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Hi Bapuk.
Don’t apologise to me my friend our collective opinion is what stops us from getting carried away and
I CERTAINLY APPRECIATE YOUR VALUABLE OPINIONS.
I think the point I am trying to make is that yes, even up to a few months ago most of us would have been ecstatic to see a MAJOR come on board almost on any terms - probably hoping for 20% retention.
However Eytan and Simon have proved themselves more than a match for the big boys and indeed this inspires me because one of my investment criteria is always that there has to be quality management at the top of any company before I invest.
Alan Burns was my driver initially and SP was his chosen number 2 and that fit the bill.
They have surpassed themselves with their negotiating skills and I suspect may yet surprise us by getting a better deal than the original CLN before the drilling commences.
Bear in mind McQ have achieved nothing in these negotiations - it has all been S and E.
Our guys have proved they are looking after shareholder value as a priority.
I believe we are more likely now to get an equal shared partnership of some kind although if the MAJOR/S stump up significant cash to cover expenses thus far that may be a negotiating position taken so we may end up with slightly less than 50%. I do think we will end up with a consortium of say Shell and Ophir.
I do believe we can drill 2 wells with the cash at our disposal as the $25-30 mio per well is worst case scenario and from my calculations I think we will expedite much more quickly and reduce capex significantly.
Furthermore if we hit the min strike of 200mio BOO that is $1BN NPV and would almost certainly re-rate the other drill prospects. So exponentially we would advance on almost any success IMHO.
This would in turn enhance our ability to further fund if there is no MAJOR on board.
I think BPC will keep operator status now for P1 but if Major comes in at any point it would be strange to not use their power to further the drilling programme optimally going forward. Unless the BG have a desire for home-grown oversight.
My base case for this until I see actual results is that any result keeps us very much alive and I am assuming 1BN BOO over the whole project as a minimum. This is massively below potential according to seismic data and Moyes so I feel comfortable with this strategy.
SP pricing will have to be a moving feast and possibly a small hedge pre/during drill but by then I think a 20% hedge will leave us in free.
GL mon ami.
IK
Sorry Interestking, it’s probably just my suggestion that BPC keep 10-20% ownership in any farm-in deal. I have no basis for this % other than thinking that’s how much a major/supermajor would allow a small company like BPC to keep for the price of joining forces and providing capital/support for multi drilling. Perhaps that would have been the case last year, but as Eytan has suffered in the Proactive Investor interview, BPC can now go it alone, for one drill at least so I guess they’ll drive to keep a much higher % if agreeing any farm-in. Time for the major(s) to put up or shut up, words to that effect I think. Do you envisage that with any farm-in BPC would hold/keep operator status (to avoid the major drilling elsewhere than BPC’s intended sweet spot etc)?
I’m a genuine holder , perhaps not as long term as some of you chaps ... I bought BPC in 2010 at 9-23p range (!!) but sold out at loss, then rebought in much bigger amounts in 2018 onwards as it all looked like it was coming together ...I had never thought sp like 50p plus could be achieved until reading some of the posts like from yourself, even 20-40p would set me up for life but daring to dream bigger is making me question my sanity !!
Whatever sp “ceiling” to be reached, it will multibag from here so new investors should do handsomely even buying at current sp, it’s just deciding whether x3, x7, x10, x20 of current sp is a realistic goal. I suppose as some have suggested, can top slice at various points and leave rest to ride or hold it all till the end of BPC journey,
Thanks
Bapuk
The question to our recent posters quoting NPV figures etc is where are you getting 10-20% BPC share of farmin from?
That is so out of date now.
We are almost certainly looking at farmin in the 50/50 range.
Would love to hear your logic for only 10-20%
GL
I’m no geologist but when I do look through all the info that cost 100 million its a pretty compelling case. Look at the slides that show the rock formation and how many oil bearing layers they’re going to drill through. If there’s really nothing there then modern technology has a lot to answer to. I have constant conversations with my other half as to when to sell, what percentage etc. Like I’m sure everyone is. Personally I’m leaning very heavily on the positive side, but that may change depending where the SP is at the start of the drill in about 6 weeks time !!!!
