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Very new to this.
Having read the RNS recently, suggests that the fall experienced in May, where FARN's drug showed no marked improvement on placebo, seems to be correlated with the administration of cortisol steroids.
Looks to be a mortality rate of 10% for no steroids + drug vs. Placebo of 30%...which is huge.
They have YODA test of really small sample size of 50 healthy adults to determine best conditions to administer Traumakine. Results due before end of year.
FARN has reentered talks for motivations of a partnership as well, as heard in interview with proactive.
With all that being said... Why is the SP falling? while Directors buying £20k worth of stock, sending a vote of confidence to that market... Yet still dropping
But all I hear is "this is a bagger"
Maybe I've got it all wrong, literally started researching 30 mins ago.
Why the optimism guys?
https://twitter.com/wealdoilers/status/1056845121231167488?s=21
@Gunny
What would it matter if they did a share consolidation? We wouldn't lose out?
If they reduced shares by 5:1 for example...let's say you have 50,000 shares...yes it becomes 10,000 BUT the share value goes up by 5.
Instead of having say, 50,000 shares at 2p ... you would have 10,000 shares at 10p...
Hi Thorpedo,
I cant say I know the PEDL back to front, no to be honest. Thanks for sharing, Im a bit of a naive PI who perhaps should go back to basics, but i am learning!
I definitely think the SCC will approve planning permission, they have no reason to not want to...
So, we have the same 'production license' type that Angus has at Brockham?
I was just trying to figure why the market is valuing at 100-110m...
Im kind of glad it currently is...as investors, we like times like this...its the whole point in investing.
Hey StarBright,
Makes sense regarding lack of buying pressure. Makes sense to hold.
Question, well two really...
What is the market waiting for? I can only assume that KL4 must be priced in too then, if buying pressure is low. Unlikely that once/if UKOG announce 900bopd like last time, the SP substantially rerates. Given the flare stack photos, numerous tankers...the oil is there and the company is derisked...so why are we only being valued at 100-110m?
My guess is because we don't have the production license and haven't proven the 5 other wells that are going to be drilled? i.e. we could drill the other 5 but not get the same flows?
That brings me onto my second question, in light of the new wells, do you believe a placing is imminent to fund the wells?
Starbright,
If and when both Portland and Kim confirmed as commercial. It is only a matter of getting a production license.
There would be no risk since the well drilled and proven commercial.
Securing funding for other wells will be easy no? Bank wouldnt worry about the risk of not obtaining a production license? Angus has a few of them...
Penguins,
Firstly - thanks for helping me out here. I am quite new to this, trying though!
I took the number of tankers to go down based on page 10, i.e. it says for first 4 months there are 16 tankers (it says that counts for both in and out...so i took that to mean, 8 really taking away black gold), then for the next 24 months, it says 12 (so 6 out)... that's why my numbers dropped off.
I agree with your 24 days, silly me! and I have changed the barrels per tanker to recommended 214.
For the SP, I'm not trying to say it will definitively go there...but as a guesstimate, im doing the value of the oil (after accounting for production costs, UKOG's 46% interest etc.) divided by number of shares in issue.
This is what I have now:
Production Programme
(1) Months <>
(2) Tankers per Day
(3) Days Working
(4) Capacity of Tanker
(5) Days per month
(6) Total Barrels for the Period of (Months <>)
(1) (2) (3) (4) (5) (6)
4 8 6 214 24 986,112
24 6 6 214 24 4,437,504
48 4 6 214 24 5,916,672
60 2 6 214 24 3,697,920
104 1 6 214 24 3,204,864
18,243,072 Barrels total.
That total barrels translates to £388,781,026 (Total Value incl. 46.735% interest, Production Cost, conversion from $ to £ etc.)
A Market Cap of £390M at current shares in issue is: ~7p
Im afraid I dont understand what this means (n00b)
"The actual value per barrel now even if the 4mmbbls appears as a 2P reserve will be much lower than OP - OPEX"
Once again, breathe of fresh air vs. typical keyboard jockeying found on here!
Cheers!
