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If farm in arrangement leads to $1 per barrel net profit and it takes 10 year to get all the oil out assuming 770mnb than at 10% discount rate this farm in deal means ~$550mn market cap. At 20% discount rate 405mn.
Yes but within 10yrs we will have multiple wells + 4 other other areas of interest to drill.Then there is a possibility of a buy out.
The most important thing of all is to hit oil.Any multiple of price is then subject to the investor of when or how much to sell for.
Get greedy after we hit oil not before.
I’m no geologist but when I do look through all the info that cost 100 million its a pretty compelling case. Look at the slides that show the rock formation and how many oil bearing layers they’re going to drill through. If there’s really nothing there then modern technology has a lot to answer to. I have constant conversations with my other half as to when to sell, what percentage etc. Like I’m sure everyone is. Personally I’m leaning very heavily on the positive side, but that may change depending where the SP is at the start of the drill in about 6 weeks time !!!!
The question to our recent posters quoting NPV figures etc is where are you getting 10-20% BPC share of farmin from?
That is so out of date now.
We are almost certainly looking at farmin in the 50/50 range.
Would love to hear your logic for only 10-20%
GL
Sorry Interestking, it’s probably just my suggestion that BPC keep 10-20% ownership in any farm-in deal. I have no basis for this % other than thinking that’s how much a major/supermajor would allow a small company like BPC to keep for the price of joining forces and providing capital/support for multi drilling. Perhaps that would have been the case last year, but as Eytan has suffered in the Proactive Investor interview, BPC can now go it alone, for one drill at least so I guess they’ll drive to keep a much higher % if agreeing any farm-in. Time for the major(s) to put up or shut up, words to that effect I think. Do you envisage that with any farm-in BPC would hold/keep operator status (to avoid the major drilling elsewhere than BPC’s intended sweet spot etc)?
I’m a genuine holder , perhaps not as long term as some of you chaps ... I bought BPC in 2010 at 9-23p range (!!) but sold out at loss, then rebought in much bigger amounts in 2018 onwards as it all looked like it was coming together ...I had never thought sp like 50p plus could be achieved until reading some of the posts like from yourself, even 20-40p would set me up for life but daring to dream bigger is making me question my sanity !!
Whatever sp “ceiling” to be reached, it will multibag from here so new investors should do handsomely even buying at current sp, it’s just deciding whether x3, x7, x10, x20 of current sp is a realistic goal. I suppose as some have suggested, can top slice at various points and leave rest to ride or hold it all till the end of BPC journey,
Thanks
Bapuk
Hi Bapuk.
Don’t apologise to me my friend our collective opinion is what stops us from getting carried away and
I CERTAINLY APPRECIATE YOUR VALUABLE OPINIONS.
I think the point I am trying to make is that yes, even up to a few months ago most of us would have been ecstatic to see a MAJOR come on board almost on any terms - probably hoping for 20% retention.
However Eytan and Simon have proved themselves more than a match for the big boys and indeed this inspires me because one of my investment criteria is always that there has to be quality management at the top of any company before I invest.
Alan Burns was my driver initially and SP was his chosen number 2 and that fit the bill.
They have surpassed themselves with their negotiating skills and I suspect may yet surprise us by getting a better deal than the original CLN before the drilling commences.
Bear in mind McQ have achieved nothing in these negotiations - it has all been S and E.
Our guys have proved they are looking after shareholder value as a priority.
I believe we are more likely now to get an equal shared partnership of some kind although if the MAJOR/S stump up significant cash to cover expenses thus far that may be a negotiating position taken so we may end up with slightly less than 50%. I do think we will end up with a consortium of say Shell and Ophir.
I do believe we can drill 2 wells with the cash at our disposal as the $25-30 mio per well is worst case scenario and from my calculations I think we will expedite much more quickly and reduce capex significantly.
Furthermore if we hit the min strike of 200mio BOO that is $1BN NPV and would almost certainly re-rate the other drill prospects. So exponentially we would advance on almost any success IMHO.
This would in turn enhance our ability to further fund if there is no MAJOR on board.
I think BPC will keep operator status now for P1 but if Major comes in at any point it would be strange to not use their power to further the drilling programme optimally going forward. Unless the BG have a desire for home-grown oversight.
My base case for this until I see actual results is that any result keeps us very much alive and I am assuming 1BN BOO over the whole project as a minimum. This is massively below potential according to seismic data and Moyes so I feel comfortable with this strategy.
SP pricing will have to be a moving feast and possibly a small hedge pre/during drill but by then I think a 20% hedge will leave us in free.
GL mon ami.
IK