Member Info for spike501

"It's nigh impossible for this to go sub 16p again based on M&P's indicative 17p offer already aired to the market. AMER will be sold whether that's through the FSP or via open market or via hostile bid... we all wait to find out."

Not sure about that - shareholders could easily reject M&Ps 17p offer, the cash portion was anyway only 12.5p. Really not sure why saying the SP could drop back to the price it was before the process started is particularly controversial.

"We go from 189bcf of gas to over 140 million barrels of oil and the sp hardly moves?"

189bcf is the recoverable estimate, 140million barrels is the oil in place.

189bcf is equivalent 30million BoE, 140million barrels of oil in place will have a recoverable of likely 30-40million - so the recoverable hasn't changed considerably, what will change is the economics with the oil far more profitable but we won't know that until the CPR.

What I'd really like to know is what the recoverable gas is from the still considerable 200BCF+ gas in place - what was the gas in place for the 189bcf.

Its just another positive step on the journey that helps to underpin the share price and allow for future value - key value drives now are the EWT and the CPR.

If they directors are buying shares its unlikely they are in the bidding process as they'd be trading on insider information.

I'm sure they'd go back to Liberator A3 - I can't imagine they have a firm drilling location for Serenity next well yet, they'll want to analyse this well data

"gives the Company flexibility to extend its drilling programme."

So are they going to go back to the original A3 destination for a 4th well? They have the rig until end of Jan and smooth operations could drill two wells in this time.

Egdon announced well before the general election was called that they expected the verdict of the appeal to be received around the turn of the year.

My assumption is that he inspectorate was either responding to a query as to whether the verdict would be delivered before the election or simply stating that as a fact rather than actively deciding to delay until after the election

I think your user name should be ohdeer

Even the SNP accepts GERS as being an acceptable overview of what the finances of Scotland looks like - Scotland runs a notional deficit far above the U.K. as a whole and that is plugged by transfers from the rest of the U.K. (south east actually which subsides every U.K. region)

Given that Scotland receives a direct fiscal subsidy from the U.K. where as in the EU it would likely be a net contributor it’s debatable that’s the case.

EU accession would also take years - it would take years to fully untangle from the UK

"Now, if the price ever rises back to the average for 2019 of 14.65p, the value of my investment will become £4.83p or an increase of almost five times. If the price rises to the all-time high of 45.2p, the capital gain is almost 15 times. If the share price instead falls to zero, when only a small sum is invested there’s little lost. In other words, if I invested in SXX in line with risk levels that are comfortable for me, there’s little downside and a lot to gain potentially."

Give me £50 and I'll flip a coin 10 times - if it comes in heads 10 in a row, I'll give you £500, if it doesn't I keep the money.

Its a great deal you can make ten times your money if you win and if you lose, its only all of it you lose.

“Spike....I believe your numbers are way off, but let’s see what we gets announced formally”

Which part - the OIP comes from BD, the percentage share comes from the actual percentage share.

Recovery factors of 25-30% is towards the upper end of industry standards with enhanced recovery techniques that won’t be factored in at this early stage and $15 NPV10 is fairly high

So which bit do you think us substantially off?

“ Filtered spike, value of find goes up and he down values the NPV”

Er no - my NPV10 is 2to 4 times higher.

"Can anyone else do the maths of what this could be worth based on 200mboe? More realistic"

More realistic than what? I've given a detailed view below - feel free to challenge some of the assumptions.

"Spike, the old figures for ujo's share of 187bcf was $40m.
Do you really believe a barrel of oil in the ground onshore right next to refineries and pipeline is worth"

You're comparing apples and pears - the $40million was the NPV10, you can see my estimate of updated NPV10 is $87million to $150million, so its an increase in valuation of 2-4X.

Shares are never valued at the NPV10 though (why would they, there is then only downside risk), especially preproduction - $5 per in the ground barrel is more than reasonable.

- 140,000,000 - 200,000,000 oil in place.
- UJO share 16.6% - 23,240,000 - 33,000,000
- Recoverable 25%-30%
- Net recoverable for UJO - 5.81million to 9.9million
- NPV10 for onshore oil is probably $15 per barrel
- Total NPV10 $87million to $150million

Valued in the ground is probably more like $5 so WN is likely $30million to $50million, so some upside but again showing SP predictions of 3-4p is simply not credible.

“ Another question relates to Tain and its partners there. 50mmboe STOIIP, with a 2C resource of 6.1mmboe seems right at the low end of commerciality as a stand alone field”

I believe the 6.1mmboe 2c is RREs 50% share of Tain - so total 2c is double which then on 50mmboe STOOIP makes sense.

The serenity drill seems to have exceeded expectations on net pay at this location but it’s supposed to thicken further west so extrapolating this well out across the field to look at STOOIP upgrades is a bit early at this a stage

I see this morning Reabold have announced the completion of the Rathlin share purchase and also state in the RNS that a two well drilling programme at West Newton B will start in Q1 2020, so plenty of news flow coming, although no mention of the well test.

Egdon stayed in their operations update on 1st October that they expect a decision at the turn of the year.

For West Newton, nothing as it’s conventional, as is everything UJO has so operationally there is no impact.

I wouldn’t be too optimistic about the SP on Monday though as anything UK onshore is likely to have sentiment damaged

"RBL would be between 5 - 8% interest."

Thats pretty high which indicates they are not standard bank lenders but more specialised providers - the announcements on the junior do indicate that the fund behind those are also part of the senior consortium.

I actually think that is good news - if these are funds chasing higher yields they are less likely to have such a strict risk appetite as standard bank lenders so may take more risk on development.