Member Info for Yanis2005

:) :) :)

https://www.lse.co.uk/rns/FLX/directorpdmr-shareholding-lcbs85wprgf9r0z.html

Morning all.

Is looking good . Now, lets find some spare cash :)

Makes that 320k Roly :) used the rest of the cash. Market should soon catch up.

Added another 300k

In 2022, Yacimientos de Litio Bolivianos (YLB) will choose the international companies with which it will establish partnerships to implement direct lithium extraction technology (EDL). The state company will seek to have a 51 percent profit, at least.

"We are going to incorporate technologists or companies that want to invest to develop the industrialization of lithium, as long as they respect our sovereignty, we must maintain at least 51 percent of profits from the exploitation of our resources," said the Deputy Minister of High Energy Technologies, Álvaro Arnez.

In April, the call was launched for foreign companies to apply pilot tests with the implementation of the EDL in the Uyuni and Pastos Grandes salt flats, in Potosí, and Coipasa, in Oruro.

https://www.lostiempos.com/actualidad/pais/20211024/ylb-busca-ganancia-superior-al-51-extraccion-del-litio

YLB will select companies that exceed the requested performance, including lower cost and lower environmental impact, to establish partnerships and begin to work on the application of this technology tool from the second half of 2022, the report adds.

“The lithium carbonate industrial plant in Uyuni is currently under construction and we expect it to start operations at the end of 2022. What we want is that from this work we can immediately build another plant for the large-scale production of cathodes and batteries. ", ad.

Arnez pointed out that by 2024 there would already be the production of lithium ion batteries on an industrial scale.

YLB generated revenues of 128 million bolivianos between January and September of this year from the sale of potassium chloride and lithium carbonate.

Serif/GP, you guys know more about accounting than I do. I am no expert in accounting lol.

My intention was to get an approximate net revenue estimate and compare that with the MCap to show that the SP is very undervalued (Friday 10:03 post). That I think we all agree on.

What ever figures we use the results are all the same – EOG is currently undervalued. By varying the figures, varies the degree of undervaluation.

Europa float 566,466,985 shares & MCap @ 1.50p = £8.5 mil

Oil revenue with Wressle flowing 500 bopd is:

150 bopd (Wressle) + 83 bopd (rest of UK onshore) = 233 bopd

Current oil price = $84.64

(1) At $17.6 break even cost, Profit per barrel = $84.64-$17.6 = $67.04 = £48.72

(2) At $9.0 break even cost, Profit per barrel = $84.64 - $9.0 = $75.64 = $54.98

Yearly revenue (considering 1, 5% downtime) = 0.95 x 233 x 48.72 x 365 = £3.9 mil

Yearly revenue (considering 2, 5% downtime) = 0.95 x 233 x 54.98 x 365 = £4.4 mil

Yearly revenue (1) = £3.9/£8.5 = 46 % of MCap @ 1.5p
Yearly revenue (2) = £4.4/£8.5 = 52 % of MCap @ 1.5p

Which is a yearly revenue of approximately half the MCap @ 1.5p

Even if we consider a higher cost for the rest of UK onshore operations, $25.95 calculated below & $17.6 for Wressle we get a yearly revenue of (5% downtime):

0.95x365x{150x(84.64-17.6) + 83x(84.64-25.95)} = $5.2 mil = £3.8 mil = 3.8/8.5 = 45 % of MCap, approx half

These simplified calculations are based on the minimum flow from Wressle of 500 bopd and the oil price is on the up so the actual revenue is expected to be more.

If Wressle is flowing at 600 bopd then there is another 30 bopd for EOG which equates to another £0.5 mil.

Conclusion – EOG is very undervalued.

GP, any particular reason you asked for a back calculation of rest of UK onshore break even cost?

Serif, that figure cannot include Capex. Yes at some stage they may drill another well and add more Capex, But Capex is a fixed sum paid in the beginning to get the Project online.

You cannot include payback (capex) in that figure, Capex cost will be recovered after somer years and if the bopd and or price received per barrel is higher Capex will be recovered earlier.

17.6 is break even point - as far as production is concerned. You cannot assign Capex cost to the bopd. Profit made will not be taxed until capex is paid off.

Serif, Capex are the costs to build the plant. Accounting for that stops the moment you finish building it and start producing. Yes, is something to consider at the start of the project before you spend a penny; - is going to cost me so much to built it, I will produce that much, is going to take so many years to recover that Capex and from there on is profit.

The figure of $17.6 which Europa is quoting for and differs from what GP is stating that Egdon quoted (i.e. the $9) is Opex.

Opex is the one that is now in Wressle accounting every year, Capex is done and dusted with as it was accounted in previous years or at the start of production.

The $17.6 that Europa is quoting means that from year 1 (from the start) anything in oil price received over $17.6 is profit. Profit doesn’t start after Capex is fully paid, ofcourse Capex as well as this profit come in the Tax calculations.

