Upland Resources Share Discussion Threads

[tyler90] 08/3/2018 15:43

Those having doubts about the CLN are missing the point about who the debt holders are. Under the typical "death spiral" scenario, the holder of the convertible debt initially shorts the issuer's common stock, which often causes the stock price to decline, making it unattractive to new investors.In this case it is not in the interests of the Chairman, Tune Gp and Optiva to see the share price to fall and I cannot see them shorting the stock.

[zengas] 08/3/2018 12:18

The 3 main investors who have provided todays additional funding are already heavily committed to the company ie Chairman 26%, Tune 16.2% and Optiva 7.25% so between them hold 49.5%.

No security has been taken against any assets and given their level of commitment I expect some of the assets that come to have a high degree of real growth.

They have also mentioned Morocco/Tunisia and a 1 Tcf gas permit with multiple discoveries. AEI also reported on it.

The CEO was part of the team that brought Tendrara, an existing discovery in Morocco to Fastnet which was never drilled by them and went immediately to Sound which created over £750m value at one point.

After yesterdays news from Sarawak, I expect things to hot up and given the investments to date I don't believe any of them are here to being in the small cap league and looking for significant returns.

[thejaba] 08/3/2018 12:05

It is in tunes interest for UPL to succeed. They've invested hard earned cash here and now loaning them an interested loan. You have to take your hat off to Dr Staley for negotiating this extraordinary deal and minimal dilution for shareholders.

[1bluehorseshoe] 08/3/2018 12:05

Reminder of Dr Staley's Covehttps://www.rigzone.com/news/oil_gas/a/120069/cove_energy_takeover_finally_over/

[1bluehorseshoe] 08/3/2018 11:36

I'd be cynical if they were like the crippling CLN as were used by Henderson for AST but to give the company capital with no rolled up interest in this manner seems to me primed for use to buy assets with beneficial value to the investors.

[tyler90] 08/3/2018 11:24

I can see 3p coming up very soon IMO

[caters] 08/3/2018 11:13

Hi hd,

I'd be interested to hear why.

tia

[hiddendepths] 08/3/2018 10:58

Hah! I'm more cynical about the CLN.

[yogaboy] 08/3/2018 10:29

Yes the CLN terms are a delight to read :)

[1bluehorseshoe] 08/3/2018 09:32

These CLN are amazing, designed for the company and investors NOT for sycophant investment houses. It's rare to see a set up like this I'm in and adding.GL

[tyler90] 08/3/2018 09:21

"This will be a useful facility over the coming weeks and months as the Company expects to become increasingly active, principally through its participation in the drilling of the Wick well in Q3 this year; which although fully funded from existing cash resources allows flexibility towards over runs."They expect to become more active principally in Wick but also elsewhere in the coming weeks & months...Exciting times ahead. Enjoy the ride.

[argyle underclap] 08/3/2018 09:18

Something big from Sarawak this way comes...

[soulsauce] 08/3/2018 09:17

Sull amen to that.

[argyle underclap] 08/3/2018 09:16

Tune Group adding more wont go unnoticed. They have a large following in investing circles.

[soulsauce] 08/3/2018 09:16

Argyle totally agree.

Fullbright welcome.

[thejaba] 08/3/2018 09:11

I'm hoping the herd doesn't arrive until we are well into the 3-4p range. With the shortage of stock and no placement for the foreseeable future then this will get v v tight stock wise.

[argyle underclap] 08/3/2018 09:11

Soul - they are en route I have no Doubt. The massive largest shareholders skin in the game (increased today - whoop whoop) is not for wick ( as good as the potential there is ).

[soulsauce] 08/3/2018 09:02

I am amazed how quiet it still is here, when the herd arrives this will really motor.

[goodbloke1] 08/3/2018 08:58

What are the buy limits anyone?

[zengas] 08/3/2018 08:11

Just to recap on post 989 20th Feb

Cash in at no dilution means shares in issue at the 460m level.

$9m available cash, M/cap at 2.5p = £11.5m.

