Member Info for barnaby67

My view is that there is a better chance of Donald Trump being the next Pope than the BG allowing BPC to drill with only the funds raised to cover drill costs and no balance sheet / shareholder equity to go after if there is a drilling or subsequent operational catastrophe. For me this is all about BPC finding one or more drill partners with large balance sheets (i.e. majors or super-majors). Alternatively i truly believe BG would rather a major (or super-major) held the licences rather than the minnow (and uber financially weak) BPC. Of course this might end up being the case come this time next year. We live in hope for a farm-in at this stage as the best outcome for us current s/h's IMHO.

I think the MM’s will take it down significantly on open but it will rebound from there, but absent any RNS (which I severely doubt we will get before end of week at very earliest - to say what i’m Not sure) I suspect it will drift a bit lower over the week - maybe to 1.6-1.7p range. Have kicked the tyres on this quite a bit over the long weekend with some excellent thoughts from a number on here trying to see if there is any other route that sees us being the fall guys. On balance i’m Not going to sell any until there is more clarity on possible outcome. Have lost circa 80% of my profits so might as well put the final 20% at risk and get out if this goes sub 1p because all hope dissipates of any possibility of a vaguely reasonable outcome!!

Potter’s shares and options are all worthless in a world where BPC goes tits up. Don’t think he will compound PI misery by offloading a few now before active talks with other major led resume as that will be a self-fulfilling prophecy on the SP. Past accrued liabilities to him have been written off. Am assuming his past pension contributions were to a DC scheme and BPC carries no past service pension liability on its BS. True he is on £300k salary again going forward (and there would be some redundancy money to cough up if he was fired) but not a worry if they run out of money and can’t raise any more! Potter would walk with practically nothing other than his pension pot in that outcome - there is a silver lining after all!!

Is that the major has played BPC. For example, It may be on v good terms with the BG perhaps because it is investing in the Bahamas bringing HO and refinery type jobs and has done this because a year or two down the line it has a very good chance of being given the licences to drill offshore Bahamas. BG would be very happy with this outcome as it has security of major having its HO in its territory and it has a huge balance sheet to deal with any, but risk remote, drilling or operational disaster. There is potential gain for both parties with that outcome in that the back costs and WI that it would have to provide BPC (and ultimately BPC’s s/h’s who to the BG are largely a bunch of overseas speculators and current management) are saved making it even more viable for the major and with some great fees the major can pay BG for the licences. In this murky world I am sure others interested in the licences maybe via an auction can be hand waved away! Major can say deal with BPC wasn’t viable in 2018 but with just licence cost (and maybe an even higher oil price in 2019/20) it now looks good. Oh and by the way it would have poured over the 3D seismics (maybe even has retained a copy of the data - naughty naughty) so by the time it gets awarded the licences it knows exactly what it wants to do drill wise, maybe even equipment mobilised ready to start drilling late next year. The £1m exclusivity fee looks like buying a round of drinks in this scenario and it has shut out competitor interest for 4+ months and they will all be left wondering why a major walked away - confidentiality is great isn’t it! It knows BPC has zero chance of going it alone and raising finance to drill, after all the friendly BG can always validly decline such a plan as they really do want a major behind any drill in their waters. True a competitor can negotiate a mutually attractive deal with BPC, but if the BG has already promised to the current major as it is a big investor in its economy then it can always find reasons to turn down any other plans put forward to it. True this is all a bunch of paranoid speculation made up by me, but a week ago we all thought a deal with the major was pretty certain and the only unknown was whether the share price would be 20p or 50p by Xmas. I still struggle to see why Potter was so optimistic when exclusivity was rolled for an extra month and with the comments in the RNS on his remuneration change to see it all collapse 3 weeks later and the major walking (I don’t subscribe to them still talking). For this reason I think the major (and maybe BG) has utterly played BPC for their own ends, particularly as there is no reason not to still think the prize is huge!!

All very curious - and that was the para before pick up discussions with other Re possible farm-in. Have always assumed that the BG would only countenance drilling if a major with a big balance sheet was behind it. What options to others see if not a farm-in?

Surely that would compromise negotiations with other parties to come. Have to accept there is stuff BPC can’t tell us at the moment!

