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This share could quite easily finnish at 1.5p or 3.5p tomorrow without an RNS, simply on the back of a small number of large value trades. There is little black and white science with the BPC share price at the moment and it is where it is on sentiment only.
I realise its sentiment that ultimately drives the prices based on news flow but as many have pointed out we have been much higher on a lot less concrete news so it is only the fear of a placing holding this back. If word were to break on one of the other financial proposals on offer which substantialy mitigates or negates a placing this share will be off.
As I have said in other posts, the fear of a placing is what the company are peddling at the moment as this suits their negotiating hand and they will not deflect from this picture however much it hurts existing shareholders. In effect we have to hold our nerve and not blink in these negotiations just as much as those sat around the be table.
Good luck with your short and if it comes off I won’t be too bitter as it will mean we are likely one step closer to drilling and I’m not being greedy here, I just want us to drill.
Short analysis. Half the well costs raised through investment via a CLN at 6p baseline with 25% premium to a lower equity price. Why 25% premium? Why 6p? A number of funding proposals already received at time of CLN agreed. Farmout partners lurking. Sea Drill, Baker Hughes and Halliburtons due dilligence positive. Well costs greatly reduced. Chance of finding oil high for a wildcat. Conclusion, short?
I find it hard to believe any financial exchange allows that type of exposure on BPC, it’s a hefty risk for them if it goes against them and they’d be closing accounts left, right and centre if it goes for them. Stocks like BPC are too susceptible to a P&D to allow true market forces to work properly and therefore short positions are rarely possible.
Plus, we’ve had many on this board over the years make claims about short positions, at the end of Exclusivity last year this board was crawling with antagonists with that rhetoric and not once was I able to find an exchange to corroborate ones story, including anything on offer with IG.
I agree with you about the 6p placing but other than that I think you’re full of siht.
Other possible offers of funding on the table are the well service providers and driller providing funding for half the costs of the well(s). The prerequisite for them getting involved was for BPC to raise half the costs, imo, dyor. This framework was drawn up for Bizzel to have something tangible to be able to provide the CLN.
The limiting factor is the number of shares available to raise the necessary funds prior to drilling. We know how much BPC need to raise for 1 or 2 wells, we know how many shares they have allocated for the funding (1.8Bn), hence an equity price can be worked out. There just aren't enough shares for a placing at 1.5p or anything like that if they are going to drill. It just wouldn't raise enough money for drilling, hence a higher equity price will be needed. There needs to be enough shares to cover the CLN aswell. These shares will not be taken upfront imo, as there is a 3 year term period with a 12% coupon. Any future hypothetical sp that equity is raised could technically be in the 3 year period of the term for the CLN. So on any oil discovery, post drill, could be at a greater sp than 6p, however without a successful discovery, would be at a lower sp +25%, If you are short, it is very risky as there is the likely chance of a farmin due to the reduced well costs. Majors have been basing there farmin costs on $100-120m per well. Now they know they can drill for as little as $25m, it makes a farmin a lot more attractive. imo dyor.
I'm short £4k/point with IG. Was somewhat surprised to see the borrow available, but you could still get it as of Friday.
As you imply, shorting illiquid small caps is generally a poor idea, however in this case it's basically certain I will make money from a 2.75p avg short, given the company needs to raise £15m+ in just a few weeks, and the only reasonable way of doing so is via a discounted placing.
As I said, I do intend to go long once the funds are raised, and my long position will be much larger than my current short.
Specialist is correct; talk of 6p minimum conversion is total nonsense.
Personally I am short at the moment because I do not see any way the drill is going to be funded other than via a heavily discounted private placing. The amount they need and the type of investors who will be willing to fund what is essentially a wildcat drill mean that the discount is likely to be large. 1.5p could prove optimistic; it will certainly be much lower than current levels.
I plan to either close my short post placing and go long, assuming the drill is definitely happening, as there is likely to be substantial upside from the placing price pre drill. I don't plan to hold any for the result.
Tatty do not sell anything at least until the drill is in the ground. IMHO 10p+. The numbers associated with this project are far in excess of the majority of projects. I.E. The potential is as big as virtually any prospect in history. Many billions. IMHO the AGM can be a bargaining environment because whilst I, like most want to see this “done” I believe the BOD are trying it on by attempting to award themselves shares BEFORE A DRILL SUCCESS .They already have shares allocated to them in similar amounts based on “successful drill.” ........ Successful financing of drill is not success. Alignment with shareholders interest is required.
I don’t think we will have the opportunity to participate as they have “several financing solutions under consideration” (paraphrase).
Any convertible loan dilution will be for done at 6p or at a 25% premium to the sp at the time of issuance, whichever is the lower, 6p being the lowest.
Once advanced, the Conditional Convertible Loan would be for a term of 3 years, with a coupon of 12% per annum, convertible at a price of either 6p per share or a 25% premium to any hypothetical future equity issuance, whichever is lower.