Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
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Please refer to yesterday’s very informative presentation by Eytan here: https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/10/20121621/BPC-UK-Investor-Magazine-VC-Presentation-20-October-2020.pdf
Refer to slide 21 and footnote 3 which states……………2021 goal >$15m NET of applicable royalties / fiscal takes.
Cross reference this with the August presentation slides 27 and 29 which show the same $15m goal with a price model of PoO at only $40/b https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/08/19180949/BPC-Management-Presentation-August-2020.pdf
1. Now let’s make the following assumptions:
(a) CERP is still a stand-alone public company but has 4 billion shares
(b) It made $15m NET profit per year based on $40/b PoO
(c) It’s expenses are $3m (consistent with 2018 accounts https://columbus-erp.com/wp-content/uploads/2019/06/Columbus-Energy-Resources-plc-Annual-Report-and-Accounts-2018.pdf )
(d) No debt
(e) To keep it simple: no capital expenditure
Net profit = $12m /£9.3m (exchange rate £1 = £1.30)
2. Now let’s look at P/E ratios……….
Tesla is 60x
Google/Microsoft is 24x
Oil industry (Q4 2019) including mid and small caps was 17x (source https://www.investopedia.com/ask/answers/012015/what-average-pricetoearnings-ratio-oil-gas-drilling-sector.asp )
3. Now let's do some maths
At $40/b PoO, BPC (CERP assets only) P/E of 17 x £9.3m = £158m market cap. But what could it be at $50/b? Refer to slide 14 in yesterday’s presentation where it implies current onshore extraction costs are c$20/b. The additional $10/b would be pure profit minus Trinidad gov royalties. For simplicity and approximation I would add another £3m to the annual net profit making it £12.3.
£12.3m x 17 P/E ratio = £209m, but let’s round down to £200m and divide by 4 billion shares……………….. 5p per share.
Bottom line: If the disrespectfully named ex-CERP asset ‘dog’ has cute puppies as planned by the BoD by end of 2021, EXCLUDING Bahamas Percy-1 being a duster or a gusher, we are looking at c£200m market cap from ex-CERP alone. That’s 4-5p!
Despite the potentially game changing Percy-1 spud, and ex-CERP potential, the SP closed at 2.5p again. CONVICTION strong BUY at least leading to spud as the SP is seriously undervalued. But DYOR as it’s just my opinion. Constructive feedback welcome.
Have a great day.
Starchild
https://www.lse.co.uk/profiles/starchild/
Irene our naughty BPC share-shorting-derivatives-diva: based on the quality of every post you have written, which I have read since the misfortune of coming across you in June, I suspect they were influenced by rather heavy inebriation.including the one where you called my last post utter garbage.
I stand by my potential £200m market-cap ex-CERP assets calculations this morning. It is based on company presentations since august using THEIR revenue figures. 200m quid is a large number. You could personally buy 10m bottles of cheap gin which could last you for a couple of years with that sort of money. As you are no doubt aware Aldi is offering Tutti Frutti gin at only £14/bottle (source www.aldi.co.uk/gin-collection ), so I may have totally underestimated the potential BPC market cap for us AND the gin procurement opportunity for you.
Have a good one.
Starchild (AKA Starfish)
Irene: your last posts to various persons are getting somewhat offensive. Nor am I interested to EVER make a wager with you. I sense frustration on your part as your CFDs going short, may fail.
All: I'm not interested to correspond with Irene further on this matter, however I welcome any feedback to test my opinions from this morning which were based on facts and company presentations. Supported by evidence.
Starchild
https://www.lse.co.uk/profiles/starchild/
Harry you have nailed it with that post it is as simple as that. I am well invested hear it is how well I play this that counts. Time will tell certainly not a boring share but maybe not for widows and orphans.
Spot on there Harry!!
I would take 100% from these levels before spud! Snap your hand off, once it gets hyped next month and PR rolls out. I think its possible!
Leave a few in for the drill but smart ones will be de risking.
We all have our goals
Good luck fellers
Arry - well done for the 08:39! Did you notice from the slides yesterday BPC still banging on about those pumps in Trinidad - you should get in touch and offer your Nodding Donkey expertise - along with rossannan on EOR and Irene on erhhhhhhhh nothing!
L_Graham86
I think you have a good chance of 100% from these levels on or before spud. As you suggest, once it gets hyped next month and all the PR rolls out, it should motor.
One slight concern is that those on here on whom we should be relying for some top notch hype are damaging their credibility by hyping the former CERP assets.
The road to P1 has clearly been long and tortuous but P1 itself remains untried/untested and is therefore eminently hype-ready. The same cannot be said of the former CERP assets. Newbies who bother to do any research will soon spot that this supposed backstop is pretty much a busted flush at current oil prices.
