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It works in our favour as, the lack of any production during the severe weather will have Atomic senior grateful that there is a new outfit, with sufficient cash reserves, then coming in to take his development forward.
What's the thoughts on the lack of RNS :
'..Im astonished this completion date Mar 15th and the increase in projected bpd by 40% wasnt issued in an update RNS..'? Which was similar thinking here.
It keeps coming back to the '..it will be completed by..' but yet, an audit report can fall at any time.
Guessing that AM wants the warrants settled, so that he can then progress with further 'developments' with respect to the other 43%WI... The original dilutions were done at 0.2p, which will then see a healthy return, say 1.2p up to 2.0p and beyond. Possible clearing of the decks prior to round 2 ?
Gents
I looked at slide 17 again, see the red dashed line - which is the gas injection rate,
it goes ballistic around End Jan and continues up and away, but some delay as field stimulated as production doesnt start on the same ballistic trajectory north until April.
@Tiburn in a weird accident of circumstance, the exec's sizeable personal stakes in the company depend on them getting the SP up during the next seven trading days and keeping it up for the next 5 trading days in a row.
Give a man a hammer and every problem becomes a nail.
COPL's "hammer" is the RNS. Won't surprise me for a second to see RNSes about "operations" on the 15% WI that we own now: These can contain production rates, maintenance shutdowns, flood rates, earnings, etc.
Then the investment community can be left to their own devices to multiply by 6.67 to estimate what these numbers will be on the purchase of 100% of Atomic.
I mean that's what I would do, if the lawyers told me it was legal.
That would suggest that Atomic senior then walks away with nothing for his last 30 years of grafting & developing the field ? The $9M fees you suggest are then... 'used to purchase field improvements....for the new owner..' ??? So what does Atomic senior get out of the deal ?!
The charts show that there is no significant gas injections in January, that there is then a hysteresis effect, of almost 2 months prior to the outputs then increasing. In addition,January was also written off, courtesy of the weather. This will have worked in our favour.
and if we see 10% sp rise each day on the 12 days to the 15th we will be @ 1.07p on deal done...........then maybe see 100% on the day...........:)
@cawcaw
I think your right , they are doing some increased flooding and figures could be higher.
Im astonished this completion date Mar 15th and the increase in projected bpd by 40% wasnt issued in an update RNS, but just released without fanfare on the website (which itself is 16 year old student entry level website design quality sadly - spend some money AM please - $20k would do it)
Missed opportunity imo - maybe tomorrow?
But overall all good - Mar 15th is just 12 trading days.
@Tiburn fantastic!!
My only add would be this question: 1400BPD was actually the production rate in December 2020 I believe, ramping up immediately? (Due to our $9MM purchase funding additional flooding straightaway.)
Also, our net ownership is effective December 1?
If I am understanding that correctly, it seems to me that the Q4 2020 financials could actually potentially show your $1MM net profit. (We will know soon enough, as these are due to be published a few weeks after the acquisition!)
Following that logic, the Q1 2021 financials (published around June) will show the next 3 increments: 1.3+1.6+1.9 = $4.8MM net profit for the Atomic business unit. And so on.
All hypothetical of course. Any thoughts?
Excellent summary Tiburn - as always.
Repayment schedule to the lender unknown and would be a factor, but its over 4 years, presumably lower in year 1 payments.
Key message detail on the presentation
"COPL re-simulated BFU plateau production (January 2021): 7,000 bbl./d at 10 MMCF/d gas injection rate) .......for 7 years commencing 2022"
Add 3,500 for Coles Creek peak by 2026 just in gas flooding = Over 10,000 bpd by then, sustained until 2030.
Slide 17 very interesting production ramp up
By end of this year looks like 5000 bpd
By Sep 2022 it reaches 8000 bpd - just for BFU
This is without any new wells coming on line in Coles Creek - planned drilling this year, or any exploration in the Federal deep zone. The $20m accordion facility used for best affect, surely early in the journey.
So based on 57% WI at this stage (likely to go to 100% as priority 1) what cash flow is coming to COPL in the near term?
Based on just 57% owned - net profit - after assumed tax/royalty/admin/lifting costs and assumed $63/b remains the same on average:
Apr 1400 bpd $1m net profit
May 1800 $1.3m
jun 2200 $1.6m
July 2700 $1.9m
Aug 3100 $2.1m
Sep 3600 $2.5m
Oct 4100 $2.8m
Nov 4500 $3.1m
Dec 4800 $3.3m
Total net profit scale this year at 57% owned = $20m
Add Insolvent NOP 27% - Net profit for 2021 = $29m
Add the CNOOC 15% then net profit for 2021 = $35m total
Average for 2022 is 7000 bpd at 100% owned = $101m net profit after costs
So Period April - Dec 2020 potential for $136m net profit after costs
This will almost certainly be used to secure 100% of the Wyoming field, drill costs and other new assets which should be additive to production revenue.