Reabold Resources (LSE:RBD) — Response to Requisitioned General Meeting - Live Q&A

0:01 Good afternoon, ladies and gentlemen, and welcome to the REABOLD RESOURCES Investor Meeting. Throughout this recorded meeting, investors online will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab. Just situated on the right hand corner of your screen, just simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review your questions submitted today and publish responses where it's appropriate to do so. We'll notify you when they're ready for your review. I'd now like to hand over to Sachin Ozar, CEO. Good afternoon.

0:33 Good afternoon. Thank you very much, and thanks, everyone, for being here. Really, just a few introductory remarks from myself. Stephen will take you through a short presentation, and then we'll be open to Q and A, and hopefully, can answer many questions that shareholders have related to the response that we'll be providing. So without further ado, I'll hand over to Stephen to take you through the presentation. Thanks, Sachin. Obviously, this is mainly about the Q and A, so I'll keep it pretty brief in terms of ranking the slides. We could hit the first slide, please.

1:09 So just to set set the scene a little bit, just a reminder of what REABOLD is really all about. So we set the REABOLD project in motion around about five years ago with what we consider to be a fairly unique strategy. We were looking to do things a little bit differently than it's typically done in the industry. And the the business model was already about identifying high quality assets that we could get into or acquire low valuations about progressing those assets by investing capital into them, often through the drilling of wells, but through other technical and commercial and work streams as

1:42 well. Ultimately, demonstrating the value in these underlying assets and then finding some form of monetization. And we believe we've been achieving that, and we believe we can demonstrate achievement of that, and we will continue to to do so.

1:58 So I think the recent sale of Coralian, what was really the sale of the Victory Project to Shell, is a perfect example of everything I just talked about in terms of the business model. So what did we do? We identified a high quality asset with high potential that had been overlooked by the rest of the industry. We invested into that asset, didn't require much capital, but we invested wisely into that asset, and we demonstrated that it was worth considerably more than the market previously previously believed. We were then able to get that asset to a position where we seek to monetize it, and we did successfully monetize it. It was sold to Shell for a significant value uplift, and that proceeds from that are allowing us to invest further into the rest of our portfolio and also to start distributing cash back to shareholders.

2:49 So the portfolio today, we believe, is is rich in opportunity is able to deliver significant value to shareholders over time. If you look at well, I'll quick run through the portfolio. So we clearly have a West Newton, which is our UK onshore project. We believe this is the largest oil and gas field in The UK onshore since which farm in the nineteen seventies. We drill or three wells have been drilled into the West Newton field, two of them driven by by REABOLD discoveries, and we're in a position now after a lot of work this year in terms of analyzing which data set that we got from that drilling campaign. We're in a position in the first half of next year to drill the first horizontal well at West Newton, and we've always believed that that would be the key event that would unlock considerable value in that project. We also have a pretty extensive North Sea portfolio now. So part of the deal in with the sale of Thirallia to Shell, as I said, was really about selling a victory project. The rest of the portfolio was in Karali, and we have retained.

3:48 We have a number of very promising licenses there, and we think that we can replicate the success that we've had at Victory with those additional licenses. We also recently acquired SimWell. This gives us exposure to the Pensacola well. The shell is imminently drilling along with Delta Energy. We have the adjacent target in the same in the same play. And, therefore, we're very much looking forward to the results of of that well, which we believe will be coming pretty pretty much preeminently. We have we drilled multiple wells in California and put them into production, so we had

4:22 a producing business over in California. We have more recently merged that business with another US listed California E and P company. And so now we have a meaningful stake in The US listed California oil and gas company. And finally, we have our investment in Danube Petroleum, which is our Romania position where we have been putting activity on hold for now simply because of capital prioritization. We've been focusing more on The UK projects, but we still believe there's extensive opportunities out within the value petroleum license.

4:55 I've pretty much covered this. This is really just a summary of the activity, license by license. I think the key point then to note is that there is a lot going on and a lot coming and a lot of news for investors to look forward to over the next twelve months. So what we've we've we've been doing recently, of course, is positioning that portfolio, building that portfolio and putting it into a place where we believe we can it can start to really deliver value. And I think that was emphasized by the ability to sell Victory to Shell and to to achieve that first key monetization, which is really the culmination of the business model for that particular asset. The rest of the assets we believe will follow, and and we put them into the the right business structures that will allow us to do that over the coming months.

5:43 So just to conclude, here, we believe that the the business model is is unique, but it is working. We've demonstrated that it's working. We think the portfolio is extremely rich, and think there's a lot of good things that are gonna be happening over the coming twelve to twenty four to twenty four months. One thing that we acknowledge is clearly an issue is a depressed share price. I'm sure we'll come on to talking about that during the the q and a, but we recognize it's an issue. We do believe it will be sold by ultimately taking the projects forward, monetizing them, and other case, with the proceeds from the Shell sale to Shell, we will start to be making distributions in some form to investors. So that's the end of the presentation. I guess we move into the the q and a part of the meeting. That's great. Thank you very much indeed. Ladies and gentlemen, please do continue to submit your questions. Just We

6:43 did receive a number of pre submitted questions ahead of today's meeting. A number of them fell into kind of the same kind of category, so we've done our best to use your time as wise as we can. There's been a number of questions on the sale of Kuranian, and and we want to kind of address those perhaps in just one go. And, you know, why was the sale price lower than shareholders were expecting? Maybe you could get bit of color around that. Yeah. Certainly. So let's just start with saying that we'd never provide any guidance or expectation in terms of what the sales price of the Victory asset was gonna be because bear in mind, that was the critical aspect the the main asset that was being sold as part of the transaction to Shell. What we did do was undergo a thorough process, which was led by Han and Partners that fully tested the market in order to determine the best value that we could extract from development asset.

