I have been watching this closely both today and over the last week. The drop today was predictable but none-the-less an over reaction due to the recent memory of Carillion and Interserve. In my opinion, Kier is in a much better position than either of these. Their respective positions are not comparable but those fundamentals are being over-shadowed by fear.
Even with the recent profit warning from Kier, the business is still making a clear profit across all business divisions. By comparison, both Carillion and Interserve were making significant losses and had been for some considerable time.
In terms of debt, Kier currently has around £60m in debt which is in a totally different league to Carillon. I do not believe there is a material risk to the liquidity of the business. This is being set upon due to wider market forces and industry sentiment and is a highly opportunistic move. I am in!
In my view, in order to understand the progressive SP drop, it is helpful to place it in some context. Clearly there are sentiment and confidennce issues with ANGS due to historical events. However, i see a good proportion of the problem being uncertainty and frustration around the Weald project as a whole at the present time.
UKOG have been suffering a very similar progressive erosion of their SP and this mirrors some of ANGS declines over certain periods with neither reporting any RNSs to explain the various drops.
Both companies have been expected to bring equipment onto their various respective sites and crack on with the next phasr of works but this hasnt materialised yet. At least GL is providing some communtications on what is going on. Steve S over at UKOG is giving them sweet FA to go on. Its worying people.
Stick with what we do know. GL has published an outline timetable of works at Brockham that we are broadly keeping to. GL has gone on the record three times in interview about Brockham in the last 2 weeks and has said that delivery of the Brockham well test is fully intended this summer with the Balcombe EWT expected in the autumn (licence/permit news expected in June). Nothing has materially changed in that.
The SP drop has occurred on minimal trading volume. I think people are just bored and are off chasing rainbows because they feel they can achieve something elsewhere.
I saw this very situation with UKOG last year in june. It rise 50% in a matter of days when works suddenly kicked off and from that time until delivery of the preliminary HH1 EWT results in late July the SP went up 150%. I expect the same at Balcome irrespective of Brockham and the gas acquisition.
My tactic... get in early while it is quiet and unloved.... and wait.
I take your point. Always open to a good debate.
I will however hold back from forming an opinion or debating the merits or negatives of the gas asset acquisition until we know more on what it is. We don't even know where to point to on a map, let alone the specific details of the asset so I don't think we are in a position to even begin to form a judgement on this yet.
The gas asset acquisition may fall through. It may not stand up to scrutiny. However, it is not automatically to be dismissed as a distraction just because it is timed to overlap with Brockham. The world does not stand still while a company works on one project at a time.
I will keep an open mind on this until we know more. I take your cautious point in assuming it is naff. However, the converse could be true - it could be the real deal and transformational. If that turns out to be true, and Brockham comes up short, then we will be damn glad that GL had the foresight to get it when he did and diversify the company.
Heck, were are getting a 2 million quid cash advance to bring it online in return for a £1 investment as part of our share of the future abandonment costs. That's in effect the cheapest corporate loan you will ever find - repayable in 9 years upon final depletion of the field.
I take your point and agree that confidence does need to be improved and built upon by performance and results.
However, it is not quite correct to say that no institutions will come near at the moment. On the contrary - GL said in his interview on the 16th May that a proportion of the recent 3 million placing was in fact taken up and subscribed by small institutional investors - as well as by some private individuals. Those institutions, whomever they are, clearly see value here at 4.25p.
Fully agree with that CS33 - I have a day job to be getting on with.... as do GL and the BOD. Let them get on with it - if you want a daily soap opera style of comms then go watch Eastenders.
In my view, from reading the RNS and watching the interviews, ANGS are clearly in talks with UKOG about how best to proceed at Brockham. Those conversations are unlikely to be a quick 10 mins on the phone with Steve Sanderson. ANGS have most likely shared all their data on Brockham with UKOG and the two companies are working through a thorough analysis and comparison between Brockham and the HH-1 / Broadford Bridge data to come up with as safe a well development plan as possible. I have said this before - it is not in UKOGs interests for ANGS to fail at Brockham as it will undermine the Weald Basin flow model from the Kimmeridge. UKOGs future growth depends on that with their upcoming horizontal wells.
