George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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Irene - you haven't detailed your alternative assumptions lately but the last one related to Saffron 1 where you predicted no oil would be produced from a drill targeting 4 zones in a proven oil production area where the COS had been independently calculated at 45%.
Needless to say you got Saffron badly wrong and the SP more than doubled soon after - augurs well for future doesn't it Irene !
This is an update to my posts from 21/10 due to being mis-quoted out of context with a ‘warning’ my RESEARCHED opinions were DANGEROUS. Challenges are welcome if evidence and links are provided. Offensive comments by persons who have no shares, permanent shorters, BPC haters or alleged disrupters/manipulators, who provide NO proof or links in support, are NOT welcome. For example Irenek’s recent posts using the term, ’ subscale garbage’, and calling me a ‘crackpot’.
Background
20/10 presentation https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/10/20121621/BPC-UK-Investor-Magazine-VC-Presentation-20-October-2020.pdf slide 21 and footnote 3 which states………’2021 goal >$15m NET of applicable royalties / fiscal takes’. And…..’end 2021 GOAL 2,500 bopd (net)’. Also refer to slide 14 stating onshore costs are c$20/b.
Cross reference this with the August slides 27 and 29 which show the same $15m goal with a price model of PoO at only $40/b https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/08/19180949/BPC-Management-Presentation-August-2020.pdf
1. Now let’s make the following simple assumptions:
(a) CERP is still a stand-alone public company with 4 billion shares
(b) $15m NET profit per year based on $40/b PoO. ($40 x 2500 bopd x 360 days = $36m gross sales/turnover. $20/b extraction costs = $18m gross profit )
(c) $3m expenses consistent with 2018 accounts https://columbus-erp.com/wp-content/uploads/2019/06/Columbus-Energy-Resources-plc-Annual-Report-and-Accounts-2018.pdf
(d) No debt/capex
$15m - $3m = $12m = £9.3m profit (@ £1 = $1.30 and $40 PoO)
2. Now let’s look at P/E ratios:
Tesla is 60x
Google/Microsoft is 24x
Oil industry (Q4 2019) was 17x (source https://www.investopedia.com/ask/answers/012015/what-average-pricetoearnings-ratio-oil-gas-drilling-sector.asp)
3. Now let's do some maths:
At $40/b PoO, P/E of 17 x £9.3m profit = £158m market cap…..c4p per share.
At $50/b PoO, the additional $10 would be profit minus gov royalties. For simplicity let’s add another c£3m to the annual total making it £12.3m x 17 P/E ratio = £209m market cap. But let’s round down to £200m and divide by 4 billion shares….. 5p per share.
‘Crackpot’ or ‘dangerous idea? In March 2020 respected analysts re-iterated 21.6p/c£220m CERP mCap!!! Source https://www.proactiveinvestors.co.uk/companies/news/916212/vsa-capital-market-movers---columbus-energy-resources-916212.html
Bottom line: CERP suffered a perfect storm of bad-luck. The biggest being lack of capex to develop some excellent assets. BPC will have the funds and if stated goals are reached end of 2021, at $40-$50 PoO we are looking at potentially £158m - £200m market cap from ex-CERP assets alone. That’s potentially a future 4-5p per SP, despite a possible TEMPORARY sub-1p SP if Percy-1 is a duster. Furthermore, BPC could possibly SELF-fund Uru-1 exploration + spud.
Strong BUY! All IMHO. DYOR.
Starchild
https://www.lse.co.uk/profiles/starchild/