We spoke to gas explorer and developer Sound Energy. Here are the latest updates from Executive Chairman Graham Lyon. Watch the full video here.
@Thirdtime lucky1. Sorry but I didn't see your 14.26 post earlier. Possibly the MM's are managing a large buy which has been set below 3p and they want to accommodate the investor. But there could be many other reasons. Tomorrow all may become clear.
The sp is being managed to keep the price below 3p. I've just made a trade,(a buy), which was one of the largest of the morning and it hasn't been reported. So up to now the MM's are working to keep the sp below 3p. Lets see what the afternoon session brings.
Interesting that some relatively modest trades, ( today 2,445,000, Im, 900,000 ) are being late reported. Same thing happened yesterday. And they were all buys. One has the impression that the MM's are keeping the brakes on from day to day. Until the final approval for the Placing has been given!? But they are definitely restraining the upward SP movement. When the brakes come off,(perhaps tomorrow), ZPHR will fly. The SP I mean!
In the 29 March RNS CH made a few very important points :
1. That additional Paradox wells will be drilled from the Bakken revenues.
2. That those revenues will amount to at least $8m in the twelve months after the Bakken wells come on line,with a price of $60 per bo.
3. That those revenues will be free of federal taxes.
4. That all this is virtually risk free since all the Bakken wells have already been drilled to target depth.
The aim, says CH, is to allow ZPHR to transform itself into a well capitalised, self sustaining platform in order to pursue,independently, the potential of the Paradox project which has 11 reservoirs to add to the lateral they are just about to drill. And all that in an environment of strengthening oil prices!!
I'm already well invested here but my confidence is telling me to go again, now that we are in a new ISA year. Can't resist such a golden opportunity!
not much wiser but the MM's didn't appear to be going anywhere today and the spread was tight giving the impression that they'd be as happy to buy as to sell. I had a dabble yesterday and hopefully we'll begin to see some more infinformation soon. From the company . I mean!
Your understanding of the earlier RNS's is obviously correct but I read from the 15 March RNS that now that the BOD has given it's approval for the State 16-2 ,( having, as you noted, hired the rig and the crew), it should be just a matter of deciding on the shape of the financial side. And I think that will be announced fairly soon. I remain as confident as ever! Go well.
Really good posts MALBRAD, Turtlewax and trig72. My thinking is obviously in line with MALBRAD'S although ,as a group, we are not too far apart.
Turtlewax, the $3.5 m for the lateral well was indeed alluded to earlier, as you say, but with the 15March RNS it became official with Board verification. That , I imagine, made the potential financiers indicate their preferences (to ZPHR), and , as Malbrad points out they will want to see a very clear route to profit which,(I think),will be an entry point well below 3p.
In relation to the possible MM involvement, trig72, you must know that they usually do as they are asked by the companies,(or the market). The MM's profit whether they manipulate the share price downward or allow it to rise. and apart from the one very large buy the trades since 15March would not have justified a 30% fall in the SP. It had to have a "helping hand". Just an opinion, of course.
Thanks, all three,for some very astute posting. What next? Data verification and the finance,I think.
If ZPHR raises that finance and then strikes oil this share price will fly. I think!
Prior to the RNS on 15 March which notified us of the Board approval of the State 16-2 lateral well the SP had risen to over 3p and there seemed a strong likelihood that,in the event of positive news, it would go much higher. But that same positive RNS brought with it the necessity for Zephyr to raise well in excess of $3.5m to even begin the drilling. An SP in excess of 3p would have made farmees or financial institutions of any colour reluctant to provide finance . and no doubt, they made that clear to Zephyr. So the word was probably communicated to MM's to reduce the SP dramatically. And that's exactly what they have done.
Current shareholders have no means of knowing what the sought after SP may be. The type and the number of trades over the past week has been of little consequence. The whole point has been the price action, which looks to private investors like a big deterrent, but we need to remember that, so far, Zephyr hasn't produced a barrel of oil. And it needs a lot of money to start that production.
The process should be. 1. The finance deal is made. 2. The SP stabilise and then it begins to rise again. Much depends on the scope and the type of the finance. We just have to decide as shareholders whether we want to leave or to stay. I think I'll stay for now !
movement in the SP. A lot of the trades seem to be of an administrative type that should not affect the Sp but the MM'S are still moving the price inexorably downward. The Sp has now dropped 30% in less than ten days and that despite excellent news in the last RNS. So unless there is a massive buy being negotiated there has to be something going on. The next few days must produce some rationale.
