Member Info for StarBright

You've certainly put in a lot of effort here for your original £8.4k stake. Over 500 posts in 30 days...!

No - not at all odd. The combination of enhanced disclosure rules in an offer period, fear of the MAR, and a desire not to drive the price up against their own interests is enough to discourage potential bidders from trying to buy a few "on the cheap".

Jungerns - if you work for a regulated financial institution then your activities here will almost certainly be a breach of your employment obligations.

Ironic - suggesting that a share may be suspended is typically the act of a cynical de-ramper! I can see from your posts that you probably aren’t one of those, but others may not care to look.

Ironic - a company can’t simply suspend its listing “once they are confident of a deal”. Fortunately - for us all - there are many protections in place to prevent this.

Agreed. Either way, the company is looking to increase its flexibility by relinquishing its premium listing. The premium listing regime does afford some additional protections for investors that will now be lost, but I suspect this is a case of needs must.

This announcement was in the interims, so isn’t new news. But is perhaps been lost amid all the excitement.

A premium listing requires companies to subscribe to something called the pre-emption right regime. Pre-emption rights give existing shareholders in a company the right to subscribe for their pro rata share of any new shares in that company issued for cash. By subscribing to the pre-emption right regime, companies are providing investors with protection against inappropriate dilution of their investments.

In simple terms, it’s much harder to do a dilutive placing if you have a premium listing. It could be that Flybe - should a takeover not happen - knows it may have to raise capital, and is clearing the decks for this.

My view is that the prevalence of shorting is massively overstated in discussion on this board. There aren't vast numbers of people earning money by shorting shares. If anything it is harder to make money shorting than it is by holding long positions (because of borrowing costs, stock availability and risk management etc.)

Most the posts you read about shorts, market makers etc are simply nonsense and can be safely disregarded. This board is sometimes a sort of "dark ages" of investment, with false priests using empty claims of insight into market operations to scare and influence inexperienced investors. Unfortunately the idea that you are losing money because of the evil acts of others is far more appealing to the human psyche than the reality that you are losing money through lack of understanding / research / experience...

Dhc must have inadvertently omitted the word "initial" used in the presentation.

"Target Initial rate 1000 bopd per horizontal well" is of course materially different to "targeted production of 1000bopd from each horizontal well".

If we apply the depletion profile embedded in the scoping report, average flows are roughly 27% of the initial flow rate.

baits - please stop making stuff up, or posting random stuff you've googled and chosen not to link/attribute*. Your lack of knowledge/experience on this topic is painfully obvious through your every post. Enough is enough now.

* https://www.investors.com/how-to-invest/investors-corner/short-sale-buy-signals/

Ninetails - the info in that post is (mostly) spot on. When it comes to discussion on market makers, shorters etc, this board is plagued by people who just make stuff up. True amateurs without even passing familiarity with the perimeters of their knowledge. They are already here in this thread... Anyone with professional experience of equity markets will read their posts and just laugh. However, "it's all a fix" is such a seductive line for the lower quartile of the village that anyone attempting to point out the comparatively dull reality is quickly attacked for being a shorter / de-ramper...

Ocelot - the spread bet providers best situation is when they have no net position, so short positions are generally helpful to them. In reality they don't hedge share by share as their own net book is effectively a portfolio (the inverse of their clients exposures) with all the associated diversification benefits. Their exposure is more beta like, and most of their hedging can be achieved more cost effectively at a macro level - for example by using portfolio analytics to isolate net exposures to (say) currency movements, rates or commodity prices. They are quite sophisticated.

You've lost me now wizard.

I see the HH site producing an average 1000bopd through its 20 year life. That will require about 16 tankers/day in the first year, falling to 2 tankers/day from year 12.

That's what the scoping document says. Whilst it leaves some wriggle room for tanker movements, I very much doubt that anyone at UKOG thinks HH will ever be producing 9000bopd, let alone as an average over 20 years! Why on earth would you think it might?

At $70/barrel, the HH site if delivered as set out in the document has an NPV10 of £125m. This higher than the May '17 $138m figure suggested by the company (albeit attributed to Cenkos) that I suspect was calculated when oil was nearer to $60/barrel.

As perky post above, I believe that the 1000bopd average in the scoping report assumes production from both Kim & Portland.

Your $3.5bn assumes 9000bopd from HH. Using the depletion rate suggested in the scoping report that is 32,400bopd for the first period of production. That is more than 150 tankers per day.

Are you serious?

I'd love to believe that argus1, but to do so requires belief that 3600bopd can be produced from the Portland layer alone. We've not seen any testing numbers to support this have we? From the 10th Sep RNS:

"Portland vertical well optimisation could achieve a forecast sustainable initial 24/7 pumped rate of around 362 barrels of oil per day ("bopd")* when full scale long-term production commences..."

That - as has been pointed out - is not even a tested 362bopd. It's a "could achieve" 362bopd, a long way from 3600bopd even with multiple wells etc.

So i am afraid that I can see nothing to support the notion that the scoping doc considered only Portland flow.

wizard, to perform the two types of valuation discussed on this thread - P/E multiple and NPV - you need a long term average flow rate. The scoping document embeds an average flow rate of just under 1000bopd for HH, but this starts out at 3500bopd and dwindles to just 400bopd for the last 9 years of the 20 year production life envisaged. You can't translate the test figures into stable/sustained production in the way you and Rodders are.

For a valuation based on production at 1000bopd, it is important to understand that initial production will need to be much much higher.

Not important. Minor cost saving on listing fees only.

The hard truth is that the confusion comes from SS and Vonk. Neither are consistent and clear when they talk about:

production - net to UKOG/ANGS or gross from their respective projects....?
revenues - gross income minus OPEX or just income?
NPV's - no discount rate mentioned, no definition of scope (project NPV vs single well NPV)
profit/earnings - never clear whether they mean pre- or post- tax, and there is HUGE difference between the two

I used to think that Vonk was the worst; that he would dissemble gratuitously to suit his narrative. He once gave ridiculous guidance for Mcap per 100barrels of production that was quickly accepted as gospel by certain ANGS watchers. But SS is possibly worse. His lack of precision undermines his credibility. I suspect the truth is that neither is really in comfortable territory when talking about numbers. Vonk is a smooth-talking relationship banker, and SS is an oil man. Both would likely be ripped to pieces if questioned on their numbers by a skilled portfolio manager. I think that the most reliable numbers we see are those that are prepared for formal purposes, including in this instance the scoping report. There there is simply less scope for obfuscation and error than there is in blow-job interviews with the likes of ShareTalk. Tread very very carefully when you listen to these...

Slots (or any assets) given to a company won't feature on its balance sheet. This is an outcome of accounting practice, and one of the principal reasons that valuations require many adjustments from published accounts. Whilst slots awarded in this way may not be on a balance sheet, it doesn't mean that their value isn't realisable.

Ok. An NPV of £15-£20m for each individual well at HH1 could give an overall site/project NPV10 similar to my estimate based on the scoping report, £125m.

Sorry - pressed post too early.

I believe that the £15-£20million is revenue per year, not an NPV.

SS & Vonk are both criminally lax (or misleading, take your pick...) in their use of financial language where precise definitions and conventions apply.