Ann: Investor Presentation - September 2018, page-65

Courtesy Newanda on the LSE board:

There's a lot of folk on here writing off the flowback attempts in the HRZ, and stating the company is failing as a result.

There's also a lot slating the current 1.2p share price, and how failure of the management has led us here.

To offer a counter balance to those views, here's a different perspective.

HRZ: the experts are telling us it is still game on, with hypotheses being formed as to why flow was not as expected, with a working hypothesis shared last night by DW that the way the lower zone was fracked versus the upper, coupled with the decision to drill out the plug possibly led to the result we had. But if we have a 5 man team of shale experts pawing over the data now prior to opening a dataroom Xmas time, then I for one am content to listen to the expert opinions and let the story unfold. We've had 2 attempts to achieve flowback and haven't managed. Maybe it will take a 3rd horizontal in the upper zone, I'm not qualified to say, but if it does the prize is commercially worth it. And I'm sure it is still worth it for quite a few more attempts. I don't know the answer, but I wonder how many attempts it took to get Eagle Ford flowing? What we have achieved is a tonne of data to allow us to empirically validate the thesis that Paul set out, and to work with real data to unlock the solution that may see it flow. This is complex geology, chemistry and physics in one of the most inhospitable places on Earth. The team have operated to plan and budget. The things they can control they have done so in my view with absolute accuracy and predictability. The things they can't control is how mother nature works 2km under the surface of the earth. That's what we need to understand.

Re the share price: of course we all want it higher, but we all knew the risk when we bought in if IW2 didn't flow. It didn't, the share price is lower. But the management of 88e, like any well run company, are here to deliver value over the medium to long-term (let's not forget what the share price was 3 years ago - undeniable that value has been created). They won't care about the share price in the short-term, and nor should they. They should be delivering catalysts for company growth in the medium to long term and I don't see many companies around who have built such a transformational portfolio of assets in such a short space of time. The potential here is staggering. Remember, we've gone from singular propsect of potential 0.8 - 2bn barrels in HRZ (arguably high risk and unproven) to that plus (and all for a market cap of £60m - any other companies out there with this potential that are cheaper?):
Yukon (100m+?) - discovery already made - lower risk
Conventional (1.75bn on 25% acreage) with a number of discoveries already made - lower risk
Winx-1 (144m) with horseshoe discovery 4km adjacent on same play - lower risk

Well done the management, you've not only derisked my investment but also added some serious upside.