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They told you - in a fashion - what was left: $0.4m.

However I’m typical fashion they didn’t give quite the full picture. That figure is before SPT. SPT is about $19 per barrel at current prices so about $0.6m if applicable to all their production. So again, unjustifiably, we don’t really know if they’re cash positive, but probably not.

Meanwhile another reference to first tranche volumes they have to give away to Heritage on Goudron and IT. Since the renewals these aren’t really CEG’s (100+/day) barrels any more. We don’t know what the new contract terms even are, and has IT actually been properly renewed yet?

Under the best possible current scenario - 400bopd and $105 realised oil price (corresponding to $117 WTI) - Trinidad will generate $2m of net cashflow. This does not cover the corporate overhead of $2.4m: they are still burning cash.

They will spend $7.1m in the next 2 years. This are the minimum obligations for the just-agreed license extension. If they don't do this, the game is over - no more corporate salaries. The long, long history of these assets is that workovers, drilling, and enhanced recovery grandstand ideas lifts the production a bit but it doesn't last.

If they can get production to 600bopd, CF grows to $6m, or $3.6m after the corporate overhead. In other words, all this $7.1m of investment will have to lift production to 600bopd for 24 months just to recover the capex, if the oil price stays high. If that happens and then production drifts back again to 400bopd as it has always done, they'll not have made a return on the $7.1m and they'll go back to burning cash to pay salaries. This is a scenario where management doa better job than all those experienced executives before them! (Of course the company promises production will go from 400 to 600 to 1000, but have we not tested that potential before.)

Historic production- 2017: 368bopd, 2018: 541bopd, 2019: 525bopd, 2020: maybe 425, 2021: no comment!

So here's the new smokescreen: what are "first tranche volumes"? These have never been referred to before and never explained that I can see. CEG illustrate the economic at 350bopd but these first tranche volumes immediately take away 30% of the revenue. In other words 30% of that production actually belongs to somebody else: it is not included in CEG's revenue line. I cannot think of another situation where this wouldn't be presented as the company's working interest production actually being net 250bopd.

This is not just a redrawing of the royalties payable to T&T, Heritage and landowners. The deductions in the next line are still >30%, equivalent to the full historic royalty cut.

My guess is that in renewing the Goudron and I-T licences (by the way I-T still has to be properly extended by 31Mar) CEG have had to give away more to Heritage. After these licences are about CEG driving incremental production. So now, perhaps, the baseline first 100bopd goes to Heritage and CEG only get paid for the rest. But CEG still bear the capex and lifting costs on the whole fields including Heritage's 100bopd.

It's possible also that first tranche also includes oil that CEG owe to PRD, but I rather doubt they are reflecting this liability.

It would be nice for them to tell us why these first tranche losses have appeared, rather than having to guess. And I think it's disingenuous not to state their own production as the output level after this 100bopd is deducted.

This section 9 is totally outrageous. The directors totally busted the company through P1, then raised another £7m on the Saffron-2 myth and subsequently destroyed that money too. Eytan's reward for that is 365 million shares (£1000 per day for the last year, regardless of how terrible the dilution he oversaw has been). Potter gets 59m but also an unknown cash payment for his demotion. And the new management get 10% of the company in share options.

DO NOT LEAVE A PENNY OF YOUR MONEY IN THE STEWARDSHIP OF THESE PEOPLE

CERP got $25m because that is what BPC were willing to pay. On the face of it, they paid a lot more than the legacy assets were worth because Saffron was bolted on as potentially very valuable appraisal assets. However I am ever-skeptical that BPC saw Saffron as another blue-sky option investors would cling on to, rather than actually believing they could solve the mobile shales problem that scuppered CERP with S1.

Remember BPC (and certainly not the management) didn't pay anything for CERP: they just printed more shares. Not very many shares in the grand scheme of things now. The only ones that paid money for CERP were the PIs who inadvertently bought Koot's shares from him when he did a runner.

It would, but of course Trindad would not be happy for that to happen. It would also be expedient to offer the oil the Heritage for $74, but since Heritage are owned by the government I doubt they would play that game.