Possible that in Sarawak they could get in on a producing asset imo given the greater support from the Chairman, Tune and Optiva. They have got incredible skin in the game now, just need the deals to flow and this is another significant building block in place. 4-5p price range and this would still be only £18-£22m m/cap given that amount of cash for deals.
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Post 989 20th Feb 2018

"In terms of value, EME could have been bought at circa 1.5p in October 2016 - about 223m shares and a m/cap of £3.5m.

By June 2017 with the open offer that wasn't even 50% taken up, placings and option excercises they had $8.5m cash and 10% in Duyung before farming into some US exploration assets.

By August 2017, 9 months after the 1.5p lows, there was 399m shares in issue.
The share price hit a high of 31p in early September 2017 and a m/cap of circa £125m. Fallen back since and waiting on further positive news to drive it forward again.

Likewise Sound Energy in Morocco. You could have taken up the open offer at 4.2p in 2014 before the share price raced ahead to 103p in 2016 and £530m m/cap.

In relation to UPL, i beleive a similar potential opportunity could happen here.
2.1p here now, 457m shares, £3m ($4m) cash. M/cap £9.6m. Main listing and huge director skin in the game and able to attract a cornerstone investor. Imo it won't be unreasonable to see this circa 4p and still under £20m.

Wick has potentially some $200m+ of value = 31p (on current shares in issue). As for now it's funded though maybe the cash will go towards a further project first and some more shares to come.

In the presentation - they highlight Malaysia, "unique access to opportunties" Unique ? Maybe this attracted Malaysian Tune to become a cornerstone 16% investor ?
What might one or two of those new assets potentially also create even by early investor sentiment?

Next potential opportunities - "Onshore Morocco and Tunisia - now accessing several attractive opportunities" - specifically highlighting - "Permit with estmated in-place resources > 1 TCF gas potential in open acreage. Multiple low risk discoveries & prospects".

Why specifically highlight that ie multiple low risk discoveries/prospects ? Could it be a similar opportunity that still has Sound at over £500m on Tendrara ? Wasn't Steve Staley involved some way in bringing the Tendrara permit to Fastnet ?

If they land a 1 tcf permit/low risk discoveries or some of those unique Malaysian opportunities the potential could be significant as per Sou or EME. (EME got into Malyasia for $2m and a existing discovery - just not flow tested - rest is history) .

Whatever way you look at it, the assets being chased are very significant in addition to the Wick asset.

Tune 16%. Optiva Ned on board circa 7.25%. Chairman 26%. Bolhassan Di (NED) 1.6%, S.Staley CEO 4.3%, A.Bin Nasharuddin 5% (all rounded) = 60%.

Free float from the 457.242m shares = 182m. I'm over 1.25% and i've seen some other large holdings posted so maybe not that much of a free float in reality. I expect to see this get coverage in the press/tip sites in due course as Sou/Eme were covered early days. The CEOs associaton with the £1.2b sale of Cove will add to investor sentiment as will 60% being held by 6 inst/director investors.

[soulsauce] 08/3/2018 07:57

Great post as usual Zengas. Makes it very clear.

[yogaboy] 08/3/2018 07:55

Wow. Our man sure knows how to write a deal.

[zengas] 08/3/2018 07:52

The loan notes are redeemable by 30th June 2020.

The available cash ($9m) is way in excess of what they need for Wick ($3m/dry hole) - so what will they put the other cash towards ?

The free float will remain tight. There are 457.242m shares in issue. They are paying £40k of the £110k fee in shares so that will take it up to 460m shares.

If with a further asset (regardless of Wick) and the shares are somewhere between 2.5p and 10p that would mean at the 10% discount (ie 2.25p - 9p) for the average price over the preceding 5 days - somewhere between 39m and 155.5m new shares if redeemed by issuing shares rather than paying cash to settle up.

If those new shares were in issue 2 years from now at either of those 2 price targets ie a total in issue of 615m @ 2.5p = £15.35 m/cap or 499m @ 10p = under £50m m/cap.

Bottom line is this company is again funded by 3 of it's main share holders, minimal dilution to existing shareholders and gives the company an amazing cash level of $9m.

[croasdalelfc] 08/3/2018 07:51

https://twitter.com/walty_pic/status/971431148663529473Not sure if this has been shared

[soulsauce] 08/3/2018 07:41

OK good luck Jung .