Strange message - RNSs said they have adequate financial resources so are you saying you know more than the BPC FD? Somehow I rather doubt it!

To me this is all about whether there is any other interested party that wants to move things on quickly. Things might happen more quickly than with previous major as part of the time was undoubtedly the BG angle with the EA (although that could be part of the problem).

I believe everyone is paying too much attention to the fact there is a week of exclusivity left and the major gave notice because it expects to conclude a deal in that time. There is no way the major after all the work it has done and the fee paid would do that if it remained interested in a deal. It simply would not take the risk of being shut out if someone else came along and as from 1st Sept paid for exclusivity. The week is the notice period for extension. We do not know why it didn’t conclude a deal - that is the only thing we do know!!!

Yes, feeling pretty disappointed in myself that I did not see this as something that I should have sold out a good part of my position when the price was in the 6-7p range and not have what was a huge binary bet on a deal being struck with the major! Am wondering now whether Potter has sold us up the river and been way optimistic on completing the deal. Always likely the major would see the fee as peanuts to look at the data and look to snap up the licences themselves at some future point having negotiated a good period in which to commence a drill if the prospect looked good. They obviously decided not worth committing and paying now - they may even have decided there was nothing of great value in the licences and it’s been struck off their list as a future project. This now looks like it was a great money making opportunity as long as you got out before the major got out!!! Maybe there will be drilling for oil offshore Bahamas one day but it doesn’t look like it will be by BPC with current s/h’s.

Spike I think your posts are very sensible and are a good r flection of reality. The RNS was always going to tank the SP, but my view is that it would have been made as positive of current situation BPC now finds itself in. I don’t see any possibility of talks with the major continuing, they cleary didn’t make any formal offer. There is no doubt they would have made it clear active talks were continuing if that were the case - no doubt on that in my mind. It is entirely possible they just walked away feeling they had a good look and rally kicked the tyres on the actual prospect but what they need d to offer on their model had no possibility of being accepted. Maybe stringent conditions were required from the BG making any drill unviable at this time - we don’t know. Have to admit I am much less optimistic this will give us another bite at the cherry any time soon, maybe never again. There may be another placing to raise 1m or so to keep the lights on next year etc ( sure the placing in June and the exclusivity fee will largely be spent on MQ). I don’t see any bidding war to buy BPC, licences will probably revert to BG mid next year anyway and there is absolutely zero prospect of drilling absent a major and farm-out whatever the cryptic route was in the RNS. Any sign of 2.5p bounce on Tuesday then I will sell all my shares but will sell half if I can get 2p give or take ASAP. Good luck to those that continue to hold.

If there was any doubt who’s calling the shots here, major can’t get BPC to accept its terms, right lads let’s not renew exclusivity and whilst we are still talking look what’s happened to your share price and the impact that has on your financial flexibility and your likely future existence. Oh and by the way no-one knows why we have ended exclusivity and you can’t say so if you think you would have got a better offer if this hadn’t happened with us, do you think you still will now?

Totally agree. MQ were taken on (as far as we know) once already into the exclusivity period and, it looks like, the BPC board had gotten us into that. If MQ had been there as soon as things started hitting up then maybe a different process would have ensured when they got indicative offers from all interested parties before deciding who to offer exclusivity to.

Jimtheknow that is a very good post. Share your view the major pulled all the strings during this exclusivity! I work in M&A but in financial sector. Normally the process I typically go through is you run an initial process based on some data you / your advisers have produced about the asset (clearly biased to your view on valuation and prospects), you invite non-binding offers, you choose a couple that best hit your criteria (biased towards financial offer but taking into account credibility of bidder, important for the regulatory approval aspect etc). Process then provides more confidential data, much more Q&A, meetings with parties and advisers leading to submission of binding offers (including submission of supplied execution docs with respondents mark-up). One then chosen for some further confirmatory DD and then deal done subject to regulatory approval. Process means you don’t go through a long process to find you get an offer at the end that is totally mismatched to your expectations. One thing that niggles me here (by comparison to the above) is engaging in a 4 month process with a party and not having asked for a very broad brush indication of where the major was at having seen a lot of the data that had previously been made available. Either BPC misjudged the major’s appetite having been seduced by the highly desirable (to it) exclusivity fee or the detailed DD changed the major’s view on valuation and so it became unattractive (at this stage at least) to BPC. Deals do fail in my sector because of failure to secure regulatory approval at the end. That is rare as the framework is tried and tested, but it does happen as there is something niche in the acquisition structure. In that case it’s back to the other parties who were previously involved but you almost never get a better offer than the reduced offer you got from the one you had gone exclusive with! What we don’t know here is whether they went exclusive as the major concerned had given much the best interest and indication of a deal (including rough non-binding offer) or they just jumped at the prospect of the exclusivity fee. It might also be tricky getting some of the previous parties they were talking to Re-engaged at short notice - firms move onto other interesting projects and skilled staff to work on these deals might not be easily diverted. Let’s see what happens here!