If you're invested in CEG you should build yourself a quick model. It really is simple and enlightening. Since CEG is basically now the old CERP, you can try and figure out the numbers you need from CERP's old results which were much simpler than CEG's recent (disaster-strewn) results.

My understanding is that CEG sell their oil to Heritage at a 15% discount to Brent. So at $90 Brent they get gross revenue of $76. Then they pay royalties to Trinidad and Heritage which historically look like 30%. Net revenue therefore $53. Then they have lifting costs: again from the past I think $30 per barrel (Saffron was going to improve these numbers but no more.)

The give operating cash flow of $23 per barrel (note this is cashflow not profits: no depreciation). At 350b/d that is $2.9m per year, then you have to deduct the estimate of $2.4m of admin costs, leaving $0.5m of net cashflow. If you do an easy little spreadsheet you can play around with the oil price and the production rate.

The elephant in the room though is Trinidad's Supplementary Petroleum Tax: an 18% tax when the realised price is above $75. I'm a bit uncertain about how this is calculated. Koot used to complain about it as a horrible cliff-edge tax, but the amounts they paid never looked as much as 18% of revenue. On the face of it though, at $76 realised they would pay $13 of SPT per barrel. Then the production is only making net $10 per barrel, which is a disaster. 350/d grosses to only $1.3m, and that certainly doesn't make them cash positive once you deduct the $2.4m admin fees.

Actually, suing the company is not a bad idea. It's quite common in the US but rather a nonsense for shareholders to sue the company they own.

But in this case, old shareholders have been reduced to just £800k of value, having suffered million in losses this month alone. The company will post-fundraise have $6-7m of cash: that would be worth having as a payout.

This is a bit historic now, but it shows the lengths they were willing to go to, keeping the ship afloat. T&T have now publish more monthly production data. https://www.energy.gov.tt/meei-consolidated-monthly-bulletins-january-november-2021/ It shows CEBL, the CEG subsidiary that operates Bonasse and Saffron within it, produced 19b/d in September, 14 in October and 12 in November. With a few old wells still going, that means Saffron-2 was producing maybe 15b/d in September: at best making profits of $200k per year at that (early) rate.

In the accounts published Sept 27th, they wrote of S2: "the well is currently producing and has demonstrated the commercial viability of the Saffron project, with work underway in support of pursuing a development of the Saffron field in 2022".

The well which cost $4.8m (and would have cost at least $2m even to the middle cruse), was earning at a rubbish $200k/y rate in its first (best?) month. Not disclosing the production rate - calling itt a commercial success and a live development project - is grounds to sue them IMO.

And another https://www.**********.co.uk/media/61f7c324b91bb33da9c18d7b/?context=/

If we're doing scorecards, and if anyone is interested, I have closed my short today at about 0.11 for a 97% gain. It would have been nice to do it at 0.1 (or better yet zero), but still one of my better trades.

The stock may drift below 0.1 but I can't really know for sure. It's not going bust imminently and companies with a bit of cash don't tend, I think, to go below about £5m market cap so even with 8 billion shares I don't think it will go below 0.07p. That would only get me one more percent so it's time to move on to something more material.

With a small company it's a flip of a coin whether it will be 0.05 or 0.15p in 3 months time: I expect them to boost production somewhat, initially, but I'm skeptical they'll have enough cash to fund their whole programme and reach a sustainable level of production/cashflow. So maybe they'll be another chance to trade CEG again so it's not goodbye.

They can't do a PB offer without hitting the same €8m retail offer limit as it would still be in that category. Unless they publish a prospectus they cannot do it, so it's no easier for them than proceeding with the OO.

The Broker Option only works because you can only take part if your broker is willing to class you as a qualifying (professional) investor. CEG themselves are no allowed to simply ask OO/PB participants to self-declare.

