Member Info for Scot126

Understood and thank you for your reply.

Surely if the non-directional strategy you describe was already in place, I'd be aware of the short position from sources in the market who have access to the borrow data. There's no such position at time of writing.

Also, again following the non-directional strategy, with Alkaid-2 and Alkaid-3 hopefully producing decent cashflows by calendar Q3 and Q4 this year, the jeopardy of PANR option to elect to repay in cash further reduces the attraction of a total financial hedge, non?

Ok, mindbender, I "get" the description about 20 mini-CBs. In practise, however, there's not going to be a metaphorical wall of borrowed stock sitting in an iceberg at 78p waiting to hedge out the entire exposure. I've suggested hedging out 3 quarters of repayment exposure, for example. What would be the incentive for them to hedge much more than that when they have the quarterly "kicker" you describe plus the resets to protect their position?

I understand the revision process you are undertaking presently. In practice, the CB investor might hedge out two or three quarters of exposure max. What incentive is there to hedge out the full $55m exposure immediately? Just there to clip 4% or 5%? Thin gruel for a firm like Susquehanna, non?

Remember to look at the resets, which very neatly limit the exposure. I'll wait for your revision. Thank you.

13:28
Mindbender - I have just written a very similar explanation on Alpha Delta Victor Foxtrot November.

I have a favour to ask of you. Would you give me permission to re-publish your explanation below if I promise to give you full credit as the author? Thank you for your consideration.

18:33
Hi Tequilaterrier - NN stands for the Northern Neighbour, and SN stands for the Southern Neighbour. NN is Pantheon Resources and SN is 88E.

Well, well, well. The farm in terms were "a 10 digit size investment over three stages in growing increments for a stake significantly below 50%".

Jlite, you were right the first time. "for a stake significantly below 50%"

I take your point about the maths of just doing a simple takeover with the current mkt cap only being $750m. But would you sell at a quid? I wouldn't. Not a chance.

Huh, that's odd. Despite the legitimate, polite, logical and informed questions posed over the weekend not one of the prolific posters on this forum has bothered to even attempt to answer. Also, and I accept this will sound harsh, isn't it a rather worrying sign of groupthink and cultish behaviour that not one of the less prolific or newcomers to this forum has piped up to say, "You know what, I was wondering why X was the case too? Tell me, Poster Y, why you don't answer scot126's reasonable question on this subject?"

For those wondering why the 88E SP is down today, here's my *opinion*. Despite Brom's attempts to distract readers, it is a statement of fact that the risk a drilling permit will not be granted is still a risk, the extended consultation period is not a run of the mill action and maybe, just maybe, some are waking up to the NN's far lower risk, far higher return, massively larger scale, enhanced data collection, preferred prime location, lower cost of development, shorter timeframe to first commercial oil and who didn't realise 88E is a gigantic game of pass the parcel.

NB. 88E and the NN share a common asset at 88E's Project Icewine and thus comparative valuation is a legitimate analysis methodology. Despite the geological model indicating the combined oilfield is split 90:10 (NN:88E) the stockmarket is valuing the 90% in the NN's acreage at £550m and 88E's 10% of the recoverable oil at £300m. Mark my words, this mathematical conundrum will not continue into perpetuity.

To be crystal clear, I dearly hope 88E receives its permit to drill, Merlin-2 goes ahead safely, is a massive success and comes in underbudget. My issue is the fundamentals of 88E are massively misunderstood and grossly overestimated by the vast, vast majority of gullible US investors on the OTC market.

Gentlemen (and ladies), start your engines!

Also, what progress they've already made at TW over the weekend!!! Wow!

Please note, for a wee tiddler on AIM to be drilling a well targeting 1.4bbo of recoverable oil and still owning 100% of the asset is quite some feat. Shareholder can be justifiably proud IMO.

Good luck to all PANR employees and contractors in Alaska. I wish them a safe and successful winter season. GLA and don't forget to tune into the webinar this afternoon at 5pm UK time. Good stuff.

Fact check me, moda. Forget all this personal abuse nonsense. Fact check me? What are you scared of? Why is every single regular poster refusing to answer these questions?

Answer? Really simple. Because they're desperate to take part in the 2022 version of pass the 88E parcel. They cannot wait to fleece all these gullible Yanks.

And you have the brass neck to accuse me of being some sort of double agent, moda? Shame on you.

19:01
Hi moda - I "get" the defensiveness and unhappiness when the likes of Rabito79 and olderwiser post their research about the relative merits of the investment cases of the two companies if you only have a position in one of them. A couple of points in response.

