Member Info for spike501

Whether it is a buy or a sell is simply based upon the price of the trade compared to the bid and ask.

The price paid was 0.204 while at the time the spread was 0.2-0.21 - its shown as a sell as its nearer the bid than the ask - its lower than the midpoint.

Its just a simple calculation, nothing sinister or manipulative to it.

How on earth could Wressle be worth 0.6? Its net to UJO 855k barrels of oil - on what planet could that be worth £72million?

I'd say 2-2.5p is fantasy. Thats £250-300million market cap with current shares in issue

0.4-0.5p is potentially achievable

BWM - perfectly happy with the size. I was estimating ~£500k left post well test, so even assuming that is zero, UJO will have £2million+ left for working capital and planning for West Newton B well - hopefully Wressle is also successful and then monthly cashburn will reduce.

I'm looking for 0.3p - I think this test will allow NPV to be raised to around $500million, which is net $80million to UJO. Call that £60million, discount it as pre-production by 40% and you end up at £36million or 0.3p per share after the placing and thats allowing no value for anything else.

Totally agree - it was anyway fairly likely, but the SP movement this week made it an almost certainty. As placings go, it is a good one, double the price achieved just a few months ago, the Company is now well funded and the market uncertainty put to bed as the SP reaction today shows.

The company weren't lying about being fully funded for the planned well test, but they would have been absolutely running on fumes after the test and thats before accounting for the change of test required due to the liquids. It was an absolutely sensible placing to ensure that at a later date UJO don't have to do a keep the lights in placing and can now focus solely on operations.

DB was referring to the sweet spot for the Cadeby reef prospect - this was always a secondary target and its hugely encouraging that oil shows were found at this location, but it remains speculative at this stage. What is great is that this all a bonus and can be evaluated almost cost free while they are drilling the Kirkham Abbey.

We are still awaiting the update on the liquids that were found in the Kirkham abbey, beneath the gas, which was not proposed - condensate would be great, oil would be even better.

Jarv - they had £2.5million in the bank at 1st May.

Cash out each month is £80k
Well cost net to UJO is £1.3million (SP Angel estimate)
Well test cost net to UJO is £0.55million (SP Angel estimate)

So assume well test takes until end of August that is £320k out in operating expenses, £1.3million out for the well and £0.55million out for the test, which in total is £2.1million, leaving them with £400k

Jarv55 - if I may answer my own view.

I don't see there will be anyway they would do a placing before releasing the next update from the logs and cores - I don't believe anything other than the gas has been priced in and it is clear there is more (both volume and liquids). I think there is big uprate to come.

Before or during the EWT, I'm not so sure - UJO are fully funded to do the EWT that is without question, however after that they are down to the last few hundred thousand. EWT's come with operational risk - things can go wrong. If post cores, they could get a placing away at 0.25-0.3 to raise £2-3million with minimal dilution to fully fund 2020 as well, this isn't a bad thing as if there was an issue with EWT, they could be back at the bucket shops with heavy discount and down at 0.1p again.

It would be incredibly shortsighted, if DB was not already out there, sounding brokers out about possibility - cash is always an issue for an oil junior.

"And UJO is running out of monies there 16.5 % has been eating up the cash on drilling here now 16.5% of a million is only £165000 in my so what did we spend everyone will be guessing."

UJO had to pay 25% of drilling costs as terms of the farm in. The total well cost was estimated in the last broker note of being in excess of £4million so at least £1million to UJO.

Ziquarat - given you believe that UJO are earning $65 per barrel net for the production they have, when the financial statements are public information and clearly show that the net earning for current production is currently barely positive from a cashflow perspective (and actually loss making from an accounting perspective), I think filtering people asking reasonable information is not the best investment strategy.

Ziquarat - given you believe that UJO are earning $65 per barrel net for the production they have, when the financial statements are public information and clearly show that the net earning for current production is currently barely positive from a cashflow perspective (and actually loss making from an accounting perspective), I think filtering people asking reasonable information is not the best investment strategy.

Wressle will definitely be cash generative, West Newton production is probably late 2020 earliest, more likely 2021. They've already said the next step for West Newton in the event of success at this well, would be the B well, so more cash will be needed for that well, plus the first production well. They also I believe plan to do seismics on at least 1 other prospect on the block

I'd hope they have another crack at Biscarthorpe as well, once they have re-anaylsed the data.

I'd expect at least £6million of new capital is needed over the next couple of years

BWM - I hope the next placing is not the last one. There is so much work to do in the portfolio at each step should hopefully add additional value - far better to do small ones for each step by step development with the aim of each time getting a higher valuation.

There is no prospect of PIs being involved at this stage unless they use something like Primary Bid - doing rights issue is far more complicated, time consuming and expensive than just tapping the institutions.

"After the EWT of WN-A1, WN-B will be drilled. So, yes, more cash will be needed."

PDM agreed, but I think the well result was incredibly significant because it moves UJO away from bucket shop death spiral placings where the placing is done at a discount so it can be flipped quickly, to the prospect of longer term investors where each placing is relatively small and used to drive value to develop the field and hopefully fairly early stage cashflow as well as debt funding options.. A large onshore gas field near to infrastructure is hugely attractive and there has just been a substantial reduction in risk going forward.

100% there has to be a placing at some point, unless there is an asset sale which I think is unlikely and undesirable for UJO at this stage.

Question is whether its done before the well test at a potential lower price but without a very near term need for cash, of after the well test when hopefully the price is higher but the company is running on fumes.

Well test isn't without operational risk, I don't think it is the worst idea in the world to raise a couple of million before the test is underway, hopefully though after log and core data has been released and gives an indication how much more beyond the 189bcf could be there (both volume and liquids).

Backwoodsman - based upon the annual results they updated that on 1st May cash was "in excess of £2.5million" - presumably not much in excess so lets call it £2.5million.

Running costs for the business are about £80k per month.

Well costs, excluding testing, including contigency were estmated in total at £5.4million of which UJO have to pay 25%, so net is £1.35million.

So cash now is around £1million

The testing cost was estimated at £2.2million in total again with UJO picking up 25% so that will be a further £0.55million.

So assuming the redesign for the liquids doesn't substantially increase the testing cost, they do have enough to do the test without a placing, but this would leave them fairly short of cash so I don't rule out them using the curretn favourable market for them to raise another couple of million now, instead of having to rattle the tin when they are on fumes.

DB already stated in the interviews that they will now have to re-design the well test as they were not expecting the liquid components.

I think the next update will be from the logs on the volumetrics and from the core analysis as to what the liquid was, possibly combined with an update on the redesign of the well test and when it will start.

0.25 or above - updated volumetrics from the logs and confirmation of the liquids in the cores taken should send this higher.

The RNS doesn't say anything

"David Bramhill said in an interview conducted by Gary Newman, that if West Newton comes in, we could be looking at 3 or 4p."

That doesn't sound like David Bramhill who is generally very cautious on what he says. Are you sure he didn't say if West Newton comes in they could be looking at 2P reserves.

3p values UJO at over £300million - 16.5% of 189bcf is not worth £300million.