Oilex Ld Share Discussion Threads

[noirua] 05/1/2020 19:01

If the bid is good enough OEX might surprise and agree to sell their 45% of Cambay: Thus covering costs going forward in their Irish Sea and Aussie venture.

Maybe 45% of Cambay is worth nearer £40 million.


Perhaps OEX are a cheaper buy than 45% of Cambay.

[jayrh] 05/1/2020 17:34

Think of it this way if gspc sell their 55% stake for 6 mill 27.5 of that is really ours because of the amount were owed basically speaking and that not taking into account interest or compensation... gl

[profit7] 05/1/2020 17:01

Watching ASX tonight
Regarding Cambay bid

Could land tonight UK time 11pm or tomorrow morning in London

[teraferma] 05/1/2020 15:49

As always good to hear your thought JR.

For me, the retention of Cambay is important, as I don't think the other assets are exciting enough on their own, to warrant an investment in Oilex. (Remember Canning basin!)

My thoughts on Cambay are as follows:
JS already has a JV partner lined up. They would have agreed on the % split, based on Oilex having first refusal and thus gaining 100% of Cambay between them.

I give Oilex's 45% stake of the Cambay PSC, an approx valuation of $18M. This is based on the valuation that Magna Energy assigned to Cambay in 2014, when they attempted to buy 15% of the PSC for $6M.
I believe that the $3M that is owed to Oilex from GSPC might be used as a sweetener in the deal for GSPC to sell their stake to Oilex's preferential partner and so might not be recouped.

I can envisage Oilex, farming down to 10-15% Cambay with a free carry on the two vertical wells (proof of concept) with an approximate cost of $9-10M. This would leave a small amount of cash (circa $2M) to cover initial costs in Australia and Ireland.

[josephrobert] 05/1/2020 12:08

Thanks for your message Teraferma.

Yes, how much OEX will farm out is something that I haven't considered. My initial thought was does it matter. The second was is there anything in the public domain that would give an indication one way or the other.

In summary looking at the RNS's etc it appears that OEX would want some interest, as part of a diversified oil and gas company, from the EIS to India to Australia, to diversify any country specific risks. However it all depends on a conversation between two parties which unfortunately we do not know what they initially want and what they will agree to.

Clearly Oilex's torturous history shows that being a one hit wonder doesn't necessarily allow you to build a stable and growing business. Cambay was always for a much larger company to complete - the risk we took in 2015 - could have paid off nicely and something to build upon. However as mentioned in a post many years ago commerciality doesn't come in one or two drills unless you get very lucky. Optimisation would have taken time from 77H, but investors would come on board as certainty after a successful 77H would have been much larger than where we are today. Then again we could have got it taken away from us by one way or another - the more something is worth the more people want it - read up about Imperial Energy if you have time or inclination.

I thought Oilex would be interested in a free carry and farm down to a level where they can do so - that means cash would freed up for EIS and Australia both initially and ongoing - Cambay can provide a big reward but it is clearly cash intensive and at the moment I wonder what OEX really considers the chances of it ever being commercial. Clearly we have very little to go on so the answer depends on a conversation between two parties who are working on contingent resources with the inherent uncertainty. However a suitable partner, i.e. someone big enough, would be interested in taking all the risk in drilling to strip out any partner risk - we have seen how destructive a partner can be - 100% of an asset is worth more than the sum of it's parts. Clearly, there is no hard and fast rules on what a fair result of a conversation will be based on uncertain information.

In an attempt to answer your question I was not sure it matters too much on how much OEX will retain of the asset. Or even when we need to consider it. At the moment our focus is on how much is it worth in it's current state. Once we know that we can raise funds to develop offshore (EIS) and onshore (Aus). Let us say 100% of Cambay is worth £25m - based on my previous notes - we own 45% - so Cambay plus plans plus cash + owed cash + listing is getting on to 3 times where we are now. There is no point in being exact on what that means in share price terms, but I think it gives a reasonable 'guessestimate'. The reason why I mentioned the valuation was to see if that was sufficient market cap. for their plans in the EIS and Aus - clearly not now but 2 or whatever years down the line. That gives me the thought that in addition to the diversification argument of retaining Cambay they need a growing Cambay to boost the share price so they can raise funds for EIS/AUS. Offshore means big pockets so I can't see how they can fund even a bit of it unless the plan is to do the initial work and free carry on that. However by then OEX will look very different to our thoughts today. Based on the 'Market Cap. driver' argument then it would make sense to retain the resource on the premise that it gets developed with due haste - so it needs a ambitious partner - who can throw experience and cash to get it developed quickly as possible. That means OEX needs to assess any partners if they have the opportunity and if it makes a difference. Apparently there have been some informal suitors, but that could be just a fact finding mission. In addition I get the impression that JS would be a reasonable partner to have. I'm basing that on what we can all see, and a conversation I had with him maybe two years ago.

Anyway, they are a few thoughts on it, I don't know but it does matter :)

The main thing for long standing investors is can we break even. I think some of us can as long as we can get average down and average down aggressively. Personally I have done so and although I haven't checked what my average is across three accounts, it is now down to what I think it is currently worth.

