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Quiet day on the BB today.
Wouldn't it be a wonderful world if we could debate the positive and negative aspects of BPC (there are both) without being hijacked by ramper or deramper types.
(And nobody serving sushi )
I will risk giving it a go.
Negative points.
Lack of financial savvy.
Missing TD on P#1.
Deadlines and delivery dates slipping.
PR.
Just a starter.
Positive points
Drilled P#1 against the odds.
Good near term development program.
Data set enhancements from P#1.
Bahamas license conditions satisfied - extension.
Again just a starter.
Now the big risk on my part.
A set of debate guidelines.
One big positive and one big negative point per day?
Rampers and derampers equally welcome. Research has more value than opinion.
I look forward to learning from both camps.
Private investor- great post.
Private_I
For me P#1 will always be a bone of contention because of the non commercial conclusion. I disagree with your negative & positive points for these reasons:
•Negative points.
Lack of financial savvy.
°BPC generated zero income pre merger & had a BOD annual wage bill in excess of £1m. Its ability to secure finance could only come from share placings & borrowing against the assets gained from the merger. At this time BPC was producing circa 250bpd & WTI was circa $35. Funding options were limited to these 2 avenues. So I disagree with the stance of "lack of financial savvy". If daily production was closer to 1000bpd & WTI was $60+ I am certain there would have been a plethora of financial options.
Missing TD on P#1.
°Stopping short of TD actually cut the total cost of drilling by $5m. We can all debate the reason for halting operations. But if drilling continued, the total Stena invoice would now be £50-52m, not £45m.
I am assuming everyone knows the numbers so won't have to debate them.
I am presuming there are people who believe that commercial oil quantities were actually located at say 5000ft+ & BPC chose to stop short and that P#2 will now target that zone?
Deadlines and delivery dates slipping.
°Does Covid not account for these missed dates in entirety?
•Postive points
°What odds were against drilling? The licence is 100% BPC's,10 years of research had been achieved, funding was achieved, drill ship contract was obtained, weather was perfect.
Data set enhancements for P#1
°I feel like you guys know something about oil exploration that I don't & are choosing to not share this secret. What are you expecting from the updated basin/P#1 results? A new drill target perhaps with proof oil is contained in a trap which will now have 100% guarantee of commericality?
Bahamas license conditions satisfied - extension
°This point confused me. Is this referring to the Drill or Drop condition?
Its my understanding that BPC did not get an extension by default. They have to reapply, which adds to capex. Apologies if I misunderstood this point. They have also reduced the acreage from 124,000²km down to 6000²km. I am pressuring you see this as positive?
So less acreage - more chance of finding oil?
*I am pressuming you see this as positive?*
SvS - exactly the kind of post I think we should have.
I think a reasoned discussion on finance would be a good place to start.
I admit openly that the 11th hour financing options had become limited and given the alternative was no P#1 drill and therefore the drill or drop would have been terminal to BPC interests in the Bahamas. On that basis, to get financing of any kind was a success. But the terms were horrific.
Board salary: for the years in the run up to drilling I felt SP was not showing enough to justify the salary. I was happier when his salary deferral and share swap came about, it finally felt like he had skin in the game.
Did he justify his salary? Would we be in a better or worse place if someone else had been at the helm?
I don't think either can be answered conclusively without having been involved in the day to day business.
Stopping short of TD.
given the reasons behind the shortfall to TD I think it was the correct business decision - we were unfortunate.
Had they hit TD we could be having very different conversations. At the moment it is still a bit of a schrodinger's cat.
Over to the floor.
Discuss and debate.
Sometimes a BOD take a direction you don't like, but it could be the best of a set of bad options.
If you do not trust the BOD to make those decisions then it should be a red flag.
I am still invested, I still trust the BOD, even when I don't like the outcome.
I am unaware of any public company that pays 50% of its cash generation out to BOD annual salaries whilst also making a year end loss.
Private_I
I don't think debating the finance options would be constructive at all. What's done is done. The only thing which will offer better terms going forward is increased production.
Hopefully any refinancing will come after a successful S2 drill in which daily production increases & proven reserves will lift the company valuation and so offer better refinancing terms.
I neither believe debating he BOD salaries will help. As yet none have offered to take a reduced salary. Their options still total their respective salaries.
Although I do believe the BOD renumeration will be destructive to any deal in the works be it finance or JV.