EXR Share Price Re-rate- When, How & Why?

EXR Share Price re-rate- When, How & Why?

Conscious of starting new threads willy-nilly but think this is warranted.

We’re ALL thinking about it….the share price…..and where it could go, so let's centralise sp related “what if’s and could be’s” into this thread.

I’d really like to see this thread full of robust Bull and Bear cases with thoughts, hypotheses and discussion.

Would be great to NOT focus on sp prediction, unless of course you can support your number with some decent reason and logic. Obviously experienced folk like @OilGasPlanning can break potential scenarios down to a number….but the rest of us I’d assume have nowhere near that level of knowledge and capability.

(PS- someone should start a SP prediction thread for a giggle….but let’s keep lame “I think 48c on 19^th December” throwaway posts out of this thread)

Also- inevitably the usual lame Muppets will post their nonsense and drivel…..if you don’t already have the usual suspects on IGNORE then perhaps please exercise some constraint and try not to reply and fuel the fire?....it’s tedious scrolling through a bunch of noise responses

**Of course, none of this is in anyway anything other than pure speculation formulated from a fairly sizeable vested interest. So…if you’re outside looking in thinking of buying, or holding & thinking of buying more….as ever. DYOR etc etc. There is an absolute mountain of risk at play here….lots and lots of ways things don’t progress or unfold as we hope they might.

We should all welcome well articulated and reasoned contrarian views, bear case scenarios and risk analysis- it would be irresponsible IMO to NOT consider how it can go wrong. No-one saw Covid coming and the associated delays, nor the Ukrainian fiasco…..no doubt other things will occur, it won’t all be plain sailing by any means….just ask @tui

Anyway…EXR Share Price Re- rate- When, How and Why?

We’re on a long & dangerous journey through unchartered territory in the quest to arrive safely and happily at a final Take Over price that the Board recommends is accepted by shareholders.

This end result is a by-product, we think, of a multi-participant dramatic series of increasing offers over time, evaluated (and rejected) until “the final number” emerges.

On this journey, I see our sp experiencing evolutionary phases of growth, with oscillation of course, but a pronounced uptrend , these time period phases overlap somewhat, but are distinct enough to be separately identified periods of time (Phases).

Phase 1- Here and Now until Nomgon Pilot testing “official” gas numbers are released- lets’ say up to end Jan 2023.

This Phase “ends” immediately on the Trading Halt news release of “the Nomgon commercial gas number” or whatever the equivalent metrics will be (more learned folk will know- maybe “proven commercial 90%+ methane bcf/tcf??”, etc). Anyway…the moment we’re released from the TH the market will re-calibrate fairly quickly….this will lead into Phase 2, but more on that later.

So what do we see the sp doing between now and that potentially “game changing” announcement?

A slow but steady-ish run up in anticipation of a great result.

This will be organic largely (some bot manipulation etc no doubt) but I see the sp getting walked up….20c, 25c?....30C?....no idea….but it’s north of 18c where we are currently.

NEXT investors emails and the like, maybe some Crux interview, Noosa Mining Conference presso etc etc will assist to bring in some new money.

Intermittent progress announcements (assuming they’re +ve!) will add fuel…..another couple of “Big Slope” type gassy-coal exploration drill results will obviously help.

Duster announcements get absorbed mostly (i.e. I don’t think we suffer serious sp detriment)…..BUT any stuffups with Major and the pilot wells WILL hurt us, or more accurately, suppress any sp appreciation in anticipation of the final result. We all know initial data looks promising, and the water should come out relatively quickly and easily and gas should flow, etc etc…but none of it is guaranteed.

We MAY see some sidelined observers looking to get some alpha gains and lower their risk tolerance triggers to take a position prior to TH release of “the number”, but all in all, I think it’s more retail investor folk like us topping up if/when we can.

IMO it’s NOT insto money…not yet…that may come in Phase 2.

Dreaming now of course….but if we saw some Director buys announced in the run-up…..that would get the rocket engines primed for lift-off (settle down Wonkers….)

So…we start to tick up, volume increases, not massive , but healthy…@WatchNact will have eyes pinned on volume and his weekly summaries will tell all, and you bot spotters will have your fingers on the pulse.

We WILL see “trapped” retail investors as the counter party sellers to our buys….we’re pretty much ALL thinking “who is selling at 22c with Nomgon results imminent???”…..well, it’s probably traders or folk that bought at 30c+, 45c or whatever we got to and pledged to exit and recover some cash, albeit at a loss (it’s NOT the 36SPPP participants though….they’re most likely long termers and had averaged up over time)

IF we see the sp move towards high 20’s then I think those “trapped” folk might alter strategy a bit, but who knows….each to their own and who could blame someone for exiting if that’ve suffered through a woeful drilling campaign so far in 2022 and a steadily declining sp….it hurts to see it. Long termers know people here that have exited for a variety of reasons.

In lieu of significant volume, the bots will have their fun, but all in all….we’re sitting at circa 27c just before “the number” drops, and Phase 1 ends.

(* of course current and anticipated wider market macro economic influences are at play…last night US CPI numbers saw most indexes and asset classes hammered…we were fairly resilient today….but a worsening macro environment will see our sp run up subdued).

Phase 2- Immediately post “The Number”- early 2023 to end 2023.

