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Finally got round to comparing ED old vs new deal and over an assumed 15 year lifespan we would have been better off under old agreement, which I doubt would surprise anyone. The only surprise was that new deal delivered more cash to Highlands until year 5 for each well. For the basis of comparison I assumed no further dilution, which meant doing it under old deal took 18-24 months longer than new deal. So I guess we can�t really say if new deal is better or not at this stage. Only things that are clear to me is that we�ve gained time and free cashflow, but at the cost of less earnings over the life of a well. What the BOD do with this time and money will ultimately decide if it was a good deal to make or not. I guess in some respect the sp is reflecting this uncertainty, but definitely do not agree that current SP has all future drills priced in. I don�t however expect much movement until flow rates are confirmed.
Would be good to have 6 consecutive weekly confirmations along the lines of: "abundant oil in samples." 100% of the lateral portion of the wellbore was successfully landed in the Niobrara formation And then on to fracking of all 6 wells.
Thanks, just trying to work out when they should finish drilling Buckskin. If re-entry date on this week's report is accurate, then they are planning on taking 7 days for each well which is a lot quicker than first two. So would expect RNS next Monday to confirm Buckskin is done. Not sure how this ties in with last week though? Scrolled back to last week and Genty74 was kind enough to post last week's details at the time: Highlands Nat. Resc. : 2401 E. 2nd Ave , Ste. 150 , Denver , Colorado 80206 , ph: (918) 361-7000 No CO Arapahoe ne/se - 15 - 5s - 64w 15-16-1BHZ / Buckskin 5-64 HOR Oil 0500507343 18027 4/24/18 start 21 days drilling True Drlg ph-> (307) 237-9301 33 Drilling
Thanks VXYZ, do you have a link to last week's report?
JJAL, I work in an industry that takes ages to adopt new technology and simple reason is cost of assets involved. I'm not saying it's definitely the reason, but when you've spent millions on a well and have substantial revenue still to come from it, it might make you a bit reluctant to try something new that might damage your asset. So I think it will snowball very quickly once we've had a few customers sign on and further demonstrate benefit of DTU. I'm hoping that court ruling might speed up the process. Keep in mind that these negotiations would probably drag on as I'm sure potential customers would want some assurances and then also there's the issue of where to draw the line on liability if something goes wrong. I'm used to seeing it take 5-10 years for new technology to be adopted, but do hope this will be a lot quicker.
As I understood it the end of May only applies to the producing wells. True pay for all new wells from the start. We also get part of our overheads covered (everything related to ED) as operator before 7.5% is calculated.
At some stage this income will be reflected in our share price. Just one thing to note - True deal starts at end of May so have additional month under old agreement. So should be around $5m by start of new deal.
The market cap today is about �3m more than 2 years ago when SP was in mid 50's. We've gone from 30m shares in issue to 116m during this period and that's been reflected in SP performance over the period. For me it highlights how massively important the structure of True deal is. I believe we've reached the end of placings and can now grow from here.
Dave, just need to keep in mind that Cantor note is for their clients. It's not for public distribution, so when/ if we'll get to see it is up in the air. If we're lucky enough to get sight of note it will be weeks after it's issued. Best we can hope for is to see increased buying action and maybe someone slipping out what target price they put on it. Either way, their clients will see it long before any of us.
Hi Cat, good to see you’re still around. Hope you’re right about someone building a position, but I just don’t see it. I can still buy 50k easily at just over mid price and the last few buys have been at similar price. Looks more like there’s still someone selling to me. At least we seem to be pretty stable in the 19-21p range.
Thought Q1 update stated no4 has been granted already?
It will be near the end of June. Be interesting to see cash balance at 31 Mar. And losses should have narrowed considerably.
BBS, think you’re slightly high in that year-end estimate. I make it $3.8+$5.4+$2 (9 months of first 2)+$1.2(2 months of 6 new)-$3(cash admin expenses)=$9.4m less anything we spend on land, DTU and Helios.
For the first 3 or 4 months the expectation is roughly $600k per month on average to us.
Fadec, if you remove current cash position from MCAP you’d struggle to justify that current ED project is fully valued at these levels. That means DTU and Helios is valued at less than zero! If you bring the outstanding founder warrants in, you probably get close to a zero valuation for DTU and Helios. I’ve been adding since we met up with the team and am very happy to have been able to add roughly 200k for around 20p on average. Bargain price in my opinion, but who knows I might have got this completely wrong!
They're doing the blowout prevention testing for Buckskin today, so would assume they've just spud the last one or will be today. Based on previous timelines given all 6 should be completely drilled by end of June. Completing all 6 will then take around 3-4 months, but not sure how they are doing it. Two at a time or all 6 at the same time? I would assume it will be 2 at a time, but could be wrong. As a side note, I know some people are disregarding ED to a certain degree which I think is a mistake. Even at 7.5% interest we will still be getting circa $600k per month for a few months from 6 new wells and we still have May income from first 2 under old arrangement. So might not have the wow factor of Helios or DTU, but is vital to ensure we can develop our main assets without massive shareholder dilution. Many on here don't agree with me, but I think BOD is doing an amazing job. Very obvious some on here have no idea what it takes to build a sustainable business or the time it takes. What's been achieved in 3 years is unbelievable. I'm more than happy for the BOD to stick to timelines that makes business sense. Just because their timeframe doesn't fit in with your investment timeframe doesn't make them wrong or incompetent.
BBS, wish that was the case but it's a lot less. After 6 years you're around 100boepd as an average and still declining. As S4LMO rightly pointed out there are lots of factors that would influence the decline rate. Using DTU on these wells could also improve things in our favour.
Sglynf, the Jan 17 CPR report has a decline curve based on BOEPD for similar wells which I use for all my estimates. Based on CPR decline curves and combined IP of 1,771BOEPD we should have produced roughly 850BOEPD. Our production figures for April is well ahead of that at almost 1,073BOEPD.
Agreed Intotheblue, but need to include gas sales as well. So that get you to 24,400BOEPD. The new format of COGCC website makes it easier to read and less confusing. http://cogcc.state.co.us/production/?&apiCounty=005&apiSequence=07269 http://cogcc.state.co.us/production/?&apiCounty=005&apiSequence=07267
Think it’s still in auction, but that normally only lasts 5mins. Tried small dummy trades and couldn’t buy or sell 500 shares. Everything is NT.