Member Info for 3littlepigs

If you're a genuine long term investor, you should read the prospectus.

I'm reading through it now and will post below some of the interesting items that I haven't seen before from other Prospectus or RNS documents:

From page 57:

"Basically, the current oil battery treating equipment, pumping units, compression capacity, and lower pressure
gas gathering lines are restricting the operator’s ability to optimize the field production rates and take advantage
of the oil production response to the gas and liquids injection. As a result, in 2021, operations personnel have
had to react to the problems as they presented themselves, one at a time. Prime examples are wells trying to flow
against pump restrictions requiring either larger size pumps, or a complete removal of the pump equipment and
installation of new “velocity strings” to allow the well to flow naturally. Another example is the undersized and
low-pressure heater treaters on most of the wells. The recent unrestricted testing of one well proved that it could
be flowing at 600 to 800 bbls/d if it did not have to be restricted by the undersized treater and the low-pressure
gas gathering lines to prevent flaring of the gas. As a result, the well is choked back to 150 to 250 bbls/d until
the bottlenecks can be remedied. More and more of these types of restrictions are expected as the field continues
to respond to the positive effects of the miscible flood."

What's his name?

Are the CC recompletions under NDA?

I think this goes to show, if you want to be taken seriously on this board, you can't have a name that references fish in any way! Carpking! You crack me up! Pigs is where it's at!

Harmonica - the role of the independent board of directors is to give oversight to the company, including its CEO. The idea they could fictitiously rns a JV that doesn’t actually exist is ludicrous.

Who is this “John” you all refer to? I only see 10 green boxes today.

From the time they finally agree the terms of a JV to the time it is signed could be 1 to 2 months. Remember, there’s lawyers involved and they’ll take at least 4 weeks to turn and re-turn the contract.

Could Art RNS that heads of terms have been agreed and the outline of those terms? Maybe. It’s a tricky business knowing what to tell the market and what not to tell the market. Until you sign the agreement details can change and it would be counterproductive to have to announce changes to a deal.

So long as it’s moving forwards I’m happy.

Art doesn't individually decide whether to accept or decline a takeover offer; the offer would be put to the board, who are custodians of the company for us, the shareholders. If they felt an offer were poor they would push back and ask for more or simply decline. If they had a good offer on the table then they would RNS the offer with a statement that the board "recommends the offer" to shareholders. But even then the offer would go to a shareholder vote. A hostile takeover is a different beast.

Personally I would reject any immediate takeover bid of less that £3 to £4. This company will transform massively in the next 12 months and a JV will accelerate that growth.

There’s nothing useful to post here so I just wanted to say, I think the term “sprat” is wonderful and perfect for our deramper Fishy. Could I claim the phrase “Spraternity” to define the sprat and all who follow him?

It’s a Canadian deadline so expect the results on SEDAR after Uk markets close, then a RNS on Monday.

Obviously I should have said I value the OIP at £1 per barrel! Not all of it at £1!!!

In a normal situation a listed business would have 35% or more of its shares in sticky institutional hands. If a takeover bid came in the board, with its investment bankers, would assess the bid and push back if the bid wasn’t in the best interests of shareholders. Once a bid looked reasonable, the board would, under NDA, approach the biggest institutional shareholders to assess their view of the bid and if they were supportive you’d see a RNS disclosing the bid with a statement that the board recommends shareholders accept the bid. They’d do this in the knowledge that a vote will approve the takeover.

We are not a normal case!

Almost 95% of shares are in retail investor hands so there’s no one for Art to canvass if an offer is made. There is therefore no way of knowing what offer would get passed under a vote.

Add to the mix the highly liquid trading of stocks and the possibility of a hostile takeover comes into play. However, I think there’s enough sticky LTHs here that while a hostile party could get to 40% or more of ownership, they might struggle to gain a controlling stake unless they offered £2+. I personally value the company at £1 for all the OIP so feel I would want a bid of £5 before I’d sell.

