The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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With that funding position now upto to $36m potential im wondering if its a hedge position to go for two drills they call as they drill Perseverance 1.
BPC Well costs estimated at $25m - if lower end or streamlined approach taken then two drills funding or sidetrack from P1 may be possible, could be determined quickly into drill as they hit top cretaceous within two weeks perhaps, Albian soon after and checks against Geological modelling versus actual conditions found.
Also, the team assembled slide 9 is impressive, extensive network.
https://www.bpcplc.com/wp-content/uploads/2020/02/BPC-Proactive-Presentation-website-20-February-2020-FINAL.pdf
Over 400 years experience between them, deployed on one drill.
Hi Tib
My thoughts exactly:-
By my calculations the funding position is:-
$36.0 mio committed funding
$2/3.0 mio cash in hand
$1.4 mio march MF issuance - this is shares @ 3.35p so should be taken up IMO.
Ergo approx $40 mio available.
My guess is:-
P1 drill Early April.
High gas evidence after several weeks (Cretaceous/Albian levels) based on Moyes evaluations.
2nd drill expedition considered.
My understanding is that the Exec believe the drill will take < 60 days which means much lower capex.
(The contingency funding of $25-30 mio per well assumes worst case scenario of 90 days drilling.)
I am doing some number crunching over the w/e re SP management/strategy and will revert.
The bottom line is do not sell any shares and do not set any stops for MMs to target.
This is only, overall, going one way pre spud.
IMO the MMs are very short of stock and have overwhelming “BUY” order books.
Becoming a £100 mio company has far reaching potential positivity as it puts us into a different league re “minimum investment criteria” for some investors, particularly professional institutions who may wish to join in.
If we don’t let them have stock there is only one way to go.
Remember we PIs own the majority of the tradable stock and have some control here.
The MOBYs are “podding” and think they have the power - they don’t - we do for once.
There will be a case for hedging just prior to spud if you feel the need, as everyone’s financial position is different.
Hopefully everyone understands DYOR and is only “playing” with money they can afford to lose.
THIS COULD BE A DUSTER.
This may also be a life changer for most and comes along once in a blue.
Take care.
P.S. If I am being too overactive and folks want me to pullback please indicate thus. I do not want to be seen as a ramper or a know it all etc.
GL
IK
very good interestking but what is DYOR
Interestking
Excellent post old chap - no ramp, just facts set out and logical inference applied.
It must be two drills position as funds potential draw down is exactly the $40m amount required for 45-60 days on each.
Sentiment being king - BPC probably don't want to say we have enabled funds for two drills in case P1 is a D word, so spin the extra contingency card, greater depth dependent on LGO as they go.
Its tight to fund two drills, but do able, more funds possible if signs are encouraging im sure.
Two drills self funding is a fantastic position enabled, I wonder if a side deal with Seadrill possible, it happens.
Message to Majors overall - BPC have two drills funding potential now without you, this is happening, its time to come to terms with your fear and desire.
Hi Old
DO YOUR OWN RESEARCH.
In other words take nothing anyone says as gospel.
The BPC website has tons of research under “INVESTORS” - particularly refer to MOYES references as they are no.1 INDEPENDENT assessors of the data provided by BPC technical data.
GL mon ami.
X
Interestking – please don’t ever ‘pull back’ as per your 06:55 message! Your input – as well as that of all the good posters on this board – is extremely valuable to those of us who do not have the time to focus entirely on their BPC investment (gamble?) and whose reading of the boards is usually done as a catch-up at weekends. Even more maddeningly, I live and work in central London, with both home and office in walking distance of the Chesterfield. Had I known in advance about the presentation the other night and not been so busy I would certainly have attended. Aarrggh! So thanks also to all the others who reported from their attendance: there is nothing like face-to-face and seeing ‘the whites of their eyes’ to get a good feel for any investment. Please keep up your good work!
Great summary I ,as an investment team does anybody have any top ideas on hedging , Int do you mean stoplosses set , not sure how that would work with brokers if we lose 30% one afternoon. Do we have any other blue sky ideas like bpc bubbling up we could hedge into, ive nibbled at txp , kefi, eqtec, cluf, clon, caspiansunrise etc. Just wondering where we go after all these fireworks subside and my wife demands another visit to paris in 2021 post success at bpc !!!
Hi Yonny.
Thanks vm for your kind words much appreciated.
FYI - My understanding is that BPC joined the presentation itinerary quite late in the day so it was not widely advertised on a timely basis. We now know why - great last minute news to impart !!
X
Hi Only
Thanks vm for your comments.
Specifically I am suggesting that any Stop loss orders will only be oxygen for the MMS.
They target them to create volume/fear/volatility - their life blood.
This share is now “in play” and very much a one way ticket barring real set backs like a “duster.”
So starve them of oxygen and there is only one way for it to go overall IMO.
I was part of this market for all of my career so know how they work.
Different story when we get to spud as most of the news etc. will be in the price and the SP will react to REAL news.
Of course you must apply your own risk parameters based on your personal finances.
However I would repeat that if you cannot afford to lose this money then maybe scale back or indeed not be in it..
I hasten to add I say this with great affection and repeat IMHO this one has the potential to change lives.
GL
X
What is your name interest king I was in the market from 1963-2015
only6 - you mentioned stop losses - Having a stop loss is great to keep a hold of some profits though they have to be set carefully would you agree?
MMs can make the price of any share plummet for just a few seconds - especially with such a volatile share as BPC is at the moment - just because they can. They can release many shares into the market so they can make a shedload.