7:30 When we look at the independent analysis that has been provided in terms of what what assets are sold for in the North Sea development assets, these are This is specifically it was certainly well within the range of what would be expected for a development type asset in North Sea. So I think we went through a full process. We had it carried out and tested the market thoroughly through that process and ultimately came to a price that we felt and indeed the crowded board had felt was a good outcome for crowded shareholders and in this specific case for REABOLD shareholders. So that is the process we went through. That

8:05 was how we got to the price that was achieved and then the metrics behind those that really determined what that sales price was. So I think, hopefully, that covers that element of of question. And so just to to add to that, I mean, everyone should probably bear in mind that it was only a couple of years ago that this asset was picked up directly from from from the the government essentially and was un unbid by anybody else. So the market assumption of the value of the asset a couple of years ago was zero. So I think achieving the sales price that we did was a very strong achievement. That's great. Thank you very much indeed. A couple of questions around the same kind of topics and kind of theme as well. Did the CEOs receive a bonus payment from the sale of Corellian?

8:52 So I I presume that that would in reference to CEOs would be to Steven and myself. So we received and will not receive we haven't received and will not receive any incentive payment whatsoever associated with the sale of Coralian to Shell. The incentive package and payment is entirely geared towards the management team of Coralian and is completely dissociated from the management team of REABOLD in relation to those payments. So just wanna make that, you know, extremely clear. The incentive payments towards the CRAWLING management, nothing to do with the REABOLD management or indeed Steve and myself as co CEOs of REABOLD. That's great. Thank you. If we can stay along the lines of remuneration, if we may, can you address claims that your pay structure is unfair and that you both have small stakes in the company?

9:47 Yeah. Shall I start with that one, Sat?

9:48 Sure. I mean, I think we'll address this question of of pay pretty directly because I think I've seen some fairly sort of misleading numbers being bandied around, particularly by the requisitioning shareholders themselves. So how does this work? So our pay is determined by a remuneration committee of which we are not a part, but sets the pay and recommends pay to the to the full to the full board. And where do they generate that number from? Well, they do it from benchmark. K. So these various benchmarks to decide what the appropriate pay for executive of a company such as REABOLD should be. And if you look at the 4,000,000,000,000 capital kind of accusation of our overpaid about being overpaid, they actually provided one of those benchmark type numbers, which is from a a KPMG report.

10:34 And that that had the salary that a CEO of a company the size of REABOLD RESOURCES would typically be earning. And if you look at our salaries, they're almost exactly in line with that number. And that's no surprise because, of course, our remuneration committee is using a benchmarking process in order to set that number. And on top of that, there were there were some claims of some additional payments that came to us. So there was a claim that we each received the £50,000 bonus for 2021, and that was attacked because the share price performance was poor in 2021. So let me just address that point. We received the payment right at the start of 2021, which was in relation for work done in in in 2017 to 2020,

11:15 which is really what we were building up the company. And that's the only bonus we've we've we've ever received. It was paid at the start of 2021. But to be absolutely clear, we received no bonus payments for 2021 or 2022. There has been no further bonus payments made, in part in recognition of the fact that the share price has not been performing, and that's clearly a metric that the remuneration committee would want to see going in the other direction in order to trigger bonus payments. There's also claims that we've received share based payments. That's also not accurate. So that that's really just an accounting tool to use to account for the fact that there are outstanding options available to us. But, again, the options are there to make sure we benefit when the shareholders benefit from a rising share price since we haven't had that. We have not been able to take advantage of any options at all. So we have received no share based payments.

12:01 Every share that we own, we have purchased ourselves. I think that hopefully covers everything on executive remuneration such as that. Is that thorough enough? Yeah. I think that was very thorough. Then the second question was associated with the stakes that we have in the company itself.

12:17 So as Steve just outlined, anytime we have an opportunity to buy shares, we we, Steve and myself and indeed the board, have been buying shares. So outside the normal windows, because this you know, which is sort of a counter blackout periods and so on where we can't buy shares, because we have been so active and so involved in a portfolio that has been moving forward, including things like the sale of Corral into Shell, which had taken us through the course of much of 2021, we have just not been in a position where we are able to buy more shares from an inside information point of view or market abuse point of view. So it it's just not been possible. But on any occasion that we feel that we can, we have we we did and we have been buying shares. That will continue to be our approach, and and we look forward to being able to build up a a healthier stake in this company as time goes on. So, you know, hopefully, that you know, our our actions in the past are an indication of our commitment to this company.

13:17 Thank you very much indeed. I may read this next question just in full. This is a very confusing time for me as a small shareholder. Is there a single clincher argument that you can give to us to why I should vote for the status quo rather than give the requisition as a chance?