Yes but within 10yrs we will have multiple wells + 4 other other areas of interest to drill.Then there is a possibility of a buy out.
The most important thing of all is to hit oil.Any multiple of price is then subject to the investor of when or how much to sell for.
Get greedy after we hit oil not before.
If farm in arrangement leads to $1 per barrel net profit and it takes 10 year to get all the oil out assuming 770mnb than at 10% discount rate this farm in deal means ~$550mn market cap. At 20% discount rate 405mn.
Hi Shamima
I don’t mean farm-in would be negative to current sp at all...indeed I’m sure it would make the sp soar into double digits. What I mean is that if say on commencing drilling as things stand currently with bpc going alone the market prices bpc at a 250 million mcap (ie roughly 2.5 times current sp= 12p) but say instead we had a farm in and had given away 80% ownership but got multi-drill funding/partnership/20% share of the prospects, how far up or down does the sp go to reflect these disparate elements...? I’m not in finance sadly so this may all seem a bit naive...
Gla
Bapuk
Did anyone DYOR and estimated if there there are 770-1440mn barrels what BPC will get for each barrel if there is a farm out? $1-2? And how long will it take to extract this amount of oil? 10 yeras?
Bapuk- i too was thinking what impact a farm in would have on the SP, however slightly disagree with you when you say it will have a negative impact.
Essentially a farm in would allow us to drill multiple wells... yes not at 100% ownership, but perhaps as can be seen as doubling out chance in striking the good stuff.
This is just how i see it playing out in my limited wisdom and could be completely wrong
How does everyone else see this?
Hi all
It’s great to be in seeing the sp finally start to mirror the near term prospects.
Reading all the posts this weekend has bolstered my hopes further. My problem is trying to work out what’s a “fair” BPC sp/mcap to expect with so many varied scenarios - with 100% ownership its relatively straightforward but if any farm-In, the fair value sp will have to be less to account for how much percentage ownership we give away to be partnered in presumably a multi drill campaign....hard to know what sp to ascribe to 10% or 20% residual ownership but with such a partnership...anyone made a spreadsheet to help work such things out ?
Gla
bapuk
Blissful- its been watching the plan play out which has made me completely gain trust in the board and makes me think that this drill will be successful.
Theres some experience in the crew here and 100m spent on appraisal of the well is probably giving us the best chance of striking here.
Very exciting times all!
Hi Oldtrader - just like me!
No names no pack drill in this day of mass media trolling etc.
I prefer anonymity.
My initials are GA and I worked for: NWB/Union Discount/Chase/Investec/Family office. Various centres including London, New York, Zurich, Geneva, Channel Islands.
With multiple targets on this drill it is definately going to be a rollercoaster. Still undecided how to play it. May need to pull on my big boy pants for this one.????
Hi Shamina, good on you for taking the gamble. I am not sure if I will sell some pre spud or not. The upside is so enticing. I have read the presentation a few times and wish we had more on the well profile as the one on page 11 of the latest presentation is difficult to read (anyone know if there is a more legible version for simpletons like me?). It appears there are multiple targets and indeed it says, 'Multiple target horizons', but for the life of me I cannot read what they are from that profile.
It appears that the first of these could be around 1800m with a few more to go through until TD.
It could well be worth waiting for the drill to hit some of these targets before selling anything. I am thinking that although the well will take between 45-60 days, we could hear some positive news a long time before that. I am no expert but would like to hear the opinions of those who are.
Good luck!
As long as it opens up the option for Institutional investors by being a £100M mkt cap company, we can at least expect some inward investment from that quarter.
Some Institutions may shun carbon related investments and just as there's a sub sector targeting 'ethical investing'......however, let's not kid ourselves into thinking that constitutes any significant part of Institutional investment strategy overall.