Good luck.
I absolutely and totally agree everyone should do their own research and not rely on this BB for 'advice'. Be especially wary of anyone that flips between talking the SP up and then down to fit their trading needs. Actual example https://www.lse.co.uk/profiles/rocket13/
This is why I usually state 'DYOR' in most of my posts. This morning I posted a justification at 0430 am why ex-CERP assets alone could, if meeting BPC BoD projections, could potentially reach £200m by end of 2021. I provided evidence, links, opinions. It came to a potential 4-5p BPC SP on ex-CERP assets alone. I will gladly change this opinion if anyone provides reliable factual evidence to the contrary. 'Evidence' doesn't include such snide comments as 'BPC Trinidad assets are cr+p', or 'the BoD are talking sh+te'.
Postman24: I am somewhat surprised by the tone of your posts and alleging dishonesty on my part. Have we been introduced? Be assured I have never been Aberdeen man nor anyone else on this BB. If you disagree with my opinions I suggest you state why but why make it personal? How have I caused you problems?
Always DYOR. GLA.
Starchild
https://www.lse.co.uk/profiles/starchild/
Rocket13; 'Star.... why don’t you take IRENEand f..k yourself'
Your offensive post makes no grammatical sense and if salacious, without going into details, clearly creates a physical conundrum.
My posts: https://www.lse.co.uk/profiles/starchild/
Your posts: https://www.lse.co.uk/profiles/rocket13/
Let readers decide.
Starchild
Rocket - this language is unnecessary and abusive and i’ve reported your post accordingly.
In the words of Thumper ‘if you can’t say something nice, then don’t say anything at all’.
I never make anything personal but, you don't really know who you are talking to on these boards, check my history, I hope you are genuine and always read them, to many rampers and derampers for my me been on to long to know how some ****s work, no disrespect to you at all, good luck
This post is a simple summary of BPC’s pros and cons and aimed at PI newbies or BB lurkers. It explains why I invested and will continue to invest in the company.
BPC Positives
1. The BoD has a proven track record of success.
2. Approx. $140m would have been spent by 1Q 2021 on 2D, 3D, analysis, research, and a spud using a $1 billion state-of-the-art Stena drill ship.
3. Share price leading to spud and soon after is very likely to increase. Spud date is +/- 15/12/20.
4. If commercial quantities of oil are found (minimum 150m bboe), SP will substantially increase.
5. If a massive oil field is found 770m - 1.4 billion boe, SP will soar. The consensus is to over 20p. An RNS recently stated if 700m boe found, assuming $40/b PoO, NPV10 would be over $2.5b.
6. BPC could become a dividend cash-cow.
7. There is approximately 1 in 3 chance of finding commercial quantities of oil. According to an article from 2018, this is 4 times better than the industry average. http://www.tribune242.com/news/2018/jan/11/oil-explorers-success-prospects-four-times-better/
8. PoO is expected to increase to over $50/b in future.
9. In August 2020 BPC merged with CERP for approx. £20m. According to management projections and the presentation below, ex-CERP assets alone have the potential to generate $15m/year NET profit by end of 2021.
10. At the current SP of 2.5p assuming point 9 comes into fruition, even if NET profit is only $10m, IMHO shareholders are fully hedged. Refer to my post yesterday at 04:31 for a deep dive of how it is potentially fully hedged.
BPC Major Risks
1. No oil is found at Percy-1.
2. Not enough oil is found.
3. The wrong type of oil is found, eg, API too heavy akin to bitumen.
4. Ex-CERP asset revenue projections fail to materialise. Ever.
5. A close encounter of the fifth kind by a star child.
6. If any of points 1 – 3 apply, and point 4 permanently applies, it will be a disaster for the company.
Key points: My family and I have several million shares. I became a shareholder in 2014 knowing full well the risks involved. In August 2020 BPC merged with CERP. I firmly believe the current BPC SP at 2.5p is seriously undervalued as it will very likely increase leading to spud, will soar on Percy-1 success, yet be FULLY HEDGED by end of 2021 if Percy-1 result is inconclusive due to ex-CERP assets. I have no reason to doubt the BoD’s financial projections and this will be clarified further following a competent person’s report/audit of probable ex-CERP reserves by year end.
Above IMHO. Always DYOR or seek professional advice. Start with the latest BPC presentation https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/10/20121621/BPC-UK-Investor-Magazine-VC-Presentation-20-October-2020.pdf
GLA
Starchild
https://www.lse.co.uk/profiles/starchild/
Great summary Star - should stimulate same old haters!
