Member Info for spike501

"if say buying at $2 per barrel in the ground proved up 500mbl is $1 Billion on potential future revenue at $55 of $27.5 Billion when the outlook for oil price is still rising"

Why only 500mbl? Why not go full hog and claim 100billion barrels as UKOG were shouting about.

Current range of recoverable for West Newton looks to be 60mil to 100mil, so on your $2 per barrel that is $20-32million to UJO.

"the immediate concern is the stupid sp currently!!"

Why is it stupid? Perhaps it was actually stupid at 0.3p and today's price is more sensible?

On what basis is this valued at £36million?

What was positive about todays news that is new information? Why should today's news have driven the share price - we've known about the exact potential of Wressle for a long time so why would you think its not already priced in?

I've long maintained that while Wressle is a positive development overall, its not going to do much for the SP as Wressle is small and baked into.

The SP is now going to be moved by West Newton - what do the updated volumetrics and reservoir characteristics look like and ultimately does it flow?

I think West Newton will be big and will flow and so there is value from here, but I don't personally think it is particularly undervalued on what we currently know and Wressle is a sideshow.

"THATS A LOT OF FULLY FUNDED FOR THE FUTURE ffs"

For what? What is the point of a company that needs a few million a year to hold £80million on the balance sheet?

"say 6 wells ffd 6 x 750 bopd etc etc"

Why on earth would 6 wells on Wressle be drilled at a few million each to extract 1million barrels?

"In my opinion spike501, Biscathorpe could be as good, if not better than West Newton."

On what basis? The company have already released the best estimates and it is far smaller than West Newton, even allowing for UJOs larger share, recoverable oil - if its there with good reservoir quality - will be far lower than the potential of West Newton.

Wressle even with the Pennystones is max 1million barrels.

"If WN sold for a UJO cut of £80m, cash on the books jumps to double current MC, zero debt portfolio fully funded for the foreseeable"

If West Newton is sold for £80million, what's it fully funded for, they've just sold their key asset - nothing else in the portfolio is comparable to West Newton. If they did sell West Newton for £80million - which they clearly won't - I'd fully expect £70million of that to be paid out as a special dividend, rather than leave it with management to mess with.

Even talk of 1p is utter fantasy - they are fully funded for substantial further appraisal of West Newton, but at some stage will need more funds, if they are to take towards production, or otherwise they sell out but its not going to be £80million upfront (implying some pays £400milion cash upfront for the field).

"Bonker99 - no physical retail supply that is Bonkers!"

Physical retail supply is a tiny part of the market and it doesn't take much to squeeze existing stock on hold, I really wouldn't get so excited about that.

I'm not convinced this has legs, I actually hope HOC are discussing hedging a portion of production at current price levels.

"200 bopd * 365 days * $56 = $4,088,000 p.a.
Minus the costs, say $16 per barrel, then that figure is : 200 bopd * 365 days *$40 = $2,920,000
US to UK exchange rate = £1 = $1.37
So net P.A. to UJO is $2,920,000 / 1.37 = £2,131,386"

Revenue minus cash cost of production does not equal profit. There are depreciation costs that need to be taken into account as well.

"The initial research suggests this could flow up to and beyond 700+ bopd"

There is no permission to flow about 500bopd.

The SP hasn't moved much as Wressle is small - the cashflow is great, makes the company cashflow is positive, but goes nowhere near to the current market cap. Its all about West Newton here.

Now clearly one swallow doesn't make a summer and Altyn have disappointed before, but if production can be maintained at the levels for this quarter then the current share price is just 2 * free cashflow.

Finally, milling execution to match production execution, almost double production Q on Q is great but only getting to where they should be and so further improvements possible as grades improve and mining increases further with ongoing investment

I'm fairly sure those approvals will all be put in pre-well - its one subsmission for sidetrack, well test and any extended test if it gets to it.

"This is a good move as completion half the cash is dependent on a decent well test - essentially bad result = no extra payment"

The second payment is only contingent on planning permission and approvals for the drill and test, not the actual result of the drill and test itself.

£1million is a fairly hefty amount at this stage of development, hopefully that is an indication of how confident they are about it as a prospect.

The RNS said nothing that's not already expected. Buy the rumour, sell the news. Wressle simply isn't that significant for the share price.

This will move for West Newton.

"Forget Biscathorpe, the timescale for us is Wressle and W.Newton"

Yep agree with that - the problem across UK onshore in recent years, is that "biggest potential onshore discovery since Wytch Farm" gets shouted about every single time.

Wytch farm is absolutely massive and nothing of any note has been discovered onshore since then - so its not a lie, but its a rampy statement. If I filled my bathtub with oil it would be the biggest discovery since Wytch Farm, but it doesn't mean it has any equivalence to Wytch Farm

I happen to believe West Newton in its own right is a hugely significant discovery and has every chance of being a very material sized oil/gas field - its way bigger than anything in recent years, how big and whether it is commercial is still to be proven, but I remain happy with the risk/reward.

Biscarthorpe also being potentially the biggest discovery since Wytch Farm tells me nothing - Egdon today tell me enough that is a nice part of the portfolio, could be very decent, but is not anywhere near West Newton and is still far from aynthing tangible.

"I have seen a few comments about Biscathorpe possibly being game changing for the company - I confess to have lost track of all the moving parts with UJO - would someone be kind enough please to tell me what is the time scale for finding out if that is the case or not and what sort of COS there is? thanks in advance."

The Egdon results show today that Biscarthorpe has some potential, but even the upside values aren't spectacular, potentially up to 6million barrels net to UJO at the top end, but there needs to be a substantial risk weighting applied to that as they clearly have no indication of reservoir properties.

"Not sure if this is a 'do or die' year "

At current gold price Altyn can bumble along with current production and comfortably service the debt, so its not really a die year.

Its been a disappointing Q2 and Q3 from a gold poured perspective, but they are at least able to mine enough to almost double production and it is generally easier to fix extraction than it is to ramp up mine production, so in theory part of the hard bit has been done.

I think this will start to move back to 2p again, gold correction seems firmly over and is firmly heading up again, so I think market expectations will quickly factor in a $2k average goldprice for 2021, when previously there was nervousness and people will start to take positions again that Q4 production update provides a positive surprise.

Sure, but is there any actual confirmation they are sharing the same rig?

"My understanding is they only have one rig, and it goes to Wressle first. Only after that will it go to WN"

Wressle is being operated by Edgon and West Newton by Rathlin - they are completely separate operations, so why would they be sharing equipment?

Mirasol - all reasonably fair points and I'm certainly applying that caution to Biscarthorpe which I think is a long way from being the slam dunk many seem to think it is and remains an interesting prospect only. However with West Newton, while risk certainly does remain, I also don't recall any onshore discovery in the last 20 years that has drilled two wells so far about and in both wells have found such large amounts of net pay that is clearly linked and has decent porosity especially at the the B1Zz site.

In my opinion this is a highly substantial onshore discovery of which there is nothing remotely comparable in recent years (despite the ramping at the time) and there should be a high degree of confidence that it flows.