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Good read, thanks for your time and thoughts. Something to look forward too then?
Firstly, refer to 7/1/21 RNS https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/w0y5j8x ). Note 6.ii.iii, with a key point edited in CAPS. ‘………the date on which BPC may be required to make a reconciling payment to the Investor is extended ….. to 16 April 2021, this extension allowing a considerably longer window for the determination of the need for a reconciliation payment (if any), which BPC CONSIDERS TO BE TO ITS ADVANTAGE….’
Background
Lombard Odier (‘LOL’) received 563m shares including BPC’s 188m ‘put’ which had to be exercised by 13/1.’ LOL never exercised the ‘call’ option. BPC recently confirmed nothing is owed to LOL for the original tranche. In several postings at the time, I firmly believed there was a backstop of 2p. Why? If they were given half a billion shares with a guaranteed SP of 2.3p with NO restrictions, they could have done one of the following:
1. Sold none. Had Percy-1 been commercial LOL would have made a fortune. If not, on 16 April LOL would be owed millions. Or,
2. Sold them all within a week. The SP would have collapsed to <1.5p. Better still they could have taken out a CFD/derivative and made a fortune shorting BPC. Then, on April 16, they would be owed millions on top.
LOL could not exercise the ‘put’ after the Percy-1 drill result on 8/2/21. Clearly this was because LOL could have made substantial gains either way, based on the above. I therefore continue to believe there was a 2p backstop, which means the most BPC had to pay, if anything, was the 15% guaranteed return on 2p. As I see it, assuming LOL kept ALL 188m put shares that hit on 15/1 (unlikely) is 0.30p/share = £564k.
Assumptions
1. The ‘put’ has a backstop of 2p/share.
2. The ‘put’ was exercised 24 days into the drill and the BoD already knew real-time data showing presence of oil and other positive geological characteristics.
3. The BoD had already war gamed a strategy in the event of a non-commercial find and this was why 16 April is advantageous.
4. Various commentators including me, foresaw an initial knee jerk reaction in the event of a duster to 0.5p SP. (Putting aside it was NOT a duster for now, merely non-commercial)
5. If anything was owed to LOL by the 16/4 reconciliation date, BPC planned to pay them in shares. Hence RNS 14/12 confirmed the deal had, ‘anti-dilution provisions.’
6. The BoD likely knew/know of something advantageous, that we do not yet know, which can substantially increase the SP by 16/4. I have already given opinions what news can achieve this: JV, Farm-in, Ex-CERP assets, etc.
7. Key: I believe something BIG is brewing.
All said and done, I hope BPC pays LOL NOTHING unless forced to by a court and refer to my previous posts for the rationale.
IMHO. DYOR. Enjoy Saturday.
Starchild
https://www.lse.co.uk/profiles/starchild/