A company is only able to offer €8m of shares to the "public" in a 12 month window. I'd mentioned this before but made a similar mistake: I thought that because the OO in May only raised £2.6m (the rest of the £6.9m taken in the "II" placing instead), they had plenty of the €8m headroom still available. But in fact it's the size of the offer made that counts, so May 2021 used up all of their 12 month limit.

I don't really buy the "not cost effective" argument. If the company wanted to offer £2m to PIs, that would cover the cost of the prospectus. The other alternative (much more likely to me) is that they don't want to make all the disclosures that would be required in a full prospectus. (Clearly you can now see why the May 2021 offer was exactly £6.9m, rather than that actually being the amount of funding they required, and that the disclosure back then was incomplete.)

With the revised offer, you can no longer apply for OO shares through February, up until close to the meeting/issuance. Now you have to decide this week, if you are in fact eligible at all. And the new 691m shares, not being "exiting shareholders", still seem to be eligible for about half the offer since they are issued on the 1st and therefore seem to be able to apply on the 2nd.

And they've just realised Bizzell's subscription was a related party transaction? Minor but a really silly thing to miss, when they'd worked it out for Uliel's.

You're forgetting that the remaining convertible notes are going to convert into £520k of shares, i.e. another 0.5b shares. They really have milked that cow for all it's worth. This last £0.5m of debt, out of ultimately just £3m credit provided for P1 (that had already earned Bizzelll 11% of the company in earlier sweetheart conversions) has now again earned Bizzell another almost 70% of the original 769m in issue. And 25m warrants. Think about that for a second!

And in the same paragraph they imply more shares for other placing/restructuring costs. The $0.3m cash costs they list for the placings sound low for a £5m raise and an open offer by a company in this situation, so I would expect there will be another £0.5m in shares issued to Strand Hanson / Arden / Gneiss as well. So these two items could be another 1b shares, to be approved at the EGM (under threat of the whole restructuring falling over and game over).

On the other hand, I don't think 100% issue authority is normal. 30% would be more typical and hopefully they haven't got the audacity to ask for more again ... but who knows. It's not in the new 0.1p investors' interests to grant that either. (Though how many of the 691m shares will have been flipped to PIs by the time the vote closes.)

There was also a large amount (in the millions) spent in 1H21 on cost-cutting measures. We don't know how much of that was a golden sorry to Simon Potter and the other departures https://www.cegplc.com/about/senior-management/. Probably in SP's case a large 6 figure sum.

We probably won't get to see those numbers and director's remuneration until the 2021 results are published, historically as late as possible: end of June.

Yes, I believe they do get a vote. Shareholders open up this possibility when they granted the directors authority to issue another 750m shares back at the May 2021: enough new share to essentially outflank them. But I don't think anyone would have realised the 750m news shares could be used like this to immediately once-issued drive through a much, much bigger dilution.

Bizzell Capital and the directors own at least 110m original shares so, with the new shares, the vote does seem a done deal.

The reason for the difference, and the reason for the error, is that the first batch of placing shares (691m) will be issued on 31Jan and these will also be eligible for the open offer. This is an odd order of events, not - I would say - in original shareholders interests, but more eligible applicants perhaps means more chance of reaching £2m.

So 797m + 691m = 1,488m shares. Multiply by 1.34 and you get 1,994m shares, pretty close to the £2m.

I would love to recommend PIs vote against this to give them a bloody nose. After all I presume no one really has a meaningful amount still to lose, the market cap being £1m in total.

But it looks like the new investors in the form of the 691m shares issued imminently, will get to vote. Together with the director/Bizzell holding of 110m that will probably get them over the line, over the head of PIs.

On the other hand it would be quite something if the share price dropped below the 0.1p. Then you might get the new shareholders voting against the second placing, so they didn’t have to go through with buying the other 4.3 billion shares.

Crazy market still. 25 million shares (£50,000) traded at around the 0.17p. But there are 5 billion shares to be issued at 0.1p. Surely at least a billion(!) of those would be sold at 0.15p which would still be an extraordinary 50% gain in a few days.

1000 barrels a day. Hasn’t that been the unachievable target for these T&T for 15 years all the way back to LGO. Pull the other one!