Member Info for Simon_Said

That is taking things too far. Sonora has attracted huge interest right up until that Morgan Stanley report, which is already being widely dismissed and will pass in impact in time.

Meanwhile Sonora has progressed rapidly, is permitted, and has remarkably low projected opex. The value of the Sonora project has not gone anywhere and even with bottom-end lithium prices would still be viable. I am confident this period will pass and financing will be arranged.

I believe some frontend engineering work is due around now, so we should hear some more practical news shortly. This is not insignificant as it affects the ultimate project financial viability. That figure, LOM operating costs of US$3,910/t Li2CO3, is the project's biggest selling point and could even go down as the process flowsheet is developed.

Seems a bit of a risk-off, red day. Ripples from the AST fiasco this morning?

Chaps, please take this debate to a more appropriate forum.

Good point Pensioner. Would be very impressive, almost 140% yoy EUS growth. And even if it 'only' hits 100%, that 100% becomes more impressive very year (as a function of being exponential growth).

As Ray points out in the video and a few of us have said a few times, even discounted transaction fees don't change the fact that the significant EUS volume these new Google Play migrations brings in still ends up with more money in Bango's coffers. It's the power of sheer scale. As EUS passes half a billion dollars the company can and should use margin as an incentive and a weapon against competition. This is the Amazon method and it works rather well for them!

Additionally, I note in the video interview that Ray describes some of these deals as promotional and temporary, so fee discounts may only be for initial periods. Those deals are commercial and concern a third party, therefore are protected and we can't know for sure.

The key is that the inflection point for profit has already been passed on a run-rate basis, so the business would only have to keep plodding along to generate a profit (given costs are fixed). But instead they are still managing to at least double EUS, all past that inflection point so all adding to bottom line. And they have around £30m in old tax losses to offset against initial profit which is very helpful.

I am excited to see the new insights products that are coming too, as I believe these will be crucial in attracting new customers and fighting off competition. The Audiens acquisition was a very forward-thinking move as the business scales up.

Oh forgot to add - regarding Parta. The reason Stephen Williams is always so excited talking about it is that the current targeted 33BCF is relatively low-risk, but there is huge potential within the license for significantly more gas and some oil.

'Recently acquired 3D seismic data has delineated considerable untapped gas resources of 33 BCF in the primary reservoir targets, with additional exploration and appraisal upside on the block being considered. Danube Petroleum Limited consider further potential on the Parta block to total approximately 300 BCF of un-risked gross prospective resources of gas and 45 MMbbl of oil using existing 2D seismic data.'

Bit of a risk-off day for AIM due to the AST news, lots of red out there. I've found AIM distinct 'moods' some days.

For those keeping track here, news due imminently about the Monroe Swell workovers, which are just a 'bonus' from the Gaelic deal and only worth tens of barrels-per-day each, but are super cheap to drill and operate, so actually carry a very good margin for Reabold, with a success value of £7-8m. But that's just a bit of extra dinner money, that happens to be coming before the main 'meal' that the Gaelic deal was actually done for.

The main wells such as West Brentwood are the real reason for the deal. West Brentwood is worth about £19m to Reabold in a success case, which is some 67% of the current market cap in a single drill. And that's the smallest of the Gaelic drills! The Monroe Swell drilling (one late this year and one before middle of next) adds a much bigger wedge at £76-77m, and £38-77m for Grizzly Island with 2 gas wells there targeting 50-90 bcf recoverable.

And all this is just California. The Romanian project on the Parta license is a huge potential gas resource and should net around £30m for Reabold in a multi-well development, but that's an NPV10 figure (i.e. NPV with 10% discount applied which is common for a pre-drill valuation).

And then there are the big UK drills which many people here invested for in the first place, with success values of over £45m for Colter net to Reabold, over £29m for Wick, and circa £43m for Oulton.

The point is not that all of these drills/projects will hit, nor that all will manage their full projected success values. The key is that there are so many projects here, and only a few of them need to hit to drastically exceed the current share price in realised value.

