Member Info for spike501

Its a good article and the conclusion matches my own - basically this is worth buying now as the well test should provide additional impetus to the share price.

As to why the share price hasn't already rocketed..
West Newton had already been discovered so this wasn't a high risk exploration well and the discovery was a big surprise so the risk discount pre-drill was pretty small.

UJO's market cap increased by around £10million with the results - at 189bcf, UJOs 16.65% is priced at $2.25boe for 2C resources which is already quite high, but probably justifies the premium as it is close to existing infrastructure

Nothing yet is known about the liquids, but its probably fair to say there is no valuation assigned for this, so news on that could drive a quick rerate.

How do you short something to build a stake?

"A friend who knows a great deal more about the situation than me, suggested a takeout price of 3p per share would be a disaster for UJO's shareholders"

Your friend is bonkers.

"I think they will test the lower find first, to test if the liquids are Gas and Oil or pressurised Oil."

They'll release the evaluations from the cores taken next - that could be a big catalyst.

Spike912 - I don't dispute that UJO were fully funded for this well included the extended well test. but still cash will be tight. Cash at 13th May was £2.5million and the estimated cash requirement for UJOs obligations for West Newton are £2.13million (from SP Angel note October 2018). Add in some running costs for the business and UJO will be running on fumes by the end of the well test if they don't raise. They could well decide not to and hope for a successful test and then raise, but it would also be prudent to raise now, while there is good sentiment and ensure they have cash for contingencies and to advance other projects.

I'm not necessarily saying it is likely, but I wouldn't be surprised and nor at this stage too disappointed.

I'm delighted with the results today as this has gone from a fairly high risk punt, to a play which easily supports the current valuation and has plenty of much lower risk upside.

I assume they are fully funded for the EWT, although it might cost a bit more than expected as the liquids will likely make the job more complex - they'll certainly need a redesign before starting, DB said as much today.

However, they won't have much left after that and have plenty of projects so a placing in the next months is a near certainty - I'd be supportive or raising a couple of million now, puts them in a strong position.

I'd never believe a AIM O&G junior who says they are fully funded and won't need to raise capital.

I don't think its that bad an article - to be fair in the NPV, Reabold have referenced the $247million NPV valuation in their RNS today.

Its fairly balanced - I don't agree with the conclusion, the announcement points to significant upside and although there are risks with the well test, they are a lot lower than the phase that has just been completed and it should provide for additional newsflow. As I've said a couple of times today, look out for the analysis on the well cuttings and logs being released in the next days and weeks - it won't take long to analyse the cores and determine what the liquids look like and how much pay is liquids.

I'd probably expect a placing shortly, but UJO should be able to do it from a position of strength as this is substantially derisked - knock out another 10% of equity to get a couple of million in the bank and strengthen the balance sheet is no bad thing.

Deloitte CPR

"After that news this is afkin joke"

Why, just out of interest?

How should UJO be valued based on the information available?

I don't think the market has caught up - it seems to be turning now and climbing again as the interviews start to filter out, but hopefully core analysis can be completed and results released in the next few weeks to provide firmer info and substantially increase NPV.

This is a very strong hold now

To play devils advocate, it was a 73% chance of commercial success, so there wasn't a substantial amount of risk to be priced in.

The RNS however gives a lot of indications the well is a lot better than initially expected and I would expect analysis of the cores will be completed shortly and news released. I expect the NPV10 for the gas will be substantially higher as it is overall larger and more liquids rich than proposed and this should drive further short term value, followed by the well test.

Its not bigger than Horse Hill - Horse Hill is not a defined conventional hydrocarbon reservoir, rather a continuous layer of unconventional oil share - estimates for oil in place in the licence were in excess of 10billion barrels of oil, compared to this which is 30million recoverable.

Horse Hill was also well timed for all the hype that was surrounding uncoventional oil sources.

In my view Horse Hill remains a load of hype as the number of wells need to recover any substantial quantities is huge and given the opposition to fracking I'd be surprised if they even get large scale planning permission. I'd much prefer to be in a conventional play like this, but its not true that West Newton is larger.

They've just got oil saturated cores at this stage, that bodes well for the future as the RNS indicates but it doesn't appear to be a reservoir discovery at this stage.

NPV10 of the gas field was $247million of which UJO own 16.7%, so around $40million or £33million - there is still development and financing risk so the NPV10 is still being discounted.

Successful flow test should add more value as it derisks further as well as updates on field size and composition which seem to be substantially better than pre-drlll expectations.

Its a great result and a platform for the future value growth, but talk of a penny a share was always fanciful at this stage.

I think it may well climb through today so a 0.3 finish isn't out the question.

"Disgraceful and should be investigated"

Investigated for what? Lying on Twitter?

The police would be pretty busy.

No rationale investor should be paying any attention to anyone posting on Twitter.

Anyone who bases their investment decisions on Chris Oil's twitter feed should be sectioned, as should anybody who refers to their shares as "Golden Tickets".

They are drilling a 2 km deep well - of course it could very well be that the delay is because they have found so much they don't know what to do with it all and need a bigger calculator, but it is also likely that the drill has taken a little longer than required due to any number of factors. The delay could even be because the sodding drill bit fell off and they are trying to fish it it.

Just relax - news will come when it comes.

They don't.

Testing, as in proper well testing, not logging, will not start until after an announcement that TD has been hit and logging has been completed.

It’s way better than a wild cat. But it’s still a step out, beyond a fault from the original discovery well. It’s not sticking a hole in an area that is guaranteed to be be oil bearing because it’s in the same trap as a successful discovery well and it is pay, flow and OWC characteristics being tested. There is still a chance there is nothing oil at the location.

Egdon consider it an exploration well.

It’s a good prospect, from my perspective a bonus given that West Newton really is an appraisal well - it’s not a banker though

Egdon resources who are the operator consider that Biscarthorpe-2 is an exploration well.

Egdon Resources plc (AIM:EDR) is pleased to announce the commencement of drilling operations at the Biscathorpe-2 exploration well on licence PEDL253 in Lincolnshire. The Biscathorpe-2 well was spudded today at 12:30 hours

http://www.egdon-resources.com/commencement-of-drilling-operations-at-biscathorpe-2/

This is a step out well, beyond a fault line from the original Biscarthorpe-1 well.

Its more likely that is has taken slightly longer than expected to reach TD and complete wireline testing and logging - nothing at all to worry about, but also I wouldn't take it as indications that they have definitely found something either and that is causing the delay in announcing anything.

There is no way they will commence actual well testing, without updating the market via RNS of a successful drill to TD and the results from wireline testing around oil saturation and information about the pay.