Starchild - A great post!
IMHO the time is coming where all LTH will finally be rewarded for their patience.
GLA!
IreneKrapp - here is your big chance to show the board your own detailed breakdown of CERP accounting taking full account of the FACT that the business is now a bolt on to existing BPC management and administration structure ( remember the CERP BOD were all terminated save Leo Koot ( despite intensive lobbying from rossannan perhaps? ) and the CERP debt was repaid by BPC !) .
If I felt like you about BPC I'd be selling my shares - but unlike rossannan you haven't told us you've bought in - please correct me if I'm wrong but I don't recall you ever claiming to have been a shareholder!
Dear Cosmonova
We note you sell star names and I’m thinking of buying four. https://cosmonova.org/order/
Five questions:
1. Is it possible to select a star which isn’t very bright in the sky and somewhat dim? As for the name, I am leaning towards… ‘We-love-Bahamas-Petroleum-but-IreneKrapp- is-that-naughty-and-extremely-annoying-BPC-share-shorting-derivatives-trader.’
2. Does it cost more if it’s an old collapsed star that has become a black hole?
3. Or does it cost less if it’s a tiny asteroid that wonders around aimlessly serving no purpose?
4. May I name our Star, the Sun, in honour of my lovely wife? I would like to use the pet name I call her by, ‘Dumpling Bunny-kins’.
5. If I named a star ‘Princess Fluffy’ and gave it as a gift to my grandchildren in honour of their new kitten, …………..AND IF a planet around this star was inhabited by aggressive hi-tech aliens who are watching us ….…. wouldn’t it cause offence and likely get them miffed?
We thank you in advance,
Starchild
https://www.lse.co.uk/profiles/starchild/
ps: Irene PROVE your last post using evidence why my ex-CERP asset value from yesterday at 04:30 is wrong.
Don't forget, if BPC uses PRDs CCS/ EOR technology to improve the ex-CERP well flows we could be making more than loose change from our T & T assets.
Realise most of you excited for the big drill but helps if business as usual is bringing in the dollars to help towards paying the bills and any future drills.
I think some people read and interpret things in how they think and ignore what is actually said. I wrote (with spelling corrected):
"We are still none the wiser as to what this CERP ******s is all about."
And we aren't, we have not yet seen the fruits of this master stroke. That's not be putting the CERP assets down, i'm watching this space keenly to be educated in it's merits. That's not an unfair observation for someone who has many millions of shares in BPC. The jury is still out, it may now be part of BPC life but the logic behind it is yet to be demonstrated.
Jimtheknow - jury still out but I'm pretty confident about the final verdict on the CERP acquisition - many people like to have a bit of insurance to fall back on with a best figure COS @35%! You've seen how painful it's been on your SP raising the cash for P1 - what odds would you give for BPC to raise same again if it's a duster ?
In4, in brief....
If people go back to some of my very first posts about the merger they will see that i thought they will raise all the money they need now i.e. before drill P#1 for CERP and then (probably) sign the farm-in for exactly the reasons you say - if P#1 is a duster the ability to raise money is long gone!!!
jimtheknow
Raise the money at this stage, yes, CERP didn’t exactly come with a nest egg, but why spend any time or money on those assets (that they don’t have to) at this stage?
NICO - always delighted to sing the praises of CO2 recovery and the wonderful opportunity that far sighted PRD directors presented to Trinidad and CERP - have my fingers and legs crossed that results will continue to give encouragement to this magnificent venture and that ENHANCED PSC will be available on the Trinity Inniss field on similar terms to that which Koot has been negotiating for years with Trinidad Government body in respect of Goudron!
Harryoffdock
As I said, the market is realising that it may be a week or two before there is more (P1) news of any significance and in the meantime is not as interested in the former CERP assets as some on this BB think it should be. Come back when the IceMAX is underway - then it really will be game on!
Irene - I'd be happy with £15 million from produced oil from the CERP assets by the end of 2021 - if you think that figure is nailed on it opens up opportunities even for Post Office book risk takers !
tel: +1 2423625120 - Bahamas Telephone number for BPC. Good luck with getting through to anyone in the Bahamas Petroleum office in the Bahamas as well. The telephone number doesn't even exist. So no one is answering the telephone at the head (virtual ) office and no one is in the Bahamas where they are supposed to be drilling in less than 2 months. And we wonder why the share price is falling by 7% today. Eytan is the commercial director, I suggest an office where any staff member of Bahamas Petroleum Company PLC can be contacted would be a start. What are the majors going to do contact the board of directors through LINKEDIN or through Facebook. As a shareholder with a considerable investment I find it inept at best.