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88 Energy - when's the discounted placing? All the money's gone

By Tom Winnifrith, The Sheriff of AIM | Monday 11 April 2016


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


At the end of December AIM listed 88 Energy (88E) had cA$1.2 million net debt and cash of cA$9.6 million. However in the prior quarter it spunked cA$16 million, with just under a million of that on PLC costs. Hmmmmm - What do you think is left?

I accept that exploration spend on Icewine in Alaska will have been lower in Q1 2016 than it was in Q1 2015 but I put it to you that the money has nearly all gone, the debt however has not. And as such the only question is when is the placing? Not is there a placing?

Actually I lie. At 2.5p the market cap is £80 million so the placing will largely be a bucket shop affair - i.e. conducted at a steep discount. All the signs are there that 88 Energy is gearing up to issue confetti. So question two is "what price is the placing?"

An RNS today boasts of a "new investor presentation." That is designed to suck in the Bulletin Board morons yet the shares are slipping. The morons buy, the clever money sells knowing that it can buy back more cheaply within weeks.

At a fundamental level it is hard to say what 88 Energy is actually worth but £80 million seems to price in an awful lot of good news. It is the smart money not the morons whose lead you should be following.


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More on 88E


Comments

5 comments

  1. I thought the Canadian or Alaskan government was refunding a bunch of drilling costs at some point ? just saying thats all ,as I sold mine yonks ago .

  2. On balance I think I would rather own some of these ( which I dont currently ) than Metal Tiger which just seems vastly over valued to me . What is that all about ? Why dont people buy something with some proven extractable reserves like Ariana . Its going up slightly each day and the train will leave the station soon if you dont get on it . Destination mining income at next stop.

  3. The company has made it abundantly clear that there will be a fund raising and has even provided a likely timeline. It is not one of those companies that denies this sort of thing.
    So, I’m afraid your headline is not news, nor is it sensational news…it’s already out there in the public domain.
    Catch-up at the back, please!


  4. @itsriskythat

    So 88 Energy is the subject of an email received today – it must be ramping time again

    Re: Meet 88 Energy – AIM’s star performer of 2016 – at The Capital Conference on 14th April 2016  

    Dear Investor,

    I am contacting you to let you know that you are entitled to a complimentary ticket to the major Capital Conference. Taking place in the heart of London City – The Brewery, 52 Chiswell Street, London, EC1Y 4SD.

  5. Thermal Maturity: Volatile Oil: High rate, recovery and performance.
    GRI Matrix Permeability: >10 x Eagle Ford: Very Good for volatile oil resource plays.
    Gross/Net Pay: 197’/186’ : Tier 1 net to gross ratio of 94%.
    Effective Porosity: 12.6%+ : 30% Higher than Eagle Ford.
    TOC: 3.7%+(wt basis): In line with highly commercial resource plays.
    Clay Content: 38%: Analogous to Marcellus/Haynesville.
    Hydrocarbon Saturation: 75% : Consistent with WORLD CLASS resource plays.
    Bottom seal: Effective: Allows for overpressure and volatile oil phase.
    Pore Pressure: 40% above normal: Essential for commercial production.

    BTW risky the invitation you received was sent by 88e??? you must be honoured to get your own personalised copy. Us lesser mortals received theirs from the organisers.


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