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Will wait and see
I know your entry point.......... will ya get it is the Q.......? :()
All the best (I doubt it......... :)
Agree , Zag. Kind of feel sorry to those who may have jumped in on the fake rise yesterday. Beware the rampers.
2.50 is my entry point
.....even if they have to put wheels on the boat, and drag it onshore @ SWP.............. :()
All the best (not in yet then zag.........? :()
They know the score, new management et all. They will be happy to do business again.
Once Stena gets its money that its owed they won't do business with CEG again. Once bitten
Someone was bubble blowing in the early morning. What are the details of the deal with Stena to get the SP to 12p or even 20p? There are no fundamental changes at present to get there.
CEG is still the same as BPC. I couldn't guess the S2 result, so that sold at a loss to get out of this mess.
SC, I wasn't aware I was improving on your figures. It doesn't take a lot of research to figure out that $1.8m-2.6m of CF at 200-300bopd works out at profitability of about $24/b (at $60) and therefore costs/royalties/discounts are over $36. At $70 it would be more like $40 costs, so double what you've described.
A 100b IP well giving $1m in the first year is not going to repay in three years because it's going to decline, and literally no-one knows how quickly. Please do find me an example of a bank lending on a new play type on anything like similar terms.
Yes I am short but I've said this is relatively small scale - still it's currently paying me for my efforts here reasonably well. Primarily I post here to provide some balance, hence I have to lean bearish. Hopefully I may have given a few readers a bit of cause for caution since the price was 5-6p. And if I have, the current price says I've done them more good than you have.
Bohemia: I note you agree with my figures and actually improved them as yours are based on $60 PoO. Mine $70. I agree a bank will expect proof of production, but not 6 months. Banks will be delighted to lend on an asset that gives a full capex and interest repayment in 1- 3 years!!!
Are you still shorting CEG? Probably explains the rest of your somewhat negative post.
Have a nice day,
CEG have given their own, less rose-tinted, economics for S2. At $60 it will return $1.8-2.6m per annum at 200-300bopd. We can extrapolate to something like $1m at 100bopd.
Nobody sensible - not a bank nor an equity institution - is going to give CEG $2-3m to drill another well that returns $1m in the first year until S2 has substantial production data so they know if/how the production declines in the first year. This will be the first production from the Lower Cruse so I'd want to see 6 months data at least before further investment. The company also has to clear a development plan with T&T gov before proceeding and a pay $0.5m to the BOLT vendors.
Personally I think even at 200bopd, a £30m market cap for the next fundraise is full, if it done in the near future to keep the Saffron wheels turning (or to pay the old bills).
And neither Stena nor Bizzell (who continue to renege on their £2m commitment) are going to put any money at any kind of valuation >5p.
Thank you Starchild. Much to look forward to.
Tunder: I will try and answer your question, on the SP estimate if we get S2 levels of 100, 200, or 300 bopd.
The simple ‘rampy’ answer is, ‘A lot more than today and cor blimey I don’t wanna be out of this share by tomorrow. BUY.’ However, it’s more complicated than that.
Firstly, I base SP predictions on pro-analysts’ reports. Refer to the 27/4 Auctus one https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/04/28113530/Auctus-BPC-27.04.2021.pdf .
They make a case for 12p short-term based on $60 PoO, excluding Bahamas. A successful S2 will help de-risk the whole SWP and open the door to funding the S3-S9 ‘twins’. IMO, anything more than 100boed, should be classed as a ‘success.’ At current PoO, this gives an ROI in c3 yrs x 9 Saffrons.
BUT there are 3 gorillas in the room which need to be captured before investors pile in. On the face of it they do not appear connected, however IMO they are.
1. How much free cash CEG has to develop SWP and other projects is dependent on the final $14m Stena bill.
2. Gov license renewal on 30/6/21
3. Percy-1 autopsy
It is in CEG’s interests to do a Stena deal involving shares because this frees ring-fenced cash, raised in the OO/Placing to payPercy-1 costs. Even if a deal were reached for c$10m, Stena would expect cash or shares of equal value. At 3-4p, it would create too much dilution.
If I were negotiating a Stena deal, I would wear a turbo-charged ramper’s hat on steroids and state:
‘…Have we got a deal for you. We will magnanimously pay $14m with no discount for the disputed $7m. FTR, It wasn’t CEG’s fault a metal object fell down your bleedin’ well, so you owe us one. Please accept 85m CEG shares @12p (=£10m/$14m) with 7 justifications:
(a) S2 was a success. As such the 27/4 Auctus report’s 12p could become a QUICK self-fulfilling prophecy. Hence our Stena offer is @12p.