13:34 Yeah. So let's tackle this just head on. Right? Absolutely clearly, the pain that is felt by shareholders, small and large, and indeed, Steven and myself, has been a result of what has been happening to the share price. And we totally recognize and believe that the share price is dissociated from a much higher value of the inherent value of the portfolio itself. And I think to us, that's absolutely clear. But please bear in mind that the portfolio

14:06 that that that is one point, but the other element we shouldn't forget is this portfolio that has been constructed, has been done by the management team with the oversight board. We believe this is a fundamentally attractive portfolio. We believe that this that that significantly enhancing value transactions have occurred, and the level of activity that has ultimately led to the corporate events for things like Daybreak, for things like Coralian demonstrate the dynamism that we are trying to bring to this company and indeed something that hopefully shareholders can see. But please let us we are aware that despite all of that, the share price itself has not been responding. Now we've laid out a set of plans that will, we believe, start addressing that issue, including elements like the distribution, and we can come on to that.

14:57 So the main point the main point I wanna leave to the shareholder who asked that question is that this is a portfolio where value has been created. This is a portfolio

15:07 that has been driven by the management team with board oversight, and we believe we will extract value for shareholders going forward. The incoming requisitioners, we believe, are attempting to use this as an opportunity to gain control of the company when it is a key inflection point. So we want to reward loyal shareholders, and we fully intend to do so. We believe you should stick with this management team and with this board, both against all resolutions. Thank you very much indeed. Next question. Are the institutional shareholders of REABOLD voting in favor of the board or in favor of the requisition as shareholders?

15:47 We've had a number of meetings with our institutional shareholders. We've had extremely strong levels of support. Many of these shareholders do not like to be specifically named ahead of time, so we will see their votes come in when they do. But we've been we've had a a a very, very strong level of support from major institution shareholders. Thank you. Do your board positions with Corellian and Rathlin create a conflict of interest with REABOLD shareholders?

16:19 Absolutely not. And this is sort of a very perplexing accusation that has been leveled at us, mainly coming from the requisition shareholders. As a k as as big corporate governance would have in terms of REABOLD ensuring that it has good oversight and the appropriate levels of control on the investee companies, it is entirely appropriate that Steven or I should be on the board of the investee companies as a means of ensuring that oversight. We are there entirely as REABOLD representatives. And to emphasize the point that was asked in the question earlier, we, Steven and I, received no personal remuneration for any of those roles.

17:04 None. We are there because we are acting for the interest of REABOLD shareholders and REABOLD shareholders only. And this is a strategy that we had laid out when we set REABOLD up

17:18 Steve and I joined REABOLD nearly five years ago, and it's simply an execution of that control feature that we talked about back then. So the fact that it's coming up now is somehow an inherent conflict of interest, I think, is is entirely misguided and and inappropriate in terms of an accusation. This is just normal practice in terms of ensuring good corporate governance by the PLC over its investee companies for the benefit of REABOLD shareholders.

17:49 Thank you, session. Let's move on. Why do you have two CEOs?

17:57 Well, so the two CEO role, Steven and I joined the company again, as I've mentioned, roughly five years ago with something that was quite an innovative and different business plan. And we, as articulated earlier, believe that we have we have achieved a significant amount during that period of time. But when we are, a, in very challenging conditions and doing things quite differently to the way industry has done it in the past, I think it does require two individuals to have shared accountability,

18:27 shared responsibility, and a shared vision for each of the decisions that are made. We again believe that those decisions have been under from an underlying point of view to the benefit of the value creation of the portfolio we have built, and that is entirely because of an not entirely, but a key factor for that has been the management structure that we had set up. It's a collaborative approach with Steven that I'm very proud of, and it's an approach that I think we have achieved, as I said, a great deal. Steve, I don't know if you

18:57 wanna add to that. Well, I think just to add to that, I mean, I think maybe it's been framed as part of this requisition process as an unnecessary duplication as a role. So you posting exactly the same thing, and therefore, there's no point having two people as why why are there two people collecting salary for doing the same job? But it really doesn't work like that. We are an extremely small management team. There's an executive team of just three people. We're all running the entire business, putting this whole portfolio together, progressing it to the point at which we we have done and doing everything else associated with with running the company. I don't think you'll

19:28 find any other company in our peer group with a smaller management team than us. And as a result, you know, our our g and a line remains very low. Our g and a spend is very low compared to peers. So it's not the fact that there's adjudication in roles at all. We are a small management team managing everything between us. We just happen to both be called CEO because that reflects the collaborative nature of the decision making that Sachin was talking about.

19:54 That's great. Thank you very much indeed. What is the relationship between Portillion Capital and REBOLD been in the past? So Portillion Capital initially had come into REBOLD as an investor during one of the capital raises, came alongside many of our institutional shareholders. And that was the first time, I guess, there was sort of this significant stake or interest that Portunian Capital had taken in REABOLD. Subsequently, it was quite a productive and beneficial relationship for both parties because Portinian Capital co invested in a number of projects alongside

20:35 us. These include things like, for instance, the Daybreak fundraise that had taken place where Portillion Capital had become an equity investor in Daybreak Oil and Gas as part of the deal structure that we had set up to create a monetization event or a liquidity point for the California business. So we were very pleased that they came in there and, obviously, inherently saw value in that business opportunity. They also came in in the convertible loan notes that we structured with Coralian, and Portillion Capital bought half of the convertible loan notes.

