I’ve read a lot of rubbish on here today about the definition of stricken and vacated. The more important question is whether the winter drilling rig has heated seats and cup holders. And a flat panel showing the ice hockey!
There’s a lot of detail in the note. It’s worth the one off fee to access it. However, it errs hugely to the conservative side with only 2.8k bopd estimated for 2023. I’d be disgusted if the company didn’t do double that next year.
Will42 - in my experience warrants don't automatically get triggered as you move through a price point. The warrant holder has to actively exercise their warrants, pay their money and then their shares get issued. Therefore it isn't true that as we go through the 24p barrier that we will suddenly get flooded by new shares. Most warrant holders will want to see a sustained move up in the share price before they exercise. Therefore we could be up near a pound before the warrants are issued. To say the upside here "has a lid on it" is, in my opinion, misleading.
I can’t send a copy as I’d be in breach of their copyright but it says the unrisked NAV is £1.55 a share made up of £0.32 P2, £0.36 development upside, £0.87 exploration upside for deep well potential. The risked NAV is £0.60 made up of the same items: £0.28, £0.22, £0.11.
R_Dunc - I would expect the auditors to only permit income generated from 1 March to be revenue. The costs that we bore for CUDA upto 28 Feb, net of CUDA's rev share up to 28 Feb, creates a receivable on the COPL books which will then be treated as part of the consideration paid for the CUDA assets. It all has the same cash effect, but I'm afraid the P&L won't look as nice. But from 1 March onwards, I agree that we should be showing a profit as we have more revenue, at the same gross margin, but no increase in overhead, so higher net margin. This is the benefit of scale and the reason the CUDA WI was so important to get.
Out of interest, can anyone find the sweepstake we had going on the purchase price. Pretty sure I said $30m and was pretty close to the mark.
Ourjambo: not sure why I see a different number to you, but I get 54,766 barrels for March (link below). I searched by operator. An extra 3k barrels unhedged at $100 is useful change, or an extra 10% in revenue.
I’m a corporate treasurer. No one wants a bridging loan. You take one because the terms of your other loans or the position on closing your deal precludes you using anything else. Therefore they are normally on poor terms as the lenders holds all the cards.
In my view, this was a great deal and the next 3 months will see the share price re-rate significantly.
· Complete the consolidation of available interests in the Wyoming assets.
· Re-finance COPL America Inc's credit facility to reduce the Company's cost of capital for which the Company is working closely with its bankers and advisors.
· Optimize and increase oil production at the operated Barron Flats Shannon Unit miscible flood.
· Commence Phase 1 of the delineation of the Barron Flats Deep Oil discovery.
· Maintain the Company's ESG operating credentials.
Objective 1 complete. I’m expecting a CPR before the AGM that enables objective 2 before end of May being a reserves based lending. That would be objective 2 ticked off. In my opinion the share price would then increase quickly as new lending would come with a development plan and the scale of what we’ll be producing by Christmas will be enormous. I’m expecting us to produce 30k barrels a day by then. Pie in the sky? Work out how many of our 16 wells would need to be horizontal and producing 2k per day to achieve that when we already have targets of 7k from the Shannon.
Today’s deal marks the second leg of COPL becoming a grown up company. Yes, I know you don’t like the placing. But we have 85% of all the assets, can obtain proper financing, can finally ramp up production of the Shannon, and prove up our billion barrel find. When we produce 7k barrels per day from Shannon by July and then add another 10k - 15k (conservative) per day from frontier we’ll all be very glad we get to keep 85% not 58% of the revenue. They key here is scale and we now have that.