Basically the warning is - BE CAREFUL - ensure you make your money - it is all there to lose - but let us not forget it is all there to make. When you have made enough to be happy, that is the time to say goodbye to some if not all of your stock.
Try not to become too emotional with your shares - we are all in it to make some money - there are plenty of warnings on all financial adverts. Scary and exciting times to own BPC shares.
Great analysis IK. I have watched this board for a few year while been a share holder and found it very interesting and insightful.
I wouldn't call myself “markey savvy” so i find it useful on hearing different opinions on news and events which can help me make an informed decision. But completely agree, you have to do your own research, but the BB helps build a bigger picture around that!
My strategy has seriously changed, i was thinking maybe top slicing in the run up but now i think i am all in on this. As people have said before this is potentially life changing, and i am happy to lose what i have for a greater gain in the long run. Just the gambler in me!
But i urge everyone here to have their own strategy as everyones financial situation is different.
I think the next few weeks is going to be an exciting time for us all, infact i am wishing the weekend away already.
I still think there will be ups and downs in this share, but with an overall steady climb up to the drill. And i for one will be trying to add during the dips!
Atb
Was'nt it Rockhopper where they dropped the price over 50% wiped out the stop losses and others panicked and sold believing a duster.
30 minutes later the price had been returned to its rightful place.
(figures approximate)
Whistler - Yes it was. I remember it well: I happened by chance to be in front of my screen at the time.
This board is beginning to sound like the SOU board a while back. It might be a life changing investment but also it might not be - so I am taking profits at every +50% (from a very low cost base). Yes giving up potential profit, but + 50% / 100% / 150% etc. Is nothing to dismiss. To each his own strategy.
Being £100m market cap doesn’t suddenly unlock institutional investors....they invest on return prospects. This is a highly speculative investment and will not have widespread appeal to institutional investors. Of course, some fund managers will hold small positions in speculative stocks. There is also a wave of pressure on institutional investors to shun carbon related investments as part of the ESG wave sweeping the investment sector. However, plenty of cash from other sources to underpin the share price of the story unfolds positively.
As long as it opens up the option for Institutional investors by being a £100M mkt cap company, we can at least expect some inward investment from that quarter.
Some Institutions may shun carbon related investments and just as there's a sub sector targeting 'ethical investing'......however, let's not kid ourselves into thinking that constitutes any significant part of Institutional investment strategy overall.
Given the potential afforded by such a gateway now opening up to Institutional buying power in a predominantly retail held stock, the impact on an Upward projection of the price can be very significant indeed......even smaller Fund holdings in BPC could have a major impetus to the Upward moving share price.
Hi Shamina, good on you for taking the gamble. I am not sure if I will sell some pre spud or not. The upside is so enticing. I have read the presentation a few times and wish we had more on the well profile as the one on page 11 of the latest presentation is difficult to read (anyone know if there is a more legible version for simpletons like me?). It appears there are multiple targets and indeed it says, 'Multiple target horizons', but for the life of me I cannot read what they are from that profile.
It appears that the first of these could be around 1800m with a few more to go through until TD.
It could well be worth waiting for the drill to hit some of these targets before selling anything. I am thinking that although the well will take between 45-60 days, we could hear some positive news a long time before that. I am no expert but would like to hear the opinions of those who are.
Good luck!
With multiple targets on this drill it is definately going to be a rollercoaster. Still undecided how to play it. May need to pull on my big boy pants for this one.????
Hi Oldtrader - just like me!
No names no pack drill in this day of mass media trolling etc.
I prefer anonymity.
My initials are GA and I worked for: NWB/Union Discount/Chase/Investec/Family office. Various centres including London, New York, Zurich, Geneva, Channel Islands.
Blissful- its been watching the plan play out which has made me completely gain trust in the board and makes me think that this drill will be successful.
Theres some experience in the crew here and 100m spent on appraisal of the well is probably giving us the best chance of striking here.
Very exciting times all!
Hi all
It’s great to be in seeing the sp finally start to mirror the near term prospects.
Reading all the posts this weekend has bolstered my hopes further. My problem is trying to work out what’s a “fair” BPC sp/mcap to expect with so many varied scenarios - with 100% ownership its relatively straightforward but if any farm-In, the fair value sp will have to be less to account for how much percentage ownership we give away to be partnered in presumably a multi drill campaign....hard to know what sp to ascribe to 10% or 20% residual ownership but with such a partnership...anyone made a spreadsheet to help work such things out ?
Gla
bapuk
Bapuk- i too was thinking what impact a farm in would have on the SP, however slightly disagree with you when you say it will have a negative impact.
Essentially a farm in would allow us to drill multiple wells... yes not at 100% ownership, but perhaps as can be seen as doubling out chance in striking the good stuff.
This is just how i see it playing out in my limited wisdom and could be completely wrong
How does everyone else see this?
Did anyone DYOR and estimated if there there are 770-1440mn barrels what BPC will get for each barrel if there is a farm out? $1-2? And how long will it take to extract this amount of oil? 10 yeras?
Hi Shamima
I don’t mean farm-in would be negative to current sp at all...indeed I’m sure it would make the sp soar into double digits. What I mean is that if say on commencing drilling as things stand currently with bpc going alone the market prices bpc at a 250 million mcap (ie roughly 2.5 times current sp= 12p) but say instead we had a farm in and had given away 80% ownership but got multi-drill funding/partnership/20% share of the prospects, how far up or down does the sp go to reflect these disparate elements...? I’m not in finance sadly so this may all seem a bit naive...
Gla
Bapuk