(b) The Gov has renewed the license and we remain confident we will get a farm-in partner, or at least get majors in the data room because the Percy-1 autopsy proved x, y, z. Last time this happened BPC’s MCap hit £156m, worth 20p today.
(c) If farm-in happens including $50m back costs, we’ll hire Stena for Uruguay.
(d) When this Stena deal is RNSd, the SP will soar because the market will know CEG will have $10m free to develop ex-CERP assets.
(e) Purely from ex-CERP assets, a Dec 2020 Auctus report stated these alone when fully developed are potentially worth £250-300m MCap.
(f) Read Starchild and Tiburn’s research posts.
(g) Finally (although I’ll beat myself when I leave this Zoom call), despite Stena making it like bandits, we’ll throw in a few million Stena warrants…..’
Tunder, sorry for the waffly answer to your simple question. Bottom line: IMHO a series of loosely connected but inter-related news during July (including the full Percy-1 and S2 autopsies) will affect the SP, not just S2’s daily production rate. GL!
“The one point I don’t fully agree with you on is using typical professional medium-longterm ROI modelling on a small MCap highly volatile AIM share“
Volatile AIM share??? Anything but....otherwise you (and many of us with pre P#1 drill exposure) would have been out of here by now and avoided the need to constantly post...it is what it is, I too made the mistake to slightly over-expose here. We knew the risk was not in our favour when it comes to these types of ‘binary bet’ plays. We hold until we finally get a partner, end of.
@Starchild - Your input is appreciated as always. Would you know roughly how much in share price would it be worth if we get the following production levels from S2?
Chrisgas: Your detailed analysis of the figures, and share-price modelling was cerebral, helpful and I believe in good faith. Although I disagreed with some of your opinions, please post more often.
You asked …. ‘ I would be interested to know how PI’s will determine if Saffron#2 is a success or not and what data they need to come to their conclusion and over what time period.’
I party answered your question (from my viewpoint) on 18/6. …..
Saffron 2 cost CEG $3m capex. Assuming $70 PoO , less $20 extraction costs = $50 gross profit per boe
• 100boed: $50x100x360= $1.8m/yr
• 200boed: $50x200x360= $3.6m/yr
• 300boed: $50x300x360= $5.4m /yr
……Above, less a number of others unit costs as listed in that post, before net cash-flow can be ascertained.
In the next few days we will know the interim S2 result with details such as depth of sands and oil shows. It will take several more weeks to get a full autopsy including well pressure, flow results, API, percentage oil vs water and ultimately boed per day production. Followed by a CPR of probable reserves. If CEG produces 100b/d I will be content, 200b/d delighted and 300b/d ecstatic. Even 100d/day (at $70 PoO), gives an ROI of c3 years and helps de-risk to a degree the other 9 Saffron ‘twins’.
The one point I don’t fully agree with you on is using typical professional medium-longterm ROI modelling on a small MCap highly volatile AIM share, compared to say Exxon or BT. Yesterday I listed 19 news triggers that could affect CEG’s SP by year end, some with substantial impact.
IMO, the key triggers to CEG’s volatility is greed and fear. Newsflow (unless dramatic such as Covid) will rarely cause Exxon or BT to lose two thirds or triple their MCaps in weeks. The engine that powers CEG’s volatility is day traders that will pile in and out based on news. If good news, the SP can substantially rise and stay higher. Today, CEG is still sitting on the ‘naughty chair’ based on the Percy-1 result and the OO/II Placing. It will not take much positive news to allow CEG to play with the good children again.
Some recent commentators opined a placing is on the cards. A placing for growth, asset acquisition or to fund a game changing event (eg a mega spud) is good. PRD recently did two and the SP increased. A placing to pay debt or to survive is not good. A bank loan to buy an asset that will likely increase is good. Borrowing money for food to avoid having to sell one’s body is not good.
There are two de-facto ‘placings’ by another name on the cards. (1) The Bizzell funding for growth investment which is set at 8p. I don’t think there would be many complaints if this was 8p. (2) A Stena deal involving shares. If this were 8p+, I would be pleased because it means CEG would have several million to develop ex-CERP assets.