Shaa, you asked “from your experience has there ever been a case where the JV takes out that particular asset?”

Anything is possible isn’t it! Obviously if they take out the asset then it’s not a JV any longer it’s an asset sale.

If that was the route they wanted to go down I guess they’d either: I) write in an option now to buy the asset at a predefined price; or ii) at a later date make an offer to buy us out of the JV. I think we are getting ahead of ourselves though!

I don’t work in Oil and I’ve not worked on a JV, but working as a corporate treasurer I’ve worked on plenty of deals. For those that aren’t familiar with the process, you start with the approach and negotiation of high level terms. Once terms have been agreed in some high level written form, the purchaser will normally be granted access to due diligence materials. Where there is risk of competition for the buyer, or more interested parties in the wings, the purchaser might be granted a period of exclusivity to complete their DD and agree the legal agreements. That could be 30 days exclusivity, or it could be more, but will depend on the complexity of DD.

The process, speed and pricing will all depend on how many interested parties there are.

Generally, deals are kept under wraps until concluded and a purchaser would not want the market to know the deal is being brokered. Given Art is being so open I would have to assume the JV partner has the protection of a period of exclusivity and that there is more than one interested party. This obviously bodes well as it places pressure on the other party to get their act together, and not to start haggling over price as the deal draws to a close.

On the subject of RBL, if the JV includes a cash buy in we could we’ll avoid the need for a RBL, but who knows.

And what would Fish care about too much dilution? If he bought in the past 14 days he’s paid a much lower price because of the dilution.

It’s LTHs who’ve been here years that have been hit by the dilution! And yet, as I approach my 2 year anniversary here, I don’t care because I don’t see the moves he’s made as dilutive, I see them as accretive! For every £1 new issued share we’ve bought assets worth £10. The market cap is yet to reflect that but underlying most of the equity issues have been accretive acquisitions or funds to keep the company alive while we realise those accretive acquisitions. This is the reality of a start-up, which if you haven’t worked that out yet, is what we are.

Great minds, bigbench

May I be the first to say…. I wouldn’t want to be out of this over the weekend!!! :)

#FOMOF
#GOPIGGIES

Good write up stas.

Remember, you should always keep your carrots fresh. A good life motto.

2 things need to be borne in mind:

1) If we go it alone we will make slower progress than if we undertake a JV, but all the rewards would be ours. Therefore, the position COPL's board need to consider is how a JV adds shareholder value by accelerating field development such that the faster accumulation of retained profits more than offsets the stake we give away. I have read some comments on here that an oil major will hold all the cards and COPL will suffer from a JV - nonsense! Our base case is to get a RBL and develop the field ourselves and our financial models will show how much profit that will generate over the next 5 years. We will only sign a JV if the rewards from a JV exceeds this base case by an acceptable multiple.

2) Signing a JV will affect how much RBL we can secure - but the point is that a JV partner has to contribute something and that is either lots of cash, or its lots of equipment, people and expertise (probably lots of the former and some of the latter). By the JV partner taking on much of the financial burden we actually don't need a very big RBL - all we need to do is refinance our current debts to cheaper rates and then let our JV partner pay for everything.

Personally I think a JV is the way to go - I'd rather have 50% of 75,000bopd in 2 years time, than 100% of 20,000bopd in 2 years time.

I think the announcement of a RBL should (*should!) be taken very well. The lender will have undertaken due diligence of the company’s development plans and its risk committee will have wanted to satisfy itself that we can repay the debt. Institutional investors will take heart in that. Plus it takes away 1 of the 2 big risks:

1. We don’t get funding, are stuck with expensive debt and go under, like Atomic and CUDA did;

2. We can’t get the oil out of the ground in the quantities advertised!

The beauty of the RBL is that it is the solution to risk 1, and facilitates mitigation of risk 2 because armed with development funds we can drill the wells needed and fund the topside remedial works/pipeline which all result in higher output.

The next 6 months could be phenomenal. Gosh, I’m getting excited just writing this!!!