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Woops - some poor maths there. Should read 3,600 to 6,000 bpd. Back to school for me!
Exactly Yachtmaster. The drop from 40% to 15% ownership should be taken in to context with the wider development and cost to get the project developed.
Under the previous arrangement ShoreCan were responsible for minimum $80M finance and they would carry Essar's 20% costs in to the drill. We were also going to be arranging the $7M performance bond, which I assume has been put back to Essar as per original SHA. That is significant debt that we will no longer be burdened with.
I also think focus shouldn't be completely on the percentage of the project, rather what that translates to in terms of production and compare that to the MCap. This initial drill, if successful, is expected to result in net oil for COPL between 900bpd to 1500bpd at low cost due to the free carry / reduced debt burden. Additionally, the first phase development of 3 further wells could result in a total production of between 4500bpd to 6000bpd. There is still a way to go to realise that, but the point is that even a 15% stake in OPL226, given the sheer size and value of it, is comparable to a 100% stake in many offshore projects.
For me, there is a very clear road to value accretion from £5M MCap.
Our share of asset ownership after an SPA/Finance deal would probably have still been the same as now and we would have still had the disagreement with Essar. At least this new deal sees us moving forward with the drill bit in a few months time. I suspect the last quarter. Anyway lots of news over the next few months.
Hi Oliberta
I dont see it that way. The drop in share of asset ownership should have lead to drop in market cap.
We need to understand the flip side of relenquishing 70% is we no longer need to fund the cost of drill.
At least that is what i understand from the deal
Yeah the build up to Liberia was exciting and then..... At least there will be oil this time. Will be an exciting few months ahead now.
Brady I agree, the outstanding shares will make it tough to see a substantial return considering the reduction in stake. But should hopefully be good for a double or triple.
It’s absolutely a welcome surprise and exciting, though when I first bought in we were talking Oilexco type riches with Liberia. Upside is obviously considerable here, yet the share price will now have permanently less torque (Albeit still massive but from essentially zero) due to shares outstanding. Don’t get me wrong, I’ll give the deal maker credit, he doesn’t take the easy route. He’s always been attracted to the highest stakes and risk/reward. It’s always fun to hold a position into a massive drill with a micro cap. as you know, I’m honestly shocked it’s going to happen.
Berta & Brady you guys suffered longer than most how about getting back in the swing?
All we've done for threeeee years is go over history, the past week, the past month and the past year. It's going to be a little bit strange talking sincerely about the future and drilling. From what I have seen the news took us all so much by surprise we are still talking about the news and haven't actually turned our heads and started posting solely about what could reasonably materialise here. Plenty of knowledgeable posters, who's going to start the ball rolling.
Rift, your posts yesterday were needed to clear up some of those historical moments. They served a purpose mate. Cheers.
Looking forward to a run of good news.
(Did I really just say that?)
Rift,
Good move....you know you want to....Lol
Don't delay.....claim today....lol
Body language of the RNS said lot more. My own view is GOVT is already on board but they cannot say it. Just need to rubber stamp the deal. Could happen lot earlier than 35 days quoted. We will see.
Hello rifteastafrica great post all have a good weekend. Let's hope for good months ahead.
Rift. That was a great statement, we had our differences in the past but I respect you & your message. 10 out of 10 mate!
Welcome back Rift Sensible post and well considered approach You were one of the original gang of hopefuls and I am pleased you are planning an imminent punt. You wont regret it lm sure
Guys i was a little pessimistic yesterday due to the dilution on the asset but the more i think about it. I think its a good buy from here. (And no, i havent bought in so im saying it before i do)
I think if the PSC gets extended then its all clear for drilling.
The main point however is as the old saying goes "A bird in the hand is worth two in the bush" and COPL from here, can better realise the NPV of a smaller more manageable financeable stake than never getting to drill with a bigger more cumbersome stake.
Jay every time COPL dropped since i sold more than a year ago i thought of your stake and others like R Dunc's stake getting hit so i hope you guys have been averaging down. I lost a tonne here before but i think now is the time. I apologise for yesterday's pessimism although if you read my posts i actually did say maybe it is better to have one bird in the hand than two in the bush.
I think Gary Newmans article was over pessimistic and the asset still holds verified oil discoveries with a development in the center.
i think all COPL have to do now is raise enough to keep lights on in terms of salaries and maybe even get paid by Essar Mauritius - Will COPL maintain their team in Essar Nigeria as defacto operator due to their long built up expertise?
I hope you guys get back to a penny fast and end up making a killing . Enough said. Back to my cash backed boring companies! I will take a punt here looking for 6 months multibag but it will be much smaller than before.
ATB