If one of the minor partners wants to sell out their share to ANGS then that is fine by me.
In the mean time - carry on and try to walk it down all you company bashers. I have another 250k shares to accumulate as low as possible by the middle of June to make my 1 million holding target.
I completely agree Baits... well said.
Those who attempt to make some sort of historical conduct analogy in order to take cheap pot shots at GL are pathetic and quite dull minded individuals.
We all have some kind of 'skeleton in our closit, if we were honest about it. GL had put himself out there, in the public image and has grown a good reputation for himself based on his professional performance. It is easy to be armchair critics, especially when you have over inflated opinions of your own knowledge and understanding. Put yourselves out there in the public eye and subject youself to the same scrutiny..... very very few here would actually have the balls between their legs for that if the rols are reversed so they are in no place to judge.
Wealdpwr - How exactly are they supposed to establish what the have without a flow test programme? Contrary to what you seem to omply, the weald wells do not gush oil out in a 100ft fountain as soon as they are drilled. Just because they dont does not mean they are a duster... far from it actually.
You seem to have overlooked the fact that the kimmeridge section of HH-1 required works to stimulate the well and improve communication with the reservoir in order to get it to flow. So far it has yielded in excess of 20,000 bbl from the Kimmeridge. If UKOG had adopted your mindset then that oil would still be in the ground.
Lucan said in the interview that this next stage is critical to the success of Brockham but we know they are in talks with UKOG for technical guidance as people who have successfully achieved it so the odds are good.
I would agree that JTP is not the best with compliance. That is precisely why he is not on the board anymore and we have a newly formed board who are fully 'on it'.
That would be a fantastic summer and is not unrealistic as it equates only to an MCap of what £75m. If UKOG can achieve that on an EWT of 220bbd in the same formation then we can - especially with the other assets.
One thing I would dearly love to see if for George Lucan to make a director share purchase on the open market. Not be gifted shares, but to put his own money in the game on the same terms as us. That for me would be the icing on the cake and a true indicator of trust.
Come on George - make it happen! :)
I have just this morning listened to the most recent Angs interview between GL and D Leggett and I must say I am impressed. Lucan has come in at a difficult time and inherited a compliance mess but he is fundamentally what Angs needs and has been sorely lacking - a professional executive. The fact that he comes from a finance background is a real asset.
I have said before not to underestimate GL. as was referenced in the interview he has a track record of developing companies and has been instrumental in bringing one company from the AIM to full market already. People have been very opinionated and critical about the proposed gas asset acquisition which I feel is odd considering none of us knows what it actually is!
A good CEO or MD will want to diversity the asset base as quickly as possible and if a good opportunity comes up then I am not averse to grabbing it. I am very positive and optimistic on Brockham but no-one will thank the company for putting their eggs in one basket if that does fall short of expectations.
Personally, I think Lucan is purposefully downplaying this as it establishes himself as grounded and manages peoples expectations. Always aim on the low side and then when the results do exceed expectations, it is all the more powerful. It is all about allocation of risk and sentiment. Paul Vonk ramped Angs up over the last few years and got the market in a frenzy when actually the facts on the ground could not back it up. The result was a house of cards and when it went a bit wrong - the effect on sentiment and confidence was immense. I would much rather see solid sustained growth based on growing reputation and in line with underlying facts and results.
I read earlier that investors on AIM typically have the patience of a nat and that is about right. I hope this stays at this level for a week or so to allow me time to accumulate some more. That sort of statement is banded around a lot but I really do mean it.