The other thing is why the share price is at current levels - the answer is that we don't have any cash to speak of - so irrespective of the recent developments/increase in certainty and timing of them - then it largely comes down to how much cash we have as that indicates if we are going bust. As an example If I'm an PCM at Charles Stanley and I phone an advisory client up and say that one of your investments have next to no cash but you can make 10-20% on the placing made a few months ago it if you sell today, the advisory client will bit their hands off.

GLAH

[profit7] 04/1/2020 17:05

#oex
✅This clearly indicates that bidding was done by Technically And Financially capable companies
✅JV soon, Mms are sleep or forgotten about oilex.
✅Monday buying before the herds arrives

[profit7] 04/1/2020 17:04

#oex
✅This clearly indicates that bidding was done by Technically And Financially capable companies
✅JV soon, Mms are sleep or forgotten about oilex.
✅Monday buying before the herds arrives

[profit7] 04/1/2020 17:04

#OEX
Managing Director, Joe Salomon, said,
✅Considering the sale process, we believe we are approaching an exciting turning point with,
✅strong interest in the large gas resource at Cambay by a
✅number of technically and financially capable companies."

💥Bids closed 💥💥💥

[profit7] 04/1/2020 17:04

#OEX
Managing Director, Joe Salomon, said,
✅Considering the sale process, we believe we are approaching an exciting turning point with,
✅strong interest in the large gas resource at Cambay by a
✅number of technically and financially capable companies."

💥Bids closed 💥💥💥

[profit7] 04/1/2020 16:56

Managing Director, Joe Salomon, said: "The process which will facilitate the recommencement of an active work programme at Cambay is now well underway. Considering the sale process, we believe we are approaching an exciting turning point with strong interest in the large gas resource at Cambay by a number of technically and financially capable companies."

[profit7] 04/1/2020 16:56

Managing Director, Joe Salomon, said: "The process which will facilitate the recommencement of an active work programme at Cambay is now well underway. Considering the sale process, we believe we are approaching an exciting turning point with strong interest in the large gas resource at Cambay by a number of technically and financially capable companies."

[profit7] 04/1/2020 16:55

Managing Director, Joe Salomon, said: "The process which will facilitate the recommencement of an active work programme at Cambay is now well underway. Considering the sale process, we believe we are approaching an exciting turning point with strong interest in the large gas resource at Cambay by a number of technically and financially capable companies."

[profit7] 04/1/2020 16:55

Managing Director, Joe Salomon, said: "The process which will facilitate the recommencement of an active work programme at Cambay is now well underway. Considering the sale process, we believe we are approaching an exciting turning point with strong interest in the large gas resource at Cambay by a number of technically and financially capable companies."

[teraferma] 03/1/2020 17:38

Hello JR.

Started buying back in here as I see value.
I believe things are finally coming to a head.

I also don't agree with the figures in the article, as it's all conjecture until Oilex can prove that they can perform a successful stimulation, but it does give some idea of the potential.
Do you think Oilex will farm down % to a marginal amount or sell out completely?

Also noticed that USTDA are tendering for feasibility study on Cambay, I believe this is on behalf of DIL for their block in Cambay, but it shows the interest.

[josephrobert] 03/1/2020 16:34

Courtesy of Teraferma who has been on the OEX boards for a good while and has sniffed out this on the other BB site:



FWIW more than I think it is worth based upon the drilling difficulties and the valuations as mentioned in an earlier post.

[josephrobert] 03/1/2020 16:12

There was a useful comparison with a company in the US with a 'similar' prospect a few years ago - which underlined that optimisation of the frac process will take a lot of time, money and luck.

Clearly $8.75m is small potatoes if this years' proposed drill results are positive, maybe by then we can attract someone who can add another 0 to that to get to the next stage. Maybe these guys can in the future but I was certainly pencilling in someone else.

Like LEK where I have taken half out today the OEX Market Cap does not match a reasonable finger in the air valuation, nowhere near. That's why I have added just over another 20% today.

GLAH

[josephrobert] 03/1/2020 16:00

Smackeraim - yes I see - EIS = East Irish Sea.

[jayrh] 03/1/2020 15:17

1 code rns lodged will it be today or monday watch asx sunday night gla

[profit7] 03/1/2020 15:00

Buying started folks
Get in before the herds arrives
Rns due anyday now
Cambay Sold or JV?
Both scenarios are good.

OILEX is undervalued

[cool hand kev] 03/1/2020 14:43

But Y is the share price Down - 1 trade just shown up for what it's worth

[profit7] 03/1/2020 14:42

1 code
1 code
1 code

Is rns Lodged

[profit7] 03/1/2020 14:32

Suddenly £15k buy

[profit7] 03/1/2020 14:31

Oilex some big buys gone through

Could we see RNS before close?

[profit7] 03/1/2020 14:31

Some big buys gone through

[profit7] 03/1/2020 14:06

Who knows, RNS could land 4pm, then all weekend chat about oilex

GLA