And that's while the company still has enough cash in the bank for another asset, ****-all operating costs (their 2 'employees' are the 2 CEOs) and zero debt. And their plan involves selling some of these assets on strike too, which will generate cash for more assets or return to shareholders depending on market landscape at the time.

Anybody who tries to tell you all of these will definitely strike and we'll all be quadrillionaires is a ramping idiot, but it isn't outlandish to say that with a diversified spread of risk like this, Reabold is a much less scarier hold than companies built around 1 or 2 projects alone, and only a small amount of operational success will justify and exceed the market cap.

Oh - one other thing that came up. The Halifax question.

They wouldn't give any specifics, but something is in the works there, regarding getting some sort of expert help to sort it out. It is to do with an over-aggressive compliance officer at Halifax. So I believe somebody is being brought in to get involved. Watch this space.

Finally, other projects and miscellany.

Regarding Colter, same story as every time I meet Stephen, he was very clear that permissions just aren’t a big deal and nothing was concerning them at present. Apparently there was a ministerial question about it but all went fine, and all the regulator amendments requested to the drill plan have been made. He was extremely relaxed about it and not sounding caution over it anymore. We talked about the fact that since it’s offshore, it’s only the OGA that get to decide, not the local council, regardless of what residents on the nearest bit of land might say.

I did not have any discussions regarding Wick, Oulton or the other Corallian projects.

And as ever, the gas at Parta in Romania is arguably the biggest prize of all and still gets them extremely excited. And it remains the project investors are talking about the least of all, despite it being huge and due this H2.

I will post more as I remember more that happened, but it was a long night and a boozy one. I cannot recommend these kind of events enough, nothing quite substitutes for meeting these people in real life and seeing the whites of their eyes.

Finally, I met a few people from here and from Twitter at the event. Without exception all very nice folks and I hope to see you again at future events. I won't mention anybody by name as I know many value your anonymity, but good to see this share seems to attract quite a moderate, thoughtful kind of investor.

Right. I need to drink all the water. All of it.

Firstly, regarding California. They’re in the boring bit right now cleaning out the first workovers (as anyone used to this kind of well knows, the slow process of cleaning and then gradually going from water to oil etc). I asked again about the workovers being ‘bonus’ items and not that important and Stephen reemphasised this point, that he has made many times. He was clear that these were just extra things they got due to the Gaelic deal and nobody should be too focused on the workovers.

He was clear that the barrel-per-day figures from them will be quite low, in the tens rather than hundreds, however they’re so cheap to bring online and so easily accessed that the effective profit margin from the oil that comes out is extremely high. This is why they’re attractive - so when we get results, don’t look to the barrel/day figures in isolation, look for the opex, NPV, revenue etc. The economics are just different to a typical oil exploration play. But they will make the company profitable very quickly. Stephen said that if there were enough workovers like this, he could make a business out of them alone!

In addition, we got some background about the workover wells and the lack of good historic data. It’s because they were poorly drilled, the word ‘cowboys’ came up. So a good prospect, but poor technique and underinvestment by the original operator by the sound of it. So they can’t use historic rates as a guide, better to look at similar types of wells in similar areas. As is typical for small wells in America, a solid high-margin well producing in the tens of barrels each day is a nice little earner. Not a company maker and absolutely not what the Gaelic acquisition was about.

The reason for the Gaelic acquisition was, as we’ve been told before, the 2 proper wells, West Brentwood (drilling imminently) and Grizzly Island (later this year). Those are where we target three-figure barrel numbers. Again, remember to look at operating costs when assessing these not just numbers of barrels. The whole wisdom of the Gaelic play is the low cost of getting the oil out. It’s not about ‘gushers’, it’s about low-cost consistent income. He said they'll run them as producers, but if someone comes along and offers a good price, they'll happily sell. Stephen said he was happy either way.

Ugh. My head.

Among the myriad delights of last night's reception was the chap I termed ‘The Beer Angel', who was walking around with frosty cold bottles, looking for people with near-empties and quietly swapping them out. Bless you, angel of beer. Also curse you for my sore head.

