Member Info for skittish

Yes, it is potentially a tricky decision over the Cluff rig.

I'm not sure who paid for the audit and the works, I would hope it not be He1, as although it passed after work, we don't own the rig and may not derive any benefit.

Cluff's accounts are as at end March 2022 so give no hint as to who paid for that work, they had little cash (neither Hotspur nor Cluff have much in ready money, a few thousand a piece), but no doubt their directors very good connections could be used (and are used) to borrow.

I'm mindful though that a year ago, early 2022 He1 implied it was fully funded with $10m in the bank - nearly all of that was used in 2022, and we didn't get a drill.

Here we are early 2023, with something like $13M in the bank, it is to be hoped that lasts until we get that elusive discovery.

DM no doubt knows much more concerning the Cluff dispute than we do. The rig maybe suitable, "available" now for hire, and could be transported to Rukwa at reasonable cost in time for a Q2 2023 drill (always my preferred option) at Tai-3.

But do you really want that rig if there is a risk court officials could be chasing it round Africa with a document seeking to impound it?

What looks like an obvious solution could be a poison chalice, and if DM gets that wrong he could really come in for some flak.

Not all that straightforward, but then I suppose DM is well paid in order to make the "right" decision, although that decision may not appear immediately to be the correct one .

Before we all get over excited over the Cluff rig case being dismissed, and the rig being "available"...

It is worth noting that the case was dismissed not on any merits but on a jurisdictional issue, as the parties had earlier agreed that any disputes would be dealt with by a hearing in England and Wales (the reporting says London) and not in Kenya.

If I was the aggrieved party, and thought I'd got a good case then I'd be immediately filing proceedings in E&W.

Of course one can see why the proceedings were filed in Kenya, as Cluff has very few assets in E&W, and its only significant asset appears to be the drilling rig in Kenya.

As an aside Cluff in its latest accounts (filed December 2022) cites lack of demand - "downturn in the oil and gas industry" as the reason it was not hired out in 2021 or 2022.

So it could be that proceedings could be filed shortly in E&W (or maybe an appeal in Kenya, if they think that has merits), but the E&W courts would not have jurisdiction in Kenya, so the aggrieved party would maybe have to try and get an order over here (E&W) preventing the rig being moved, and then ask for that order to be enforced via the Kenyan courts.

So it is time consuming, somewhat complicated and also expensive, maybe if the rig remains DM's preferred choice there may be a window of opportunity here, maybe a few weeks or even days to get the rig out of the country, before Cluff get slapped with another court order.

If that is what the aggrieved party decides to do.

It could be a bit of a game of cat and mouse, as the aggrieved party were not interested in the rig until it looked like it was on the move, maybe they could negotiate a way out, as suddenly the rig appears to be a valuable asset, and on the verge of generating cash.

I've been looking up the Presentation again from 25-11-2022, and especially LB's part of that, in which she goes into quite a bit of detail, which I hadn't seen before, on what went on during the 2021 drill.

Whilst some, especially Dai and KO commented, no one from what I can see really drilled down (apologies for the pun) into what she was saying, although I thought it was quite interesting and a bit shocking.

This slide is quite interesting and I used it to locate the potential sites of the Tai-3 and -4 wells -

https://www.flickr.com/photos/194934344@N06/52617667095/in/dateposted/

Now, with hindsight, we know that He1 used the "wrong" type of rig.

But LB also confesses that they drilled in the "wrong" place. This part of the slide shows the fault that they were targeting -

https://www.flickr.com/photos/194934344@N06/52627055645/in/dateposted/

and you can see that Tai-1 is to the immediate W of the fault. But this is the wrong side of the fault to be drilling on, in the presentation LB says (27.00) when they drilled they didn't know the exact location of the fault, and more recent seismic has confirmed where it is. This I find really strange because you can see the fault on Google Earth, and it is pretty obvious where it is.

This is what I posted on 29-1-2022,
https://www.flickr.com/photos/194934344@N06/51850030129/in/dateposted/

giving my interpretation of where the faults were from GE, and that Tai-1 was on the "wrong" side of the fault. Obviously He1 are dealing with a far more complex set of measurements, and I am only very much an amateur with a passing interest in geology, but I find it really odd that they could get it so wrong. They only needed to be 100M to the E and that was the right place.