1) The manner in which Rabito79, olderwiser and I research and model companies which share an asset is exactly how analysts in investment banks, fund managers and finance directors in the O&G industry address their relative merits. I know this because I was one these guys for >20 years. You can take my word for this if you wish or cast it aside. It doesn't change the facts of the matter.

2) Do you and the other readers of this forum note that Brom, liquid1, andy216, Slackbladder2708, ATrades, GS et al, despite having the questions typed out for them in most cases, show no interest in fact discovery? Polite, intelligent, legitimate, logical, rational questions have been posed and a) not answered by the author of >25,700 posts (how many???!!!!) b) not even posed by those who profess to wish to understand the 88E investment case?

Does this not strike anybody as odd? Even just a little bit curious?

Tell you what else would scare the pants off me? I'd be scared rigid if I saw that ELKO (Erik Opstad's personal company) had already sold their 2022 allotted shares. Is no-one asking themselves the implications of the decision to sell shares by the man in the world who knows most about Peregrine/Umiat, the man who saw the results from Merlin-1 before anyone else on the planet? Helloooooo......anyone out there???!!!

Here's the thing. folks. You don't have to believe me, this scot126 fella, what the hell does he know? Here's an idea, why don't you start asking yourself the questions posed by the likes of Rabito79, olderwiser and me? better still, ask Brom. Ask GS? Ask moda? Ask any of the regular posters? Fact check them? If there's nothing to hide or to be defensive about, then the answers should be forthcoming, non? That's what happens with nearly every company I've been involved with where shareholders investigate the fundamentals. Generally, if shareholders are comfortable with the fundamentals as they understand them at that precise moment in time, they're normally delighted to engage with others asking legitimate questions.

88E? Crickets........

16:34
Hi again liquid1 - undeterred, I see! Now then, this latest link goes through to an American who, on the face of it, appears to be a chartist. Fine, no worries.

However, this TA commentator then declares that $EEENF will be over a $1 per share if things go as expected. Let me be as blunt as possible. There is no a snowball's chance in Hell of 88E with its 14.8bn shares on issue being valued at $1 per shares between now and eternity. How so? Let's stipulate all three horizons which Merlin-2 is targeting come in and are adjudged to be legitimate discoveries. Let's say that's 650mmbo, in fact let's round it up to 700mmbo, ok?

What price would a potential acquiror pay for 700mmbo barrels in the ground? Let's look at the most recent concrete example of a transaction on the Alaskan North Slope, shall we? Oil Search (now merged with Santos, actually taken over if truth be told) paid Armstrong US$3.10 per contingent barrel of oil in the ground at Pikka/Horseshoe to the north of Peregrine.

Wow, that's a decent start you might be thinking to yourself? Actually, no. Santos/Repsol's Pikka/Horseshoe oilfield will requires c.$4bn to get to commercial oil production. They likely won't be producing until 2026 at the earliest. And they're a great deal closer to existing infrastructure than Willow and Peregrine/Umiat. So what? Well, the isolation of Peregrine/Umiat means it'll a) cost more to develop b) won't start developing (even on a success case remember) until the end of the decade at the earliest and c) means that the price paid per barrel of oil in the ground will be far, far less than the $3.10 paid by Oil Search in Q3'17.

And that's not all. Oil Search was buying into a project where 12 wells had already been drilled plus 7 laterals. Thus, Oil Search was paying $3.10 per CONTINGENT barrel in the ground. How many more wells will it take for 88E to achieve the same amount of empirical data? Another half dozen? Cost $150m to do so? How many shares will be on issue at that stage? 20bn shares? 25 bn shares? How many Alaskan winter seasons will it take? Another 3 or 4 maybe?

Net, net, net. Perhaps $1 per barrel in the ground could be paid? Let's call it $700m, divided by 14.8bn shares = US$0.0473. EEENF was trading at $US$0.03 on Friday. Hmmm.........

This guy on YouTube doesn't have a scooby and it his content is outrageous. I'm all for free speech an' all that good stuff but where does responsibility and regard for your fellow man come in?

What's that? Do you hear that? The music? Do you not hear it? It's the sound of this season's massive game of pass the $EEENF parcel where players are paying an entry fee of £300m for 10% of a contingent resource asset v's £550m for 90% of the same asset. I know what you're thinking, that doesn't make mathematical sense. Yep, I agree.

15:34
Hi andy216 - understood. Please note the following facts. For 5 or 6 years as a member of lse I posted on this forum on precisely one occasion. That all changed in March/April '21 when Dave Wall of 88E a) confirmed 88E's understanding that there's likely to be an overlap of a horizon(s) from the area around Talitha/Alkaid southwards and downdip on to 88E acreage.

It is standard practice for fundamental investors like wot I am to undertake comparative analysis and comparative valuation assessments where two listed companies have a shared asset. How do I know this? Because that's been a key part of my career since 1994. Trust that answers your question.

