Member Info for Breq

Thanks. If flow rates are good, acquiring Brite's interest would be great.

Something along the lines of we'll buy 20%, you keep 5%, we'll pay your capex on the 5%. We can offer cash or cash and shares.

If Corcel can do a deal like that then they would have over 13,500 BOD by year end. $220m annual cash flow before capex at a $45 a barrel margin. Current market cap, assuming 2.1bn shares after warrants, of $22m.

Shows what could happen after decent flow rates and a deal.

Reading through the RNSs and the recent presentation looks like:

TO-14 initial flow of 6,000 BOD. Being maybe half of the 12,000 or more it should be capable of. Restricting to 6,000 being good reservoir management.

TO-13 initial flow of 2,500 BOD, as towards the edge of the reservoir as distinct from on the crest like TO-14 and similar to old wells.

That would give 1,500 BOD to Corcel's 18% interest as suggested by page 11 in the presentation. At a $45 a barrel margin, that would be cash flow of the current market cap per year from these first 2 wells. It's not obvious from the presentation if they'll add a well or two over the next 6 months during the EPS stage or if the increase to 6,500 BOD net to Corcel by the end of 2024 is a result of more trucking or oil pipes to the refinery. If it is due to more trucking then obviously Corcel expect the 2 existing wells to flow much higher. That seems unlikely in my opinion though we should expect modern completion techniques to improve flow rates. It's possible TO-14 could be an absolute gusher but getting 6,500 BOD from an 18% interest would mean 36,000 BOD gross from Tobias which seems highly unlikely. No reason why they couldn't drill 2 more wells during the EPS stage as each one seems to take 3 months including drilling testing and bad weather. Also 36,000 BOD from Tobias would mean 95 trucks doing two 150 km trip to the refinery each day which although theoretically possible is unlikely so H2 2024 must be FFD to reach that 6,500 target.

The good news is Corcel's 1,500 net BOD should pay for their share of a new well and more every couple of months. So hopefully modest dilution and has been pointed RBL may kick in after the CPR. It would make sense for Sonangol as financing could be put in place at the field level. Easier to get prompt payment for everyone's share of the FFD cost.

Obviously all depends on the flow rates but the RNSs and presentation support very little dilution. I'm also thinking Corcel might make an offer for Brite's share of Tobias as Brite's seem technical lead generators as distinct from producers.

Just thoughts.

I see Corcel have just retweeted their recent 'meet the management' video.

Very obvious observation:

Corcel are keen to communicate that the management are experienced in oil and gas and top class in governance etc.

From observations over the years, iffy AIM directors tend to lie low and not communicate in such an open personal way. Why would they. After their scam they could just fade away. We would hardly know what they even look like.

This type of video is very positive IMHO.

Good point Nige. I hadn't thought of that.

Trouble is we can't ask him. If he's been hacked the hacker will just lie and say the account hasn't been hacked.

Does anyone know Art ? Maybe we can ask the poster a question that only the real Art could answer.

Art,

As is well known, lots of posters post on boards they don't have shares in, but there's no need to get upset about that.

All is good and all the best.

Art,

Sorry to have to say it again but we’re not medically qualified. If you’re really worried about things then talk to your GP.

We obviously can’t help you by explaining things to you rationally.

All the best.

Art,

These matters shouldn’t upset you to the degree they seem to. The use of warrants to raise money is widespread. The considerable difference between the warrant exercise price and the current share price is simply due to the Angola project being acquired by Corcel and AK joining the board as Exec Chairman.

As the share price reflects, shareholders and the market are extremely pleased with these developments.

But if you continue to be upset, we’re not the ones to talk to. I would gently remind you most of us are not medically qualified.

All the best to you.

ROCKLAWN,

As Calder5 points out this has all been dealt with as detailed in the 23 Feb RNS. Segregation of duties.

If you read the company's RNSs it will give you a good handle on all things Corcel.

