Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
Personally, I hope that Peter Hill succeeds with GBP because he is a decent bloke. But to be fair, significant risks remain. GBP still only has 2D seismic over its one remaining block. The new 2D seismic that the team bought allowed them to increase prospective resources from c700m barrels to 2900m barrels, which is substantial. This year they absolutely must convince a large oil company to farm in - before September - because to get another extension they will need to commit to the acquisition of 3D seismic (and possibly a well) during the next phase. There is no way that GBP alone can fund and conduct 3D seismic (let alone drill a well). The cost of 3D seismic in a remote place like Namibia will certainly be upwards of $3m and probably above $5m. GBP would need to vastly increase its market cap - by at least a factor of 5 - to raise that amount of funds. The only catalyst for another decent fund raise would be a farm in. So, fingers crossed that some big boy likes their toys and decides to join the game.
Attracting a farm in partner will still be a challenge even with the new figures for prospective resources, because you have to remember that these numbers are only based on 2D seismic. Imagine trying to describe London by drawing a few straight lines across a map... You might completely miss the Thames, Mayfair, the City and conclude that London is a modest city full of terraced houses. The same problem applies when using 2D seismic to appraise oil blocks. 2D seismic simply cannot be used to confirm the presence of a closed trap and it can easily miss critical faults, etc. We are already in March, which leaves GBP with less than 6 months to secure a farm in partner, notify the Namibians, and secure another extension. It's not an impossible task, but gosh it's going to be tough. Hats off to Peter if he succeeds.
Jim, what is the connection in your mind between the Venus well and GBP? Venus is about 900km from GBP, that's like the straight line distance between London and Nice.... Success or failure with Venus has no relevance to GBP...
Well, one thing for sure, is that Eco and Azinam will not be drilling unless they find a farm in partner.
Look at Eco's recent half yearly report:
https://www.lse.co.uk/rns/ECO/results-for-the-three-months-ended-30-june-2020-cdlq89epvo0ptdo.html
They state:
· As at 30 June 2020, the Company had cash and cash equivalents of US$ 17.9 million with zero debt and remains fully funded for its share (15% WI net) of further appraisal and exploration drilling at Orinduik Block offshore Guyana (the "Orinduik Block") of up to three wells at US$120M (gross)."
Meaning, that Eco needs to ring fence about US$18m to cover its share of expected Guyana drilling costs. Since they only have US$17.9m in the bank....that means they have zero cash to spend in Namibia. Zero.
So. No farm in partner, no drilling.
Getting desperate Jim? Throwing in the kitchen sink to boost GBP back up over your 1p buy in price? Hilarious...
That is an interesting question, Geowiz. It's clear that quite a few people here are obsessed with PEL 29 and its potential.
What's less clear is how much GBP can afford to spend on 29 to keep the Namibians happy. The £1m raised recently won't go far at all... They needs those funds just to keep the company afloat - and to pay for data interpretation / farm-out efforts / etc.
What does that leave - if anything - to spend on 29? Not enough for a seismic survey, that's for sure.
Hopefully they can scrape together an extension but it's unlikely to have any material impact on the share price. They hold 29 today...and if they get an extension then nothing will have changed, really.
They need farm out, or a buy out. Nothing else is going to push this company above 1.5p, but a loss of 29 could drive it lower for a while...
It is so boring here... Honestly. Nothing has happened with GBP for how long? 10 years? The Peters just keep chugging along... Occasionally raising funds. Occasionally buying little bits of data and doing pointless resource reports. They haven't managed to boost the share price for a decade! And now the stock has deadlined at 0.8p. Nothing is happening. Even Jim has gone silent! The only sound is crickets, chirping in the distance.
The CEO of GBP subscribed for £15,000 worth of shares in the recent placement! Gosh that's pathetic... But I guess it's par for the course when you consider his paltry efforts in GBP to date.
No! You have it all wrong! The CPR on 29 is based on 2D seismic only. It's pure speculation. The 3.5 billion barrel number is meaningless at this stage. If they ever do 3D seismic on 29 that resource figure is going to shrink dramatically.