Given the potential afforded by such a gateway now opening up to Institutional buying power in a predominantly retail held stock, the impact on an Upward projection of the price can be very significant indeed......even smaller Fund holdings in BPC could have a major impetus to the Upward moving share price.
Being £100m market cap doesn’t suddenly unlock institutional investors....they invest on return prospects. This is a highly speculative investment and will not have widespread appeal to institutional investors. Of course, some fund managers will hold small positions in speculative stocks. There is also a wave of pressure on institutional investors to shun carbon related investments as part of the ESG wave sweeping the investment sector. However, plenty of cash from other sources to underpin the share price of the story unfolds positively.
This board is beginning to sound like the SOU board a while back. It might be a life changing investment but also it might not be - so I am taking profits at every +50% (from a very low cost base). Yes giving up potential profit, but + 50% / 100% / 150% etc. Is nothing to dismiss. To each his own strategy.
Whistler - Yes it was. I remember it well: I happened by chance to be in front of my screen at the time.
Was'nt it Rockhopper where they dropped the price over 50% wiped out the stop losses and others panicked and sold believing a duster.
30 minutes later the price had been returned to its rightful place.
(figures approximate)
Great analysis IK. I have watched this board for a few year while been a share holder and found it very interesting and insightful.
I wouldn't call myself “markey savvy” so i find it useful on hearing different opinions on news and events which can help me make an informed decision. But completely agree, you have to do your own research, but the BB helps build a bigger picture around that!
My strategy has seriously changed, i was thinking maybe top slicing in the run up but now i think i am all in on this. As people have said before this is potentially life changing, and i am happy to lose what i have for a greater gain in the long run. Just the gambler in me!
But i urge everyone here to have their own strategy as everyones financial situation is different.
I think the next few weeks is going to be an exciting time for us all, infact i am wishing the weekend away already.
I still think there will be ups and downs in this share, but with an overall steady climb up to the drill. And i for one will be trying to add during the dips!
Atb
only6 - you mentioned stop losses - Having a stop loss is great to keep a hold of some profits though they have to be set carefully would you agree?
MMs can make the price of any share plummet for just a few seconds - especially with such a volatile share as BPC is at the moment - just because they can. They can release many shares into the market so they can make a shedload.
Basically the warning is - BE CAREFUL - ensure you make your money - it is all there to lose - but let us not forget it is all there to make. When you have made enough to be happy, that is the time to say goodbye to some if not all of your stock.
Try not to become too emotional with your shares - we are all in it to make some money - there are plenty of warnings on all financial adverts. Scary and exciting times to own BPC shares.
What is your name interest king I was in the market from 1963-2015
Hi Only
Thanks vm for your comments.
Specifically I am suggesting that any Stop loss orders will only be oxygen for the MMS.
They target them to create volume/fear/volatility - their life blood.
This share is now “in play” and very much a one way ticket barring real set backs like a “duster.”
So starve them of oxygen and there is only one way for it to go overall IMO.
I was part of this market for all of my career so know how they work.
Different story when we get to spud as most of the news etc. will be in the price and the SP will react to REAL news.
Of course you must apply your own risk parameters based on your personal finances.
However I would repeat that if you cannot afford to lose this money then maybe scale back or indeed not be in it..
I hasten to add I say this with great affection and repeat IMHO this one has the potential to change lives.
GL
X
Hi Yonny.
Thanks vm for your kind words much appreciated.
FYI - My understanding is that BPC joined the presentation itinerary quite late in the day so it was not widely advertised on a timely basis. We now know why - great last minute news to impart !!
X
Great summary I ,as an investment team does anybody have any top ideas on hedging , Int do you mean stoplosses set , not sure how that would work with brokers if we lose 30% one afternoon. Do we have any other blue sky ideas like bpc bubbling up we could hedge into, ive nibbled at txp , kefi, eqtec, cluf, clon, caspiansunrise etc. Just wondering where we go after all these fireworks subside and my wife demands another visit to paris in 2021 post success at bpc !!!