Member Info for Scot126

"For now I will retreat back to waiting and watching and holding mode."

GS - There's another task you're incapable of completing. Tsk, tsk, tsk.

11:21 Hi cbaron - very well-written post. Thanks for that.

Tues 23:34
Goldstinger - this thread's collective dim view of your conduct has got nothing whatsoever to do with whether a post does or does not "help the investment case". Rather, the content of your posts all too often is not rooted in fact and no proof or evidence is offered in support of your often fantastical conspiracy theories. There's an general view that you just make things up as you go along.

In addition, there's the really quite prolonged history of various posters providing long, detailed, factual and evidence-based answers to your many questions which a) go unacknowledged and b) you often proceed to dismiss these ***factual*** answers because if you were to accept their veracity it would demolish one or all of your many conspiracy theories.

Notwithstanding the explanatory paragraphs above, there's also the matter of your loathsome series of drunken posts directed towards me on another thread. And yet you still expect people to engage with you on an equal footing? [The drunken and filth-laced posts were removed by lse]

The Attenborough pecking order pseudo-science is nothing but projection on your part. You've admitted previously to being of reasonably advanced years. When are you going to gain the maturity to accept that in life there are occasions (every day in my case but obviously not in yours) where other people know lots more about certain subjects than you do? It doesn't make them better human beings or more clever or more successful.....some people just know more about certain subjects than others. Most children realise and accept this by starting secondary school. What happened to you?!

Your desire for PANR to retain 100% W.I. in the asset is noted. That's my preference too FWIW. But I also freely admit I am not in possession of the full facts. I am completely confident in the BoD's ability to work to ensure the best possible deal for PIs like me and I'm more than comfortable leaving them to get on with it. I have no intention of speculating on the terms of any deal in advance of reading the pertinent RNS because I wish to maintain and support the strong hand the BoD has in these negotiations.

"For now I will retreat back to waiting and watching and holding mode." Awesome, kindly do exactly that.

(Part Two, continued from below)

I'm starting to see posts about the timing of funding from the likes of GS and others on different forums. A quick reminder to newcomers that the funding for drilling Talitha-A was secured in the second half of November '20 and ice road construction began in the first 10 days of December. The Talitha ice road was completed by 5/1/21. Frankly, I would be *amazed* if PANR management hadn't already arranged for the assortment of service providers/contractors to begin work on a pre-arranged date "subject to funding being secured". That’s exactly what they did last year. Same goes for the rig and crew. I recall management were happy to go on the record stating their positive opinion of the professionalism of the crew/rig employed at Talitha-A.

I have *complete faith* management will deliver the winter programme as laid out in broad terms during the April/August webinars. I'll remind readers that this is the same group of executives who negotiated the PANR/GB merger for over 6 months in H2 2018 and not a peep was heard by anyone until the announcement was made. The combined PANR/GB management are, IMO, more than capable of negotiating a favourable agreement to secure the upcoming winter programme. Objectively, and all else being equal, I suspect it is easier to negotiate farm out terms in an $80 oil environment, with the Talitha-A VAS results in hand and having secured the Theta West leases at auction v's this time last year, wouldn't you?

PS For the avoidance of doubt, my *personal* preference continues to be to self-fund for one more winter season. However, it is my *opinion* a farm out is the more likely method of securing funding for the anticipated winter programme. /end

09:40
Goldstinger – I’ll try to answer your points in turn.

1) It’s got comparatively little to do with the wording in the TR-1s. I’ve told you before that the intra-party agreement within CHONS is private and does not require to be made available to anyone outside of the parties concerned. That said, I know/have met/am in contact with some of the original GB founders’n’funders. Before you or Jofhobbit go off on another of your bewildering conspiracy theories, I had not met one of these individuals prior to the PANR/GB merger, although I had met Riverstone in my professional capacity some time in 2013/14.

As I’ve informed you previously and repeatedly, the reason for the two classes of shares (voting/non-voting) was to provide a legal workaround of the RTO rules. Of the remaining CHONS holding of 118m, we suspect Farallon is likely the beneficial owner of the majority of that block but we don’t know if it’s 51% or 81%, for example? I am trying to find out the approximate % ownership of the 118m shares, Farallon:GB founders’n’funders. Once I find out, I will post it here.

From communications with some of the original GB f’n’fs we know that the intra-party debt is “very, very, close” to being repaid. The intra-party agreement remains in place and CHONS is not ready to be dissolved quite yet.