21:15 But then what happened at the point we announced the transaction with of Keralian with Shell slightly earlier than that, in fact, when we started talking about REABOLD acquiring for £250,000, the Keralian North Sea license interests, the relationship started to frame. Portillion Capital,

21:38 in my view, started demanding that they had a right to invest in the REABOLD North Sea portfolio. We felt, Steven had outlined earlier, a significant amount of inherent value exists in that portfolio that we can progress without the need of significant amounts of capital, and therefore, wasn't something that we felt we needed to do.

21:58 And then at that point, Portillion Capital attempted to circumvent. WEIBOLD's acquisition of those assets went straight to Corrali and attempted to acquire those same assets for £500,000, and then also attempted to well, essentially jeopardize the transaction of Corralia into Shell through a spurious claim that they brought forward on convertible loan notes. So very quickly at that point, the relationship started to break down. So if we're from our point of view, it's just when the company was really changing its footing, capital was going to be coming into the company, a rich set of opportunities existed in front of us, and we were going to have the capital to take them forward without needing to go to the equity capital markets as had been the case previously.

22:45 So in our view, this was an attempt for essentially a board proposed control type approach, which was taking control of the company without paying any premium to the existing shareholders for doing so. Obviously, we would consider any approach to the company if it's in the interest of shareholders, but this isn't it. And, you know, it's it's just unfortunate from our perspective that it has come to this because we think we could have continued to create value for both Bortion Capital and REABOLD shareholders if we'd worked in a collaborative way. Thank you very much indeed, Sachin. A few more questions, if I may. Can you explain the rationale behind your intention to return £4,000,000 of capital to shareholders? How will this take place? And when will the money be distributed?

23:33 So they they the plan is to distribute is to make that distribution when we receive the second tranche of the payment from Shell, which is at the point that they could pay the development plan is approved for for the victory for the victory project, which we expect to happen next year. The rationale behind it really is well, this goes back to the to the original strategy that we always had at REABOLD and the way we laid this out at the very start process was that on a project by project basis, we looked at we looked at acquire interest in projects at very low low valuation levels,

24:04 invest some capital to take them forward and unlock value, and then look for monetization. And at some point, that monetization should be shared with shareholders through some form of of of capital return. Now there is and and I can see a question that's coming in on on the live, you know, very much related to this, which also which kind of asks the question, okay. Why not, for example, invest it in Danny Petroleum where I sort of said we've had to put that on pause because we were focusing capital elsewhere mainly into the into The UK assets. So that's an extremely valid question. However,

24:35 when we look at the various mechanisms of potential distributions, and we have stated that we wanna discuss the various mechanism, which mechanism is preferred by our shareholders before we make a decision. But right now, as we look at it, clearly, the best thing that we could do with that 4,000,000 of capital is to invest that into REVOLD through some form of share acquisition. And that, we believe, would give investors the best return possible for that 4,000,000. That would probably deliver a better return than drilling a well in the remainder because our share price is where it is, and it and it's so depressed.

25:08 So I think just, you know, be absolutely clear about the point that Steve is making. The distribution is an inherent philosophy about what we wanna do with excess capital. The 4,000,000 feels like excess capital to to us. But on top of that and in addition, the reinvestment opportunity into REABOLD's own shares is about the the the best value opportunity that we see right now were we able to invest that 4,000,000 in today's market conditions. It would constitute approximately 20% of the value of the company as it stands today, But, obviously, we will be evaluating conditions at the time that the second tranche comes in. So there are two key aspects to this, and we we we really want to ensure that shareholders understand that there are two dimensions to that point.

25:58 Thank you both. Let's turn to the next question. Can you deliver on the pipeline for REABOLD for 2023 and beyond?

26:06 Yes. I mean, I think, again, just to go back to the point that we made earlier, we have been a very active company in terms of creating, constructing, carrying out operations and corporate activity on our interests historically. And I think that's one thing that we have executed on. So when it comes to 2023 and beyond, then the answer to that is just given the fact that we have done these things. I think we are firmly and well positioned to do so as we had said now knowing that that

26:39 we're going to be, you know, a better funded situation. But just to run through the activity specifically, number one, the acquisition that's under that that we're take that is taking place right now, which is the acquisition of SimWell, will lead to a significant read across from a well that is being drilled by Shell on an adjacent license called the Pensacola well, and that will have a very, very significant impact on the acquisition that we made that we're making, And then we have the well that is going to be drilled next year on West Newton, the horizontal well, which is a key aspect of unlocking substantial value in that package in that portfolio. But in addition to that, we will be carrying out a process of farming out and testing the market on the REABOLD North Sea assets as well. So there's a significant amount of near term activity to come, and that is both on drilling activity, corporate activity, as as I've said that we've done in the past, and something we believe is fundamentally exciting because we are going to be well capitalized to carry out that program.

27:44 That's great. And let's turn to this last question from me, if I may. What have the requisition requisitioning shareholders suggested that they would do differently? Do you think they would deliver more value for shareholders than them? I mean, the one of the confusing things about the whole requisition process has been sort of the lack of clarity coming from the requisition about what they actually intend to do. So it feels like when you look at their sort of strategic aims, in many cases, it's simply a replication of the strategy that we have already got in place and have historically had in place. There were a few claims about that that they had identified certain projects they would like to be acquiring, but no disclosure on what those projects are or how that funding or how the funding would take place for those. So

28:29 we really don't see any concrete evidence that there is a planned strategic change and certainly not a planned strategic improvement. So I think the the simple answer is we we really don't see any argument coming from the requisitioning side that would be compelling for investors to think, let's try it that way instead.

