Member Info for Bohemia

You missed, further down:

"A suite of logs will now be run over each of these deeper reservoir sections of interest, anticipated to take approximately 5-7 days - a further announcement will be made at that time."

The 2011 accounts are quite something to behold. They raised £46m equity, ultimately their largest ever. $34m was spent/invested on 3D seismic. On top of that (i.e. not capitalised investment in the assets), they spent/lost $10m: $5m on salaries and another $5m elsewhere (biggest classifications legal/ professional/ travel/ accomodation/ "other" : more consulting mates?).

$10m running a single office for one year. Compared to the $3m with which they now say they can run 2 locations including dozens of wells in T&T.

If you (hopefully) hold your shares in a broker nominee account, CEG won’t know how many of that nominee’s shares remain yours so it would be wrong of then to disclose anything.

If you own the shares directly, you might want to know that the details of all placing participants will get published in short order.

Well why not do both. Apparently the prior 2P was worth $10m and S will be bankable for another $10m+ to pay for itself. I mean, the equity raise only halved the share price so who needs readily available and already negotiated debt.

And yet they did a $10 million equity raise instead. I think you can work out the RBL discussion wasn’t successful.

The upfront development cost depends on how quickly you want to go after it. If you are happy to drill 1 more well in 2021, wait for the cashflow and drill perhaps 3 in 2022, 4-5 in 2023 and so on, then sure you only need a few million up front.

But CEG say they want to drill 5-9 more in 2021. That will cost $10-15m, of which very little will come from S2 inside 6 months (notwithstanding another 5 wells in 2021 is unrealistic timing-wise). Add in the $3m from Bizzell that hasn't arrived and a less optimistic outcome on P1 cost resolution, and yes it does seem like they need $15-20m more. Less any debt funding thy can find - exactly zero in my opinion this year at least.

It was cased last time and, though there may be less formation damage and shale/clay movement in S2, there was still enough difficulty to require an unplanned intermediate casing and to prevent them open-hole logging the well again. It may be better, but it’s certain not all you’d hope for.

Feels odd not being the most negative on here. If they get a decent flow rate, I'd expect the price to jump t0 4-5p to allow for a fundraise at 3/3.5p.

But don't get too carried away with next week's logging analysis. I'm sure they'll find some promising sands but so did CERP without being able to turn that into commercial flow.

I think we are probably in agreement that the licence fees are a side show.

What really matters is whether the government want CEG to continue with the licences and, if they don't, whether they can reasonably refuse the renewal.

The first two terms of the licences were initially to be six years in total. In the end CEG has had them for fourteen years. I have no idea how many years' fees they've paid, but have they had less opportunity to explore in fourteen compromised years that they should have had in six normal years?

Then, what happens after six (/fourteen) years? Does CEG have the right to a renewal or is it the government's discretion. If the government does hold the discretion, I don't think it's unreasonable. CEG have had the time to produce something with their expenditure. If they had a commercial discovery, they are entitled to a production lease of up to 30 years: they cannot be kicked off a valid find. But since they haven't been successful, why should they be entitled to more years? A six year run doesn't seem to be out of kilter with other exploration regimes. Ultimately though it comes down to the legal terms of the licences.

As for taking advantage of a small company, they still have legal recourse if they have a case. Rockhopper are suing Italy for a cancelled licence, and a third party is fully funding the legal costs.

Reluctant to be belligerent but the drilling phase of S1 was done by mid January, so about 70-75 days. CEG will be at the same point once the 5-7 days of logging is completed, so about 7 weeks. That's quicker but not necessarily a win for the more higher spec drilling choice.

I would certainly expect CEG to get the testing done in less than CERP's 3 months but you can't declare victory on that yet. And this second phase is less important cost wise if CERP/CEG are using their own production rig and only expending personnel costs for portions of the testing period (3 tests over 3 months is not necessarily more expensive than 3 tests in one month).

I don't think that contradicts what I said. I'm not really sure what they think can be done "in parallel" in 4500ft 8.5 inch hole! What it perhaps means is the that the logging will be analysed and the test programme agreed with the gov while the drilling rig is switched out.

Further down it is more explicit: "The well is being readied for production testing, which is expected to commence on or around 23rd July." They are equating production testing with production - not unreasonable in this case.