A tiny wee correction for olderwiser. On completion of the merger, CHONS owned 205,833,800 shares and now owns 118,330,855 so CHONS has sold 87.5m PANR shares since the beginning of 2021. [happy to be corrected]

Goldstinger – immediately after the merger was finalised, CHONS owned 102,471,055 non-voting shares. The reason there’s no need for any shares to remain non-voting under the current capital structure is that CHONS hasn’t supported any company fundraisings since the merger in Jan ’19 and therefore has been arithmetically diluted. In addition, CHONS is now miles below any ownership percentage which would transgress the RTO rules. Best practice on the part of any holder would naturally see non-voting shares being converted to voting shares, which is exactly what has occurred.

“I think all the non voting shares didn't count towards their holding percentage until converted.” For the purposes of TR-1 notifications, only the voting shares owned by CHONS expressed as a percentage of the *total voting shares on issue* is required by the stock exchange. However, for the purposes of the RTO rules the total beneficial ownership does become an issue, thus the requirement for the two classes of shares.

“This is the lowest their holdings have been for a while, isn't it?” Correct, lowest beneficial ownership figure since the merger.

(Part One, to be continued above)

(Part 2, continued from below)

But the main thing, Adz_K, is when conducting a comparative analysis of the two stocks, using the historically-accepted risked/unrisked model, and you have industry veterans/analysts valuing PANR at >3x 88E on any given day (Rabito79); valuing PANR >7x 88E on any given day (scot126); valuing PANR 10x 88E on any given day (@contrarian8888) and who all share their rationale and models btw. And the response from the prolific social media commentators on 88E? Nothing, nada, zilch, zero…..complete silence.

Summary? It’s fundamentals v’s hype where the fundamentals are overwhelmingly and empirically in PANR’s favour.
Trust that answers your question, Adz_K?

As for what you should do with your investment dollars? That’s your call, none of my business. You wanna trade the hype of 88E, knock yourself out. But unlike the members of the 88E cult, please be under no illusions that you’re trading hype and not fundamentals, in fact not even speculation built on fundamentals!

03:38
Hi Adz_K – I’ve seen your tweets and I *think* I understand where your post is coming from.

Here’s what happening, IMO, in a nutshell.

In March/April, whether by accident or design, the US OTC market went wild for 88E. The social media campaign which occurred was like a tsunami and gathered everything and everybody in their path. The trouble was, *and continues to be*, that the 88E valuation is running miles and miles and miles ahead of its fundamentals. It was running ahead of its fundamentals in March/April and it’s running ahead of its fundamentals right now, today.

That’s fine, it happens, no big deal, correct? The trouble is that these rather unsophisticated investors have adopted a cult-ish outlook and unwavering loyalty to 88E. They view any attempt to correct a falsehood as an attack on the company and, as a cohort, do not appear to have the capacity nor interest in separating the facts of the 88E investment case from the hype and speculation so beloved on social media.

Meanwhile, PANR (their northern neighbour on Project Icewine) has concentrated solely on the nuts and bolts of their investment case. For example, the data gained by Talitha-A was incredibly valuable and served to advance the PANR investment case massively. Merlin-1, on the other hand, was budgeted to cost $12.6m and came in at $29m. That’s bad enough but the results from Merlin-1 were inconclusive to negative and had to discontinue due to an equipment failure. And yet the cult of 88E could not seem to process these *facts*.

88E hype:

a) contractors accept shares for payment = good; contractors immediately sell those shares = ignore

b) inaccurate rumour circulates that ex-88E CEO, Dave Wall, has bought 88E stock in the market after he leaves the company = good; this proves to be factually incorrect = ignore

c) plans for Merlin-2 are announced for the 21/22 drilling season = good; no plan to flow test Merlin-2 (??????) = ignore

d) rumour goes round social media that Conoco are about to bid 10c per share up to $1 per share for 88E = good; confirmation that Conoco’s Willow project (on which Peregrine/Umiat depends) is looking at a “multi-year delay”, therefore NPV per barrel in the ground calculation automatically decreases = ignore

e) social media “influencer” and paralegal from New Jersey tweets that 88E has “delivered and then some” = good; multiple equity analysts and oil industry veterans express fact-based doubts about 88E’s geology and strategy = ignore

f) 88E and PANR both confirm formally that there is a geological overlap at Talitha/Alkaid with Icewine = good; investigation points to PANR acreage contains vast majority of the oil by volume (>90%) = ignore

(Part 1, to be continued above)

17:51
Fact check - Umiat is located on Federal land.

