Member Info for spike501

Drill, baby drill.

Any price moves now are distraction - I bought to hold for results.

"Spike, this was my targets as written not long ago- what’s yours ? Cut the crap as I’m genuinely interested in your say :-"

Yeah ok, apologies, I just found your posts on the delays, something completely outside of the ADV's control and completely standard in drilling to be hysterical.

I'm invested over at Jadestone, one of the regulars here, forget which, posted over there, I took a deeper look here and it makes sense as a speculative investment - the risk/reward here balance looks pretty good.

Its a mugs game making targets on AIM shares - I think as usual its getting over exuberant here, with some posts comparing to Jadestone simply because it might have a peak of 20,000bopd, ignoring that this is a currently a single asset, non-operated company where the expected 2P will be 12.5million, where as Jadestone is producing 20,000bopd from about 70million 2P across a number of operated assets with at least a further double in 2C that is moving to development.

Spike, this was my targets as written not long ago- what’s yours ? Cut the crap as I’m genuinely interested in your say :-"

Yep agreed - 9p would be very nice and funding should come quickly.

"Yes, they will have additional costs such as corporate overheads and interest on the intended loan. So let’s say $60 per barrel operating cash flow. So to suggest that a value above $10 a barrel is not credible misses the particular economics of this project."

The economics are indeed attractive, but this will still be an undeveloped and initially unfunded project - notwithstanding an initial spike, I'd be amazed if this settles at a valuation of above $10 per 2P post drill.

"Spike you will become even more unpopular than me if you post anything other than just positive posts on here."

HMS - in the nicest possible way, your posts were ridiculous.

"spike, I think there is an inherent difference to the drill being risky and delayed, ie a broken drill bit etc and the cos. The two are separate and distinct. Issues with the rig only slow down the drill, they don't affect the cos. "

Depending on the severity it can go as far as resulting in a failure to complete or inclusive result which means the requirement isn't met to move to 2P and another appraisal well is needed - something which Advance don't have the money for and would require a substantial placing at a much lower share price. Again I'm not saying this is likely, but the operational elements don't make this a binary result and again to re-iterate its this risk that likely improves the upside in the event of success.

"spike, I think there is an inherent difference to the drill being risky and delayed, ie a broken drill bit etc and the cos. The two are separate and distinct. Issues with the rig only slow down the drill, they don't affect the cos. "

Depending on the severity it can go as far as resulting in a failure to complete or inclusive result which means the requirement isn't met to move to 2P and another appraisal well is needed - something which Advance don't have the money for and would require a substantial placing at a much lower share price. Again I'm not saying this is likely, but the operational elements don't make this a binary result and again to re-iterate its this risk that likely improves the upside in the event of success.

The original poster asked what was happening and I provided the answer. Always on drills there are traders that take position for pre-drill rises but want no exposure whatsoever to the drill as its an inherently risky activity where things can and do go wrong and they aren't holding for a result so during the drill there is effectively only downside until it gets near the timeframe of results.

Also if this is such a nailed on certainty, what makes posters here think its going to rise on results - if its a know quantity then surely its already priced in?

Its probably not because all elements considered - COS and operational risk - there is probably a 20-25% chance that there isn't the nailed on positive result here that posters expect and the downside case here is terrible as its a single asset. That risk is important and one of the reasons why there is probably a good gain to be made here on success, as overall the probability of success is good, but because its not risk free and the downside case is severe, success is far from priced in.

Still you go ahead with your childish posts about sea monsters.

"they don't want exposure to a drill that has 95% cos, smart"

Because there are more elements than just the COS - oil drills are inherently risky, stuff can and does go wrong.

"WTF is going on here?"

Traders who hoped to catch a pre drill rise, no derisking as they don't want exposure to the drill.

"The SP represents the Market Value i.e. no. of share x SP = Market Capitalisation. There is a huge difference between Book and Market Value, because the market (normally) gives a premium (anything from 10% to +100% depending on lots of factors) to the book value. With a NPV of +16p I would expect (in this case) the SP to be +30p.

Discuss!"

When and more importantly why, would the market give a premium to NPV. Would you pay £1.20 for something now that gives a discounted cashflow of £1 over say 10 years? I think you may be thinking of NAV as opposed to NPV.