Source: http://ukogplc.com/pdfs/Horse%20Hill%20Production%20EIA%20Scoping%20Report%20051018.pdf
Current Brent Price = 85
Production Cost = 25
Profit = 60
$ to £ = 0.76
UKOG % Interest = 0.46735
Months <> // Tankers per Day // Days Working //Capacity of Tanker// Days per month // Total Barrels **Taken from pg. 10 of Source **
4 // 8 // 6 // 300 // 30 // 1,728,000
24 // 6 // 6 // 300 // 30 // 7,776,000
48 // 4 // 6 // 300 // 30 // 10,368,000
60 // 2 // 6 // 300 // 30 // 6,480,000
104 // 1 // 6 // 300 // 30 // 5,616,000
Looking at schedule of tankers, assuming each tanker carries approx 300 barrels - the total barrels over the next 20 years is = 31,968,000 ...
People will say this number is flawed as the final result doesn't take into account cost of new wells etc... but also note it only shows 32 million barrels, when Kimmeridge reserves are in the billions of...it also doesn't factor in more wells being drilled beyond 6, and therefore increasing our output! I think this is more of a factor than the cost of a couple wells at the end of the day!
So now if we do:
(Total Barrels) * (Profit) * ($ > £) * (UKOG % Interest) = £681,275,163
Which is an SP of about 12.22p (MCAP of £680M)
Doesn't include even more wells...only goes by 3500 bopd, not increased flows due to horizontal wells/more wells etc.
STRONG BUY!
If they flowed steady at 900 bopd - what would the SP go to? In other words, if they hit their planned 3500bopd across the six wells (3 for portland, 3 for Kimm)... what would the SP be based on that news?
Is it 35* 15m/25m/45m? (Vonk in his interview said that 100 Bopd is equivalent of £25-45 million and someone else said he is wrong and it is more like 15m)
@15m = 525M
@ 25m = 875M
@45m = 1, 575M (or 1.6Bill)
Thoughts?
How would you go about valuation if they said stable flows 1100 bopd?
If they flowed steady at 900 bopd - what would the SP go to? In other words, if they hit their planned 3500bopd across the six wells (3 for portland, 3 for Kimm)... what would the SP be based on that news?
Is it 35* 15m/25m/45m? (Vonk in his interview said that 100 Bopd is equivalent of £25-45 million and someone else said he is wrong and it is more like 15m)
@15m = 525M
@ 25m = 875M
@45m = 1, 575M (or 1.6Bill)
Thoughts?
How would you go about valuation if they said stable flows 1100 bopd?
Exactly my point guys... current MCAP seems to only factor in Portland...not Kimm...so current prices are a steal, since we heavily derisked re: Kimm flowing...i.e. there was tanker sighting yesterday...we know its flowing...cant believe this isnt rocketing already...but im relatively new to this game
nothing changed...portland commercial priced in...dont see how it is though...because based on 300bopd with 3 wells of 7-11 million barrels of oil...likely of which 40% is recoverable...that gives us a quick estimate of:
(40% of 7M barrels = 2.8M barrels of oil)
(£2.8 million * (current oil price ($85) - $25 for production costs) = $168 million dollars... = £129M )
(Current MCAP is £111M... )
And all of this is without Kimmeridge tied in // Based on the fact that they suspect 900 bopd from kimmeridge... and have submitted planning for 3500 bopd...they expect to get 866bopd from each kimmeridge well...
Twittersphere suggesting there will be a placing before Brockham? I havent done cash burn calculations. Don't see why they would do a placing prior to Brockham because if they hit, then they can print money without dilution? I remember someone saying in order to get OGA approval for the drilling they had to show healthy financials to be permitted...so I think the actual reason has to be Bergen selling / not enough momentum (unlike the UKOG following) / lack of detail regarding how long the flow was tested for / water content (which Alan has dismissed...and I agree Alan) but with lack of further testing, maybe we need a 150 EWT?, we cant guarantee the best tactic to deal with the water. Even better yet, could all be down to fact that we dont have production there and only 25%. Those last two points are so minor I threw them in there because i've said basically everything else so why not!
Can anyone enlighten on the Brockham operation / point me towards the RNS that explains it? I thought UKOG had Brockham and that they messed up the well because of the angle they drilled it at etc? Genuinely believe that after today's news, this has to be one of the most undervalued stocks on the market. Once water dealt with and production license obtained...enough said really. Over the moon!