In any case, it doesn't matter. No major oil company is going to farm in to 29 to shoot 3D seismic and then maybe drill a well.
You forget that there are too many options in the area around GBP's 29 block.... Eco, Azinam, and GBP itself have a collection of prospects that have already been covered by 3D seismic. There is NO WAY that any major oil company is going to ignore all of those drill-ready prospects so that they can waste time and money acquiring 3D seismic over your precious PEL 29. No way, never. You want to boost TRP? Then go to the TRP board. GBP's future depends on advancing 94. Get over it!
You know, I really don't understand this obsession with PEL 29...
I have written here before that oil companies need a diverse collection of assets to diversify risk, but 29 and 94 are neighbouring blocks, so the diversification benefits that they provide are minimal.
Large oil companies are clearly struggling in today's commercial environment - just look at the news today about Shell firing 9000 employees, which is almost ridiculous given that personnel costs represent only a single-digit portion of Shell's total spending...
On that basis, oil companies are going to be looking for the best "bang for buck" that they can find.
PEL 94 has prospects that have already been covered by 3D seismic. They are well defined and "drill-ready". PEL 29 only has 2D seismic and its prospects remain risky and amorphous.
Oil companies with money are much more likely to farm in to drill-ready blocks where their investment can generate a win/lose answer quite quickly, than spend two years acquiring and processing 3D seismic to find out if there is anything even worth drilling.
I think GBP is right to focus on 94 because they could drill it next year. A decisive event on 29 is at least 3 years away...
Total's well will generate noise, for sure. But Total is drilling in the Orange Basin and GBP is way up on the northern side of the Walvis Basin. Those two basins are separated by over 1000km...
Equivalent to the distance between London and John O' Groats...
We already know that there is gas down near Total - e.g. Kudu.
Good news would be welcome, but will not have any technical relevance to GBP.
For what it's worth I think you're probably right Marmited.
If GBP's managers were in talks to sell the company outright then they wouldn't bother suffering such huge dilution for a paltry £1m, which is barely enough to keep the lights on throughout 2021. There's almost certainly no merger/RTO on the way either.
In PGS' Q2 2020 Earnings release the company wrote off another $25m of their investment into the Azimuth Group. Azinam almost certainly has no money and no ability to complete an RTO with GBP, no matter what Jim dreams in his little bathtub.
Speaking of Jim, our resident ramper is surprisingly silent since his screwy speculations were proven wrong and his fabled investment at 0.9p sank underwater...
The only thing likely to boost GBP's valuation in the forseeable future is a farm out. I suspect that they are desperately buying time and praying for success in Total's upcoming well.
Jazbo, you say: "Why not do some research"? Regarding what? The length of time that Peter Hill has been in saddle? Well, it doesn't really matter if he's been there for 7 years or 9 years...either figure is still ridiculous given the utter lack of progress achieved.
I actually love your quote: "Global has an experienced and driven management and technical team both in Australia and London."
That's quite funny when you think about it, because it means they have more offices than actual oilfield assets*! Hilarious.
(* PEL 29 and 94 are contiguous blocks from a geological perspective, divided on the map by an arbitrary border, so it's entirely reasonable to claim that GBP currently has just one asset.)
Gosh, you'd think Peter Hill would cough up more. He's been in place for how long? 7? 8 years? During that period he has drawn well over £1m in salary and collected various tranches of options. But what has he achieved? Next to nothing... An extension or two, and...??? No farm out in SEVEN years!!! The company only has two blocks....what the heck does he do with his days?
Good question Bishop. Apart from the upcoming Total drilling event, the Namibian oil sector is full of tumbleweeds at the moment. Azinam has no money, Eco needs a new farm-in partner to share drilling costs... If a credible new entrant is pushing to acquire PEL 29, then GBP could be at risk of losing it. But if there's no-one knocking on the Namibians' door (which seems to be the case) then they might decide that it's better to retain GBP than to let the block sit alone and unloved. (Better the devil you know...etc)
This is extracted verbatim from GBP's 2019 Annual Report:
"In late 2017, the Company also negotiated and agreed with the Namibian Ministry of Mines and Energy (“MME”) an extension of the First Renewal Exploration Period (Phase 2) of the Company’s Licence of 12 months to December 2018. At the same time the MME had previously agreed entry into the Second Renewal Period (Phase 3) effective from 3 December 2018 for a period of two years. Subsequently, a firm work programme for Phase 3 was agreed with the MME whereby the Company will undertake various studies, including mapping of source rock, mapping of contourites deposits, fault studies and amplitude versus offset analyses and extended elastic impedance studies on seismic data.
