Member Info for zeusfurla

BBN Thanks for setting out very clearly and in detail once again your understanding of the current position regarding Liberator. I fully agree with you that the market has over-reacted. The main reason for this to my mind is the exit of Miton and part of the LO holding. No company could handle c10%+ of its shareholder base exiting within a week. This has impacted on shareholder confidence. It is important to note that risk appetitie amongst II's (Miton in particular) is much less than typically seen among PI's. The L2 pilot well result has reduced the likely available reserves from 21mmbbl to somewhere between 13 and 21mmbbl. We still have Serenity. I would have expected maybe a 20-30% drop in sp value but II selling has precipitated a larger fall. I feel the pain of this as acutley as others but this is only Part 1 of the I3E story. There are other chapters to come which on balance are likely to have better outcomes. Downside risk is maybe 10p in the short-term but much less than that (if any at all) as revised Phase 1 plans are finalised for the reserves that the compmany knows are there and already have junior debt in place for. Upside potential is substantially more than 10p - multiples of this. I can't put a figure on it but even at 30p+ this would still be a stand-out buy on a risk-reward basis.

SQ320 That is exactly my thoughts. Short-term sp is likely being driven by factors other than intrinsic value so we may see some volatility until 7E closure.

I don't want to clog up the board with short-term posts on trading so last one for now. Interesting to see opening bid topday at 22.55 and offer at 23.7. If my theory is right the MM's would have hoped that some PI's would have jumped in and sold given the 'panic' their drop in yesterday's sp induced. However they are still not dropping the offer much - at 23.7 is not much lower than most of trading yesterday. With such a wide spread I can't see many PI's selling at 22.62 (the current bid price). Enopugh from me. AIM market and self-interest of MM's is frustrating and not related to real value on offer.

The uncrossed trade at 22.4p at end of day also looks like it has been manufactured to give the impression that there is some background news pushing the sp down - which there is not. Best to hold firm - we know the news flow is coming.

The upside of new shares is that it provides funds for SAVP but of course there is the risk of early selling. Once the deal completes even with additional equity issued we should see an appreciateion based on the Hannam note.

Agadem

I've just looked back at end of day trades and by looking at thhe trade type you can see that 8 of these were standard makrket trades, all of which were buys. Almost all of the remainder were sells but there were using the 'A' type reported on LSE which means auto or algorithm trade where parameters are set by companies/PI's or even MM's to buy or sell at pre-set prices. It appears that someone (or more than 1) has set auto trades to sell when certain conditions are met likely to keep the sp down for their own purposes. I can only speculate what these are but can see from using RSP within L2 (the most detailed info you can get) that there is downward pressure being pu ton the sp for whatever reason.

I fully expect this to continue this morning and until further news arrives which pusehes the sp back up.

Just to restate my thoughts on this. The MM's have built up a short position in recent weeks as the sp appreciated from the low 20's (or even 18p) to 25p and have sold shares they didn't have (the normal practice). What's different is that we've seen sustained buying and little opportunity to drop the sp. Then an RNS comes along and the sp is crashed from 25p to 20p on little volume, causing some panic selling from PI's. The sp recovers but the short position remains as early selling on 20p day is completely offset by the end of trading by buying. I've seen this pattern in other shares. MM's will continue to push the sp down until they have the shares they need (at a lower price) to offset against their earlier sells. The risk for MM's as we know is that news has started to arrive and will continue in the coming weeks making it difficult to hold the sp down. We saw today an estimated 250k excess of buys over sells yet the sp dropped quite a bit. The selling was achieved through algo's and autotrades - we can't see who is doing this but sells were well timed to drop the sp and clear out the bid. Overall I remain highly confident that SAVP is going places and soon. MM's can't hold back the tide indefinitely.

An indicator of current PI confidence is that out of 25 trades today (excluding the majority which are auto-generated algorithm trades), 23 are buys and 2 are sells. Current PI sentiment is as you would expect - very positive. There are always reasons for selling and in particular for algo tradinmg which can be short-term in nature. I am happy to sit tight and wait for more news.

Just to back up my comments on MM's. Today we've seen 86k buys and 110k sells yet the bid has dropped from 24.12 at close yesterday to 23.42 just now, a 3% drop on £5k of excess sells. There may be a background seller but if there is the trades are not yet being reported. This behaviour is not an issue for me as a longer-term holder and may even be due to interested parties wanting to keep the sp down in advance of the 7E transaction closing aloong with the issue of c$20m of new shares (this figure is for memory). Time for patience.

