Member Info for spike501

"All I know is that i did as advised and researched this project before deciding to invest a large portion of my pension pot into it. "

I don't wish to be insensitive but when would anyone invest a large portion of their pension pot into a company with no revenues and requiring huge amounts of cash before any cashflow could be achieved?

I'd be looking at salvaging whatever is left, this could easily end up with massive dilution for existing holders, or worst case nothing.

Great

And?

Reabold are an investment company not an oil operating company - its highly unlikely they will buyout an operational company as then they need to change their company purpose to reflect this.

UJO have zero obligation to confirm any speculation about a 3rd party company and its highly unlikely they would even be in on those discussions.

Heid, thats from 20th August

"How do you know it is fantasy?"

Could Rathlin be in T/O talks - possibly? I still think any likely suitors for WN will be watching until it flows before any considerations are made and then would more likely go for the asset as opposed to taking over one of the individual companies. But its possible.

Are operations delayed because Rathlin are in advanced T/O talks as BMD is suggesting - total nonsense, there is no way Rathlin or the other companies would want operations delayed while talks were ongoing.

Its more BMD froth - its a only a couple of boys ago he put out posts suggesting the big boys were in talks with UJO.

The tweet is fantasy - T/O talks are no basis for halting operations. BMD is about 20% decent information and 80% froth, rumour and exaggeration, mostly aligned to his trading strategy.

"This time next year"

...Rodney

"I have friends in high places at JP Morgan and all are confident that SXX will secure funding."

Window cleaning the tower?

137 bopd is 500k per year - this is allowing for no downtime and no decline rate.

Even taking the 500k per year , oil price is about $60 you arrive at the top of my range of $3million per year, with no allowance for lifting cost which will likely be in the range $10-15 per barrel, so net is $2-2.5million

To get 700bopd requires proving a different zone is flowing which I believe (but maybe wrong) requires permitting. It’s unlikely in 2020

Wressle production isn't starting until mid year and that will require capital expenditure as will any new well on West Newton.

I would work under the assumption that there will be one placing in the early part of next year, once the CPR and well test for West Newton is complete and planning permission is submitted for Biscarthorpe.

I still think Bramhill is being a bit loose with his figures for Wressle cashflows - initial production is 500bopd of which net to UJO is a little over 100 per day - call it 400k a year (thats with no allowance for decline rates) and that is $2.5-3million to UJO per annum, however that doesn't exclude any lifting costs. I don-t see it bringing in more than $2million net per year in free cashflow and profitability will be a lot lower than that due to ongoing amortisation and depreciation.

"Would prefer a consolidation of shares before further placings take place, as we already at confetti levels"

Why, what does it matter at this stage - I can understand when targeting the FTSE or a company for hundreds of millions, but even after the consolidation its a small cap AIM oiler and a penny stock - its just an unnecessary complication and expense at this stage

"within 4 weeks...
Placing will be 0.18
They need money for the well test "

Cash in bank at September 30 September was £2.8million. As confirmed in interview a substantial portion of the well test has already been paid by UJO.

So how much additional is the well test costing?

Figures please - show your workings.

I said last time they'd be a placing which very upset this board and was strongly argued against as nto beign required blah blah blah - I was correct.

This time I'm saying there is no placing required any time soon.

Egdon have updated on Wressle - planning appeal heard 5th-13th November, decision expected at turn if the year, then another 6 months to first production.

Thanks BBN - appreciate your responses as always. I think our view on the availability of the financing differs and I wouldn't be so optimistic of driving a good deal if only Serenity is a success but I don't think there is any point labouring the point. Lets just keep fingers crossed for Serenity and then see where we are.

Serenity will have no reserves as there will be no FDP plan, so no it won't.

Yes it can be sold or JV'd, but without Liberator any potential buyer is an extremely strong position, will know it and will squeeze it.

Liberator phase 1 remains absolutely key here.

"In my humble opinion, the debt is of no serious consequence if the target is hit because the whole picture changes here, and WH Ireland, be they house broker or not, is explaining that the geology points towards oil migrating to both Serenity and the Liberator extension, both of which are scheduled to be drilled, and I3E has a very good chance of hitting it even if their model isn't 100% accurate."

The debt is a serious consequence is Serenity is hit but Liberator doesn't provide an opportunity for near term cashflow. Everyone can then see a an AIM junior with no near term revenue and high yield bonds take cash and requiring near term repayment.

At that point the vultures are circling and Serenity will not attract a 'fair' market valuation. Monetisation of Liberator remains absolutely crucial here hence the SP reaction to the failed pilot well and the subsequent move to drill Serenity as the second drill suggesting there seismic interpretation is far from certain.

BBN - with respect you are just quoting from a generic document that explains reserve based lending for layman. The financing providers who are entering in RBL programs will be taking a far deeper view and conditions have tightened in recent years.

Of course RBL needs to be in place before cashflows are in place as in most cases RBL is paying for the bulk of the upfront infrastructure investment, however the modelling of the RBL capacity will be based upon the cashflows that will be generated from the project being developed (or from already existing assets that generate cashflow, something not applicable to I3E).

Its highly unlikely that finance providers will provide RBL facilities for phase 1 based upon phase 2 reserves, when there is limited visibility and high uncertainty on the cashflows from the phase 2 development.

Just for info, I've worked for most of the last decade on asset backed financing, where repayment is via cashflows generated from the assets - not in the O&G sector but operating under the same principles.

BBN - regardless whether technically phase 2 reserves could be used against an RBL facility, I'd be highly surprised if a lender took into account phase 2 reserves for a facility that is required for the phase 1 production. Reserves that are not on production and not much use to a lender, its primarily the security against the cashflows they want.

I still think there is a significant risk here that the available facility size could be substantially reduced due to the result of the pilot well.