The financial commitment to undertake the work programme is estimated at US$350,000. In addition, and carried over from the First Renewal Period (Phase 2), is the acquisition of 600 sq km of 3D seismic data – contingent upon the Company concluding a farmout – and the drilling of one exploration well."
So basically, to retain PEL 29 under the current published terms, GBP needs to acquire 600km2 of 3D seismic AND drill a well before 3rd of December 2020.
Clearly, impossible. Utterly impossible. So, we just have to hope that they can secure ANOTHER extension...
Yeah, Geowiz, I also wonder if we can expect any good news soon...
GBP still had enough cash to survive until early 2021; they weren't desperate.
If management actually expected good news (PEL 29 extension, farm out, etc) within the next few months then they would have waited until after the announcement to raise funds at a higher valuation.
Instead, they have bitten the bullet and raised money under horrendously unfavourable terms.
To me, that suggests that GBP is unlikely to be generating any value itself in the near future. Instead, they're just trying to keep the lights on until someone (Total, Eco, etc) drills a well and inspires a new wave of excitement across Namibia.
Another consequence of this event... There is NO WAY that management is even contemplating a merger in the near future given that they have just publicly come out and valued GBP at 0.75p!! They have no wiggle room left in negotiations any more because the public markets have just placed a concrete figure on GBP's current valuation. This company is so tiny...any sort of "merger" activity would involve GBP getting swallowed completely by its counterparty and the Peters won't want to give up their precious little lifestyle business.
Look at the way the placement was structured with warrants and a massive discount!! This scheme allows the incoming investors to have their cake and eat it too... They will receive their shares at a 0.75p subscription price and then sell them in dribbles at 0.9-1.1p over time, thus securing somewhere in the region of a 25% return. And then if the share price does magically pop above 1.5p they'll exercise their warrants and sell more shares! A structure like this is almost guaranteed to hold back share price growth until these new investors have completely sold out.
The terms of this placement are massively favourable for incoming investors and enormously unfavourable for existing holders.
Seems like a bit of a mess... An absolutely horrible placing price. 0.75p? My god...
I feel sorry for anyone who listened to Jim's blatant ramping over the last few months and subsequently lost their pants. What were you saying, Jim? Proudly spouting that you bought in during a recent dip at (what was it?) 0.9p?? Great. It seems as though you got ripped off ;)
Hopefully these placing funds will be used to secure an extension on PEL 29. That would be helpful. I would also hope that a conditional extension has already been pre-arranged and that there will be good news soon. It would be a tragedy if this latest million is simply used to keep the lights on for another year while the Peters hope and pray for a farm-in partner.
For anyone out there who still believes in the value of brokers' notes, I hope this event inspires you to be more cautious. All this talk of 15p and 150p and billions of barrels... It's just noise. It's just a pie-in-the-sky fantasy designed to generate unfounded excitement. What investors SHOULD do, is to think about the steps and the funds required to advance the assets under current conditions. If GBP can't make tangible progress - via 3D seismic, drilling, etc - then those fantastic valuations will always remain exactly that - a fantasy.
I remember some posters recently stating that any placement would likely be done at a premium. Hmmmm. And what really happened? Funds were raised at (approximately) a 50% DISCOUNT to recent highs in August/September. This is par for the course with GBP... The company has been hovering in the 1-2p range for over FIVE YEARS!
We can't change the assets, they've been cooked by mother nature for millions of years. But it really has become time now to CHANGE THE MANAGEMENT!!!! They are absolutely moribund...like ancient mummies undergoing fossilization. We need fewer "Peters" and more managers with a pulse who can actually negotiate farmouts and extensions.
What did you post, Jim? Was it interesting? Worth another go?