Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
Fully agree Manwell, Victory price was poor but it provided enough cash to drill and prove up all the work done on WN, and that’s what we should do to maximise the selling price. If that doesn’t work, though, we are toast and I will hold my hand up that I was wrong to buy these shares and when I’ve defended management. Hope for all our sakes that I wasn’t…. Good luck everyone.
Hi NVG.
I’ve been pretty consistent I think - I’m in for West Newton, everything else is leading up to that. I warned multiple times that nearly everyone was far too bullish about the price Reabold would get for Victory, and that it would be frustrating when people sold the shares because the price wasn’t what they’d hoped for. Despite this I was still disappointed by the final price and like everyone else I’m also disappointed in slow progress on WN and with the share price - management haven’t delivered as I’d hoped. But equally I don’t subscribe to the highly negative views on here, and I don’t like people talking self-serving or ill-informed rubbish and am happy point it out when I see it.
To answer your question I’m not related to the company in any way, I have a decent chunk of shares and am underwater, but not by a huge amount. The best chance of still making good money on this share is delivering West Newton and can’t see why Sattar and friends make that more likely. I think they’ll make it much less so, in fact.
- The requisitioning shareholders (RSs) are making the case that they have been key strategic drivers of Reabold but that RBD management has failed in execution of this strategy. But their document is riddled with errors and is highly disingenuous.
- On page 4 they say they “presented” the West Newton opportunity to Reabold in 2020. The text is clearly intended to imply that without Portillion there would be no WN. This is completely false, as anyone who knows the company at all knows RBD bought into WN via Rathlin in Nov 2018. The text does make this clear at all. It is disingenuous at best, misleading at worst. It is also completely inconsistent, as it pitches increasing the stake in WN as a strategic win driven by Portillion, with the implication therefore that WN is a good asset. It is (we hope), but the only reason we own a big chunk of this good asset is RBD management.
- On page 4 they claim credit for an intro to Hannam and Partners - ridiculous, H&P is a well known advisor and not some hidden gem they uncovered. They then go on to pull the sale process of Victory to shreds…. the process which was run by H&P, who they earlier trumpeted introducing RBD to. Completely inconsistent.
- On Page 5 - “ We are concerned that Corallian Energy’s directors were financially incentivised to pursue a sale of Reabold” and “ the Requisitioning Shareholders are further concerned that the Corallian Energy directors may have had a conflict of interest of securing a sale of Reabold at the expense of maximising its full value”. The sale of Reabold? Corallian directors selling Reabold?? They mean selling Corallian, not Reabold. A basic, but very important error. Made not once, but twice.
- On Page 7 they talk about the lack of strategic alignment between management, the board and shareholders. The RBD board owns 3.11% of shares, the RSs have only 1.87% - RBD board has far more skin in the game than these chancers. This also ignores the holdings of the Oza family (a further 2.63% as per Bloomberg holders list).
- I could go on - they say that the Victory process should have been restarted in August, which would have taken another 6m (further delaying West Newton, our key asset) and with no guarantee of a better price. They claim there are significant savings to be made…. on £1.5m total expenses? And Sattar literally tried to screw over RBD (and its shareholders - us) on the non-Victory licenses for his own personal gain.
- Their presentation is misleading, inconsistent and riddled with errors. They are out for themselves, not us. If RBD is to work then West Newton needs to work, and our management team knows that asset far better than Sattar et al and they give us a far better chance of it finally delivering.
“Both co-CEOs have minimal skin in the game with their combined holdings equating to less than 1% of total shares”.
That is highly, highly disingenuous. Oza’s wife owns 2.6% of the company. He has plenty of skin in the game.
Paul1deano - WN requires some long lead time equipment and RBD could not get the ball rolling on these until they had line of sight on the Victory cash. So slow progress at West Newton is a direct result of slow progress in selling Victory, which was a direct result of selling to a Major, who are notoriously slow moving in general and in the case of Victory had no incentive to go faster.
Most people on this board remain much more interested in blaming the board for everything that happens, regardless of whether it was under their control or not - for more details see the fantasy “valuations” posters had for Victory and their outrage when actual, real buyers saw it differently.
allis - you actually want us to sell down West Newton before proving it can flow, even though we have the cash in hand to do so?? That makes absolutely no sense at all. Please explain why you think that wouldn’t be an inordinately stupid thing to do.
Investor_Tester - it really wasn’t double that before. The $222m announced today is the CPR’s assessment of the value of RBD’s 56% stake. The previous gross NPV of $448m you refer to was for 100% of WN. The comparable number to the $448m in today’s report is $396m, which is an independent valuation. And the prospective resource is on top. And there is now nothing in the share price for either.
Pboo - the initial drills are not comparable at all, they were made with little understanding of the field. The updated CoS given today is based on in-depth third party expert analysis using actual core samples. If you don’t understand the difference then you’re probably investing in the wrong sector.
