Member Info for spike501

"Smashed in minutes, Leslie no meat attached to the RNS just take that no explanation. Probably too busy trying to offload his shares to help us understand the drill result."

I'm not sure what help you need - there was no attic. They still need to see what the net to gross is to make an updated reservoir assessment to see if there is any hope of commerciality on a long term basis, but it looks grim and there is certainly no 40,000bopd coming in a couple of years.

"70% down holy ****"

Well yeah, this is now a company with £7million and no projects. Any new project will likely require a placing which will now have to be at a much lower level.

This was the punt here - it was a high COS, but the downside case was effectively nothing and unfortunately the downside case came in.

"The reservoir came in shallow to expectation."

The top of the resevoir was deeper than prognosis not shallower, the OWC is known, hence the gross pay was far less than expected.

"What am I missing why is it not good news as they won’t be at TD yet"

They were targeting an attic and there is no attic. 12 metre gross simply won't be enough for commerciality.

Its a disaster - no way will this be enough to be commercial.

"I'd be surprised if ADV doesn't follow CVN into a trading halt awaiting results. Could you imagine the rumour mill if we stayed open.."

That's AIM, you pays your money, you take your chance.

I'd expect they release an update this morning, but if not it's not going to be suspended.

Advance won’t halt trading, the rules here are very different to ASX.

"Why de-risk today at 5p when you could have de-risked yesterday significantly higher, once the rise, that's what I never understand."

It was still rising yesterday, it opened up this morning, which was sold into and then as it reduced, more day traders locked in gains to take it back down to 5. Seems to have cleared now and the price strengthening again.

Tend to agree that having outlined a detailed dividend policy for 2022 which includes the already communicated potential to increase due to commodity prices, bumping it up already isn't the right way to go. SP has momentum so no real need to intervene further at this stage and if commodity prices remain elevated then a small bump can be announced when results are released and I expect anyway the market is pricing this in.

Google just flashed a trade at 5.94 - fat finger?

Thanks both - I'll be honest I say I didn't realise the cost of the well was sub $20million, I had in my head in the $25-35million range.

I still don't expect them to go it alone though and I think G_G_G the North Sea is nowhere near committed to you as you think. Shell pulling out of Cambo was a big signal, it was far from a purely commercial decision and its going to take companies with big cojones to start entering into early stage projects - the big players are out as they don't need the PR hassle and for independents its a big risk. I do hope the Government does have the bottle to copy the Norwegian Government and commit to maximising recovery, but at the moment they have parties to worry about.

No I don’t think I will have trouble but I expect the market will not like a large amount of free cash being used for a speculative punt - I agree COS is good on Serenity but the chance of reaching commercial development isn’t.

It will turn this share back from being a reliable cash generator to a speculative share and I think the market will hate it. I’m fairly sure the board know this though and it won’t happen.

Farm out makes sense if the next drill is carried so it’s pure upside - I can’t see it soon unless Gov or OGA make definitive statement around the North Sea with Gov in turmoil I can’t see it.

Would like to be surprised, I expect the market has already discounted it down to zero so it would be a boost.

They’d be daft to go it alone on serenity in the current environment. I’d certainly sell if they decided to go down that route, it’s far too large a commitment for a company this in what is now a politically risky place - I think there is a good chance the UKCS is finished, I certainly would commit any substantial funds until there is evidence new projects will be sanctioned.

Inflation continuing to kick on and gold is strengthening despite yields also strengthening.

The situation in Kazakhstan also appears to be settling - the internet has been opened back up and the crackdown appears to be sufficiently strong to quell unrest.

I’m reviewing this investment now - political risk has heightened but I’m also somewhat uncomfortable with investing in Kazakhstan now. I obviously knew it was a dictatorship and not a fully open society but it did seem to be relatively benovelent and focusing on development. The brutal crackdown is making me reassess.

“ Or are they already planning a Plan B for Serenity, maybe involving a full sale?”

I doubt at anytime in the last 5 years anybody would have paid any cash upfront for an unappraised North Sea oil field, best you’d get is a downstream milestone or revenue share offer.

Personally I don’t assign any value to serenity as it stands, it would simply be a bonus.

Just to add on the Maari approval.

You can search the web and find a lot of commentary about the proposed transfer from OMV to Jadestone and a lot of activists arguing the transfer shouldn't be done on the basis that Jadestone are a small operator looking to squeeze the last drops out of end of life fields so how can they be trusted or what if they are wrong etc etc. There are also references to the transition manager at Jadestone being also at Taranaki which is where a lot of the controversy comes from as this is where NZ Government had to foot the bill.

https://www.rnz.co.nz/news/business/426061/industry-insider-sounds-warning-over-risk-of-potential-maari-oil-field-sale

On the positive side for the deal.
- The new law protects NZ as OMV would still retain liabilities if Jadestone did for some reason screw up, so from that aspect there is limited rational reason for the NZ Gov to withhold approval. I'd assume now the law is final, there are finalisation of commercial points between OMV and Jadestone happening as OMV will want to ensure they don't risk liabilities
- Jadestone already operate under similar conditions in Australia so they are a proven operator so again the NZ Government have no rational reason to turn down Jadestone.

However as we have seen, politics is becoming increasingly irrational - there is still the political risk that NZ simply decide they don't want to approve the transfer to prevent noise from activists and also put out PR about phasing out NZ fossil fuel production. Part of the Maari transaction is about Jadestone extending the end of life.

So I don't see it as a done deal yet.

The new decommissioning bill became law on 3rd December - this had to be passed before any further progress could be made.

https://www.argusmedia.com/en/news/2279769-new-zealand-upstream-decommissioning-bill-becomes-law

I recall it being posted here, that once it was passed there was an expectation that the transaction could be closed relatively quickly.

"Go on, tell us your views fir a change cis I’m not gonna forever entertain leeches like you"

My views are you are just a s**t-stirrer as there is no other reason you would repetitively post utter nonsense about an completely insignificant and unavoidable delay in the handover of the rig and knock spud of the well. I shall also no longer be engaging with you, as I don't believe you post in good faith.

HMS, sorry but total guff - anyone investing in oil companies know that drill dates are highly uncertain especially when it’s a direct handover from a previous operation.

A 4-6 week delay is utterly irrelevant in the context of the drill and the communication was completely appropriate, there is no market or investor requirements to provide running updates on rig movements.

Anyone who got burnt gambling on a spud date has nobody to blame but themselves- I want the BOD focusing on operations and developing the business and not putting effort into meaningless updates for the impatient and immature.

Shell pulling out of Cambo was a highly significant event for UKCS - there is now significant uncertainty of the sanction of future development projects so its unsurprising nothing with concluded and I wouldn't expect anything unless then Government provide substantially more certainty for the future.