Member Info for 3littlepigs

Completely agree - we need to pay off the bonds in cash using funds from a RBL or a JV. The bonds are too dilutive and even a high rate of interest on a RBL will be less dilutive than these confetti bonds. One point to note (reference Prospectus page 107 and 108) is that as soon as we have the cash we can enforce a cash repayment even if the BH has exercised their conversion option:

"Subject to the right of each Bondholder to exercise its conversion rights, by giving not less than 30 days and not more than 45 days notice, the Company may at its option (the “Company’s Option Notice”) redeem all, but not some of the Bonds by the cash payment (on the date (the “Company Option Redemption Date”) specified in the Company Option Notice of an early redemption amount (the “Company Call Early Redemption Amount”) in respect of each Bond
outstanding, at any time on or after the date falling six months after the issue date, if the value of a Bond as determined by the calculation agent, on at least 20 dealing days in any period of 30 consecutive dealing days not ending earlier than 7 dealing days prior to the giving of the relevant Company Option Notice, has exceeded US$0.26 million (such option of the company being the “Company’s Prepayment Option”)."

I would prefer to see us use cash to repay the bonds than to drill 10 new wells.

My name is McCarthy Tétrault and I am a closet COPL investor ;)
Don't mix me up with that law firm in Canada!

150p bigbench!!!!!

I read Edmund’s missive and thought it was a very well thought out de-ramp. Not the usual mud throwing that’s transparently negative, but still a very negative post dressed up as something more. But maybe I’m wrong and too eternally optimistic.

The value for me lies in getting the GGS in, done CC recompletions done and production going north of 2k bopd. Then, with JV partner of RBL funding we get a horizontal or 3 drilled and by early Q4 we’re at 5k+ bopd and people start believing 10k is achievable in the near term. Sentiment will change and the share price will actually restate towards £1 and then beyond.

Just my view.

Don, which document are you reading? I think you’re looking at an old document. I hope that’s not deliberate.

I’m reading the material change document dated today and it basically disclosed everything we already knew about the $14.8m financing.

The one thing I do note is:

“ Prior to the Financing, the Main Bondholder held Original Bonds and Original Warrants representing approximately 46.2% of the then issued and outstanding voting shares of the Company, on a fully-diluted basis. Following the Financing, the Main Bondholder owns bonds and warrants representing approximately 54.7% of the issued and outstanding voting shares of the Company, on a fully diluted basis.”

I know bladderman - I think they are making real progress. De-waxing - recompletions - flaring - warmer weather in april - high pressure gas capture - it's going to just get bigger and at some point our finances go from breakeven to $1m profit for a month to $3m for the month because most of our fixed costs are - yes - fixed, so every barrel's net back of say, $50 just drops through to the bottom line .

I quite enjoyed listening to the flaring hearing on the youtube channel, although I must admit I fell asleep half way through. His opening discussions about driving his poor wife through Wyoming and stopping to look at the rocks made me chuckle! He sounded just like Art!

I just downloaded the data for all wells and divided the total production for each well for the month of Feb by the number of days that well was online for. When I sum all the wells, I see that they produced in aggregate 1,509 bopd in Feb, which compares to 1,380 in January. I see this as positive and would summarise as: for every day that our wells were online we produced more oil in February than in January.

What we now need is for all the wells to be online 31 days a month. In Feb each well averaged 23 days out of the 28 days there are in February.

Certain wells were only online for a few days, whereas in Jan were online for 31 days (were these shut in for works?): CC 31-17 was only online for 8 days, CC 12-23 was online for 8 days.

BFU 44-21V produced 91 bopd in Feb compared to 66 bopd in Jan - a 37% increase month on month.
29 out of our 37 wells that were producing increased their daily output in Feb, while 8 produced less.

I know the January production levels were a low benchmark to start from, but see our ability increase month on month as good and the overall level of 1,500 per day as ok - with more CC recompletions this will quickly become 2000 bopd...

I seem to recall someone telling us that if a stock is in your watchlist then it doesn’t show on your top riser board. But it will show on the top riser board for people who have never heard of COPL.

Let's not talk about whether JVs are dilutive. Let's talk about how shareholder value is maximised in the medium term.

If we got it alone we need to raise some cash (let's say £100m), drill some horizontals, (let's say 20) and use the cash generated to drill more horizontals. As the reserves increase we can double down on our RBL and drill more horizontals and earn more cash. Repeat. Let's say this gets us to 30k bopd in 2 years time and then 100k in 5 years time, we'd look awesome and we'd have 100% WI (less the CNOOC part).