If you read the 29 Feb option RNS it will become obvious that only a 'good' well test result will result in an exercise of the option. In the event of a 'good' well test, Richard Jennings is happy to take some money off the table and take away any talk of a share overhang.

My guess is Corcel know the market knows Corcel will be receiving flow test results over the next week or two.

Corcel don't want to be accidentally seen as AK possibly 'insider trading' in the event of Corcel drawing down on the convertible facility then a day later announcing good Sonangol flow test results.

So they are just reminding the market that in the normal course of events Corcel and their loan provider are, as one would expect, discussing current requirements which may or may not lead to a drawdown irrespective of any flow test results received over the next week or two.

Thanks Ed. The recharging the reservoir bit really intrigues me. Could they run the wells flat out and then after say 3 years turn off the taps then start again a year or two later.

How long did the reservoir take to recharge over the 25 years the field has been closed ? I guess they'll have a better idea soon.

We're looking forward to a reserves figure if flow rates are good.

How about this for a first guess:

3,400 acre reservoir - so 1,400 acres - so 14,000,000 square meters.

80 m average depth - based off 80 to 120 m depth so far reported.

So 1,120,000,000 cubic meters of reservoir. So 6,720,000,000 barrels of oil by volume.

But porosity of 4 to 14% as reported to date. So an average of 7% (conservative). So 470,400,000 barrels in the pores of the reservoir rock.

But maybe only 80% of that, as only most of the reservoir showing oil as reported to date. So 376,000,000 barrels.

But maybe only 40% can be recovered. Although high permeability reported to date. So 150 m barrels recoverable. 29 m have been recovered to date. So 130 m left.

130 million times 18% gives 23 m barrels to Corcel. Against reported reserves of 12 m as of today.

All figures approximate and to the nearest million. No doubt there are some misconceptions in my thinking. Any comments.

Could be Newuncle. But you've got CIRT growing in a linear fashion whereas in 2023 it was growing exponentially until July. We could reasonably expect a network effect i.e. more doctors tell more doctors. So hopefully your figure is an underestimate.

As for PSE you have 6,500 tests in Dec. So 78,000 annualised. That's 0.39% of only the US market. Could be correct. Or could be 1% or more.

Just in case anyone missed the hidden message in QBT's X video today:

The SHA-256 algorithm was originally developed for cryptography i.e. the writing of messages which are secure (unreadable) between sender and recipient.

The creator of Bitcoin, SN, 'elbowed' the SHA-256 algorithm into his (what a guess!) Bitcoin production and distribution machine.

Academics, including QBT's, had studied SHA-256, for several years prior to it's now recognised use in Bitcoin.

So, from an academic perspective, one could say QBT is not fundamentally about faster Bitcoin mining. It's about faster cryptography solving.

FG perhaps today almost looked dismissive at the use of SHA-256 for a purpose it was not originally intended for.

There is speculation that SN - Bitcoin's creator - was actually a large group of researchers or government entity, say for example the NSA. But some suggest that an off the peg component - SHA-256 - would only have been chosen by an individual or small group.

It is almost inconceivable that PSE would be included in this new trial. The NHS only adopts new better mousetrap technology when it has had many years of validation in other countries. The NHS is managed to allocate most of its annual cash to its employees and former employees through pension payments. It simply doesn’t have the inclination to allocate cash to new technologies.

But from a business perspective we shouldn’t really care. The US does adopt new technologies, especially when the payers save money. Hence why CirT is gaining traction. The PSE will also gain traction in the US for the same reason. As we all know the US market is 10 times the size of the UK.

Can’t help but think you must know this Dug. Is the NHS trial just a straw dog?

Thanks DugWalker. Excellent post. My take is the probability of all 5 (I think) biomarkers, which in turn depend on 3D genome shapes being in particular designs, being positive and so giving a positive ( confirmed by biopsy) PSE result is much much less likely to be pure chance than a single biomarker trial like PSA. Hence why trial statisticians assign a high probability to OBD’s 147 patient trial. On a basic non-technical level we could argue OBD did 5 tests on 735 patients, it just so happened the same 147 people applied 5 times.

