Sorry @jakspara. I haven’t had time to reply to you until now. Hotcopper glitch not linking back to your original reply to me which was - “Before taking a shot at the guys character on a public forum ie. accusing him of being dishonest. Have you asked him directly what is the context of the “rich gas-condensate discovery” quoted in the ann? I don’t believe he has stated that the CGR is in the rich window, I believe he is speaking to the quality/API of the hydrocarbons. Perhaps this is a good question to put forward in the upcoming webinar? Sounds like you’ve turned pretty bitter on this and looking for faults, that’s a shame mate, hopefully things turn around soon.”
I’ve been in contact with Scott before all of my recent posts. I haven’t posted anything that I haven’t discussed or had an email exchange with him first. In reference to a “rich” condensate discovery - Scott’s view is that because we have confirmed 10-25 bbls/mmscf from a gas sample at Mukuyu-2 then this validates the yield of 135bbls/mmscf estimated from mud gas data at Mukuyu-1. And therefore the average for the field can be seen as a “rich” yield. Not sure I agree with this approach but it’s an interesting theory. In my opinion a Mukuyu-2 gas composition result simply tells me what the yield is at the Mukuyu-2 location and that’s all. Can you imagine making the same announcement if we had no condensate yield whatsoever at Mukuyu-2?!
And I’m not sure why you’re fixated on highlighting character assassination when all I’m doing is stating facts. You don’t have to agree with everything an MD says or does just because you hold shares in a company. You’re entitled to have a different opinion. And I’ll list some specific examples of what I would consider red flags. None of this is potentially defamatory or character assassination so if you report my post again I’ll just repost it. And I’m not posting this to be negative. This is information that we’re entitled to as shareholders and information that any other junior oil and gas company on the asx would have already disclosed to the market.
And these examples go back to continuous disclosure obligations (Guidance Notes) and compliance with the ASX Listing Rules (Chapter 5 - Oil & Gas). You should read these links including the flow chart in the guidance notes and Section 5.30 in the listing rules.
Net pay at Mukuyu-1. Wireline logs were run and evaluated. At that time Scott confirmed in a webinar and at the AGM that the company had determined a preliminary net pay figure. Is this information that a reasonable person would expect to have a material effect on the share price? Absolutely yes. Was it announced to market? No. Does this comply with continuous disclosure requirements? No. We should have stayed in a trading halt until that was announced. It doesn’t matter if future wells or lab testing will refine or improve the result. It’s the starting point that needs to be announced to the market “as quickly as you can”.
Gross hydrocarbons vs net pay at Mukuyu-1. This comes back to Clause 5.30(d) in the listing rules. The purpose of this clause is to prevent investors from jumping to conclusions with respect to the significance of what has been encountered. Mukuyu-1 has been declared a discovery. The gross hydrocarbon bearing intervals in the Upper Angwa at this location were reported in Jan-2023. But still no net pay. Does this meet listing rule 5.30(d)? No. We had >1,000m of hydrocarbon shows at Mukuyu-1 and >200m of gross hydrocarbon bearing intervals. If the company reported a preliminary net pay figure of say 20-30m at Mukuyu-1 back in 2022 after running and evaluating wireline logs it may or may not have been good for the share price back then but it would have set our expectations and avoided the train wreck that we had when they announced such a low net pay figure at Mukuyu-2. And that’s the purpose of this rule.
Reservoir quality. The company has confirmed that they have poro/perm data from down hole at Mukuyu-2. Is this information that a reasonable person would expect to have a material effect on the share price? Of course it is. They don’t have to report hard data in mD and %. But a qualitative description needs to be made in line with industry standards that all other junior ASX listed explorers follow. This is the single most important piece of technical information that will allow us to make an informed decision about what we can expect from the flow test. If he told us we have tight or poor quality reservoir then our risk appetite is going to be completely different to what it would be if he came out and told us we have predominantly good to excellent reservoir characteristics. I want to be able to make that call now based on the market sensitive information that the company has in their possession. Not go into the flow test without any idea about the risks. That’s the purpose of continuous disclosure - it allows shareholders and investors to make an informed decision regarding their investment.
Mukuyu-2 discovery in the Lower Angwa. This is a simple one. The information required to meet the listing rules for declaration of a discovery wasn’t reported to the market. It was provided for the Upper Angwa but not the Lower Angwa. Again I keep harping on about reservoir quality. But this is one of the key objectives for an exploration well which hasn’t been disclosed. The industry standard for reporting exploration well results is - did we encounter hydrocarbons, what is the nature of those hydrocarbons, what is the net pay and what is the reservoir quality. 4 key objectives. There should also be clarification on how the results sit in comparison to pre-drill expectations (better, in-line or worse). And generally but not always some guidance on the likely prospective recoverable resources. We’re not getting this from Invictus. You’re happy with that. I’m not.
IVZ Price at posting:
8.0¢ Sentiment: None Disclosure: Held