28:47 Well, look. Thank you very much to you both. That takes care of those presubmitted questions that we had. Sachin, if I could just ask you too, if you would be so kind, just to move that mouse in the question box that you've got in. There's a few questions there that have come in from investors. If I could just ask you where, of course, it is appropriate to do so, just to maybe read out the question and then give a response. And then, as I say, I'll pick up from you at the end. Yeah. Okay. So we'll start with this first question. So it's why not reinvest capital generated from the victory

29:19 instead of returning to shareholders, including assets like Danube. I believe Steve has already really answered that question. But just to reemphasize the point again, we fundamentally believe that one of the key points here is that reinvesting into REABOLD shares is one of the best investments that we can make in terms of generating the return for our investments. Okay. So just go to the next one. Right. So we have a question here. If the Shell deal was a good deal, why did the REABOLD share price go down so much? And I think maybe this is one of the points that Steven and I have been discussing in relation not only to this news flow, but other news flow that has taken place in the past. And I think one of the things that we, Steven and myself, acknowledge is that in order to improve the response of the market to the news that we do put out and putting it in a way that the market understands does mean renewed efforts on our communications and the way in which we make those communications to our investors.

30:33 So I think this is as much about how the message is conveyed to investors as much as anything else. I think this is something that we will be working very hard on sharpening, improving, and delivering on in a way that is easy for shareholders to understand and comprehend. One of the points that we get back very often is that information that does come out or is released, including by RNS, is often complicated and difficult to understand. So it is something that we will make a significant effort on going forward to improve our ability to convey those messages. Yeah. And just to add to that, I think, understanding what the particularly the private investor mindset is at any given time is something we want to put an increased effort into. And the corraling in sales price is a key a key example of that, I think. Because as Sachi mentioned earlier, we never guided to a sales price, but clearly, some expectations had started to be formed in minds of some investors.

31:31 You know, with hindsight, we could get in getting in front of that and making sure that there there weren't some realistic expectations in the in in the market, and that would have probably ended up in a better place. Okay. We have a question here that's essentially asking for an explanation of the difference between the gross proceeds and net proceeds that were received from the prevailing sales shell. So to gross the numbers up, there's a headline number of 32,000,000. We obviously own 25 50%, I beg your pardon, of Coralian. Our net proceeds were 12.7. So grossing all of that up, the difference between gross and net proceeds is around 6,600,000. So it's made up of three key elements between the gross figure and the net figure.

32:17 So number one was the ongoing costs between completion and the actual announcement of the transaction that Keralium were carrying out in terms of moving through the field development place for victory because all of that work has to carry on during the phase of execution of the transaction all the way to completion, but it's taken place relatively recently. So that's number one. Number two is the advisory fees and overall transaction fees. We had attempted that's both and to structure the fees in such a way that they were geared highly towards a success based outcome. And the reason is that there was very limited amounts of capital available within Coralian itself or indeed for REABOLD to constantly be putting into Coralian through this process of the sale.

33:07 So we worked with Coralian and indeed the advisers to entire to to heavily skew the fees towards a success based outcome. Then the final element of this was the incentive package, as we've mentioned earlier, to the Coralian management team on successful outcome. The incentive scheme that they had, again, was very, very skewed towards a successful outcome of the sale of Coralian, and they took a very low base salary. This was understood at the start, something that we worked with Coralian on to ensure there was as little cash drag on the company as we went through the sales process. So those are the three elements that make up the difference between the headline figure and the the next figure.

33:55 So let's run through this. So there's a question about are the board of directors in a position to buy stock on the open market considering value disconnect mentioned? This is always welcomed by shareholders to show confidence in the company as well as best aligning the board of directors with shareholders. So as Sachin sort of addressed this earlier, I think, he made the point that given that we are so active in terms of both deal making and operationally drilling lots of wells, etcetera, we are very, very often inside, and that provides us with very few opportunities to buy. However, as Sachin also mentioned, yes, when we can, we will certainly be looking at acquiring more shares in the market, especially at this kind of this kind of share price. We've already already covered that one. Yep. We've covered that one.

35:06 Okay. So we have a question here associated with the North Sea licenses. And have any been approved for FTP or achieved flow rates in barrels of oil equivalent per day? So this is maybe just a broader question about the REABOLD North Sea license area in terms of how mature some of those license or prospects are. So to answer the question in in relation to flow rates, there are areas in the portfolio that have had successful flow rates from wells that have been drilled. But maybe to take a quick step back, we talk about the North Sea license area in three blocks in in three broad areas. Number one, we have the Northwest Shetland. We have the East Shetland Basin, and then we have the Innamarra Moray Firth. So the Northwest Shetland, these are the assets we believe that do look very much like Victory, and we'll be attempting to move those assets forward in the same way to a degree that we did the Victory Field.

36:07 There was a well drilled on Laxford. It did test, and clearly, that is forming part of our excitement associated with the Northwest Of Shetland. In the East Shetland Basin, we do have wells also that have been drilled and tested over there primarily on the Alton discovery. This is, again, something we're working up. It is adjacent infrastructure both for the oil and for the gas, and there are a number of opportunities, again, that are being developed and will be marketed associated with the East Shetland Basin. The Innamore Firth is a very large opportunity, but that is certainly more on the exploration side and exploration fund. But the thing that makes it particularly interesting is the relatively low cost of drilling in the Innamore Firth. So it's a broad portfolio with a number of aspects to them, but critically, they are not wildcat rank exploration by any means and do have some mature leads and prospects on them. So, again, something we're very excited about and look forward to testing the market on all three of those packages. Yeah.

