Member Info for spike501

Jolly Ranch was Nighthawk's 'flagship' project which was unconventional and did require fracking.

There isn't much getting away from the fact Nighthawk was a ****show, but I don't think it has much read through here. The main talent of an AIM oil CEO should be deal making and talking up projects to raise capital and Bramhill has done really well here. I suspect the failure of Nighthawk and seeming success here, is more down to luck, than competence which is very much the nature of oil exploration.

Bramhill does seem to be in the right place at the right time - with Nighthawk he was fairly early in the unconventional stuff (even if ultimately the asset was a failure) and here he got into UK Onshore at the right time and focussed on conventional which offered good value as the hot money was chasing fracking.

If longer term expectations for gold price have gone above $1650 let alone $1800, then producers are throwing off some serious cash and it’s hard to see a mine with 3.5million in reserves at very good grades and the ability to produce 100k Oz per year with manageable capex, won’t become a serious acquisition target.

Next production update - I guess released in mid August - could be a real catalyst - if they can mine and process 150k tonnes and improve grades, then annual production run rate could be getting towards 30k Oz, which starts to be hefty cash flow.

"Dude seriously have you researched that asset at all. To call it depleting is a fools call. Read the RNS's. It's constrained at 500 boopd. It can do 1000 boopd. It did do 710 boopd equivalent. It has the Pennystone flags to complete an FDP."

Of course is depleting, its on oilfield - on 500bopd the 2P reserves last 4 years, although the production profile anyway shows the expected declines. The additional *****tone granted provides another 750k in resources.

In total at 500bopd, including the contigent the reserve life is approx 14 years - you don't get a PE of 10 to 1 on that.

Look at the evaluations both the brokers assign to Wressle - its bang inline with my valuation and nowhere near the valuation of £40million.

Wressle is great, nice little bit of cashflow to cover G&A and a bit leftover with a bit of upside opportunity, but UJO is not a £40million company based upon Wressle production.

How do you get a few million profit each year?

At $60 oil price, Union Jack maybe makes a profit of $30 per barrel, which at 200bopd is $2.1million per year call it £1.8million pre tax - from that you have to deduct £1million for G&A, so profit is less than £1million, but lets call it £1million.

Apply a P/E of 10 and you get a valuation of £10million.

But you can't apply a P/E of 10 as its a depleting asset - at 200bopd, reserve life is just 4 years, even adding in resources its about 12 years. You don't get a P/E of 10 on a resource that only lasts 4 years certainly and 12 years definitely

GKB47 - totally agree, Wressle cash is great as it covers G&A, provides some additional cashflow and can probably start unlocking debt financing facilities. I really don't want to talk it down, however on its own it does not justify such a high valuation as get thrown around.

You can't take oil price minus cash cost and multiply by a P/E factor and draw valuation.

"Having said that I’ve seen posts on twitter to suggest that when oil price picks up just based on Wressle income would suggest we’re a £40m company (200 BOPD @ £40 profit) with a fair price to earning ratio."

Wressle isn't worth £40million, net to Union Jack its 260k reserves, and 750k resources, plus a bit more prospective - at best on a resource basis its valued at $10million and even that is a stretch.

On the "profit" from Wressle, you've got to split cashflow from profit - cash cost for Wressle is $17, so anything above that is cash inflow from production, but there are additional non-cash costs on that, mainly for D&A (depreciation and amortisation), so breakeven for field profit is probably rather $30 and then on top of this you have G&A costs at the business level.

Its unlikely that Wressle allows UJO to make any substantial profit at a company level - it will provide very useful net cash flow, but by the time you count D&A and admin costs, there is unlikely to be much actual profit left

West Newton B is to further appraise the Kirkham Abbey and better delineate the field and has also been position to explore the Cadeby, which only had hydrocarbon shows at WN-A but (presumably) no reservoir development.

“ preparations for work at Loxley”

Look at the wording - not for work at Loxley, for “preparations” for work at Loxley.

Gold now pushing towards $1800 and at a gold/silver ratio at almost 100 to 1, its hard to see substantial upside for silver as it gets dragged upwards and the ratio reduces. Bodes well here

For 99% og small investors, buy/sell indicators are an utter irrelevance, you’d be best off turning you screen of and making a cup of tea, in the same way you’d best of ignoring the mythical ‘games’ of the market makers who for the most part are not risk takers so they are not ‘filling their boots’ with ‘golden tickets’ and instead are providing liquidity and matching supply with demand for as little risk to themselves as they can.

BP? Have a day off, BP have no interest in a a UK onshore development that might have 50million recoverable, its peanuts for them and they'd get every swampy in the land descending on it from now until eternity. Its not worth the PR hassle for them

"Greta Thunberg will be proud !"

I think Greta is more concerned about the oil being extracted and the burning of that as opposed to the carbon emissions from the extractions which are peanuts in the whole scheme of things.

This is just PR greenwashing (and I hate that term).

Do you and the 4 people so far who have recommend you, realise the unit share price isn't comparable across companies? UKOG went to 10p with about 3.5billion shares in issue, so a market cap of about £350million (which was still crazy overvalued).

UJO already has 15billion shares in issue, so 10p would give a market cap of £1.5bn - this is utter cloud cuckoo land.

"Then we can put in place an inexpensive side track that would take that potentially up to 8-10 thousand (8000-10000 bopd). "

I think you're getting a bit carried away there - Wressle is a nice long term cash generator, but its pretty small and there is no chance of even getting planning permissions for an 8-10k bopd development, even if it could produce that, which is highly unlikely.

"I think the broker is offloading placement shares for a small profit. Once clear will go north."

This has been down a ski slope for years, sure there have been a couple of bumps along the way, but nothing to suggest the trend will change, its just more shares, more cashburn, more jam tomorrow.

There might be something here for traders to make a quick few percent, but you guys aren't traders, you're massively underwater, dreaming of 1p a share or above which is a pipedream.

Agreed - 1p is OTT based upon the volumetrics and NPV forecasts for WN, although to be fair you can never rule out the market getting carried away.

0.3-0.4 is acheivable on successful flow tests and possibly up to 0.6p if WN-B is good and showing oil in the lower formation

The CEO basically indicates at the start that Humber have been struggling - "We now have a fully funded partnership to contine on PEDL183"

I suspect 0.15p will be a point of resistance as that is my buy in price and the universe is pretty adverse to me making profits.

“ I would be the first to admit that, at a glance, the company's apparent wellbeing not appear 100%, however it is to the entire country's benefit that UKOG does a Boris and returns to full health. ”

Talk about delusions of grandeur - the best UKOG could ever hope for was a handful of nodding donkeys producing a few thousand barrels a day,

Have you not worked out by now the 100bn Gatwick gusher was a shameless ramp and all UKOG have is a few puddles like most of the other small cap onshore producers.

As a UJO holder I really hope not - Horse Hill is a ramped up money pit.