IMHO. DYOR. Have a great day
While all this conjecture regarding drilling in the SWP and the possible farm-in the Bahamas has been most informative it should not detract from the fact that this still remains a company with little or no money of its own. Therefore, at this point in time new and current investors should be concentrating solely on the outcome of the Saffron and Suriname projects as these projects will provide the funding, if successful, for the company’s future development.
With the forth coming Saffron#2 drill nearing completion it may be logical for current investors to re-evaluate their holding and strategy. Most professional analysts use some form of DCF model to evaluate the future share price of a company and those analysts covering the oil industry are no different. In a normal DCF the WACC (weighted average cost of capital) is used as the discount factor for the calculation of the discounted FCFF. The DCF model also uses a terminal value at the end of the excess growth period – usually 10 years. In the NAV model employed by the oil industry the discount rate is a standard 10%. In addition, the terminal value as used in the DCF is omitted and is replaced by calculating the discounted FCFF until the well/field is depleted.
Figure 3 in the Auctus report states the Total Core NAV is 9.7p (post conversion) and the Presentation PDF states the life of the Saffron field is expected to be 15 years. Therefore, in 16 years the intrinsic value of NAV is 9.7*(1.1)^16 = 44.57p using the 10% DCF. Now we can calculate our IRR (internal rate of return). The amount required is 44.57p, the initial lump sum investment is the current share price say 2.8p and this gives an IRR of 18.88% per annum over the 16 years. For those like me that bought at 22.4p (post conversion) it will take 12-13 years to reach breakeven point at this IRR.
The above is for illustrating that the NAV, Target Val, PV or whatever is not a near term valuation. I don’t contest that shareholder over exuberance based on rumour or news could spike the share price over 9.7p but it’s unlikely.
New investors should be aware of the following:
1. The company is led by a BOD’s who are to-date devout under achievers showing little regard for creating shareholder value but more than capable of looking after their own self interests.
2. The annual accounts have been delayed for a further 3 months owing to, allegedly, Covid-19.
I would be interested to know how PI’s will determine if Saffron#2 is a success or not and what data they need to come to their conclusion and over what time period.
Finally, accredited to an unknown comedian, with minor edits ‘I came into this world with nothing and thanks to BPC I still have most of it left.’
Rather than opening that can of worms and having this BB descend into squabbling again, I think we shouldn't revisit this topic.
This BB has been getting so much better of late by users not engaging in posts they know will lead to nowhere.
I am looking forward to positive S2 results & another bullseye on Suriname.
Apologies i don't mean to offend. I've just come from another share holding and feeling alittle disgruntled on a CEO's over bullish reviews and lack of transparency on future shares in issue..
I take it you mean 1.5p before consolidation? Ie 10.50p
Without discussing other stocks or generalising; I have no opinion on those companies you have mentioned.
Apologies if you have taken my reply as speaking in defence of how stocks on the AIM move or their respective BOD decisions to raise capital. That was not my intention.
CEG have made it clear that upto 750M shares can be issued in 2021. That resolution was passed in the AGM. I am expecting stepped RNS's through the year to process the SWP field development. I don't expect people to have total recall on my posts but I recall saying I expect a SP of 1.5p by year end.
rossannan.. Vanguard has a few investments in there portfolios.. The s&p is quite healthy these days and theres a number of investment companies like polar technology investments.to name a few..
ShouldveSold.. How long have the likes of boohoo and asos and abcam been in the aim 100 market for then?... I take it there will be no negative comments given by yourself when the large issue of shares arrives here in the future then?
“Don't forget you can earn 20% profit each year on a far less risk investment these days.”
Please share the details with us!
DaProphet your posts reads as if you are wrestling with your own investment decisions rather than asking me a specific or general set of questions.
Without getting into hypotheticals, discussing other stocks or operations not bringing success; stocks go up as well as down.
In my opinion choosing to invest in a stock where its income doesn't cover its Opex or Capex & not expecting the company to raise necessary funds along the way is naive.
In no way I am calling you naive or saying your investments have been poor or misjudged.
The trouble is the ratio of shares issued should be in a good acceptable ratio of the news given. So i take it you'll accept a large dilution in shares when they are issued and be quite content with a minimal gain.. Can i ask how you to expect to see a worthwhile profit in the shareforecast if that's the normal. Don't forget you can earn 20% profit each year on a far less risk investment these days..