There is a lot to look forward to;
- As Lucan acknowledged, the SP is on the floor but he has gone on record to say no further placings in sight;
- Cash in bank covers operations and running costs for a year;
- Cash generative gas asset acquisition being finalised and could well be announced in a few weeks;
- Brockham flow test prep underway - expect this in June;
- Planning consent expected in June for the EWT at the monster Balcome well;
- EWT at Balcome expected around August time
This is in safe hands now, regardless of Brockham, and is literally being given away due to the AIM lack-of -patience mentality. I have bought more today and will continue to accumulate at this level targeting 1,000,000 shares. I am over half way there...... GLA
I have listened to the interview with LL today several times and i must say that I am very impressed with not only the content but also the measured tone. LL has always been a good comunicator and after Vonk we need someone credible and reliable to both deliver and manage expectations. That is how trust and respect are earned from the market, and importantly from large investors and vendors as LL rightly pointed out.
I have noted this evening some discussion and concern about the communication aspect between the well and the reservoir. In particular, people seem put out that the company are taking time to consider their approach. Personally I am extremely grateful that they are.
If people recal their Wield History, they will note that UKOG well and truely screwed up the flow from the Kimmeridge at Broadford Bridge because they used the wrong technique for promoting good contact. UKOG have since admitted that by using acid wash to supposedly clean out the fractures, they inadvertently cemented and clogged them up. The Weald operators now with hindsight know that, whilst a traditional sandstone reservoir (i.e. the portland) responds very well to a preparatory acid wash, the clay based Kimmeridge does not.
If Angs had rushed this phase they could equally screw up Brockham. It is vital that ANGS get this next step right and if they want to take a week or two then that is fine by me. Personally I think that ANGS are talking with UKOG as they have first hand experience of this Kimmeridge behaviour and will equally be needing to address this issue then they drill their horizontal wells later this year. UKOG and ANGS may in some eyes be competing but actually their success is mutally linked. If ANGS mess up Kimmeridge production from Brockham then that, on the back of UKOG at Broadford Bridge will not do anything to develop the Weald concept for either party. It is in UKOGs interest for ANGS to succeed.
Hi Mr008, I do not know what instrumentation or monitoring they have undertaken but I agree with Baits that there must have been some measurement of the well pressure after the setting of the bridge plug.
The pressure inside the well string would have been hydrostatic or equal to the water pressure zone. The bridge plug would have been set, establishing a seal and then I imagine that the down hole pump was turned on to test it. This would have lowered the pressure somewhat inside the well. They wouldn't have kept it on long enough to risk raising hydrocarbons to surface as they are not allowed to until they have the test kit there. However a short test run of the pump would lower the well pressure enough to allow them a baseline to monitor against. If, after the pump was turned off, the well pressure crept up to match the water pressure then they likely have a leak and a poor seal. If the well pressure stays down then they have a good stable bridge plug seal and no bypassing thru any fractures. I think the data the are analysing are consecutive days of well pressure post pump switch off, to indicate a good stable seal. After that it's pumping time!
Evening all. There have been some really good discussions and observations over the last few days. I hope I can offer a view / insight following on from Dimvesters post below. As some will know, I am a Chartered Geologist (although not in the O&G sector) and have a better than average understanding of hydrogeology and the movement of fluids through soil and rock.
Dimvestor mentioned that there is uncertainty whether the bridge plug will seal out the water zone as it could find another path around the plug through the natural fracture sets. I see the concern, however there is one clear indicator that suggests that the oil bearing zone and the water bearing zone are separated and are not hydraulically connected.... And that is the pressure differential between the two zones.
If the water zone was able to naturally connect with the oil zone, then the pressure of the zones would be near to equal.... It would have to be. There is no way on earth that there can be a 200psi difference between the two zones IF fluid can move freely from one zone into the other. It is against basic physics principles. The only reason water is in the oil is because the open perforated well section connected the two.
Provided Angs can set the bridge plug correctly and establish a good seal between the two zones, then that should fully resolve the cross contamination issue. From the recent communications from the company, it appears that they have achieved this.
My thoughts exactly,
Those 4.25 OO shares are going to be looked at like gifts by people very shortly. How a bit of perspective can change things.
Fundamentally, this is set up like a pressure cooker and the pressure is building........