MALBRAD. My hope is that ZPHR will achieve a farmin from some (relatively)) major oiler in recompense for a decent share in the expected profits from a forthcoming oil strike on the lateral well. Cane Creek alone is forecast to yield an NPV of $156m at an oil price of $60 a barrel. and it needs only $23 per barrel for breakeven. So there should be plenty for the farmee to aim at. Also in an era when majors have cut back on exploration they will certainly be looking for good prospects as the oil price increases and economies improve.
Apropos the $16M tax credit I thought CH indicated that there was an intention to use it in relation to an acquisition. But I can't find the source of that just now.
The current fall in the SP may well be related to investors selling because they feel that there will be a gap of a few months before next news. I don't think there will be such a gap. I feel that we'll have news in the next couple of weeks. CH doesn't tend to hang about!
You're quite right Theboys it was you to whom that I should have directed my apology. I do that now.
It is of no great importance but the sp closed on Friday 12 March at 3.1p and on the next trading day (15 March, the day of the RNS, it fell back again although clearly not before you made your purchases),it fell back again and it hasn't recovered since). Not that that matters in the great scheme of things. Like you I remain very confident as you can see from my latest posts. But apologies again for my error. Go well.
Drakouna, your comments are interesting. But I don't think the fall in the sp over the past few days is very much related to investors selling out. I'm one of those who bought in substantially between .5p and1p and I've never thought of selling because I think ZPHR has a lot more to give us. The sp fall on 15March was clearlyrelated to MM activity to facilitate the large buy later reported. I repeat what I've already said that ZPHR " is not a popular share by AIM standards". Aimers don't go wild for shares such as this one which indicate a well dilling in three months time ! also there are relatively few share in freefloat at any given time. In other words patience,(as well as confidence) is required. I have both for ZPHR.
Malbrad,apologies I now see that the sp remained at it's high for a while on the morning of 15 March ,( the RNS date), but it had reached 3.2p on the afternoon of 14March before the RNS was released.
Thebhoys, the recent RNS'S weren't the catalyst for the rise to 3p+ . In fact there was no news at that time so one has to guess that the price rise was due to buying on the back of rumour which is a common occurrence on AIM. I suppose there was subsequently some profit taking but my guess is that the MM's then dropped the sp to accommodate the 10m+ buyer on Monday. ZPHR has not a great deal of shares in freefloat and it is certainly not a "popular" share despite it's very clear prospects, and it's very smart BOD. It is somewhat tainted by the Rose background I imagine!
But,(my final guess), is that CH will come up with an interview or news related to a farmin which will drive the sp spectacularly upwards. And soon!!
I believe we're on the same page. I've been thinking these past couple of days that CH will come up with a new interview or presentation if only to reiterate the fact that the drill is confirmed. He rarely misses an opportunity to keep us informed. And he's an ace presenter! We've got the makings of a biggie in ZPHR. The SP will begin to increase quite soon, Ithink!
Yesterdays large buyer probably came in for about 10million shares. It may well be reported later today. Hard to tell how many because the buyer was in an unnotifiable position prior to yesterday.
Todays trading,so far, gives the impression that there may be a further large trade on the books . We'll see.
Malbrad, the correct reporting of buys and sell has always been a weak point on AIM, but yesterday the MM's clearly needed shares so they reduced the sp to help themselves. And for acquisition purposes Zephyr hold a tax credit of $16M. A buy in will be related to the ongoing business. That does not mean that there may not be a capital raise at some point Also if the upcoming Cane Creek well is a success it will produce revenue in the late summer 2021.
I am as confident here as I've been from the start!
I'm well invested here so I thought I'd share some of the reasons for my confidence in that investment.
1.Zephyr is awaiting the analysis of the log and core data it extracted from the State 16-2 vertical well. It is anticipated that the decision to drill a horizontal well at Cane Creek ,(based on that analysis), will be taken by the end of March. That is in two weeks time.
2.The cost of drilling the new well will be in the region of $3m, but CH has commented that ZPHR is currently involved in "partner conversations and other funding options" which are almost certainly about the financing of that well. Zephyr is currently debt free.
3.Zephyr holds a tax loss of $16M which it can use to fund new acquisitions in its current area of activity. That is what it intends to do!
4. Assuming that the lateral well is a success ZPHR will commence commercial production from Cane Creek in late summer 2021. So not long to wait.
5. All the financial modeling for the Cane Creek activity was done at an oil price of $49. It is now $70 which makes the case much more compelling.
6. The NPV 10 calculation for Cane Creek alone was $148M with oil at $60. Compare that with the current MCAP of $23m and we haven't even started to motor. ZPHR could possible achieve an SP in access 0f 15p in the relatively short term, in my opinion, if all goes well.
7. The BOD hold around 20% of the company capital. So they are very well aligned with the shareholders.
Added to all that the rig and the team have already been contracted for the anticipated drill. Not long to wait!!