I'd be grateful if you would, in turn, answer a question of mine?

The market is valuing 10% of the combined NN/88E oilfield at £300m on the 88E side of the border. The same market is also valuing the NN's 90% of the NN/88E oilfield at £550m????? 10% = £300m, 90% = £550m. My question is as follows: do you know the statistical probability of the equity markets continuing to value the asset in the ratio described above?

The answer is nil.

There is a zero percent probability that the market maintains this mispricing. The maths, always, always, always comes out. Always. Good stuff.

Someone ask Brom the following. "From a legal risk management perspective, would you prefer 88E's Alaskan leases were a) located solely on State land or b) as they are now, located on a mixt of Federal and State land. NB 88E's operations this season at Merlin-2 are located on Federal land.

Another question for Brom. Again looking at it from a risk management perspective, would he prefer 88E to have all the permits required to drill in their possession today or would he prefer to still be waiting for the legal process to complete?

Actually, while we've got Brom, let's ask him this too? Would he prefer to be drilling a) a well targeting three horizons totalling c.650mmbo of technically recoverable resource with a 56% geological CoS over 100 miles from TAPS or b) drilling a well targeting 1.4 billion barrels of contingent resources located 20 miles from TAPS PLUS flow testing a further four horizons over a 3700ft proven (VAS study by Baker Hughes in 2021) oil column located 9 miles from TAPS PLUS two production wells within a stone's throw of TAPS and the Dalton Highway? He can pay £330m for a company undertaking scenario (a) and £550m for a company undertaking scenario (b).

Ask yourself why Brom doesn't answer these completely legitimate questions where two listed companies self-admittedly share an asset? Most of you will know the answer though won't admit it publicly. It's because Brom doesn't want the factual answer to be revealed and disseminated with his name attached to it.

Ask Brom if he sold 88E shares in March/April '21? He's already admitted to doing so but useful for the new readers of this forum to read it in black and white.

Hi liquid1 - the video from my fellow Celt from Duggan Capital is dreadful. It's just littered with factual errors. The guy is a trader, who knows he may be an extremely successful trader? But be under no illusion, that's what he is. I started in the global equity markets in 1994 and I sat beside folk like him for years and years. They gain a superficial understanding of a stock with catalysts (impending drilling activity in this case) plus a history of uninformed punters whipping up some type of hysteria as the anticipation of news flow rises.

And all of that is fine and dandy. I'm sure he uses all the relevant legal caveats, etc, etc. And I don't doubt for a millisecond traders will make money over the course of the next few days/weeks. The trouble is, those profits will be made off the backs of thousands of mug punters on the US OTC market. They'll be fed the red meat of misinformation and disinformation and distraction and obfuscation by social media influencers as clever and deliberately vague as Brom all the way to Twitter clowns aping the conduct of the now Federally-indicted Steven Gallagher, aka Alex Delarge.

Enjoy the party, but dance near the door.

PS Anyone noticed Brom is swift to reply to nice posts thanking him for his >25.5k posts but he just ignores *factual, polite and legitimate* questions? Most curious, most curious indeed.

PPS Ask yourself the following. You're the CEO of Conoco. Why would you need to purchase 88E's incredibly isolated Peregrine/Umiat leases in Q1'22 when a) Willow has just been delayed by 2 years b) Willow will require a minimum investment of $3bn prior to commercial oil c) Conoco owns the only infrastructure linking Peregrine/Umiat to TAPS and is thus the only viable buyer of those leases? *Even if* Peregrine/Umiat is saturated with oil, why wouldn't the Conoco CEO wait for 5 years, 8 years, 10 years before purchasing the leases from 88E? It's a serious question? Care to answer me?

13:04
FORD707 - that's a very honest and interesting post. Very illuminating. Thank you for posting.

Going back to your post timed @ 10:48 today. You wrote of the SN, "I do believe they have value and oil within their leases." There's that word "believe" again, rhymes with "hope" and "faith", doesn't it? Listen, they undoubtedly have hydrocarbons located on their leases. Trouble for them is that even if there are huge great pools of the stuff at Yukon, Peregrine and Umiat they are entirely, and I repeat entirely, beholden to supermajors and billions of dollars of infrastructure before a gallon of commercial oil will ever be produced in any of those locations. This is a fact, not an opinion, a fact. Thus the NPVs of these projects are tiny -> zero. You don't have to believe me, oh no. Just look at what the group of Alaskan oil veterans who made up APDC did *after* the results of Merlin-1. Do you remember? APDC sold their 50% of Peregrine back to the SN for $14m. Also a fact. Genuine question, honestly put. What makes you think a UK-based construction firm owner knows more about the value of some NPRA leases than Erik and all his oil veteran mates? They've given you the value of Peregrine in broad daylight, FORD707.....$28m total.