37:08 And just to add to that, there's clearly renewed interest in the North Sea of late. And, of course, part of that is the is the licensing round, and we're seeing lots of companies getting geared up to be active in the licensing round. But, you know, we think the portfolio that we can present to them as it stands today has a number of very attractive opportunities that in many cases, as Sachin was describing, are more matured than the opportunity that people would be picking up in the in the licensing round. So we're expecting a lot of interest, and we're very excited about taking those those opportunities out of the market. Market. Right. So we have a question here, which is asking for our opinion on what the current NAV of REABOLD is at $90 per barrel. I think, you know, the the point to make also is that we have a very gas rich portfolio in in The UK, so we also have to think about it within the context of The UK gas market. Now we don't sort of put out a a a board based NAV associated with the assets of the company. But I think what we what we would recognize is where the portfolio sits today and the value inherent in that portfolio is significantly dislocated from what you would believe is is a valuation or net asset value of the company. In addition to that, for where the assets that we have have read across valuations attributed in the capital markets, it's also clear that we are significantly undervalued from that point of view. So the

38:38 key question, I guess, inherent in underlying that is what are we going to do in order to close the gap between where the inherent value of the portfolio is and where our share price is. And we have hopefully run through that, but one of the key aspects is the return to shareholders, which we think could make a significant difference in how that valuation is perceived and and what that valuation is. And the demonstration that we can generate excess capital through things like corporate transactions or the monetization of assets in the future will hopefully just lend further credibility to reducing that gap between the inherent value of the portfolio and what the share price is today. And it's clearly one of the key aspects of what Steve and I work on on a daily basis, if you like.

39:29 The question here about director remuneration. You said that your basic remuneration is in line with the market. However, there are two of you, and you're each receiving market rate. This means the management costs are likely to be around double what they might be. Because I think I sort of touched on this a little bit earlier on. I don't think there's any company in our peer group that is being run by a single executive. I just don't I just don't think that's that's viable. There's always a team associated with this. We have a very small team. There are three individuals. And so if you look at our total management compensation, it is very low compared with our peer group. So it it's not the case that we're simply adding a second person doing exactly the same job unnecessarily. We we we we believe that the management structure is entirely appropriate for a company of our size and that we are as efficient as possible and that, again, compared to our peer groups, our management management pay and, indeed, our total g and a, because we believe we run the entire company very legally. Our total g and a line is very low compared to the.

40:31 Yeah. And and we we have put out a a couple of metrics associated with that and some of the responses that we provide. And, you know, when you look at the total g and a, when the total management expenses is a key aspect of that, it is absolutely one of the lowest in our peer group. So, hopefully, that does answer that question very clearly. Okay. Another question. Does your proposed distribution mean you will never require new equity? Well, I think it it it wouldn't be sensible of me to go on on record saying something will actually never happen because it's impossible to know what's going on in in what might happen in the future. But what we can say is that we believe that following the receipt of the second tranche of proceeds from the sale of Kralien to Shell, we will have capital in excess of the needs that we have identified within the current portfolio and that, therefore, we're seeking to distribute that cash. And as mentioned earlier, quite possibly via buying back shares, which as well as being a distribution to shareholders is actually what we believe to be an extremely attractive investment opportunity for the company.

41:38 We have a question here just in relation with about the drilling activity West Wheaton. But I believe that it's probably referring to the testing program, which is why didn't we inform the market during the testing program that it was not progressing the way we had hoped, and we didn't inform shareholders in a reasonable time scale. So just to go back to the testing program itself, one of the key aspects of the testing program that we carried out both at the a site and the b site was to ensure that we could design and optimize a horizontal well that would be highly productive. And I think all of the input that we've gathered from the testing program and the deep hydrodynamic program has led us to the CPR that we published that clearly has this very strong chance of success associated with commercialization of the West Newton field.

42:35 So I don't think it's fair to say that it went entirely badly. I think we've learned many things that helped us be in the position that we are today. However, I do think it's fair to say that we did have results from that testing program that had resulted in not getting a sustained flow rate that we may have otherwise got if we'd carried out a more optimized completions program. Now during the whole testing piece, what we were doing was iteratively learning how the reservoir was responding to what we were doing to it, and each piece of activity was improving the nature in which the reservoir was responding. So we were never in a position to be able to make a comment about what was happening during the testing program until such times the testing program had completed.

43:29 So because at that point, we could give a fair and reasoned judgment as to what had happened. Whereas prior to that point, I think we would have been it would have been very difficult for us to provide any reasonable response in terms of what was happening to during the testing program. So I believe that we had conveyed as soon as reasonably to the market the results of what we saw when we were in a position to do so. Okay. So we have a question here about the short term or the disconnect between the share price and portfolio value.

44:20 What can we do in the short term to rectify it? And you talk about the company being an inflection point. So let's just break that out down into two parts because I think there's probably two slightly separate questions to this. So to go back again to what is the ethos behind the distribution intent that we are we'll be making on the second tranche of the proceeds coming from Shell from the Shell transaction is precisely to this point. That is one of the mechanisms that could and should address the disconnect between where the share price is and what the inherent value of the portfolio is. So it's two parts that's made up to the decision for the distribution. One is that it's just good practice to ensure shareholders know that there's a formal mechanism of excess returns. But secondly, just the REABOLD valuation as it stands today, in our view, is one of the most attractive investments REABOLD can make, and that in itself is inherently a correcting mechanism.

