Member Info for StarBright

Obviously hit a nerve..!

Got it. That's what a former colleague used to call a "Golden Otter's Groove"... ;>

Here's the relevant text from the "robust commerciality" RNS referenced above:

"The Company's economic modelling indicates that HH-1 Portland is robustly commercial at even the lowest observed sustainable daily rate of 140 bopd..."

Which chartists with which charts argus1?

Plenty of people with chart skills here. UKOG is a textbook example of when TA probably isn't the right tool though. Too volatile, driven by short-term sentiment and news flow.

For clarity. Short positions >0.2% have to be disclosed to the FCA, with those over 0.5% then disclosed publicly on the daily spreadsheet.

Correction accepted.

But the many posters here accused daily of being shorts aren't market makers are they jptop7?

For sure MM's are permitted to hold short positions. In practice they tend not to hold material positions - either long or short - because of onerous capital adequacy rules. Also because, contrary to the fevered imaginations of many here, their business isn't one dependent on playing the share price. These are flow businesses - they make their money from the spread. They are picking up nickels in front of the market's steamroller, and it doesn't really matter to them whether the price is 2p or 6p. They need to avoid getting caught holding material positions (short or long) when there are price changes, as these can wipe out many weeks worth of nickel collecting. Hence they tend to avoid principal positions in volatile instruments. Their commercial interests lie in finding the price which encourages both buyers and sellers to transact, without them having to expose their own capital.

Legalease - when you say "booked" what do you mean?

100% correct jungerns.

I don't think that the posters are looking for cheaper entry prices though. Just Walter Mitty characters trying to look knowledgeable on the internet.

FYI short positions >0.2% have to be disclosed to the FCA, and are listed publicly here every day: https://www.fca.org.uk/publication/data/short-positions-daily-update.xls

UKOG are not on this list. I've not seen them there previously either. The Walts will say that this is AIM and the rules are frequently broken. Not these rules - too easy to track and prove after the event.

Legalease - Share prices are discounting / estimating vehicles. They represent the sum total of market participants expectations. Not just what has been formally announced! If investors believe that good news will be announced shortly they will buy the stock ahead of the expected announcement. As a result of their buying the price will rise and the good news is said to be "priced in" before any announcement has been made.

If UKOG's CPR contains material positive surprises, the SP will rise accordingly. However, experience tells us that it is unlikely that any such positive news was omitted from the recent RNS.

Good post wasit10538, that's a fascinating parallel.

JiffyBag: “In other words in the short to medium term ,there is still a lot of information yet to be gleaned that will have an impact on the SP good or bad depending upon the results.”

Yes - I agree with this wholeheartedly. The key challenge with UKOG as an investment lies with forming and then constantly re-evaluating a view on what is priced in. Good news is only good news if it is NEW news. Recent tanker sightings and the confirmation of the previous Portland results weren’t/aren’t new news.

This is a sentiment fuelled share with a price long inflated by hopium and hot air. However, there is real potential for upside surprise and a subsequent major re-rating. If this happens it will happen quickly, and not necessarily on the publication of an RNS. Although the SP drifts lower during quiet periods I don’t think it is any danger of falling back to a level underpinned by the hard commercial reality of cash flow etc.

If you want a shot at the potential “multi-bag” upside here, you have to accept that your seat at the table is over-priced.

Vernony: you are absolutely right. There are many frequent and authoritative posters on here whose posts reveal nothing more than their lack of real knowledge and experience. They are like people posting on a football forum who don’t understand (or aren’t even aware of!) the offside rule. Their lack of awareness of the perimeters of their own knowledge is breathtaking at times. True Walter MIttys!

No response dhc? I am not surprised.

When the post I referenced above (suggesting Portland at 400bopd was priced in) was made, what you were posting about? Shall I quote you as a reminder?

“Get them brochures on order: 2nd homes, Luxury cars, Exotic holidays, Rolex's. Paying the mortgage off first could be the order of the day. Lambo's and Rarri's for the high value investors. ”

Cynical spam ramping targeted to influence the many inexperienced investors who visit this site. You should be ashamed.

