Member Info for armatrading

A value in the early 10's would do very nicely for me, Jim.

From AGM 17th September 2019:
"Ø Today, Shore Capital published their report by [Lead E&P] Research Analyst, Craig Howie. Mr Howie told me that this had been prepared on a very cautious double-discount basis that confirmed a risked share price of 6p (similar to 2018). He pointed out to me that the risked NAV assumed a conservative probability of success at 10% and that if the assumption were of a 30% chance of success, the risked NAV would move to almost 20p per share. As most shareholders will know, the technical audit by Moyes and Co gave a geological chance of success of 25% – 35% so that one can see that the analyst is indeed being ultra-cautious. Finally, Mr Howie’s conclusion was that, once unrisked, the c/share rose to 83.2."

For some context, the Shore Capital report of 8th June 2018 states:
"Ahead of confirmation of the outcome of the current farm-out negotiations, we are pleased to introduce a Risked NAV estimate of 6p/share (see Fig. 2). Our sum-of-the-parts
valuation incorporates mean potential oil-in-place of 8.3 billion barrels, to which we apply a30% recovery factor Both of these assumptions are based on Moyes and Company's independent technical audit. At this stage, we assume a relatively generic offshore "in ground "value per barrel of US$4/bbl. along with a conservative 10% probability of success (which we would expect to improve markedly to reflect commercial de-risking upon a successful farm-out). We also make certain financial adjustments to reflect the present value of central costs, forecast net cash and potential warrant exercises. Our risked value for BPC's projects comes out at circa USS150m. which we believe looks sensible with reference to the >US$100m invested by the company in its projects to date a successful farm-out would require us to make various adjustments to our sum-of-the-parts valuation (reflecting inter alia reduced commercial risk, back costs received. BPC's retained interest and payment of deferred remuneration). The terms of any deal would also provide a clear valuation read-across to the assets themselves, although we are confident that such a transaction would be value accretive. Subsequent drilling would be an equally critical value driver in due course. However, in the meantime, we would highlight the fact that our assumed probability of success (combining geological and commercial elements)
stands at a conservative 10%. This compares to the 25-35% geological chance of success generally assumed in Moyes' technical audit. We therefore see scope for a significant value uplift upon a successful farm-out. as our assumed "double discount" unwinds and overall risk declines to a level more consistent with the geological probability of success."

Would this £2m in capital (dilution) cover the CLN condition of having the full 2 years (now 17 months) of G&A to run BPC?

The 'having to be fully funded for two years' condition of the CLN, is really nagging at the back of my mind.

We've never had clarity on this. I'm cautiously optimistic on this, but at the same time I'm prepared for further dilution without a farm-out.

At least a farm-out would guarantee finances going forward, and more than the single well. The uplift in share price would make up for any dilution of the potential asset IMHO.

Very nice couple of trades there.

Absolutely, Jim.

Although the drill is the outcome (well, apart from striking/not striking oil, that is). But the journey will be the really exciting part, the build up of news-flow and hopefully consequent share price uplift.

I think there should be news about the Mutual Fund before anything else, in order to allow Bahamians to get invested before things really kick off. That just leaves a matter of days, really, for news to drop about the MF.

It's now less than 100 days to the proposed date of drill.

Thanks, Jim. That is reassuring, and makes a lot of logical sense.

It doesn't make any sense for Bizzell to NOT grant the loan ('loan'). I was just concerned about that particular clause in the agreement

PoC - To my mind, the CLN/funding situation is a bit chicken-and-egg.

Without the loan, BPC won't have funds to last until June 2021. To get the loan, one of the conditions is to have funding until June 2021.

So, would Bizzell waive that particulat condition, in order to grant the loan, which would then give BPC the funds needed until June 2021...

If there's no farm out, additional funds will be needed to comply with the 18 months of general and admin expenses, as per CLN.

Bryn - no need to tar the 'hipsters' with the same brush as the tipsters ;-)

That sounds very sensible Bonum, especially if there's a correction, and 'ordinary' stocks go down.

Dutch - maybe the previous farm in partner was tying to screw them.

Correction:
I wonder if BPC have had a *disagreement* during the farm in discussions, and this is their way of publicly saying this.

Robbla - Good point.

I wonder if BPC have had a discussion during the farm in discussions, and this is their way of publicly saying this.

That's some silver lining in the cloud, Lint.
Looks like Seadrill aren't the only ones in the industry that are struggling:
https://seekingalpha.com/article/4311291-bloodletting-begins-halliburton

All things being equal, that would make sense. Let's hope it happens.

Normally a mutual fund buys shares in-market.

As there is no other market (e.g. BPC shares are not listed on the Bahamas BISX stock exchange), the shares would be purchased from the existing pool of shares on the London Stock Exchange (from AIM).

So, substantial buying through the mutual fund, should affect the BPC share price for the better.

P.S.
No hares were harmed in the making of that typo.

I did, of course, intend to type shares.