17:51 and 17:54

FORD707 - you're kidding, aren't you? Investing is all about "hype, sentiment and potential". You can't be serious.....was that some sort of joke, FORD707? If so, I don't get it?

Everyone and their dog knows I'm a fundamental investor. For anyone who considers himself a trader, there's a huge value arbitrage opportunity between 88E and NN. Perhaps that's more your thing, FORD707?

I suppose this thread is making tiny steps of progress in the journey towards reality. More and more posters are finally admitting 88E is a hype and sentiment trade only and that they recognise the fundamentals ***do not support*** the mkt cap of £200m.

Question for you, FORD707? Would you buy 88E shares tomorrow at 0.92p?

16:48 and 16:59

There's moral support on a tough day and then there's wilful ignorance. I contend Goldstinger's opinion is ignorance but Brom's content is something a great deal darker. Readers will note that Brom hasn't even acknowledged the ***mathematical fact*** that the NPV per barrel in the ground at Umiat/Peregrine today is *less* than it was yesterday. Just one variable in the calculation needs to be adjusted to reflect the extended timetable until Willow is available to be piggy-backed. Not one poster can deny this mathematical fact. No matter the futile attempts at deflecting, the maths do not lie.

Looking again at the pipeline eastwards solution. The gas pipeline parallel to TAPS is budgeted to cost c.$47m per mile. A Peregrine/Umiat/Icewine/TAPS pipeline will have a narrower diameter, but the construction will be on virgin land, crossing multiple rivers, on a caribou migration trail.....hell, let's just call it $10m per mile, shall we? 92 miles x $10m = approaching a billion dollars and how many years to completing construction?

Is anyone here seriously thinking any potential buyer won't be taking into account the capex cost of an eastwards pipeline ***before*** coming up with an offer per barrel in the ground then you're living in cloud cuckoo land.

All of which takes me back to something cbaron, Rabito79 and I have been suggesting for weeks/months now. Project Icewine looks to be 88E's best chance of achieving any value whatsoever for its loyal shareholders.

88E's own partners on Peregrine, a bunch of grizzled Alaskan veterans we were told, valued Peregrine at $28m plus add ons. Let's call it $30m because I'm in a generous mood.

The 88E BoD themselves value Umiat at $1m, from the purchase price.

Yukon? Entirely reliant on partnering with companies located to the west of Yukon and raising 88E's share of exploration, appraisal and development costs. I reckon $20m max but let's call it $50m because, as already stated, I'm in a generous mood today.

That's $81m plus Icewine plus cash at hand supporting a mkt cap of $275m. Thus, using my numbers, the market is ascribing $190m to Project Icewine minus cash of, say, $35m......call it $150m for ease of maths?

So there we have it. I contend the market is today valuing Project Icewine at $150m. My research suggests the maximum 88E can hope for from the "overlap theory" is 10% of NN's volume of oil resource. 10% = $150m, so therefore the owner of 90% of the volume must be valued at $1.35bn....isn't it? Nope, the NN is today valued at $743m.

QED if any 88E shareholder is implacable in their contention that 88E is today worth £200m, then the NN is selling at the equivalent of 0.92p v's the closing price of 1.65p.

QED +1. 88E is either massively over-valued or the NN is massively under-valued. Your call?

Anyone reading this who *wouldn't* buy 88E shares at 0.92p tomorrow?

More up to date guide on Alaskan pricing. The tough operating environment is a multiplying factor on the costs per km.

https://www.gem.wiki/Alaska_LNG_Pipeline_(AKLNG)

Is the pipeline eastwards a viable option? Current judgement has got to be that it's not.

You mean this Umiat?

https://www.rcinet.ca/eye-on-the-arctic/2017/08/21/arctic-alaska-oil-field-remains-alive-despite-bankruptcy-isolation/

At least we now have a definitive answer for the length of pipeline required for the eastwards solution - 92 miles. Now then, serious question.....how much is a 92 mile pipeline going to cost the owner of Umiat/Peregrine?

It may not be apples and apples but the estimated cost of constructing an 800 mile gas pipeline in Alaska was $38bn. So 92miles over virgin ground, on a caribou migration path, admittedly requiring a smaller diameter pipe.....how much time, money and legal challenges will that require before it's open for business? Anyone?