Now drilling in the "wrong" place naturally has implications.

https://www.flickr.com/photos/194934344@N06/52624996201/in/dateposted/

Above is a profile of the drill, with my annotations. The top and bottom red arrows show what I believe to be the actual drill line. This is confirmed by LB saying the Lake Beds were tested out of closure (ie on the wrong side of the fault), and the drill didn't actually get to the right side of the fault til it was around 500 metres down. Immediately after it was on the right side of the fault there were helium shows.

Any gas above that would have escaped, although there was a gas show trapped in the upper layers. This (500M) was also around the level where the drilling pipe parted.

LB also confirms they stopped short of one main target, the basement, I reckon they were around 200M short.

As wireline only went to 880M, He1 only actually got any readings at all over around 350M of the deteriorating 1100M hole.

I think this also explains Tai-2 to 70M, they hoped to get free flow of gas from a shallow reservoir, to confirm a discovery, but failed. It was pointless drilling further as the pad was in the wrong place.

continued/-...

continued/-...

Now setting aside that they were in the wrong place, with the right rig, in the right place I think the chances of a discovery are much improved as all the factors which went against them in 2021 would then be in their favour in 2023.

Once they were the right side of the fault helium shows came thick and fast.

This is also a reason why I'm quite relaxed about delays, as it gives more time to plan and think about what they are doing. 2021 was clearly rushed, LB came on board in March 2021, the pad was built in May 2021, was the pad location already decided by the time she got there? Clearly much of the money from the 2nd round of funding was wasted with the failed drills.

So 2023 will be the right rig, in the right place, and down all the way to 1300M+.

We hope.

I remain optimistic, whilst recognising it is a high risk, high reward prospect.

"Hotspur Geothermal owns an Epiroc Predator 220 rig package, which has recently completed extensive recommissioning. Hotspur Geothermal Limited, through its wholly owned subsidiary Cluff Geothermal Limited, owns and operates a 1,000 hp Epiroc Predator 220 drilling package."

Cluff and Hotspur are essentially the same outfit, and have similar directors.

As to the contractual dispute, this only came out of the woodwork when the rig appeared ready to rent out. Someone did post more potential details a while back, and whilst money talks, I'd suggest the rig is going nowhere until the dispute is resolved.

And the people who own the rig are not short of a bob or two in the first place, if in doubt look up the Percy Faimly and Syon House, the registered office of Cluff and Hotspur.

And Hotspur ain't any random name.

They can afford to outwait any dispute, if it suits.

Helium One cannot.

I'm not trying to mislead, unless DM is.

DM says in the latest interview at 1.36 "this was not an option which they (Invictus) exercised, this was an amendment to the contract".

It is what DM says, not me, and nowhere in any of the RNS's is the word "option" mentioned. The existence of an "option" was an assumption made by some on this board.

He1 was passed over by Exalo, which is why he was (and still is) so cut up about it!

I think you need to look at the bigger picture and reasons for that suggestion.

Exalo decided voluntarily to go with Invictus Energy rather than He1.

There was no option to be exercised, it was simply a commercial decision by Exalo to prefer Invictus over He1. Why that preference? One can speculate - it look like He1 are only planning to drill one well, maybe Exalo thinks Invictus will drill more wells, or are better financed or whatever.

But it was a commercial choice by Exalo, not a contractual necessity. That is why DM says they were "thrown under a bus". Exalo chose Invictus over He1.

Maybe if He1 (and potential partners) were offering to take a rig for say 3 wells that would be much more attractive to the rig owner and result in it being less likely that He1 (and potential partners) would be "thrown under a bus".

I don't doubt the problems and complexities of such an arrangement, but I suspect DM is still smarting from his potential suitors rejection, particularly as the preference was for some hick Aussie from "Down Under".

That said we are clearly in for a long wait, hoping to drill "this year" puts us back to at least Q3 2023 (IMHO), and DM did labour the point about all the things which needed to be done to get prepared for then. I never did believe Q1, (were never going to drill in the wet) but did originally think Q2 was likely.

If Noble are planning 2 wells in Q3, maybe we could tag on with them and get a well in early Q4? Unless of course a better alternative presents in the meantime.

Interestingly Tai-3 will target primarily the Top Karoo, with Tai-4 targeting the lakebeds (obviously each will drill through both, but it looks like 3 is optimised for the Karoo, 4 for the Lake Beds, and Karoo looks like where they are hoping for the big hit. The emissions from the MSS study last January seem to follow more closely the contours from the Top Karoo, rather than the Lake Beds.

Plenty of time to accumulate.

Haven't posted for a while, and only just managed to view latest presentation, and still haven't finished it yet.

