I *am* calling into question the passivity displayed by 99% of this forum's members when confronted with a 2.5 year history of conduct by management which sees shareholders last in the list to be rewarded. This is not normal.

21:07
Hi tradedesk - nope, they're nowhere near fully funded for Hickory-1. I also noted a) no guidance to 88E's shareholders of the total cost of licensing the 3D seismic b) no guidance on the anticipated cost of Hickory-1 c) no great fanfare about farm out discussions/negotiations which is most unlike 88E historically in the run up to a drill d) no promise to their permissive shareholder base that Erik Opstad's ELKO won't be the prime contractor for the third drill in a row!

You lot are either gluttons for punishment, the laziest bunch of investors I've ever observed, the most naïve shareholders I've ever observed....or perhaps just the most philanthropic with your chosen charity being the "Dave Wall & Erik Opstad Sunseeker in the Med Fund". Wakey, wakey.

12:14
Hi maxwell1 - if gas was moving to surface as part of clean-up phase, presumably it would have to be flared off? Correct?

11:15 - perhaps industry practitioners would care to weigh in?

https://twitter.com/Adz_UK22/status/1579382030307315722?t=jNGWPnauoSNdSgsQ_hZqdw&s=19.

Thanks 3sands and dhb368 . Your responses to this appear to be consistent with my *understanding*. Not too long to wait now. GLA

16:31
Farmer cringsing - that's a bl00dy good question and one I found myself asking a while back. I am 100% ***happy to be corrected*** by people on this forum who may actually have undertaken such an operation in the field. My current ***understanding*** is that the plugs are all milled through in one procedure and it is not the plan to "mill out single plug/open and flow back single stage/collect single flow data" x30.

I completely agree with you, cringsing, that the single stage by single stage process would *appear* to be the way to collect the most data, wouldn't it? We also know from the webinars that different ratios of fracking materials (water, sand, proppant) and pressure was being considered for Alkaid-2 => data from each individual stage may differ slightly from its adjoining stages?

I would be delighted if a sector practitioner could explain to this forum whether, for example, there may be laws of physics which don't permit the "single stage by single stage" process v's a more simple plan of milling out all the plugs in a oner? Perhaps it's a cost/benefit/time question? Perhaps there's a danger of negatively affecting the wider reservoir if the "single stage by single stage" process is adopted v's the "mill out all plugs in a oner"?

Naturally the company and its contractors will have decided this weeks/months ago. I'd just be interested in being educated? TIA

12:56
The security in question is not an ADR. I'd urge caution on this question of fungibility. My *understanding* is that *all* stock has to be sourced originally from the London quote.

11.40
Mindbender - would be grateful if you could provide a source or citation for your understanding that the UK and US lines are fungible. TIA

Fri 18:21
In order to qualify as a social media influencer, marmaris, I am reliably informed you must have a six-pack or a b00b job. Which is it?

Website up and running fyi.

Company 100% aware of website issue....their service provider already working on it.

14:16
Yep, I saw that too.

13:52
Hi Splice - doesn't look too unreasonable to me. Just to remind folk, formal guidance is 150bopd per 1000ft of lateral. Alkaid-2 is an intentionally conservative 5200ft because it's the first production well. The company anticipates the laterals in full field development will be c.8000ft. Hope that helps.

Hiya Brom - could 88E not piggyback off Alkaid-1 and Alkaid-2 data (which will be known by then) and argue it's the same structure(s)? No harm in trying?

Your scenario...88E need to raise how much? $15m? $20m? More?

You're obviously been in touch with the company. Any luck finding out the total cost of licensing the 3D seismic? Also, did the BoD release the share sales cash to Erik, I mean ELKO?

11:37
See MagicMuffinman thread on Twitter. Hard to fault his logic.

10.36
You're 100% correct, chrisev1. I have repeatedly criticised the 88E BoD for allowing ELKO to sell shares during the drilling and logging of Merlin-1 and Merlin-2. No arguments there, that is a fact.

Sadly what you are failing to understand is that ELKO was able to sell whilst ***NEW*** and ***material*** data was being collected in real time and thus possessed information which would not be published and digested by all the other shareholders and the wider market for days and days.

The position with PANR is really very different. Folk like Brom and olderwiser and Blackadder will be able to confirm that flow tests sees data collected, recorded and stored at surface automatically. The fact that PANR's NOMAD and lawyers signed off on the oppies sales means that, as a question of legal fact, flow testing operation had not yet started. Fracking and plugging every 165ft! Yes. But no flow testing. As such, the three directors were not in possession of any material information which hadn't already been communicated to the market => all legal and ethical.

ELKO's share sales where they had real time data when folk like you didn't, chrisev1, is highly, highly, highly likely questionable. Those concerns about 88E's corporate governance getting any louder now?

C'mon SeaHawk, with the winter season approaching soon enough they'll be focussing on Theta West and Talitha for the next round of activity. In my model, Alkaid represents <10% of the asset base. Perhaps time to re-assess the likely location of the next operations? Alkaid-3 can be drilled all year round. Operations at Talitha and especially Theta West cannot. Trust that helps.