Member Info for spike501

"Have the company confirmed that they are moving to LA-03 location post P&A ops?"

The drilling programme will have been fully pre-planned and has been previously announced. They have no reason to confirm via RNS, only update if they change plans which I think is highly unlikely.

"Also, as cash is now an issue (they have to pay 8% on the £22m loan minimum) first phase oil now unlikely until 2021 at earliest."

Cash isn't an immediate issue - they should have capacity after this programme for the interest costs for some time yet. If you view my posts I am concerned there may be an impact on financing availaibility and risk to phase 1 but lets not jump the gun yet.

"So question is... will they just drill on the LA-03 location and drop Serenity drill?"

As I say I don't see cash as critical, but even if it is tight, I imagine the break costs for the rig and everything else will be fairly hefty to not make it worth it. Serenity is also a good prospect as it is close to existing infrastructure, so success there should result in a decent impact on share price, make equity easier to raise if they do need cash and it could be a saleable asset to the nearby producers from Tain (Repsol?).

Sorry I think this post is a way overreaction - well 1 is a bad result I fully acknowledge that, but ripping up the current campaign is not the answer.

BBN - the initial two posts for this were superb, thanks very much for those.

I said “D’oh” because I’m invested here.

I’m all for looking st the positives but claiming there is a cash value of 35.5p is mindless ramping - you’ve not offset the £22million of debt against that and the cash is in the majority being spent on the drills, which will hopefully bring the value.

Filter away, but I’ll still reply to posts that are misleading

Its pointless valuing the cash as its all about to be spent on the drilling campaign - after these three wells then there is net debt.

Good article Gary and pretty much mirrors my own thoughts - this result has certainly increased the risk here as currently it has raised questions over the model and phase 1 production for 2020, but there are still too sizeable wells remaining so from this position there seems to be plenty of upside.

"They did not say that the Phase 1 development was under threat, which if it was would surely have been added as a disclaimer by the nomad, against the company's comment regarding"

I wouldn't call this a key takeaway at this stage, its clearly too early to know hence there would be no requirement to disclose anything. At this stage it has simply increased the risk as it calls into question the model and may have a number of knock on impacts.

BBN - agreed, there is unlikely to be any liquidity issues, however the poster I was responding to was clearly asking whether there was 45p cash per share, which would indicate the SP doesn't value the business at cash which isn't true and ultimately there is no cash value in the business post this drilling campaign.

"I3E will have corporate costs but the reality is still a long way from "net cash less than zero." With all due respect, such hard hitting view points should be checked for validity prior to be spoken."

BBN - net cash = cash minus debt. They will have cash in bank (around $10-15million), but they will also have $22million of junior debt, hence they will have negative net cash.

There is no sizeable cash position here to support the SP.

Forget the cash in the bank - its primarily earmarked for this drilling campaign, after it is completed net cash will be less than zero.

"So many people selling on what is not great news but not terrible news."

Its pretty poor news - this was a 90% COS well and it has missed the target. Understandably the market is now questioning what the impact is on the entire financing plan and 2020 first oil - whether there is an impact is yet to be seen.

I'd agree its recoverable as the follow up work from this well may be able to deliver certainty and there are still two high impact wells to come, but the market reaction at this stage is totally understandable.

D’oh

"It looks more stable today but does anyone have an estimate for the next week or so?"

It could go up, go down or stay more or less the same.

“I bet you WN has more oil/gas in place than HH“

Not sure about oil in place but commercially recoverable oil utterly no doubt.

"To arrive at a share price value you need to look at the known revenue for this year on a pe basis and compare it to other company's"

If that was the case no one would invest in Amazon, or indeed any growth companies in general, but I certainly would have a portfolio without some exposure to that sort of business.

GKB47 - the Cadeby was always a secondary target at this location. As the RNS from 17th June stated, they have found oil shows at this location in the Cadeby, indicating there is a working petroleum system and it will be drilled again as part of West Newton 2 where they expect better reservoir development.

Elrico - thanks for the reply, let me address both points.

On the 'hidden' cash, I listened to your interview to get context. In blunt terms SOH is quite wrong - a company cannot have cash in its bank accounts that it cannot report in its financials - the cash it has in its bank accounts has to be reported. It is a possible for a company to have cash in its bank account for sales that it has not recognised as revenue - if for example it had received £100 in its bank account but for accounting reasons could not yet recognise it as revenue then it would show assets as £100 cash and a liability of £100 as a prepayment from customer. OPTI doesn't have this.

What I think SOH was trying to indicate was that OPTI had delivered product to the customer in H1 which it hadn't recognised as revenue in H1 and then the cash was received subsequent to H1 close so is in the bank account now (and presumably also the revenue is recognised).

On the cash burn - cash at end of H2 2018 was £1.324million and cash at end of H1 2019 was £0.984million - this would indicate just short of £400k cash burn, however the company received £823k through financing activities (share and debt issue), so first half cash burn was well in excess of £1million. Both SOH and TW are wrong and the cashflow statement is pretty clear.

Brybags - this finished 7 percent up.

LSE calculates the percentage increase based upon the current midpoint against the midpoint of the close of the day before, which is pretty much the best way to do it (although as a holder its probably even better to do the change in the bid price)

Google calculates by taking the midpoint from the previous close and then comparing the price of the latest trade it has recorded, This is problematic, especially when there is a case like today where a late trade is the last trade recorded.

Armani - you got the wrong spike

“Sorry--maybe should have done at least that with news but London Stock Exchange say same as here 7.02% Up Maybe tomorrow will be better??”

This is what happens when rampy expectations of 3p or 4p get thrown around - you all need to chill out.

This is up 100% in 2 months, and nearly 300% since April - everyone here apart from those who bought this morning is in the money, we’ve now had oil confirmed and it’s up 7% in a day and you’re disappointed.

Set reasonable expectations and enjoy the decent gains

It’ll be a delayed trade - it closed 0.3-0.31, so midpoint 0.305 which is a 7.02% gain as LSE shows