What of Umiat's 100mmbo reserves. Yep, as you say, the oil is there. But it's been sitting there for 70 years since it was first discovered. How come? Because it's sooooo isolated it cannot be produced commercially. Why else do you think Dave Wall was able to buy it for $1m??????

The only real value in the SN's leases are in Project Icewine. Those leases could be incredibly valuable some day soon. The thing is you can buy 90% of the combined PANR/SN oilfield for £550m and 10% of it for £300m. As the Americans say, do the math!

All of the above is from a fundamental viewpoint. I am not suggesting for one millisecond the SN's game of pass the parcel won't work for some traders over the next few days/weeks. But that's all it is, a massive game of pass the parcel. I say to you directly, be like Dave Wall, Erik Opstad, ELKO, APDC, Brom, jofshobbit and all the other players who make up the SN - be sure to sell some/all of your SN shares over the course of the current drilling season. I do not want to read in 2023 that you "did not sell a share in the SN" as you said about the 2021 season.

13:08
Hi andy216 - fair question if you're new to this forum. The answer is no. Let me know if you wish to read my rationale?

12:57
Hi bchm - aye, Brom's a good egg an' all that. Couldn't help noticing that he hasn't provided any fact-based or evidence-based reply to Rabito79? Hmmm, funny that.

11:05
Hi ATrades - I challenge you directly to fact check Brom and Rabito79. Once you receive replies from both individuals, let's see if you're capable of an honest assessment of both replies. Actually, before that, let's see a) if you even bother to fact check either of them and b) if either of them reply to your facts checks?

Or is it not about the facts of the 88E investment case for you and simply about a massive game of pass the parcel? You tell us? Because if that's all it is, I "get" that you're utterly uninterested in facts and it's all about disinformation and misinformation of thousands of credulous Americans.

09:28
Well there we have it, folks. In all my years following this forum this is the gold medal post by the forum's most prolific poster. What's the number now, Brom? You getting close to 26,000 posts yet?

FAO those with even a partially open mind. At no time, repeat NO TIME, has the company made any distinction between the cost of drilling a well and all the ancillary services required to enable the drilling to occur. Brom's explanation for the 130% cost overrun for Merlin-1 is a flat out falsehood. Challenge him. Fact check him. Ask him to detail or provide a quote from a member of 88E management which explains the total cost of a well (or two wells) does *not* include all the ancillary services too. So the costs of feeding the crew when they were on site, that's separate too? The cost of diesel, personnel, generators, vehicles.....none of that is included in the "total cost"????? Only the cost of the hire of the rig and the crew actually working on the rig doing the drilling?????

That is complete gibberish. Wake up, folks. You're being lied to.

Quick summary.

88E has three main projects: Yukon, Icewine and Peregrine/Umiat.

a) Yukon - 88E's Erik Opstad (88E's General Manager of Alaskan Operations) is on record in 2021 (Petroleum News) declaring his personal leases adjacent to 88E's Yukon acreage have a "negative NPV". QED Yukon is worth $0.

b) Peregrine/Umiat - Umiat has 100mmbo of reserves but is so isolated not one barrel of oil has been produced since it was discovered in the 1940s. 88E paid $1m for it. Let's agree it's still worth $1m. 50% of Peregrine was sold back to 88E in 2021 by a consortium of Alaskan oil veterans (***after*** the results arrived from Merlin-1) for $14m. So let's stipulate Umiat/Peregrine is worth $30m. That's what the company and Alaskan veterans value it at. Who are we to argue?

c) This leaves Project Icewine accounting for a cool c.£300m of market value. April '21 saw 88E formally publish its view that certain PANR horizons overlapped into their Central Block leases. FWIW I think they're correct. Looks to Rabito79 and me that the Kuparuk, SFS and maybe some SMD near the Dalton could overlap onto 88E's acreage? I think it'll end up being <10% of the recoverable oil across the totality of the combined acreage but, for the purposes of this exercise, let's say 88E has 10% by volume, ok? Thus, the market is valuing 10% of the combined PANR/88E oilfield at £300m on the 88E side of the border. Wait, what??? The same market is also valuing PANR's 90% of the PANR/88E oilfield at £550m????? 10% = £300m, 90% = £550m.

Hmmmm, and double hmmmm.

Something is very wrong here. Either 88E is waaaayyyyyy overvalued or PANR is waaaayyyy undervalued (or a combination of both of course).

I 100% concede many (most?) of this forum accept 88E is now a meme stock, completely divorced from the fundamentals. That's your call, but pls don't be left holding the baby when the music stops.