14:54
Indeed, alpha90, but what's the point in directing shareholders' funds towards a project which, due to its location only ever had one strategic buyer in mind.....and that strategic buyer is now looking at a "multi-year delay" in developing Willow? The northern route to market for 88E oil (at Umiat/Peregrine, if it's proven) has just suffered a crucial blow today because it relied on Willow's infrastructure. Peregrine/Umiat is literally and metaphorically at the end of the pipeline which *would have been* the northern route to market. Why would Conoco not just wait until Willow was 5 years into production before looking at Peregrine/Umiat? Willow, and thus Conoco, were essential to the northern route. If Conoco has no need for Peregrine/Umiat for the foreseeable future, who else is going to buy it?

Ah, but what about the 100 mile pipeline to the east solution? Ok, let's be serious for once. How much will such a pipeline cost 88E to construct? "Won't be our problem, we'll just prove up and sell on......at which point it becomes the new owner's problem." Yes, true......but the cost of the eastwards pipeline solution will be reflected in the NPV per barrel in the ground anyone is prepared to pay for Umiat/Peregrine. The sheer cost of the eastwards pipeline solution may render Umiat/Peregrine worthless.

Do readers now begin to appreciate why Umiat has never produced a commercial barrel of oil in 70 years?

With all the above in mind, a bunch of you will presumably be writing to the company asking legitimate questions about the wisdom of drilling Merlin-2? Or will platitudes from an anonymous avatar quell any stirrings of unease that the Willow news brought this morning?

88E's NPV per barrel decreased today after the Willow news. That is a mathematical fact. And yet the SP is up. That is *not* a sign of a rational market and Irrational markets are not perpetual.

Hiya Brom - you obviously have plenty of time to write posts today so you must just have missed my question. I'll have another go.

https://www.adn.com/business-economy/energy/2021/10/20/conocophillips-and-biden-administration-wont-appeal-court-ruling-blocking-permit-for-major-north-slope-oil-project/

The journalist is pointing to a multi-year delay in development of Willow. So, Brom, you obviously agree that mathematically this decision will have a negative effect on the NPV per barrel in the ground calculation for Umiat and Peregrine owing to the time value of money variable alone? The decision also, prima facie, adds another layer of uncertainty as to whether either asset will ever be developed in the future. The owner of Willow, Conoco, remains the only strategic buyer (owing to the necessity to piggyback Willow's infrastructure for Umiat/Peregrine to be financially viable) so they're not going to be approaching 88E anytime soon, are they? Why would they?

Do you therefore agree Umiat remains a stranded asset and Peregrine looks like joining it for the foreseeable future?

In the light of this news, do you think the 88E BoD ought to reconsider its plans to drill Merlin-2 this coming winter season? If Umiat and Peregrine are to remain stranded assets for the foreseeable future, spending shareholders' funds on drilling at Peregrine can surely no longer be viewed as an optimal use of available cash?

The owners of TAPS have a serious problem on their hands. They will have factored in those 100k+ bopd from Willow in their forecasts for future throughput. It is therefore a logical progression that this decision has just increased the NPV per barrel in the ground calculation for the NN and decreased the same figure for 88E's Umiat/Peregrine.

Can't help wondering if Erik Opstad and Dave Wall saw this coming? Looks like they bailed before the market woke up to the fact that Umiat and Peregrine both look pretty stranded for the foreseeable future. Unless 88E has a few hundred million dollars to construct a 100+ mile pipeline eastwards to TAPS? Hmmmm, nope, don't think it does.

Reaction anyone or just collectively sinking your heads further into the sand?

09:04
Indeed, Captain Hindsight. And you could have sold ASOS above £70 per share. What other blinding insights do you have for us today? Jeepers........

"With the deadline to appeal an August court decision come and gone, it appears federal approval for ConocoPhillips’ massive Willow oil project on the North Slope will be subject to at least a partial do-over, all but ensuring the development will be delayed multiple years." - Anchorage Daily News 20/10/21

Brom - do you agree, at the bare minimum, the NPV per barrel in the ground calculation for Peregrine and Umiat has decreased today v's where it was yesterday?

08:51
Hi Brom - any reaction to the Willow news and to the article written by Elwood Brehmer of the Anchorage Daily News?