On re-reading yesterday's RNS what I particularly like is the way that management have explained their thought processes in a logical way. I wondered why they hadn't acquired the available 4th seismic data set amongst other things and they explained that convincingly. Whoever has written this RNS has addressed concerns that some have had on over-confidence of management and lack of rational decision-making. There is still risk of course but I am more convinced of the quality of i3E management which is an important factor.

Div I agree totally and have topped up this week. The only concern for me just now is behavi9our of MM's who have taken every opportunity this week to suppress the sp - they must be short and can see a rise coming.

INterpreting that section of the RNS - it says to me that they have confirmed that there is oil in this location but not as much as they thought so still should increase overall potential reserves once data is analysed and integrated.

MM's doing a good job of gradually forcing the sp down in little or no volume. The market exists for their benefit not ours. I wonder if the FCA would be interested in any manipulation going on here? I expect not but AIM again showing it is not easy for PI's to access a fair market.

Interesting patterns of trading today - some big sells offset by a high volume of buys. At 930 I make it approx an excess of 500k buys over sells. I t appears that there may be a larger seller (maybe a PI who wought in the teens?) taking profits. Still a lot of suppressed upward momentum on the SAVP sp despite MM's trying to keep a lid on it. Compared to Friday last week we have only 1 outstanding condition prior to deal closure for 7E - a better placfe than last week and yet the sp is down despite excess buying. I think there is some short-term downward pressure here but it's looking strong for the next few weeks and months.

Just listened to VOX podcast and happy with what I heard. 7E to close, mainly procedural, possible incremental short-term debt required but available, sweet spot for both sides of business to grow in coming months. I thought AK tried to suppress a laugh when saying over the next 6 months we'll have 'commenced the work on our EPS in Niger' - I think the news on this is imminent - only weeks away. SP drop today in my view was manipulated by MM's causing PI's to sell then a strong recovery in the 2nd half of the day. I disclose that I am a holder (no surprise) and topped up this morning. I'm expecting positive things this year from SAVP. You can sense that they are keen to start the next phase of SAVP's existence as soon as cash flow allows following 7E completion. Not long now. Main risk is timeline (ie patience required) but the outcomes are looking de-risked to a large extent.

I've gone through and estimated buys v sells today as the early day trades to me looked like they had been forced by MM's to push the sp down. My analysis shows buys and sells broadly breaking even over the day. There could of course be some unreported trades to come to justify a sp drop of over 2p but far more likely is that MM's have dropped the sp to try to get as many cheap shares as they can as they have been running short in recenjt weeks. If my view is correct the upward pressure will return over the next week or 2, with or without news. This remains an outstanding investment opportunity right now imho.

A lot of scaremongering going on this morning. Worth reading the bit at the end of the Interims signed by a major accountancy firm -

Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly financial report for the six months ended 30 June 2019 is not prepared, in all material respects, in accordance with the basis of accounting described in Note 2.
Use of our report
 
Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Glasgow
27 September 2019

Going concern is stated as ongoing and we know cash is tight just now - that is significantly reassuring - gross market over-reaction.

There is no doubt MM's have gone short recently given the buying and have now crashed the sp to get shares at a lower price. This dents PI confidence. I can't believe how much this drop has ben overdone. I have bought more this morning. This is already de-risked with Presidential sign-off! Some patience required. Don't let the MM's take your hard-earned cash.

As an accountant I've read a few of these. No concerns here. Key points are the use of 'reasoanble and strong expectation' and the fact that the going concern basis continues to be adopted. Some less well-informed investors may wobble but no concerns from me. Timing is always uncertain n such significnt transactions.

Given signficant recent trading volumes the comments of any 1 individual on a BB are not going to materially affect the sp. I do not like confirmation bias and welcome views from all angles as part of a healthy an informed debate. The issue here is as I have said before that the outcome will be binary - either commercially extractable or not and we won't know that until the drilling is done. Asses the facts and take a position (or not) and stay calm is my approach.

Backwoodsman I am grappling with similar issues. The problem with any drilling is that is won't be 72% successful or 43% or 87%. It will be commercially viable or it won't be - 100% or 0. Yes, the quantity recoverable may vary but whether the CoS is 72% or some other figure doesn't remove the risk of a 0 outcome. I am invested here as I think the 100% outcome is highly attractive but more importantly if the 2 drills fail (which is less likely than 1 or 2 of them succeeding) there is still value in the discovered oil reserves in Liberator. The OGA report does highlight some issues in North Sea exploration but we are a few years further down the line. I think risk appetite is key. If you don't like binary outcomes it's better to focus on other companies (including O&G) that are already producing and have lower risk (and lower potential reward).