I got a good amount of face time with James from Camarco (lovely chap and really cares about Reabold, very genuine), and a very large amount of time with both Stephen and Sachin. I have been to a fair few investor events over the years but never one quite this open and casual, the CEOs were truly just mingling and having a drink and taking questions. They were both relaxed, happy and open.

The mood was celebratory, and it became clear this was sort of a ‘party’ to celebrate the start of their drilling campaign after 6 years of planning. A lot of S&S’s former M&G colleagues were in attendance to congratulate them on what they’d done since leaving. There was a key bit of context we’ve never really had before. They were working at M&G for exorbitant salaries, and the fact that they left to go it alone (together) was clearly a significant event in their world, and a significant number of well-wishers from their former life were there. Also a good few oil sector analysts, investors, and fundies milling around.

My next post will be about California...

Just on my way home. I'll make a full post tomorrow when I'm not quite as drunk. In brief, the CEOs were both a pleasure and remarkably candid. Really feel like I had drinks with nice regular people not stuff public CEOs. My opinion from before was reinforced - the workovers don't matter very much and don't expect a great deal from them. The key is the actual wells not the little workovers which they just got as a bonus in their Gaelic investment. But despite this, even uninteresting barrel per day figures from the workovers still means significant money for Reabold because the costs are so amazingly low. And the whole deal was very cheap to begin with. The main wells in Cali will be much more interesting and they think Grizzly Island may attract a bid. If not they'll produce and take it as revenue. Colter and Wick permissions are not controversial and not worrying. Parta remains the most exciting and least talked about. The food was good and the drinks plentiful. Cracking night.

I shall put it to S&S this evening at the drinks reception.

As predicted, there are the delayed print sells. Somebody dropped right after that RNS in a few tranches.

No change to investment case, and market cap remains in silly town down here. I have taken some more in this little 'pause for breath'.

To be clear the workovers were a 'bonus' with the Gaelic acquisition. The actual drills there are the 'meat' of the deal. They are also fairly imminent but the workovers will come first. Stephen Williams told me they are not that fussed about the workovers, they're just a little cheap bonus.

Yep settling back up again now. Seems somebody may have misunderstood the RNS and sold out, reckon we'll get a delayed sell print later.

Investment case remains the same. 6 drills in next 5 months, only a few of which would need to strike to make the current <£30m market cap look absurd. No debt, little cost obligation or overheads, and cash in the bank.

Lol just realised that II reduced their position at around .7-.75 just days before the big drive upward. Methinks somebody may not be their bosses best friend right now.

Lol days of gains and he's silent, one II reduces their position (still holding a huge chunk of the company) and he's back to his trolling ways. 'Bailing' out indeed... moron.

Sorry Stesaxman I clearly misunderstood your earlier post.

Nonetheless there are some sells to account for the price staying more or less flat, and that's fine. Churn is OK, I never chide people for taking profit if they need to. Just for me personally, absolutely not considering selling right before 6 drills in 5 months. Especially while this isn't even 1p yet and mcap is only just over £30m!

Yep look like 1p is the holding spot before drills. Luckily the drill activity is starting right away, possibly as we speak in California, and the other projects all due for kickoffs before year-end. This will be a totally different company by Christmas.

There was a bit of bad timing with the Morgan Stanley dodgy lithium report at the same moment as the placing. But that seems to be calming now and plenty of saner voices coming out with more sensible lithium forecasts. And with Sonora's LOM operational costs of US$3,910/t of Li2CO3, strategic positioning and advanced permitting state, it's really still a very attractive asset. I've no doubt funding will be found, and on their terms. Secker will not sell this out for silly money, it's not his style. Indeed they chose to close the placing rather than accept silly money (undoubtedly they would have gotten it away if they'd been willing to go very low).

I continue to hold, though admittedly have the luxury of a lower average than some here so it's not quite as distressing for me. But I really think this project remains enormously compelling and the BoD's determination to get a fair price will pay off.