Dhc: If robust commerciality for the Portland was priced in, what would the share price be and why?

...during the last three months?

There are many posts on the board questioning what has happened in the last week or so. Repeated allegations of “manipulation by MM’s”, expressions of disgust regarding the “AIM casino”, calls for the FCA to investigate etc. Clearly a lot of angry private investors.

To understand properly it is necessary to go back to earlier in the year.

- From the end of February until the end of June, UKOG traded in a 20% / 0.3p range either side of 1.5p.
- On June 27th the company released an RNS saying that a 150 day EWT on the HH well was underway. The share price rose, and for the next 8 weeks fluctuated in a range 0.4p either side of about the 2.1p mark.
- Late in August speculation and expectation regarding the release of EWT results on the Portland layer became the dominant theme here on this board.
- On or around the 27th August the price rose again - perhaps fuelled by discussion here (DHC and others posting about Rolexes, Lambos, second homes...) and pictures from the “eyes on site” - briefly touching 2.75p.
- Frustration built as no results were released during the next couple of weeks, with the SP dropping back to about 2.15p
- On Sept 10th the company released an RNS covering the results of the Portland testing. After an initial sharp/transient upwards spike toward 2.7p, the SP fell back to the 2.15p +/- pre RNS level

The absence of a sustained re-rating on the back of the Portland RNS has provoked something of a fury, with investors expressing surprise and a lack of understanding as to why the SP isn’t significantly higher.

It only takes a brief look at either the potted history above, or better still the 6 month chart, to confirm that the rise and re-rating is there. It just took place BEFORE the RNS was released.

Ahead of the RNS, numerous posters had observed that Portland flows at or around the previously indicated level were probably “in the price”. For this they were generally lambasted here as trolls, derampers, swampies etc. An example from Sep 3rd:

“Markets react positively to new news. I don’t think that 400bopd will be new news as such. It’s been widely telegraphed, so is probably largely priced in already. It will be a valuable confirmation and an important step along the way. But I don’t think Portland at 400 barrels will be enough to trigger a re-rate by itself.”

No-one has been cheated here! No-one should be surprised or angry. The company has made an important breakthrough and the share price has been re-rated upwards by about 40% as a result. The re-rate however preceded the RNS, driven by bulletin board speculation, and by reports/pictures from the “eyes on site”.

I hope that some lessons - particularly that anything widely discussed on a bulletin board is likely to be “in the price” already - have been learned.

Not to mention “Get them brochures on order: 2nd homes, Luxury cars, Exotic holidays, Rolex's. Paying the mortgage off first could be the order of the day. Lambo's and Rarri's for the high value investors.”...

You should be ashamed.

Maybe dhc your repeated posts about (and I quote) “...2nd homes, Luxury cars, Exotic holidays, Rolex's...” and "well done if you followed the sequence and got your golden tickets. You might have to be very quick on Monday morning..." explain why you are viewed as a ramper?

Just imo.

This board is at its best when it features contributions from posters sharing their knowledge and experience of the oil industry and investing. Particularly where views are combined in discussion and refined through debate, The present tribal obsession with dividing all posts and posters simplistically into “rampers” and “de-rampers” is making this impossible, and it is notable that there are fewer and fewer contributions from posters with professional knowledge and experience. If a better balance cannot be found, an empty echo chamber where self-appointed priests cheerlead an uncritical and unquestioning choir is the inevitable result.

I think that would be a shame.

pa_richards - the relevant RNS says:

"For a total consideration of £4,500,000, the Company will purchase Solo's 15% shareholding in HHDL, equating to a further 9.75% beneficial interest in the Licences. The total consideration of £4,500,000 with an effective date of 28 August 2018, will be satisfied through the issue of 234,042,221 new ordinary shares in UKOG ("Consideration Shares"). The Consideration Shares are calculated based on the 10-day volume weighted average price from 24 August 2018 of 1.92 pence."

Interestingly it goes on to say that the Gunsynd and Primorous transactions were revised upwards to reflect the same price. That - I think - was unusual and very kind of UKOG...

I understand that the SP can vary post transaction. It is normal practice to mark the transaction at the original price declared, so that is what I have done.