Edgein, CERP did case the Lower Cruse but did blame the compromised testing on problems cementing the bottom hole. It was perforated and tested in two 6ft intervals, not open hole. I can't find the final cost for S1 but it was put at $2m; CEG spending $3m on a larger rig and still then going 50% over time and not being able to open-hole log doesn't sound to me like they've cracked it.

"In a week they should have production figures or at least some indications."

A week? Did you read the RNS stating the production testing (i.e. first step: perforating) won't commence until around 23rd July. I presume they are going to do as CERP did: take the drilling away and bring in their production rig.

If I was WSPC I'd certainly hope I can contractually demand full payment before moving my rig out of the way.

The only positive here is that they have got the well down to (and cased at) final depth.

In six days since 24/6 they were mean to drill, log and complete the final section; whereas in it took more like ten to complete the drilling. It appears that they were unable to open-hole log the recent part of the Lower Cruse, as for the upper part of the Lower Cruse, so they have again had problems with the condition of the hole and therefore perhaps damage to the formation. The Lower Cruse is now behind pipe so all they can do is cased hole logging. At least CERP were eventually open that this is a less useful outcome https://www.investegate.co.uk/columbus-energy-res--cerp-/rns/operational-update---saffron-well-testing/202001240700067912A/

And they were going to MDT-sample the reservoir sections, so it doesn't sound like that has been possible. Again, nice of them to tell us.

The drilling/logging part of the well was meant to take 25-30 days. Now it's going to run to at least 47 days.

CEG said the same back when it didn’t matter so much.

“If the licensee has complied with the provisions of the Petroleum Act, the Petroleum Regulations and the terms of the licence the Governor General will renew the licence for a further period not exceeding three years for the whole of the licence area. Thereafter he may, in his discretion, renew the licence for two successive periods, each not exceeding three years, on application made by the licensee not less than three months before the date of expiry of the licence. The terms and conditions of the renewal shall be agreed at the time of the renewal.”

https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2008/09/01180256/2008-09-02-bpc_-_admission_document_2008.pdf

They’ve already said it will take 2-3 weeks to prepare for testing.

It’s hard for me to think of a positive reason for the current delay. Struggling to set the intermediate casing, slow drilling of the final section, trouble running the open hole logs, trouble cementing the bottom hole. Since we know they aren’t testing yet, are there any conceivable “good” time extensions?

Thanks. Those numbers seem very consistent with the source I used for $63 Jan-May21 (https://www.statista.com/statistics/262861/uk-brent-crude-oil-monthly-price-development/).

Heritage's default seems to be technical, stemming from late filing of its accounts. With TT$1.2b of operating profit (in a tough year) and TT$0.9b of debt it doesn't seem to be in too much trouble otherwise.

Taking a long time to onboard Mr Riley. If I were him, maybe I’d think twice about putting my name on the 2020 accounts and wait to see what I’m getting myself into first.

I wouldn't try and compare my position to a normal investment in reverse. It's pretty small, a bit of fun - the most I might get out of it is a holiday but for now I have a running profit I'm willing to gamble seeing it through. Should it go up to 5p or 6p I'll be losing money but nothing scary and I'm very confident they'll be a placing to bring down the price for my exit, if that's the way it goes.

Shenanigans only take you so far. There are plenty of 1500b/d companies spinning a good tale still below £50m.

Ross, I've debated it but if I close now I miss the chance that S-2 is a technical failure and to run the short all the way down to zero. My interpretation is they've been unable to open hole log the top of the Lower Cruse (the thicker portion according to Columbus) so I'm not sure what they can say from cased hole logging. Plus all the way down they've reported less net than Columbus. And Columbus had problems cementing the bottom hole, so that might be compromised for CEG too.

And then do I really fear the net pay announcement? Not really: Columbus had net pay but couldn't get it to produce. Are you going to pay 4p just because they have net pay? How much would it rise?

The production test is the real watershed. Can't they even limp that far without raising more money (depends how hard LO and Stena can push)? Literally no-one know if it will flow. Of course I fear that it could flow 500+b/d and spike the share price, but even at 200/300/400 barrels I believe they'll be straight back for more cash ($10-15m) and with no meaningful production time under their belt that will probably happen at no more than 3.5p again.

So I'm pretty happy with my risk-reward.

Yes SC has continually argued CEG is generating $3m pa of cash after all costs, whereas I have maintained that's impossible and the $3m is quoted before the $4m of G&A costs.

And a long game? You've said yourself it's game over if S2 is a let down, and either way they need to raise more cash asap. They can only delay the accounts 3 more months.