45:21 So I I hope that that answers the question associated with with the the share price and the inherent value of the portfolio. So the next question is talking about the inflection point and the activity on West Newton and how quickly it will move forward in terms of recognizing value. Now I think the example that we would probably like to use here was victory itself. If you were to look at victory and say the timelines and benchmarks for the field development plan, environmental statement, and then ultimately first gas as the milestones from which we would extract value, then I agree with you. It's a very long timeline between the point we announced victory and those milestones.

46:10 But I I hope what shareholders can recognize is our ability to monetize the assets happens well before those longer term milestones can be achieved. Now I'm not saying we can definitely do that at West Newton, but it's certainly a successful well test at the B 2 site will certainly enhance our ability to start achieving other forms of corporate transactions that do start to unlock the value inherent in West Newton well before it would ever be the case that it goes into full production. So that is a historic example of how that would or could apply to success post the horizontal well at. And that's not something that's years away. That's something that's probably in a nearer term window than that.

46:58 Just on on top of that, you know, aside from my season, there are a few other significant things that are potentially happening within the portfolio in quite a short time frame. So we've already mentioned that we've got a significant amount of leverage to the Pensacola well, which is gonna be spending imminently. So should we be getting a result of that within within weeks. We think that's something that could be extremely meaningful for us. And, of course, we're looking to bring partner that will do deals with the assets in the North Sea Port area, which is also something that is on a short term time frame. And then on top of all of that, in terms of how do we move the share price in the short term, I think we've already kind of made the point that we are acknowledging that the way we tell the story and the way we communicate with the investor base has to get better, and that is something that will be a key area of focus for us as well. And we are hopeful that that will start to drive the share price in the right direction in the short term before we get to the the really big value unlocking events at West Newson.

47:51 And we have a question here is that you seem to have no technical staff other than the non execs. So how will the technical work progress at your newly acquired North Sea assets? So this is, I presume, referencing the REABOLD North Sea portfolio because we have to complete it on the Symworld transaction as yet. But on the REABOLD North Sea portfolio, what we've done is we have taken on as consultants the team that was previously at Coralian. So there's deep familiarity with the technicals of that project, and they are the ones who are helping us progress those assets in terms of maturing the data route, the technical presentation of those assets, integration of all of the work that has been done, including some of questions that were referenced earlier that will form part of quite detailed farm out package for all of the for all of the assets in in the portfolio. So in many ways, it's a very seamless transition from where the assets were previously in the corraling portfolio to now being fully in in in our hands. And as I say, it's just been a seamless transition because not only does that apply from a technical point of view of the assets, it's also a relationship point of view that Steven and I know the technical team from the Kuralean days and do and do know and understand how that technical team works.

49:14 So I think so far, it's been progressing very well. And just to be clear, the vast bulk of the technical work has already been done whilst the assets were in the hands of of trialing via the investment that we have all put in to fund that work. So most of it is already done. And as Sachin said, we can employ on on on an as needed basis under a consultancy agreement, the same technical team that have done that work and did the work on as well, but have done the work on the assets that we've picked up as they go into the the format process. We've gone up timescales for drilling at West Newton, you say, next year. But when well, we actually said the target is h one next year, so we expect it to be at towards the middle of the year is probably the most accurate time scale we provide at the moment.

50:11 Yeah. I mean, I think it'd be fair to say that we have attempted also recognizing the tightness that exists in the market to acquire certain long lead items to try and protect ourselves as best we can in order to ensure that that that we do hit the timeline that Steve had mentioned. Hey. But while I'm a long term holder, I've seen a noticeable increase in communication from the shareholders and the decision of distributing funds to shareholders since the process. Good to see, but will that continue if you stay on? Yeah. Well, there's two things. There's obviously the the distributing funds under those communications. So the distributing funds we've stated that is the intention. So that that remains the intention. And, of course, if we get future monetization events, then we've already set the model, basically, is to part is to impart distribute those funds to to shareholders as we go through those processes. So, yes. And in terms of the communication, I think that was my answer to a question a few minutes ago. But, yes, we are fully intending to engage more strongly or best find a way of doing it better in terms of our engagement with the particularly the retail or private investor base.

51:16 I think we have another question here with about the share price and it being low, again, you know, in relationship to where the the the inherent value of the portfolio is. And I think just to reiterate again in in in relation to this question about putting in place a share buyback, Steve had had articulated once earlier, and and we'll just reiterate it again, that that that to do the significant redistribution that we referred to earlier, we await the second tranche of the proceeds from Shell due next year. And I think if current conditions were as they are right now, we would be strongly minded that the nature of that distribution would be via some kind of buyback or tender offer just to reemphasize the point inherent in this question.

52:05 But just to explain, why haven't we done it now? I think it's only appropriate to put a share buyback in place when you have excess funds to do it. So we believe the share price is extremely depressed and way lower than it should be, much lower than the inherent value of the assets. But the assets only have value when you have an ability to fund them. So we also need to make sure we are funded for the for the work programs that we are planning to put in place. Beyond that, when we have cash beyond that, I think that's the appropriate time to start to buy that shares. K. We have a question here about the Pensacola Well, that if we get good results, how confident were you on West Newton? I think the way I would answer this question is actually in relation to the SIM well asset that we're acquiring because Pensacola was in in the license adjacent to the SIM well license in 02/03/1932 that we will be acquiring, and the read across for that license is much, much more important, if you like.