This is a possible steal at these prices - maybe.

Just a quickie.

This slide from the presentation gave us information on the possible locations of Tai-3 and 4.

https://www.flickr.com/photos/194934344@N06/52617667095/in/photostream/

By taking out the image of the intended 3 and 4, you can overlay on Google Maps, and then align the seismic lines on the image of the 3 and 4 location , with the seismic lines on previous He1 presentations. Both Tai-3 and 4 are located at the crossing points of multiple seismic lines.

That gives you this

https://www.flickr.com/photos/194934344@N06/52617502439/in/photostream/

And then pin the two locations and remove the image overlays, and you get this, the intended locations of Tai-3 and Tai-4.

https://www.flickr.com/photos/194934344@N06/52616727752/in/photostream/

Switching to Sentinel-2 imagery this was taken on 1-1-2023, with the Tai-3 location in the centre of the image.

https://www.flickr.com/photos/194934344@N06/52617733173/in/photostream/

And there appears to be a faint trace of tracks, leading to the approximate location of Tai-3, although these may be tracing previously existing tracks in the locality.

https://www.flickr.com/photos/194934344@N06/52617317546/in/photostream/

Will look in more detail at these locations later, or anyone else can by zeroing in on GE.

I do think that we need a bit of realism here.

I think that the photo of the COO disclosed today was probably taken at the end of last month, the same time as he appears to have been in Dar es Salaam. The cloud is wispy, as it was at the end of November, and all the satellite photos of Rukwa since then show thick cloud.

DS is a spin meister par excellence.

I believe that he principal aim is to keep interest in He1 running until he is ready to drill sometime mid Q2 2023. With hindsight I think that is what he has been up to since Q3 2021, and never had any intention of drilling in 2022, as he had no money.

He has almost bridged that 2 year gap, with talk of seismic surveys, (which never took place), shallow drilling, deep drilling, (neither of which also took place), other things, long forgotten (which never took place), various potential rigs (I've actually lost count of how many there have been - 6 whole months spent of the "Predator" down to minute detail of valves, injectors etc, then "oops" - contractual dispute, but it did its job, stringing us along)), and bits of haphazard information disclosed on Twitter.

But he has almost done it.

Drilling and the "present" rig are "subject to final contract negotiations and dependent on local ground conditions" and "a target spud date of Q1 2023 subject to the necessary funding for the drilling programme being in place"

That is all you need to know.

They want no mud and money.

At present they likely have mud and no money.

The recent accounts tie them to a financial narrative, important for raising funds. I suspect with the published accounts they are doing the rounds, trying to get offers. How much, probably something like £10-£15M to get some decent drilling done and get them through at least the next 12 months.

But first they need a GM or AGM, likely needing 4 weeks notice, to disallow pre emption rights.

DM seems in no rush, AGM January/February, fundraise immediately thereafter (maybe) , oops "present" rig has been snaffled, but we can get another for May 2023.

Sorted....

Incidentally that photo of the Tai C location (Tai-3 following spud?) shows a tree line much further back than the Tai-1/2 location. In fact I can't recognise any of the trees. Is Tai-3 to be 100M+ (likely south) of the Tai-1 location?

We will see when they spud late May/early June 2023.

ART123, As I've been saying (repeatedly) for the last 9 months or so, they can't do a placing.

Legally.

If DM & Co did a placing they would soon have their collars felt by plod, and end up peeling spuds for a couple of years.

This is not an issue - as DM deliberately did not disallow pre emption rights at that 2022 AGM. He had no intention of doing a placing, whether it be for 200M shares or 200, or even 1 share.

He could call a GM to disallow, (as it appears he is about to do), or do a rights issue (very messy, and expensive) , but not do a rights issue.

That is the clue (together with today's admission that they are almost brassic vis a vis drilling) that allows you to know that the last 12 months+ have all been smoke and mirrors, and he had no intention (barring a miracle lottery win) of drilling in 2022.

Accounts, AGM, disallowance of pre emption rights, placing, contract, drill...

Looks like things are finally actually moving.

AGM RNS Thurday.

All IMHO,DYOR etc...

I accept that my views on the likely date(s) for drilling have not been popular, and I was doubting that any drilling would take place in 2022 as long ago as July and September, at a time when the RNS's were all gung ho for drilling in 2022.

This is the link to the car rally

https://www.thecitizen.co.tz/tanzania/news/sports/rain-surprises-tanzanian-drivers-at-guru-nanak-rally-4023828

Bearing in mind the cost/value of drilling equipment it would not be attractive to see a Rukwa drilling rig in a similar position.

