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Back to topic .... hope you don't mind the repost of your calcs, Daceon.
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Welcome! A summary of why HSBC have reported a 5% holding here.
THE ATOMIC DEAL
Two operated oil fields: the Barron Flats Shannon Unit (57.7% WI) and Cole Creek Unit (66.7% WI) located in the Powder River Basin in the State of Wyoming, USA:
· Current production rate of 1,400 bbls/d (gross) rising to 5,000 bbls/d (gross) in 2022 and c.7,000 bbls/d (gross) in 2026 (2P reserve case, Ryder Scott Report).
ROAD MAP TO OWNERSHIP OF ATOMIC
• Deposit (non-refundable): $1 million - COMPLETE
• Initial Debt-Financed Payment: $8 million for 15% of Atomic's Working Interest in all of its leasehold on or before December 31, 2020. - COMPLETE
· (Note: If the acquisition does not complete, the Company will retain this interest)
• Assumed Debt: $26 million at closing – FINANCE APPROVED PENDING COMPLETION OF AUDIT
• Total Additional Debt and Cash: $15 million at closing – FINANCE APPROVED PENDING COMPLETION OF AUDIT
• COPL Common Shares to Atomic Shareholder(s): $4 million priced at closing – TO BE ISSUED AT CLOSE OF DEAL.
The final possible completion date is 15/3
From the latest RNS Thursday 18/2 “we are working with the Lender to complete loan documentation in the coming week." – Ryan Gaffney, CFO.
VALUE TO COPL
Total Cost $54m
Estimated SP on completion of purchase of Atomic : 1-2p
DEVELOPMENT OF THE ASSET
- Roll out tripling of the gas injection programme at Barron flats
- Drilling cole creek plans
- Production ramp up - monthly updates expected all positive incline so no surprises but each one adds to the market cap and net worth
WHAT ABOUT THE OTHER OWNERS OF THE OIL FIELDS?
There are good reasons to believe that a 100% purchase the asset is possible.
- NOP (in financial distress) buyout would take us to 85%
- Chinese own 15% (being forced to sell by US Govt)
There is a $20m accordion facility built into the finance agreement which may be earmarked for this very purpose.
DOES COPL HAVE ANY OTHER POSSIBLE REVENUE STREAMS?
The Atomic deal came as a huge and very welcome surprise to the shareholders. The main reason that we had been holding was for the expectation that COPL’s interest in OLP226, a large offshore asset in Nigeria, being developed.
1 - PSR is assumed - no evidence to state it will not be agreed. It has been delayed several times however most shareholders would agree that it is likely to still occur.
2 - Oil is found already, next to a producing prolific field - drill planned is appraisal not exploration
3 - Essar want a rapid ROI to date on $70m exploration spend - can spend a lot, drilling costs very low and would want to capitalise on that asap - COPL are carried
4 - Nigeria have much to gain from their oil assets getting to production.
With 60k bopd assumed production
COPL share at 15% (5% with option to increase)
Oil at $40/b
tax 70%
lifting costs $20/b
This equals $19.4m net profit p.a
mc $331m
Note: Oil is curren
Wonder if HSBC added more on Wednesday during the very high volume day. If so we won't get a TR1 until Friday eve. Let's see..
Excellent thanks muchly daceon excellent summary
Welcome! A summary of why HSBC have reported a 5% holding here.
THE ATOMIC DEAL
Two operated oil fields: the Barron Flats Shannon Unit (57.7% WI) and Cole Creek Unit (66.7% WI) located in the Powder River Basin in the State of Wyoming, USA:
· Current production rate of 1,400 bbls/d (gross) rising to 5,000 bbls/d (gross) in 2022 and c.7,000 bbls/d (gross) in 2026 (2P reserve case, Ryder Scott Report).
ROAD MAP TO OWNERSHIP OF ATOMIC
• Deposit (non-refundable): $1 million - COMPLETE
• Initial Debt-Financed Payment: $8 million for 15% of Atomic's Working Interest in all of its leasehold on or before December 31, 2020. - COMPLETE
· (Note: If the acquisition does not complete, the Company will retain this interest)
• Assumed Debt: $26 million at closing – FINANCE APPROVED PENDING COMPLETION OF AUDIT
• Total Additional Debt and Cash: $15 million at closing – FINANCE APPROVED PENDING COMPLETION OF AUDIT
• COPL Common Shares to Atomic Shareholder(s): $4 million priced at closing – TO BE ISSUED AT CLOSE OF DEAL.
The final possible completion date is 15/3
From the latest RNS Thursday 18/2 “we are working with the Lender to complete loan documentation in the coming week." – Ryan Gaffney, CFO.
VALUE TO COPL
Total Cost $54m
Estimated SP on completion of purchase of Atomic : 1-2p
DEVELOPMENT OF THE ASSET
- Roll out tripling of the gas injection programme at Barron flats
- Drilling cole creek plans
- Production ramp up - monthly updates expected all positive incline so no surprises but each one adds to the market cap and net worth
WHAT ABOUT THE OTHER OWNERS OF THE OIL FIELDS?
There are good reasons to believe that a 100% purchase the asset is possible.
- NOP (in financial distress) buyout would take us to 85%
- Chinese own 15% (being forced to sell by US Govt)
There is a $20m accordion facility built into the finance agreement which may be earmarked for this very purpose.
DOES COPL HAVE ANY OTHER POSSIBLE REVENUE STREAMS?
The Atomic deal came as a huge and very welcome surprise to the shareholders. The main reason that we had been holding was for the expectation that COPL’s interest in OLP226, a large offshore asset in Nigeria, being developed.
1 - PSR is assumed - no evidence to state it will not be agreed. It has been delayed several times however most shareholders would agree that it is likely to still occur.
2 - Oil is found already, next to a producing prolific field - drill planned is appraisal not exploration
3 - Essar want a rapid ROI to date on $70m exploration spend - can spend a lot, drilling costs very low and would want to capitalise on that asap - COPL are carried
4 - Nigeria have much to gain from their oil assets getting to production.
With 60k bopd assumed production
COPL share at 15% (5% with option to increase)
Oil at $40/b
tax 70%
lifting costs $20/b
This equals $19.4m net profit p.a
mc $331m
Note: Oil is currently approx. $60 per barrel