Typically, E&P companies trade at a substantial discount to NPV as there is always risk (funding, regulatory, operational) associated with E&P with the discount being steeper the earlier stage its at.

People need to keep themselves grounded here, some of the figures being talked about are fantasy - the expected case here would give net 2P after deductions due to the PSC of 12.5million barrels. Any talk of share prices beyond an $10 per barrel of 2P are not credible and I suspect even that might be a stretch.

“They said no and the first 30 pages have been released, shows 10s of thousands of adverse reactions and 1200 deaths within first 90 days. (USA)“

In the first three months Pfizer shipped tens of millions of vaccines which were then delivered. Adverse reports and subsequent deaths don’t necessarily relate to the vaccine, it just happens that someone has a condition post vaccine that is then report as a potential adverse event.

1200 deaths out of tens of millions of people in a few weeks, especially when the initially doses were focused on the vulnerable is likely to be well within the statistical range of expected deaths for that group, vaccinated or not.

Hence the MSM aren’t bothered as it’s a non-story.

Jadestone SP moved upwards in the market in the days before the Montara announcement. Its moved up today so potentially there is a some leaks around Skua, in which case the rig will shortly move to Buffalo.

S-T - I assume you refer to me with that comment, which is a shame as I was actually about to comment that this board is very open and although we have a different opinion as to short term valuation, I appreciate the time you have taken to respond and the politeness of response. I’ve also highlight to you why I believe your case is overly bullish and showed you were I get the 12.5 2P.

As to other boards, I’m bullish on Altn which my posts reflect - in JSE and I3E but don’t post much and negative on UJO which I did hold but is now an utter bag of garbage with some terrible rampers on that board.

"The earlier quote that 'contrary to popular belief the market is not generally that stupid to miss easy wins' allowed me a wee smile because we know the market is stupid enough to buy into easy losses. The market has no hesitation in being stupid at times."

NoEasy - that was me, and my post did acknowledge that on small AIM stocks it tends to be the other way that PIs underestimate the risk and overestimate the upside, hence the buy the rumour, sell the news behaviour of many stocks.

My point here is that if this is such a no brainer of a well, then its seems improbable that this well is going to result in a 3 bagger or more as some posters are suggesting upon success. My belief is that it is not a no brainer well, but the risk is pretty well understood and the market is currently overpriced the risk (or underpricing the chance of success), although I do agree it is under the radar.

Will be interesting to see what happens in the run up to the drill, whether the market becomes aware and some more hot money comes here.

“Not sure why you keep quoting that 2P figure?“

12.5million barrels will be the net 2P to Advance if the gross 34million 2C case is confirmed by the well. The PSC with East Timor assigns 65% of oil profit to the holders of the licence so 25million is the net 2C attributable to the licence holders net if the East Timor interest at the gross 34million 2C case - this is outlined in the CPR.

“Just take a look at the market cap at Jadestone Energy who are producing 20,000bopd.

If we hit a successful at Buffalo that will yeild 20,000bopd”

As highlighted before Jadestone have over 50million of 2P, another 60million+ of 2C across multiple developments - they have a reserve life of approximately 7 years at 20,000bopd with plenty of contingent resources to extend further.

Comparing Jadestone which is actually producing 20,000 bopd (assuming the Skua work overs are successful) to Advance which if this is successful could in the near future produce 20,000 bopd is completely superficial, especially given its known that Buffalo will have high peak production but quickly decline.

Never say never with small oil stocks but Buffalo pre development with 12.5million 2P is unlikely to be worth the £200million+ you are predicting.

It comes back to your previous post - if this is such a nailed on, no risk drill, why would the market be discounting it by 80% of your assumed value?

"Have I been wrong about Wressle producing and the solid income Union Jack is banking now ?"

You've been utterly and repeatedly wrong about the value of Wressle, you have zero comprehension of valuing depleting assets.

You've been hopelessly wrong about the value of Union Jack in general, ramping the pants of it with utterly fantasy targets.

"Mirasol, I get you about shorting, but his first comment fair enough: why WOULD real holders keep moaning here and deramping? Just so sad and obvious."

Why would holders want a ramping echo chamber and what good would that do potential new investors. Those posting negatively here have pretty much been bang on the money, while the chief rampers have been repeatedly and hopelessly wrong.