Member Info for spike501

My big worry now BBN is that there Seismic model has again shown to be inaccurate and again what should have been a straightforward drill to confirm funding no longer is.

20ft against 100ft planned is a big miss

To answer my own post..

It looks like they were expecting 100feet of sands above OWC at this location suggesting this is a poor result.

Any idea the thickness they were targeting at this area 20feet doesn’t sound so bad as it’s a highly productive sand, guess it depends on the net pay?

You can’t suspend the market just because of volatility - everyone has the right to trade their own horizon and you can’t simply shut up and lock people in.

"It’s highly doubtful but the Only Logical Reason re Nil RNS on 40% Drop is that they actually have struck Oil and they are assessing Reservoir Volume and that this being so / has coincided with the SP drop.
Because the Logical RNS would be to say we haven’t TD down yet wouldn’t it ? .."

Or they are trying to polish a turd.

"197mmbbl STOIIP at Serenity with even a conservative recovery of say 30% at $3 per bbl in ground = £1+ per share"

This is utter fantasy - if Liberator is a duster and the development next year is gone, its an AIM company with high yield debt with no prospect of repaying and it will breach covenants at the end of Q1. Serenity has had one drill, it still needs multiple appraisals to prove that up, which will cost tens of millions of dollars. They'll be absolutely squeezed on any Serenity farm in to save the company and it would never fetch $3 per barrel.

"But what would be the point in selling now? If it is bad news, its pretty much priced in and there is another drill to come"

A duster here is definitely not priced in at this level .

Its difficult to stay relaxed with the price action here, but leaks on North Sea oil drills are pretty rare and the institutions involved here are too reputable to be trading on inside information, so my gut is still that this a decline that has driven some panic selling, as opposed to there being a problem with the drill.

Did the rig sink?

Absolutely falling off a cliff now.

BWM - the primary reservoir target they were drilling was the Westphalian Sandstone which BP had discovered, but the sands were expected to thicken at the location UJO drilled. The drill showed it hadn't thickened and the reservoir was absent at that location so it looked like a duster.

They then analysed the results and announced in the Dinantian limestone they had hydrocarbon shows and the lab results indicated up to 35 metres of oil pay that they consider untested. Subsequent to that DB has been telling everyone its potentially the largest unappraised onshore field in the UK and that has been amplified on the bulletin boards with the impression all they have to do is stick a sidetrack in and bobs your uncle.

What is clear from Egdon today is that it is evidence of a working petroleum system but they still have a lot of work to do to find an accumulation in a productive reservoir.

Reaction - it was fairly obvious that a placing was going to have to come in the fairly near term to fund the 2020 work programme. This is the nature of AIM O&G.

I suspect they expected a much better market response to release of the updated volumetrics, but it simply didn't come and so they are still raising with the bucket shops and then the news often leaks. I think its been badly handled but and the market has played some games, but its nothing more than that.

Frankly I think if you are this angry then you have overexposed yourself to a high risk AIM O&G stock and need to relook at your investment strategy.

Debt funding is not a solution - its won't be available to UJO at this stage of WN development and there is not enough production to support any secured debt.

BWM - the primary target was absent according to the drilling results, but in the updated analysis released in July where they disclosed about a 35metre oil column in the Dinantian, there has been nothing disclosed there about it being poor reservoir quality.

So update from Egdon today on Biscarthorpe notes;

"confirming the likely presence of a 35 metre column of good quality oil within the Dinantian Limestone interval, which despite poor reservoir quality"

I don't believe the information about poor reservoir quality has been disclosed before.

Try 2.5-3bn shares

"The fact is the valulation we currently have for WN could double further via the production drilling which will take place during Q1."

Its not production drilling - this is all appraisal work to establish the actual size of West Newton. After the next phase is done, thats when a field development plan will be done for production wells.

0.13 would be ridiculous - 35% discount to prevailing SP doesn\t sound credible.

Open placings for a company this size are generally too complicated, time consuming and expensive to organise - there is also no guarantee existing holders take up what is about 20% of the market cap.

"I think the MC doesn't reflect the importance of this drill coming up trumps and what it means to the business. The risk/reward is for me worth sitting in for the results on this drill with the data from the unsuccessful well not long ago. The clock is ticking maybe 10 more trading days?"

I'd venture that the market is over estimated the risk of this well - which isn't totally unfair given the result of the first pilot well, but with the additional data gathered since then, this does seem to be about as low a risk as it can get.