Sentinel-2 snapped Rukwa yesterday and indicates that the area for miles around around Tai-1 is, lets say, "moist".

Should be "never intended to drill in 2022", of course.

Not quite sure why.

Maybe he needs to convince people he is much better prepared than in 2020, and he knew he couldn't build the team out quickly enough to go for Q2 2022.

Anyway, I do think there is good chance of a truly magnificent discovery in 2023.

The 2022 AGM (held 14.3.2022) was called 2 days after the 2021 Annual Results were published.

Today the 2022 Annual Results were published.

Around 10 weeks earlier than last time.

In order to do a placing they need to disapply pre emption rights - which they conspicuously failed to do at the 1st 2022 AGM.

One reason for the "early" results may be in order to call an "early" AGM, possibly in mid December. There is nothing to prevent two AGM's being called in a single calendar year.

Disapplication of pre emption rights could then clear the way for the placing to take place in early January, thus allowing contracts etc to be signed.

We now know the financial position is likely pretty dire. I was puzzled by (but didn't comment much thereon) all the fire and light/smoke and mirrors over the Kenya rig - it just didn't make sense, clearly DM was just playing for time (or simply playing shareholders).

His biggest problem over the last 18 months appears to have been how to bridge the gap between between Tai-1/1A/2 and Tai-3 , without all shareholders losing faith. The Kenya excursion wasted a good 6 months, and that, I suspect was its main purpose.

I don't know what any placing price will be, one can speculate, but c£10M for c200M shares would seem fair and not unduly dilutive. He may even get a 2-3 well programme out of it, Tai-3,4 and 5!

But not until Q2 2023.

Anyone seen the pictures of the car rally last month, a few hundred km north of Rukwa. It rained. Cars skidding off the dirt tracks all over the place. Dirt tracks, rain, mud, not great for moving heavy equipment.

Anyway, things appear at last to be properly moving, as opposed to all the smoke and mirrors, and DM has almost bridged his 18 month gap - it appears he never intended to drill in 2021, he never had the money, and he never intended to get the money, hence not disapplying pre emption rights.

I'm sure the resolution disapplying pre emption rights at the next AGM, will be quite prominent.

My bet is RNS Thursday.

Been chucking it down in Rukwa, and likely still will be in April

The only thing preventing them raising cash privately for shares is the law and the possibility of a lengthy jail sentence.

They can't place without a GM.

Simples.

And they would need to commit to a specific cash narrative in any event. Hence the results.

I'd wager no drill til late Q2, possibly Q3.

No placing, and Sentinel 2 says no rig at Rukwa, or preparations for that, as yet.

Only if DM & Co want to go to jail for fraud, which I doubt.

But they didn't disallow pre emption rights, so they can't offer any shares for cash.

They can issue shares to pay for services, as they did earlier this year, but not for cash.

Hence they cannot legally fundraise, unless pro rata offer to all shareholders.

I know there is much speculation regarding a fund raise, and money will be needed at sometime.

I have posted on this topic on several occasions, sometime ago, at length, but just to reiterate...

He1 themselves ruled out a fundraise via placing at the AGM when they listed the proposed resolutions, back in February 2022.

Not just by saying "we won't do one", but by not disallowing pre emption rights.

Just a bit important, from a legal point of view.

Thus, legally there can be no placing, no matter how much cash potential investors throw at the company, assuming anyone is willing to throw in the first place.

They can do a rights issue, open to all present investors, or call a GM to disallow pre emption rights, but no placing.

This is by design and not accident.

Bearing in mind the next notice of AGM is due in just 3 months I think the odds are against a GM between now and the AGM.

I did do a post some time ago suggesting they could get through to mid next year and drill, without raising funds - although you would have to take a view on whether my figures were correct or not.

This was based on the premise that "drilling programme" would initially be to just drill a single well at Tai in 2022/3, Tai-3, and the company would cut costs to the bone to do so, hence very little activity thus far in 2022.

I won't bother posting my views on the Kenyan rig, I am somewhat perplexed by what is going on with that, you can make it make sense, but only by adding in some speculative information, which may or may not be correct.

Save I don't expect drilling until Q2 2023, one well only Tai-3, then raise, as pre emption rights will be disallowed at the April 2023 AGM.

I would be happy with that, and I am now much happier in general, now I don't look in on this board every day.

PS. Latest Sentinel-2 image, 7-11-2022, shows no activity at Tai.