52:58 So I think a successful well on Pensacola significantly derisks and enhances the value of that license P2332. Shell, just as a reminder, Shell is operator on both licenses and has a very comprehensive dataset across both the Pensacola license and P23P2332. And because of that, I think we would feel really strongly encouraged on the value enhancement of of of that P2332 license. But to come on to West Newton, you're quite right to mention that there are a lot of similarities associated with the geological and analogous nature of Pensacola with West Newton.

53:44 However, I think what we'd say here is the dataset and information that we have over West Newton realistically is far deeper and far richer and far more progressed than is the case even after a successful well at Pensacola as it pertains to West Newtley. So the West Newtley asset out of all of the similar plate types, we believe, is by far and away the most progressed, the most derisked, and the one that we, again, believe is most likely to to have value associated with it first. So it's part of a play trend. We do recognize that. We've built up a position in there, but I think West Newton actually sits as the prime asset within that overall trend rather than significantly learning anything about it coming from Pensacola. Just to add to that thing, we as we have all been in a pretty unique position in terms of our footprint across this new emerging play. So we have the onshore position, and we, of course, have the offshore position. And that gives us access to a very, very rich dataset.

54:45 I I think we're somewhat using that in that regard. Oh, Jesus. So a couple of questions coming through regarding the forward strategy for for the California business. So, clearly, we've by merging it into a a listed entity, that's the first step to set it up ready for a monetization event in the future. Then we think it's the appropriate time now. Firstly, we think that the valuation associated with it currently is is is lower than it will be. Will be exiting that at a higher at a higher price.

55:30 And we think that Daybreak is in a position where what we know because we've had the assets. We know there are some really attractive drilling opportunities in the Daybreak portfolio, so we're expecting Daybreak to be a driver of growth within both the old Daybreak asset base and the REABOLD asset base. And we we believe we will see Daybreak as a growing company. We will maintain our position as a major shareholder until the appropriate time comes to start thinking about it. So Yeah. And just to guide, you know, Shell, there is a presentation that talks about the work program that Daybreak will be executing and the trajectory for growth that will be ahead of them. Clearly, we want to be participating in that trajectory for growth because a lot of it is associated with assets that Steve had described that we know very, very well because we used to own them, but also the confidence that we have in the current county or legacy position that Daybreak itself had.

56:23 So we think it is an exciting time, and then certainly would encourage shareholders to just review the presentation materials and information present on the Daybreak website for that growth trajectory. West Newton, will it flow this time? Well, that's about a director question as we can get, but, obviously, it's a really important question. Look. We believe that the learnings we've had from the vertical wells at are gonna be extremely important in delivering a really, really good outcome from the first horizontal well. RPS agree with that, and we've seen them attribute 86% chance of success. So that's 86% chance of getting commercial flow rates, but that's the independent view. Obviously, we are more optimistic than that, but, you know, that's probably what you would expect.

57:19 But I think what what's important to recognize is that over the last sort of twelve months since we've carried out the the initial testing program, the the depth of work that's gone in to understanding that reservoir and working out how to best exploit it is is highly considerable. There and and that is what's giving us confidence that, yes, when we drill horizontal well, we will be delivering a commercial flow rate. We we do also have here a question in the current gas market. Why do you think Western Union is not getting more positive PR or government interest? And I think that is that is a very fair question because, clearly, from the CPR that that has been recently compiled compiled for Western Union as a gas asset, it is stands very favorably even with some of the larger fields in the North Sea.

58:08 But I I think at its heart, because this is an onshore asset, there is still significant mindset issue associated not only with the industry, but probably to a degree with government, where there is this view that, well, it's the North Sea that can deliver near term gas production, gas assets, and enhance energy security. So there's a there is a PR job to do on getting both the industry and government on-site with the fact that West Loop itself is as large as any of the North Sea assets that have been, you know, for instance, EMR for fast track development recently. So that is something that we will be engaging in. We will be pushing forward, and I think will be critical as part of the well test or the drilling of the b two horizontal well and and ultimately, the flow rate from that well.

59:02 So it's something that we'll we'll be working on very aggressively as we stated earlier as it pertains to PR. I think we're coming up to the end of our hour long slot now. So I guess it's time to wrap wrap wrap Any yeah. So just a couple of final words from us. We want to thank everybody for the Q and A for all the questions. I think Steel and I have hopefully been clear that one of the things we know that we have to do and have to deliver better is the communications associated with our shareholders. This is something that we will continue to do after the requisition because we we are confident that our major shareholders will be voting against all resolutions, and we would encourage all shareholders to do the same because we believe we are the team that has and will continue to deliver the inherent value from the portfolio and will be the team that can close the gap between what is in the current share price and what the inherent value is.

1:00:04 So from the final words from us, I think that's the message we would like to leave. Again, thank you very much to everyone. That's great. Stephen Session, thank you very much indeed for updating investors during today's meeting. Could I please ask those attendees on the call not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the company can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of REABOLD RESOURCES PLC, we'd like to thank you for attending today's meeting. Good afternoon to you all.