The really clever bit was OBD crunching vast amounts of data to find 5 tell tell biomarkers prior to the trial.

Hope that makes sense. Let me know if I’ve got it wrong.

Can QBT Do What They Say They Can Do ?

This is the big $ 1bn ( or more!) question. Some don't believe they can, claiming:

' A small micro cap wouldn't be able to work this out if bigger, much better resourced, companies haven't.'

That doesn't really make sense. All breakthroughs are made by one or a small group of people. The same logic would argue Einstein didn't create the theory of relativity because he was only one man. Also, the theory needed to create Method B is a product of thinking, not CapEx. So the inability of QBT to match big company CapEx is not relevant. Bitcoin itself was created by one man or a small team.

'Even if a small team could work this out, it wouldn't be these guys.'

That doesn't really make sense. The limited visible evidence available suggests QBT has assembled a very experienced and talented group of academics. Including Dr Lov Grover, a consultant at QBT, who in a Jan 6 RNS described QBT as having 'perhaps, the best management team in the area of quantum'. He praised FG and Dr Rita Pizzi ( Chief Research Officer) by name. For those unfamiliar with Lov Grover, Grover's Algorithm is a foundational component of quantum computing. It allows unstructured databases to be searched much quicker than was previously thought possible. His algorithm is the equivalent of finding a needle in a hay stack quickly. He cracked it by having all the hay self combust, leaving the needle. Having Dr Grover join your company and publicly praise the management is about the highest seal of approval. Come to think of it, finding a needle in a hay stack quicker than others is rather like what QBT's Method B does.

'Even if this small team have worked this out, they won't be able to make a working product out of the theory.'

It is a bit tricky. You have to address latency, as do software suppliers to high frequency trading houses who place their servers by the HFT servers. You have to protect your coding as do the Renaissance Technologies of this world by keeping your coding in house and separate from the exchanges' servers. Hence today's placing, which addresses these speed and IP issues.

I've yet to hear a credible argument against QBT although at the current market cap the investor community is obviously deeply sceptical.

FG:

'We are in VERY ADVANCED DISCUSSION with most of the big mining players in North America.' I think that is the first time FG has used the words 'very advanced'.

'Because we have now defined this software service architecture which is THE SOLUTION to provide/supply our technology to these big players.' This suggests QBT have cracked the latency (speed) and IP issues in agreement with the large NA miners. It wouldn't be a 'solution' if QBT liked the SaaS approach - supported by their own servers located near the miners - but the miners didn't.

Good comments.

There have been quite a few comparisons to a possible ARB type share price rise. But there is a fundamental difference between ARB and QBT’s end games. ARB was always going to face the hard hard slog of having to buy ever more and ever newer mining rigs to scale successfully. The difficulty ( impossibility?) of doing this meant their share price was always likely to come down to earth.

QBT’s end game is the opposite: a quantum algorithm which will enable mining so much faster than current classical computing mining that they could buy just one single quantum computer and ‘own’ all bitcoin mining.

Very reasonable comments and questions, but:

Method B has until now been in development. Whether QBT or a third party owned the rigs, wouldn’t have changed that. Bitmain’s machines have only just been reverse engineered to allow Method B to work on them.

QBT could have bought second hand Intel machines and used their half developed software on them but, my guess, thought they’d be better off finishing development given their limited resources.

Any analysis of the software industry shows the most successful players leave CAPEX investment to their customers whenever possible. QBT is now a SaaS company. Let the ARBs of this world spend 100s of millions in CAPEX. Assuming Method B works as well as presented, it’s a no brainer for miners. But even Method B will only make mining a good business rather than a great business.

Er, that's the whole point to Machine Learning, it learns. I 'd be concerned if Method B didn't improve between Nov 2022 and May 2023.

As for your suggestion that QBT are comparing their 2.6 improvement to obsolete equipment, the RNS specifically states comparison to typical mining machines in use during the testing.