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Unfortunately it gets a little bit more complicated than a pure math question i.e. adding up each wells CoS. As (essentially) virgin wildcat territory the geologists have evaluated each prospect and returned a CoS, once one of the targets is picked and the drill bit makes its way to TD the geological model for the basin will be refined, as will the CoS for other targets in the basin. So in some ways this is why it's a bit futile adding up all the targets CoS now and it's why this first 'proper' well is a big deal.
I say 'virgin' but old, off target wells have been drilled with oil shows present so we know the conditions for oil were once there, this is a very encouraging first sign. How much of that oil has escaped though over the last few million years is the question we're all waiting to know.
Jim/Phoebus, I stand corrected and thank you for your observations. I'll reword my statement to...... 'if BPC has 2 prospected wells to explore, it increases our odds of success'.
The overall probability of striking oil is greater the more wells you drill, but yes you do not add the COS. Surely the chance of success on two wells is calculated as 1 - ((1 - COS.a) x (1 - COS.b)) where COS are written as a fractions. If you drill 2 wells of 30% COS the chance of success overall is 51%.
Starchild, some interesting points discussed but i'd just like to point something very important out, 2 drills would not increase the CoS to c.65%, that is not how you calculate probability. In the example you gave the CoS doesn't increase as you describe, this is basic math.
Petroleuminvest - I noticed that as well and scratched my head over it. I think the answer is that this is an old presentation (2015), before we had the independent Moyes report done in 2017. Moyes’s In-depth analysis must have considered all the proximity data and still came to uplifting conclusions.
The question from this gentleman from a forum back in 2015 is very interesting and slightly worrying. However, our structures are different and in deeper water, not to mention all Bahamian wells struck oil. Any thoughts? Go to 17:00 into the video. Cuban oil exploration is no longer happening...and we are very close to the region where these three wells were drilled.
https://www.youtube.com/watch?v=OeUDsS5wdNk&t=1113s
''.because if there's 1 good well, there's probably others.''
When I first bought into BPC, there were from my fading memory, 5 separate deposits each containing up to 500 MBO.
Petrol, please refer to this key presentation by Dr Zac Phillips below. The 36p fair value price is if commercial volumes of oil are found creating a potential net asset worth $1 billion. There are various checks done after spud and striking oil which can take several weeks. £1 per share would value the company at £2.3B with current shares in play, assuming no dilution. My personal take on this: if the spud is successful and proven, depending on POO at the time, farm-in or take-over M+A at a huge premium will be on the cards...because if there's 1 good well, there's probably others. The nice thing about a farm-in , is the oil major will do the work and BPC shareholders collect royalties via dividends. Depending on dividends and POO, it will dictate the share price. Zac's article...
https://www.proactiveinvestors.co.uk/companies/news/912143/bahamas-petroleum-company---countdown-has-begun-912143.html/long
Starchild,
Nice. However when you say Zak predicts 36p at 'successful spud', do you mean when the drillbit hits sand or on completion of the well and an oil strike? If they hit oil here and its a good oil strike (all historic Bahamian offshore drills have hit oil) it should send the price through the roof...i.e circa 50p-100p+
a good week here for holders
and hope all have a good weekend
You too IK ;)
Xx
Bonum - absolutely luv ya - and I mean that - have a good W/E - I know mine is these days!
XXX
Lol, more about holding for the bigger picture to play out, leading to the drilling in late Dec.....and through to results IK.
No crystal ball.....just speculation of course ;)
Either way, we drill and that's what really counts.
Atb my friend
Bonum - So don’t want to be out over the w/e before anyone else says It!
Luv Ya!
GL
IK
XX
107909 from me at the off. Wonder if it was the first one? .03244 pd. nice to Av up!
Trek
AIM financial packages usually involve screwing shareholders :( Set a price target and get out when I hit it.
Is it going to gap up on opening
There she blows. Only two MM have opened for business so far. I expect it to open pretty much where it finished last night.
ADVFN show the offer price raised to 3.6
As always, an excellent summation Starchild (06:16 post).
Regarding 100p on rig mobilisation, I think most of us can safely discount that outcome as not happening.
However, we do note that there's been repeated mention of alternative finance to that already agreed, to enable less dilution to shareholder value.
We have 'Majors & Supermajors' still in negotiations on some level and now Stena in the frame too. As I stated previously, the price action suggests there may be further News due and I would think it would relate to the aforementioned.
A very strong finish into close at the days high, to offset any lower level sells and consistent with the possibility of News due, imo.
My own view on the share price leading into drilling is anywhere between 10-20p, dependent on the eventual financing package chosen- we have options by the sounds of it.
Irrespective of the eventual level, it should be a Multiple of the current SP, hence a Profit to all those buying g now - perhaps that's the most pertinent point.
Partnership RNS Monday?
Atb & have a good day all.
Star
P.S.
Invitation to Langan’s issued - so long as you’re not a vegan - joke re Vegan!
XX
Star - and I mean that!
Couldn’t have put it any better - you are spot on - thank you.
Well done - summation personified!
GL
IK
XX
Good morning
Yesterday BPC was the record riser in the All-AIM market at 70.33%. This means traders will study the stock today. I looked back at historical price patterns. On 22/1/20 SP was 2.1p and over the next 24 trading days until 25/2/20 it surged to a 5.7p inter-day high. An opinion by Shore capital that SP could reach 8.5p upon confirmation a drill ship 'was on its way' and Zak's 36p financial model on successful spud, helped this SP increase.
Leaving aside the SP on a successful spud, I believe there is a case to argue that BPC is in a better position today than in January based on Tuesday's RNS. Rationale:
1. Involvement of Stena for all the reasons I stated yesterday morning. 'A partnership made in heaven.'
2. Several funding options on the table.
3. Farm-in with a major still a possibility. (or a mini farm-in with Stena)
4. POO price is irrelevant until a successful find is proven. People with PhDs can then opine on projected SP (30p, 36p, 40p?) nearer the time.
5. And importantly, there is the potential for a 2nd drill during or soon after the 1st. It is petty cash for Stena and would double the probability of a successful find to c65%.
6. All the above may even entice institutional investors/hedge funds to have a small flutter.
Clearly, the main contributing factor governing whether the SP will substantially exceed 5.7p again in the next 24 trading days, is speculative risk appetite, under-pinned by Covid-19 developments and global stock markets generally.
Finally, let's remember over the 24 trading days in Jan-Feb referred to above, not every day created a new SP high. 3 steps forward and 1 back still results in getting to a final destination. So, if any day traders are reading our posts, I suggest 'you switch off your stop/loss trading algorithms and keep an affordable chunk of BPC stock. It could earn you a MASSIVE ROI'.
Have a great day.