Brynjon, as always a well reasoned post. Yes, we are all speculating as unfortunately that is what the RNS has left us with. There is no harm in that, we all make our own decisions at the end of the day. Degsy’s re-post and endorsement of the fantasist from Advfn was the (non-financial) low point of yesterday - as if the BPC FD is going to say those things to some chap that runs a B.B. deserves a wrap over the knuckles as it was patently not tru (and anyone reasonable could see that to be the case). I don’t subscribe to the view that the major gave notice of end of exclusivity and didn’t give its decision at the same time. We know they haven’t actually made an offer as I believe BPC would be duty bound to inform the market (whether it rejected the offer or was still contemplating). Given market impact of yesterday’ announcement even if it had say a 7 day notice period of ending or continuing the exclusivity, the parties could have agreed to waive that if the major had said it wants to wait until end of current period to give a decision but BPC would get a deal or no deal decision at that point. All things said and done it comes to whether the major made a very informal offer to test the water and BPC said no or the major walked (either prospect based or something that involved the BG - this latter possibility was dismissed yesterday but it is the be all and end all ultimately and we really don’t know where the BG are at with public opinion and many other factors right now). So the most likely reason is the major walked because it didn’t see the same opportunity and risk/rewards as BPC (as advised by MQ) or they found the prospect unattractive (which is going to be a difficult one to overcome). Given the lack of info on all of this it is not difficult to see why the market reacted as it did yesterday - I suspect the fact the price is close to 2p rather than sub 1p suggests some weight given to the optimistic explanations currently but this could quickly fall away by say mid September if no clarity provided on where we are really at (what’s happening with the EA, what is the BG current view on a drill actually taking place, do other discussions with majors look like they are actually taking place, what do they really mean by asset based discussions particularly as that was listed before discussions with other majors etc etc). If anyone doubted this was always a bet (admittedly the odds seemed good) there can be none now. We will know our fate for sure in the coming months. Right is that red or black for £60k!!!

Maybe the major wants to buy BPC. Pull out of exclusivity, send the price tumbling and then buy up as much in the market before launching a bid. OK bit far fetched!

But by the end of 3 months they weren’t sure enough to want to keep going for another month? Don’t get me wrong it is entirely possible that they concluded the risk / reward wasn’t attractive enough!

SORRY the licence bit did say confident not certain. Main point still holds though.

As much as I would love to believe this I absolutely cannot believe that the BPC FD would say such a price sensitive thing to anyone that was not under the duty of confidentiality to the business. If that were true it and had come from BPC in the RNS (not withstanding that the confidentiality agreement would almost certainly prohibit BPC saying anything public about the negotiations) then we would not have seen such a large fall today. I also think it is highly improbable BPC would have certainty the BG would extend the licences at this stage.

I chipped away buying early part of year and had built up a holding that cost just about £25k. Had been in in the past for long periods for generally much smaller amounts and got out after feeling utterly frustrated with Potter and his inability to hold a **** up in a brewery. Things looked much better early this year (Potter excepted) and looked like a great bet. Have been feeling smug all summer until I got up this morning early for a work call and checked the site whilst waiting for others to dial-in. Found it hard to concentrate on work all day, particularly as I was wfh today! Ah well, at least GKP done great last few months and UKOG looking up again. Must get into habit of taking some profits though! GLA that stay the course here. Am going to hit AGM on the 13th - should be interesting.