Member Info for scrwal

They will basically have real time results - see company tweet Aug 13 showing the surface well test equipment. Whilst the results won't be classed as official until "proper" lab testing is done they will be very accurate and for reporting purposes are the real deal - any lab testing needed will basically verify the on-site results.

You can already buy GTE on the LSE.

Also read note 17 on page 37 of the Rule 2.7 Announcement where it states new GTE shares will be admitted to the Official List and to trading on the LSE Main Market.

Interactive Investor allow you to hold AMEX:GTE in a SIPP, ISA, JISA and trading account - price currently is $7.62

You can also buy TSE:GTE on the Toronto exchange at C$10.41.

Strop - funding is required after the EWT which may not be covered by financing especially considering the lack of a track record in creating and completing a project. Yes there should be good results but that doesn't mean anyone capable of providing loan financing will pony up all the money as there is still a lot of risk. It's also naive for the company to intimate they can get loan finance to fully fund the next stage of development.

EXMEX - what particular aspect of the law is relevant or negates what I posted as I can't see it from what I have read on the subject.

The EWT is fully funded including a contingency. There will be no placing before the results are known - they will be getting real time results which may even be released to the market before the testing is finished.

Given the optimism over grades and flow rates it would be stupid to do an early placement.

Will there be a placing - yes it is inevitable unless a JV is in the pipeline. Will it hit current holders financially - no as even if there is dilution the share price will have risen giving the likely scenario that any discounted placing price will exceed the current price.

The original deal was 45m EST shares for DVK and a right for 75m EST shares when "upon

the confirmation of a mineral resource on one of the Licences of at least one million ounces of

gold equivalent at an average grade of at least two grammes per tonne of gold equivalent as

defined by an independent professional firm appointed by the Company to either JORC Code

or NI 43-101 classification standards." This was basically activated when the maiden JORC for Verkhuba was issued.

The shares bought back are cancelled - this is clearly stated on each RNS issued regarding the shares bought under the buyback programme.

I can sell at 0.725p and buy at 0.749p so the real life spread is much smaller

Not sure if BHP are interested in Verkhuba as the open pit and underground sizes may not be big enough. They are really chasing porphyry deposits which are a different beast and much larger.

Alex has clearly said that a sale will occur if it's good enough. The latest investor presentation states that the process is underway for partnership or sale.

It wouldn't surprise me that the non binding offer mentioned in the 3 April rns was for a sale.

June will be the big month when the Verkhuba options are finalised. I don't know if I want a JV instead of an outright sale as the sale would provide a load of cash.

The audit report is not qualified and is prepared on a going concern basis so the Auditors are happy that whilst the risk exists it is unlikely to crystallize especially bearing in mind the recent developments which supports that stance.

The relevant rns was headed as Initiation of Farm-Out Process for Verkhuba.

The process won't be finalised till June and as Crofton pointed out the rns states one non-binding offer has been received.

Obviously there are no guarantees of success but several companies have been interested as per the rns.

Buy backs can be good or bad. In DECs case they could be very bad if the share price meanders sideways. It doesn't matter what the underlying metrics show as the market capitalisation of the company takes a significant hit and DEC is currently in the bottom 5 of the FTSE 250. A large buyback would put it at the bottom and if there was any further price weakness then it could be looking at automatic relegation from the 250. It may be this that the shorters are looking at in the immediate short term or by the end of May with further attacks in the meantime.

TheTrotsky

DEC haven't done that in the past. On any acquisition they make they have reassessed the ARO and have capitalised that as part of the assets which they then depreciate over the asset life.

They are unwinding the ARO but have not hit the P/L with a one off set cost.

Note 5 gives more info but note 11 clearly shows the costs capitalised/released under acquisitions of Natural Oil and Gas Properties that relate to the ARO. These figures are also included in note 20.

I agree with the simplistic terms you put forward but that isn't what DEC have done in the main.

This is the 2022 Accounting Policy "ASSET RETIREMENT OBLIGATIONS

Where a liability for the retirement of a well, removal of production equipment and site restoration at the end of the

production life of a well exists, the Group recognises a liability for asset retirement. The amount recognised is the present value of estimated future net expenditures determined in accordance with our anticipated retirement plans as well as with local conditions and requirements. The unwinding of the discount on the decommissioning liability is included as accretion of the decommissioning provision. The cost of the relevant property, plant and equipment asset is increased with an amount equivalent to the liability and depreciated on a unit of production basis. The Group recognises changes in estimates prospectively, with corresponding adjustments to the liability and the associated non-current asset.

As of 31 December 2022 and 2021, the Group had no midstream asset retirement obligations."

TheTrotsky re your reply 15.03

The provision would normally be reduced by cash paid to plug the wells so that those costs incurred do not hit the profit and loss account. The part which has been capitalised as an asset is depreciated over the asset life and that is what hits the profit and loss over the asset life , you are in effect spreading the charge over a long period rather than taking an immediate hit with a "normal" provision eg bad debts , provision for a cost over-run or a provision for remedial costs ( eg builders for defective works).

The provision can also be changed as a result of lower cost expectations or any integral assumptions being revised. However this could lead to various items potentially being mis-stated as any change should primarily be reflected against the fixed asset costs but there is scope to abuse the system and release it directly to the revenue account especially if the provision is being reduced as that creates pure profit - the auditors should pick it up but stranger things have happened.

The problems with the ARO model as far as I am concerned is that the decline rate used is lower than decline rates notified by the company in other documents. The June 2022 supplement page 11 has a very clear major assumption of a 4.5% long term production decline rate. In any other document produced by the company the decline rate is usually twice this figure. The placing circular of 8 Feb 2023 page 6 has a paragraph about the assets being acquired and their decline rates with the company stating " On a pro-forma basis, the Company expects to have a company-wide average

decline rate of approximately 11% following the Proposed Acquisition, below its peer group." So which decline rate is accurate and why is he ARO model using such a low rate.

Furthermore in the circular, same page 2 paragraphs later the company states "The Company estimates

costs for P&A activities to be approximately US$40,000 – 60,000 per well" These figures have yet to be incorporated into any available model as the 2023 version has not yet been released.

Also for the first time the company in the illustration in the supplement states that no sinking fund is required as sufficient FCF will be generated - this is rubbish since in say 40 years time production will be much lower but plugging costs won't be so you have to build up a cash provision to cover those costs.

There may have been a broker downgrade today. On other advfn Investec is mentioned.

As regards the ARO the company has indicated the following 10 yearly targets for retirements - 4.500:14,500:19,000:19,000:15,000 - a total of 72,000. Currently they are retiring 200 wells annually.

The ARO provision is also a bit misleading as the bulk of it hasn't been charged against profits but is capitalised as an asset and then depreciated over the asset life.

All the previous ARO presentations have clearly indicated a need for a sinking fund - the model showed the build up of cash once al debt was paid off. To then state no sinking fund is needed because sufficient yearly cash flows exist is insanity. They only have the capacity to retire 500 wells annually and are actually retiring only 250 of their own wells. The last supplement indicates 4,500 retirements in the first 10 years and then 14,500 in the next ten years and 19,000 in the next two ten year periods,

I would guess that the dividend may well be linked to the repayment of the arrears which would be a prudent course of action.

Those production figures you are quoting are not what was said in the presentation. The question asked was in relation to time frames to get back to prior rates inferring if the pipeline opened and at no point has anything been said about significant increases in local sales. In fact the sales were referred to as being erratic .

The only comment was made regarding the physical limitations on road tanker usage with a max of c40bopd being possible if working 24 hours.

Hopefully sales increase but don't expect there to be much said about it unless there is a significant guaranteed increase.