For me, this is where we really start to motor (predicated of course on “the number” being a good one).

We’ve proved up some commercially viable gas flows….all that latent potential we have is now actually starting to be realised. We’re “walking the walk” not just “talking the talk”.

This is the trigger for sidelined money to enter….sure they’ve missed some of the gains from Phase 1 run-up but a HUGE risk element gate has been passed.

I think we start to see “smart” money enter….(hey, maybe they’re actually “smart but slow” and we humble & brave early retail investors are the “really smart” ones !

It’s family office, high net wealth (as a portion of an overall investment portfolio)and risk tolerant, alpha seeking funds/insto’s happy to NOW take a position once we’ve “proven” ourselves.

It may also be sidelined observer industry folk & practitioners who have been interestingly watching and waiting for their risk appetite vetting to trigger.

We may just also see Director buys…..now again…a dream scenario, but that would be a fantastic validator.

We see more retail investment, maybe a period of media related FOMO activity as we’ve seen before, but nothing crazy as current economic sentiment remains cautious and mostly risk-off.

We may, but I somewhat doubt early in 2023, also see a larger insto taking a position. We have WatchnAct monitoring weekly volumes and we monitor the Top 20 shareholder movements monthly.

We’ll know soon enough through volume if someone is accumulating a chunky position, and it’ll be validated (albeit as a lag indicator) in the Top 20 holdings movements.

So- Maybe some wild-ish oscillation on the day of TH release and a day or so immediately thereafter as the news sinks in but reasonably quickly the sp will calibrate to a level the market can get it’s head around….and I think that will be a straight forward calc.- “x amount of proven gas at y delivered market rate = z total $amount then divide that by EXR shares on issue = share price”. Clinical and easily digestible attribution of our “worth”.

But fairly quickly thereafter, I see a period of real price discovery…..new highs…..a sp value attributed with a premium/s attributed to:

“well they’ve only explored 6% (or whatever it is) of the PSC and if they find more gas laden sub-basins…they could have this amt of gas,” etc etc

AND – “what’s this H2 thing with SB Energy” AND

“they have a QLD gas asset as well you know that could have 3tcf”

We now enter the period of interesting volatility as the market seeks to price in a future value of our 3 combined assets, influenced constantly of course by progress updates (or lack thereof) or surprise MOU’s and the like. NY already stated in that MarketIndex piece recently (or maybe the journo did I dunno) that each of the 3 projects are potentially individually valued at more than the current marketcap.

Overall, because of our “core” CBM asset initial success will see a positive sentiment attached to us again and by correlation, a willingness to absorb (to a degree) disappointing news because we’ve kicked a goal with Nomogn and we’ve got a 68% drilling success to date ledger (or whatever it is) and now we have Major with better equipment and we can revisit previous dusters and go deeper etc etc and maybe Nomgon, Yangir and Big Slope all link up and is just 1 ginormous sub-basin.

We’ve re-established some goodwill and a degree of tolerance for “failure” but of course, more drilling delays, Covid like lockdowns, supply chain issues, dusters etc let alone any major blackswan type events, will quickly suck the goodwill well dry.

Whilst the 3 assets are all under a single EXR entity, we’ll also see parallel activity with H2 and QLD and news flow and a reactionary sp dependent on the quality of that activity and associated news flow.

This period could be seriously entertaining and exciting….value creation progressing across 3 fronts….left -field announcements, surprises galore (hopefully pleasant ones!) etc.

For sure we’ll see some super exciting left-field developments and subsequent market reaction…..but this is also the period where it becomes difficult to try and accurately attribute a value to us and a corresponding sp.

Improving macro economic conditions and the emergence from recessionary days towards the beginning of another bull cycle could see us trade with significant t premiums attached to our “what if ?” value.

Of course, the macro environment could still be rubbish but I still see a premium attached to us based on global energy themes (i.e. the wider economy may be in the doldrums but the market loves our “tale of 2 (now 3) gasses” thematic.

Our share registry strengthens with larger, insti holders (which we need to help fend off low-ball sub value early take over bids)…conversely we are also at risk of a hostile T/O actor obtaining a significant % and agitating.

IF we separate H2 into another entity then the proverbial dung hits the fan….it’s unchartered territory then, but until that happens (or dosn’t) all 3 assets are under the EXR listing.

All in all- impossible to even begin to suggest what our sp will be say end of 2023…it could be $1 or it could be multiples of that.

Again…if H2 separates into another entity then who knows how that plays out…..my mind and body are prepared to be blown away

Phase 3- 2024-2026

Futurist crystal-ball gazing Wonkers sees this (in order):

1. H2 separate entity- EXR shareholders given an H2 holding…SB Energy secures downstream customers, pilot plant funded & up and evaluating, Insto monies are in, maybe SB Energy just pays us all out
2. QLD asset (still under EXR shingle) proven up and sold off to Shell, Santos, whoever…..lots of monies back in our coffers, maybe a special dividend paid out, residual cash spent in Mongolia to further prove up PSC
3. EXR exit to a major for much monies after NY and Boar politely but consistently decline offers from multiple participants until Gazprom (yeah…weird I know but I’ve always had a feeling) pays us what we’re happy with.

Looking forward to everyone’s thoughts, opinions and scenarios (and lack of responses to the muppets- just put em on IGNORE