Or we can JV - we can take a cash buy in to pay off our debt, and then make them pay for all the drilling. With deeper pockets they might drill at 3 times the speed and we might have 50% of 75k bpod in 2 years time, and be at 300k in 5 years time. Yes, we've given away 50% of our WI to achieve this, but the time value of money could mean, (depending our your discount rate) that the NPV of the JV is much better than the NPV of going it alone. Don't forget that we don't look at the Wyoming asset in isolation. We look at all our opportunities. In the go it alone scenario, we plough all our investment into trying to realise 100% of 1Bn barrels. But in the JV scenario we can take our money and buy into other assets elsewhere, giving us a more diverse portfolio.

If it were me, I'd JV this. It diversifies our risk, delivers cheap finance and realises cash much faster. I think this would be the faster route to maximising shareholder value.

Finally, before I log off, forget using the word dilutive - this is and has been from the start an accretive strategy of buying assets at far below their value, even taking into account the issuance of equity and the convertible bonds and the wonga rates payable on senior lending. I know that will be seen by some as a crazy statement and will no doubt trigger some to disagree - please go ahead and do so, but know this: I'm going out for Friday night beers and will never read your response! Chin chin. Good luck all LTH's.

Dougb - I believe, if we secure cash from a RBL, that even if the bond holder converts we can exercise our own option to settle/redeem in cash. This would be the big lever to preventing dilution.

dougb - i would further add that this disclosure in the prospects suggests that your numbers are grossly overinflated:
In the event that all of the outstanding Warrants and Options are exercised and the Bonds issued
pursuant to the July 2022 Placing and the Winter Bond Financing are converted and settled into
Common Shares, Existing Shareholders will as a result, suffer a maximum aggregate dilution of
approximately 0.88 Common Shares for every one Common Share they currently own, which is
equivalent to a dilution of approximately 47 per cent.

dougb - I need to look into your numbers more closely, but I would draw your attention to this disclosure in the prospectus - page 2 -
As at 30 January 2023 (being the latest practicable date prior to publication of this Prospectus) in so
far as is known to the Company based on public filings, no person, directly or indirectly, currently
has, or will have an interest in ten percent (10%) or more of the Company’s capital or voting rights.
Anavio has an interest in approximately thirty five percent (35%) of the Company’s capital or voting
rights (on a fully diluted basis), assuming full conversion of the issued Bonds, the Warrants and
assuming repayment of Conversion Payments in cash.

I've just read the entirety of this thread and am chuckling at the conspiracy theory: there isn't a billion barrel find, there wasn't a RS report, Art made it all up, RNS'd it all, and everyone (Ryan, the board etc) are all in on it! Brilliant!

On a serious note, I too am in for a large wedge here and would have liked to see the RS report. I would also like to know what is going on with the RBL and JV. However, as I work on a lot of insider deals in my day job I know that NDAs and a company's ability to keep deals under wraps until they are signed is hugely important. So I understand why we are experiencing such silence (even if I don't like it). What everyone needs to remember is that for every deal a company does, 9 potential deals get scrapped. So you can't tell every investor about every deal in real time or the share price would yo-yo to no one's benefit. (although maybe that would be better than a share price that only goes down!)

I hate to say this, as I am getting impatient after 2 year here, but we need to be patient!

Presumably this would include the booking of Frontier 1 reserves.

I tried to buy £1k earlier and HL wouldn’t give me a quote to buy. I’ve tried again since and failed. That’s the first time in 2 years I’ve not been able to buy immediately.

It's on the company's website. For some reason it is called "Prospectus 2022"
https://www.canoverseas.com/shareholder-information/

It will breach 50p with JV news bigbench!

Scotty- did you read the RNS?

A billion barrels?! Is that a lot?

If you could pump a barrel a second you’d pump a million barrels in 11.5 days. But to pump a billion barrels would take you 31.7 years.

From page 58:

The second sand of the upper Cretaceous Frontier formation is also prospective at Cole Creek. Well logs
illustrate the development of a reservoir quality sand in the Frontier formation. Slawson drilled the 44-22H
horizontal well within the Frontier sands along the east limb of the structurally-closed anticline in 2018. This
well, reportedly, had some drilling issues and multiple fracs were not performed. It produced over 61,000 barrels
of oil and only 5,500 barrels of water since 2018. A properly drilled horizontal well in the Frontier sands with
40 to 60 stage fracs would be expected to produce at an initial rate of 1,000 bbls/d. Net pay for the Frontier sands
ranges from 10 feet to 35 feet in the Cole Creek area.