Shanta Gold's CEO explains the Q2 production shortfall and emphasises the cashflow strength of SGH. Watch the full video here.
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It's well known that at 500 bopd production, overall operating costs in Trinidad and Tobago are approximately US$20 per barrel. Based on $40 per barrel oil price this would result in the Trinidad and Tobago business generating sufficient cashflow to cover the costs of its own operations. In the event of production increasing beyond 500bopd, and/or in the event of the oil price being greater than $40 per barrel, operations in Trinidad and Tobago would likely be in a position to generate surplus cash that can be deployed to other activities across BPC's business. dyor.
Unfortunately Auctus don’t agree with you there. Have a look at their financial modelling.: c$20 profit per barrel not $40. What’s the source for $20 costs because for lifting costs that reasonable, but BPC also sell their oil to Heritage at a discount for marketing/quality (c$9 according Auctus) and have to pay further royalties of c$11 per barrel. 60-9-11-20=20.
Bohemia: respectfully your argument is absolutely flawed.
Assuming $60 PoO... 475boe/day x 360 days x $40 net profit per bboe = $6.85m (BPC has stated it cost $20/b in expenses to extract onshore Trinidad but they are trying to improve this figure)
Less $4m G+A opex, excluding capex (assuming none of the $20/b extraction costs are included in some of the G&A) leaves just under $3m/year cash.
This is a key USP in everything, ie we are generating cash daily, otherwise we would have been worse off after the CERP merger having to subsidise payroll/G&A etc. This is NOT the case.
As long as I’m not at risk of repeating myself more than you do SC, BPC are not generating cashflow after open and G&A. The $3m from production does not cover the $4m central costs.
Here’s how they put it in the OO RNS:
“at a US$60/bbl oil price, 500 bopd of stable production from these fields results in annual cashflows to BPC of approximately US$3 million per annum, which approximately equates to the Company's operating costs and overhead in Trinidad.”
In other words the $3m covers approximately $3m of G&A in Trinidad. The Trinidad business breaks even. It does not cover their G&A outside Trinidad: executive costs, PLC costs, Bahamas licence costs.
So BPC overall continues to burn cash even before S2 capex. And I contest that a breakeven production business in Trinidad is worth £27m to cover the market cap, as does the Auctus valuation if you are willing to test Eytan’s fuzzy bar chart.
Starchild haven't you noticed over the last week especially the trolls increase. I just shows me how desperate then are before the share price increases and drilling get underway. The more desperate they get the more positive I feel the outcome will be. When it gets to drilling the majority of the 30 wells and we have more oil discoveries they will still be trolling, very pathetic to be honest.
I fully accept you are not Uncas. I was worried a bit there, but I can blame Findme for coming up with such a ridiculous suggestion.
That leaves the question - who on this board is Uncas under a new name? I'm either paranoid or he's hiding somewhere on this board.
Starchild or Eytan:)
You state you've invested even more recently since post p1 drill than your old existing amount.
Your either the bravest individual I've ever heard of in the investment world or the biggest fool.
I sincerely hope it comes good for you or at least you get your money back.
I am neither Eytan nor Leo (as suggested a few weeks ago). My posts tend to be written in British English with a slight twist based on where I live, as opposed to being 'corrupted' with Australian or Dutch lingo. in fact, if I was Texan, my posts would need deciphering.
Interesting trivia: the expression 'shark biscuit' is Aussie slang for a small child paddling in the sea.
Thanks for the detailed post Eytan!
And good luck with new position...
The next 10 days will be pivotal in BPC’s reset.
It is important to vote before the EGM deadline in a few days. I strongly recommend voting FOR all 5 resolutions. It is simple and will takes less than 5 mins. Either logon and contact your provider via secure message or phone them. For admin advice contact Link Services https://www.bpcplc.com/investor-relations/shareholder-information/
Take independent professional advice whether to participate in the Open Offer.
Some HNWIs / IIs reading this BB for the first time will be doing due dili. It is possible they have been pre-selected as part of an IPO Pathfinder and have been invited to give opinion before the II placing (this) Thursday 13/5 1635. A few pointers:
I suggest you watch two very recent presentations by Eytan Uliel, CEO designate.
• 29/4/21 company presentation (31 mins) https://youtu.be/oEl4lw107OA
• 6/5/21 follow up QA interview (38 mins) https://www.youtube.com/watch?v=97B0ZuskdrI
• Read the 5 page Auctus 27/4/21 pro-analyst’s report: https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/04/28113530/Auctus-BPC-27.04.2021.pdf
Key points (IMO)
1. There’s a small group on this BB that machine gun post negativity 24x7. Some admit to shorting, others are ex-CERP and BPC holders who appear to be doing their best to hurt the company while trolling and intimidating others.
2. BPC is sitting on c$85m in Trinidad tax losses. This is potentially worth c$25m net which is more than BPC’s Mcap today. In theory, a tax loss can be monetised by moving assets and leaving corporate shells only holding those tax credits. It could be of interest to other Trinidad HC companies making a profit. I am not suggesting BPC will do this, as keeping them will increase the potential net ROI and annual free cash.
3. BPC is currently making $3m/year ($60 PoO) in free cash after $4m annual G&A in opex, pre capex. BPC’s current output is 450-500boe/day and aims for 2500/day in 7 months.
4. BPC will spud Saffron 2 in 2 weeks, subject to the EGM and successful placing. The additional potential 200-300/boe day could add 50% to current production. This in itself is not a big deal, however it will help to de-risk the whole SW Trinidad peninsula which is potentially sitting on 230mboe. (A small North Sea oil field?)
5. Despite the BoD’s belief the asset can be monetized based on $140m spent, the market currently values a potential Bahamas farm-in as zilch.
6. BPC’s current SP/Mcap only takes into account today’s production. Any future news, even slightly positive is pure up-side.
All IMHO. Always DYOR. GL2A real shareholders and those about to be.
BTW: I have been an LTH since 2014 with 10s of millions of shares. Most purchased after the Bahamas non-commercial result on 8/2/21.
Ps: re some comments yesterday, I am not UNCAS nor am or have been anyone else on this BB