So the cost of production (Opex) should be the same for all parties involved, Egdon as well as Europa, the way I see it.

GP, There is no reason for them to have vastly different figures. Europa is clear on the cost and is stated in both 2020 & 2021 Final Results reports.

2021 Repot: With an estimated break-even oil price (excluding Europa's corporate overheads) of US$17.6 per barrel, Wressle production is highly profitable at current oil prices

2020 Report: Wressle Development granted planning consent on appeal First oil at Wressle set to commence at an estimated gross rate of 500bopd late 2020 Estimated break-even oil price (excluding Europa’s corporate overheads) of US$17.6 per barrel for Wressle.

This cost should only include operational costs, no corporate overheads and historical drilling costs should be excluded. It should only include cost of routing operational activities (operations, routine maintenance, transportation, license fees, etc).

Include only activities that purely relate to Wressle. As such, the production cost should be the same for all parties involved. I would expect the Wressle field to produce the oil, sell it, extract the production/sales costs and divide the net money received amongst the partners according to their percentage ownership. Do you agree? Or I am I missing something?

GP, I don’t know why Eldon quotes $9 for Wressle, Europa quotes $17.6 for Wressle, and $17.6 does not include administrative costs.

The $25.95 figure that I calculated is based on the 2019 Finals report statement “Net Cash Spent on Ops = £661,000” which excludes administrative costs. And you are right, this will be the average ops costs for all facilities in 2019.

Hi Mannnan, I am not worried, it is heavily undervalued, in time it will move up. Is not likely to move much lower and if it does I will be adding more.

The sound of the SP resting, building up strength for next week.

Happy weekend everybody.

2019 Finals

Revenue = £1.7 mil
Average bopd = 91 barrels

Average oil price received = $66.7
Average exchange rate = US$ 1.29
Gives
Average Oil Price received = 66.7/1.27 = £51.7 per barrel

Therefore Days Run in a year = 1,700,00 / 91 / 51.7 = 361.3 days (this gives a downtime of a mere 1% - I assumed 10% in my calc)

Net Cash Spent on Ops = £661,000

Therefore, Cost of extraction = 661,000 / 361.3 / 91 = £20.1 = 20.1 x 1.29 = $25.95 per barrel

Not bad … cost of extraction for the other fields is only a little higher that Wressle … $25.95

GP/Serif, I found one more detail in the 2019 Final Report that enables a back calculation - coming in the next post

Mrbobbybere, $58 is far too high, far too high.

From the 2020 Final Results report the average oil price received in 2020 was $48.0 per barrel ($66.0 per barrel in 2019.

No point in spending $58 to extract it and then selling it for $48!

I think the cost is higher than Wressle, but not too high, I do not expect it to be higher than ~$25.

GP, i have gone back through 2 previous Final reports and the production cost is not explicitly given. There is also not enough detailed information to enable a back calculation.

Yes, the older fields (83 bopd) very likely have much higher extraction costs than Wressle, but as a ballpark calculation my calculation below should not be far out - I allowed 10% downtime but in reality downtime should be less (for example, 3 weeks downtime in a year is 5.8%).

Serif, I agree with you a placing should not be required now that the money is rolling in, but who knows?

With no credit to Moroccan and Irish assets, we have a minimum yearly revenue from UK operations which is about half the value of current MCap - heavily undervalued SP - crazy state of affairs.

I think I agree with other posters here that pointed to “sentiment” as the reason - positive market sentiment is not there, in fact market sentiment appears to be negative/neutral following this windfall. Why? In my opinion, the reason for this is the BOD failing to promote this change in fortunes and clouding the situation by talking about new ventures without clarifying funding intentions.

Nice one Geeman, thanks for the update.

Europa float 566,466,985 shares
MCap @ 1.50p = £8.5 mil (the SP is currently below 1.50p)

Oil revenue with Wressle flowing 500 bopd is:

150 bopd (Wressle) + 93 bopd (rest of UK onshore) = 243 bopd

Current oil price = $84.81, Cost of production = $17.6
Profit per barrel = $84.81-$17.6 = $67.21 = £48.72

Yearly revenue = 243 x 48.72 x 365 = £4.3 mil
Assume 10% downtime
Yearly revenue = 0.9 x 4.3 mil = £3.9 mil

Yearly revenue = £3.9/£8.5 = 46 % of MCap @ 1.50p

Yearly revenue is calculated on the minimum flow from Wressle of 500 bopd, but we know is more, and the oil price is on the up.

Why is the SP stagnant and so undervalued?

Geeman, the SP is holding quite well at this level ands there aren’t many sellers down here.

Today, with the Ask at 3p I did some dummy buys and was quoted 3.09p for 50k shares. Had to go down to 10k shares to get a quote at 3p. If I had more spare cash right now, I will be buying.