Dear All - please see link below for an update on Willow.

https://www.adn.com/business-economy/energy/2021/10/20/conocophillips-and-biden-administration-wont-appeal-court-ruling-blocking-permit-for-major-north-slope-oil-project/

By any objective analysis, this is not good news for the SN. The journalist is pointing to a multi-year delay in development so, at the barest minimum, this will have a negative effect on the NPV per barrel in the ground calculation owing to the time value of money variable.

Umiat remains a stranded asset and Peregrine looks like joining it for the foreseeable future.

It highlights once again the tremendous advantage of being located on State land and being intersected by TAPS and the Dalton Highway.

The owners of TAPS have a serious problem on their hands. They will have factored in those 100k+ bopd in their forecasts for future throughput. It is therefore a logical progression that this decision has just a) increased the NPV per barrel in the ground calculation for Alkaid, Talitha and Theta West b) increased the attraction of PANR's play to the owners of TAPS and c) increased the likelihood of PANR's acreage being developed, and developed swiftly. Good stuff.

It's a pity for Conoco (Willow) and the SN but it is self-evidently a positive for PANR. A market reacting icily objectively and rationally will see the SN being sold off and those investors wishing to remain exposed to an Alaskan E&P buying PANR. Let's see what happens?

06.30
By any objective analysis, this is not good news for 88E.
The journalist is pointing to a multi-year delay in development so, at the barest minimum, this will have a negative effect on the NPV per barrel in the ground calculation owing to the time value of money variable.

Umiat remains a stranded asset and Peregrine looks like joining it for the foreseeable future.

(Part 4, continued from below)

Tue 12:58
Hi sittingbush - You’ll be happy to read that whether the company signs a farm out agreement in the next few days/weeks or not, it will not pose much if any of a barrier to the PANR BoD if they decide to put the company up for sale or not. This is one of the under-appreciated facets of the PANR investment case. It is in the *exceptionally rare* position of being a 100% W.I. owner of a potentially huge asset whilst being a relatively small and nimble corporate entity with only a handful of employees. The beauty of that scenario is the ability to make decisions quickly if warranted. As for Jay’s age and the express intention to prove up and sell on? I *think* Jay is in his early 70s but I’m happy to be corrected. My best guess? The company will be put up for sale following the winter 22/23 drilling season. I repeat, that’s a guess.

(Part 3, continued from below)

Sun 12:31
Hi Seahawk – I agree with your post with the exception of one word or suggestion. I don’t believe it is necessary nor advantageous to have a major partner up with PANR at this stage. Firstly, and really just for the record, whilst I suspect a farm out will be the option PANR chooses to fund the anticipated winter operations, my *personal preference is to go it alone for one more drilling season. That said, partnering with a major at this *relatively* early stage would, IMHO, reduce the jeopardy of a competitive bidding process in the future. I agree with you that if a major partnered PANR this month then they would undoubtedly be in the driving seat to “buy us out”. I admit that this is one of the reasons for my desire to go it alone for one more drilling season.

What’s the alternative? An oilco which isn’t a major? A specialist finance fund which seeks to advance the empirical data up the curve as expeditiously as possible, to advance up the value-add curve with the intention, like the PANR BoD, to sell at the point of maximum value *prior* to the necessity to attract the billions of capex required for full development plans?
Apart from that, it may interest some readers that ***if*** the PANR geological model and breakeven guidance is proven empirically then Seahawk’s potential target price of >£10 is a mathematical possibility.

Tue 11:29
FORD707 – not entirely convinced you’re correct about the “end of October-ish” timetable? During the webinar Justin Hondris referred directly to the calendar of events this time last year which saw funding secured by the last 10 days of November and the ice road beginning construction by the 10th of December. I’d be genuinely surprised if management hasn’t lined up these same contractors “subject to funding being completed”, wouldn’t you? Personally, I am happy to outsource this important task to the management. They succeeded last year when the POO was c.$40 per barrel *and* before the market knew about the extent of Theta West. That gives me complete confidence they’ll get it sorted for this coming winter season.

Like you, I’d be delighted to read confirmation that PANR’s first lateral production well will be drilled in the spring of 2022. Before that, however, I’d be even more delighted to read funding had been secured to guarantee Talitha-A is flow tested and Theta West is drilled and tested.

Selling the company/asset outright? Personally, I doubt the BoD would be willing sellers *prior* to the results from the upcoming winter drilling season. That doesn’t stop anyone from making an approach, however.

(continued above)