Dingodog1 - a small offshore project like Victory with a sale price agreed with the only bidder pre-war and pre-180 degree u-turn of Uk Govt policy on uk oil and gas production shouldn’t be comparable to interest/price achieved for a large onshore development like WN. As long as it flows of course….
I’m interested Barking, what do you think they should have done? They hired a reputable oil & gas independent advisor to hawk Victory to potential buyers, there appeared to be interest only from one, and they sold it for the best price offered. You think they should have cancelled the process and started it again when the war kicked off? We’d still be waiting for a deal in early 2023, we could not afford to wait. It was worth what the market would pay.
No - 2026 is somewhat irrelevant because of how little is in the RBD price for WN at these share price levels, but when a project can deliver first gas is absolutely relevant for its sale price, and thus value to RBD. A delay is not a good thing, but neither does it justify this share price fall from already miniscule levels.
Of course supply chain issues can get worse in 3 months, have you seen the state of the US fracking market? That Norwegian yards are already full? Boat costs spiking? Supply chain issues have been a major part of the inflation backdrop in general and oil and gas is worse than most. The delay in getting Victory cash won’t help either on that front, unfortunately.
No mention of the H123 drill in a medium term community liaison notice isn’t necessarily a bad sign, but I’d have been happier with a reiteration.
That’s the idea - step change in political and regulatory support for domestic supply, and Majors will be keen to invest and most importantly show they’re investing to stave off calls for a increase in the EPL windfall tax. But nothing is happening until it’s been proven the gas will flow, which as far as we know is still H123
What’s new
- first gas now 2026 vs 2025 previously. Negative.
- CPR to be published next week. Expected, but still positive given how little trust investors have at this stage
What’s not new
- that WN is a gas development, not oil. This has been 100% clear since the June 22 development plan
- pretty much anything else
Happy to hear alternative views, but this seems like a massive overreaction. There is clearly almost nothing in the share price for WN at these levels anyway, so how is a 1 year delay worth 20% from the shares? If you believe this project has value then this is a clear buying op into next week, as share price reaction does not correlate with any change in actual value. If you don’t believe in WN, why are you in the shares?
The CPR next week will be a genuine driver of value. Key to watch
- West Newton recoverable gas - last number we have is 203bcf from the 21st June 2022 WN development plan
- Prospective recoverable resource form the other prospects on the license, which were last given in the 13th Oct 2021 release - Ellerby 51.3bcf, Spring Hill 36bcf, Withersea 45.
Obviously at this stage it has to be good
The numbers to watch in the CPR will be
1. West Newton recoverable gas - last number we have is 203bcf from the 21st June 2022 WN development plan
2. Prospective recoverable resource form the other prospects on the license, which were last given in the 13th Oct 2021 release - Ellerby 51.3bcf, Spring Hill 36bcf, Withersea 45.6bcf
Needless to say, importance of the former far outweighs the latter
It is getting tiresome explaining the same thing over and over. Victory is a small undeveloped gas prospect, it is not a certainty to produce (Stifel for example valued it at a 25% chance of success) which has to be taken into account for the sale price, as does the very important fact there was only one bidder (it seems). What exactly would you have had RBD do in that scenario? They need the money and took the deal that was there.
The fact is that most posters on here don’t have the first idea how to ascribe a sale price to such an asset, and are throwing their toys out of the pram after being hit with reality. Show me other small, undeveloped gas prospects that have sold for hundreds of millions and I will retract my view.
The main point you’re forgetting is that BrokermanDan has a direct inside link to UJO and has leaked every significant story to do with WN before it’s public. If he’s not saying there’s a placement, then there’s no placement
Thanks Olivia, you make fair points about the difference between NPVs and sale/value ascribed to assets in share prices. My view:
Victory is a small, offshore UK gas prospect. The important parts of the sale process were conducted pre-Ukraine and well before the change to a new UK Government with strong support for UK O&G development. It seems it had only one bidder, likely the owner of the nearby infrastructure, and RBD needed a deal. The price offered was lower than hoped, but not much lower than anyone with even a passing knowledge of O&G M&A expected.
If, and I admit it’s a big if still, West Newton flows then the prospects for realising significant value from a sale are far higher, given its bigger size, location onshore and near infrastructure, vastly different gas price (structurally higher post invasion / permanent removal of Russian pipeline gas) and far more supportive political backdrop. Victory cash will be enough to prove it up (assuming it works) and there is almost nothing the current share price for its potential value.
The other Corallian licences can be sold on too. They are not going to get £776m, but they’re not worth nothing either. And there is almost nothing the current share price for them either.
Overall, can still be worth 2-3p within 12m. A bull case, for sure. But not a ridiculous one.
There’s no place for mature reflection here - you’ll be drowned out by the shouting of people who thought they knew how to value an undeveloped uk gas prospect by looking at forward curves and an NPV, but actually had no clue at all. And are now blaming that on RBD.