Member Info for Candlestick

ITD - the R in RBL is for Reserves.

The R in the 993m barrels is Resource.

They won’t take this into account at all in terms of the RBL

https://www.theglobeandmail.com/amp/globe-investor/inside-the-market/oilexco-worse-than-oil/article778626/

“History doesn’t always repeat, but it often rhymes”

Tbf, the 2020 ones were pre-consolidation so are around 6.7m at 24p.

Just getting my head around the cash position here…
Jan 1 2022: c$4m
Feb 2022: +$45.4 (placing/debt) - less costs so let’s say +$44m
Running total = $48m

Feb 2022: less $36m - Williston purchase.
Running total = $12m

Apr 2022: +$6m - accrued revenue from Q1. Genuinely no idea from when, to when, including what!
Running total = $18m

May 2022: Total Cash = $11.9m (from final accounts RNS)

So we’ve spent $6m in five months and only generated $6m from Q1 non-op? Considering it’s meant to be giving us $35-$40m pa, I think I must be missing something?

I guess the issue is if a lot of the existing funds are used to build a road. Even if they don’t need to raise for the road, if this takes up their funds…

Anybody know how much we’re looking at for the road?

Is that true?

My understanding was the butane swap is purely financial and is in no way linked to physical purchases.

Could you provide a link to the contrary please?

Tilburn -

For clarity, the Q1 financials made it clear that there was a big gap with the swaps:
“For the three month Reporting Period, the Company recorded a realized loss on crude oil derivatives of $3.5 million ($34.60/bbl) and a realized gain on butane derivatives of $2.6 million ($25.71/bbl) related to the purchase of butane used for the miscible flood recovery program in the BFU”

With WTI remaining high, Q2 will be worse, but the unhedged amount from CUDA could offset this (fingers-crossed)

WTI is at $108 for Q2 currently. So it’s c$50 not c$70.

Still losing due to the higher oil price, but not as bad as you suggest.

Add in CUDA production and we’re ahead, is that right?

CH -

Just looking at hedging plus CUDA and thrown this together to include the butane swap, plus CUDA impact.

For Q2, assume we hedge 93,205 bbl for the Quarter (matching Q1)
Average price per barrel of $108.28 for Q2 (based on average WTI price to now)
Hedged price per barrel of $56.58
Hedging loss of $4.82m for Q2

For Q2, assume we hedged 3.192m gallons for the Quarter (matching Q1)
Average price of $1.50 for Q2
Hedged price of $0.768
Hedging gain of $2.34m for Q2

So an overall hedging loss of $2.48m

From Mar 1 we get CUDA bopd added - 477 bopd in Q1
Realised price of $105/bbl (average is $108.28, assume lower realised)
Less Royalties of $24.15/bbl (based on 23%, Q1 plus a bit)
Price less Royalties is $80.85/bbl
Less Production taxes / Operating costs of $22/bbl (matching Q1)
Price less taxes is $58.85/bbl
Total CUDA profit is $2.53m

So overall, based on hedging losses plus CUDA profits, at a combined bopd of 1591 (matching Q1), we’re positive. Any increase in overal production should also increase profit… I think. And that’s not including CUDA for March which will get added in Q2 I guess.

I have no idea how the actual non-CUDA production fits in, and happy to be schooled on the above - you’ll need to simplify it though!

CH -
Have you missed out the butane side of the swap, how do the numbers look when that’s added in?

We’re also not currently using butane (granted, that’s a CAPEX saving).

Wasn’t accusing you, was referring to the comments around 6% being dumped

No, not at all. The original warrants (5%) were part of the deal last year as part of the completion of the Atomic deal (see the RNS from 18/3/21). So they’ve been known about for 15 months and were a clear part of the costs.

The additional 1% was due to the technical default and was clearly stated in the year end, back in April.

I don’t 100% know if they are able to swap the cash for shares, but I would really doubt they would as there’s an inherent risk if they were to do this.

To talk about an extra 6% suddenly being sold (sorry, “dumped”) is disingenuous at best, blatantly and deliberately lying at worst.

There isn’t a price as such, it depends on the value of the company at the time.
“The Lender Warrants may be exercised, in whole or in part at any time and from time to time from and after March 16, 2021 until the later of: (i) the 60th day following the date on which the SCF is paid in full and (ii) March 16, 2025. Upon exercise, the Lender would be entitled to redeem such Lender Warrants for an amount equal to the greater of 6% of the Company's market capitalization or 6% of the net asset value of COPL America at such time.”

In the Q1 accounts they were valued at $5.5m, but that value will be significantly lower right now (I make it roughly $4m)
“As at March 31, 2022, the Lender Warrants were revalued at $5.5 million using 6% of COPL's market capitalization on a fully diluted basis (December 31, 2021 - $2.3 million using 5% of COPL's market capitalization on a fully diluted basis). The resulting change in fair value of $3.3 million related to $2.3 million on the original 5% Lender Warrants recognized in the loss on derivative liabilities and $0.9 million related to the additional 1% Lender Warrants recognized in financing costs for the three month Reporting Period.”

They weren’t given shares for the default. They were cash warrants, so COPL will need to give them cash when they’re redeemed.

They’re cash warrants, so they don’t get shares and so can’t sell anything.

Dominion and HSBC look correct, based on their most recent TR1s (Sept).
Not sure about Capital Group, looks like they’ve been invested for years but the stated % is the same as when they first came on board!
https://www.proactiveinvestors.co.uk/companies/news/57257/canadian-overseas-petroleum-in-notification-of-major-share-stake-67485.html

I’ve always figured you sell shares and they ‘sit’ somewhere. Let’s say they’re held by the MMs
Then when somebody else wants to buy, the MMs use those shares to sell to them. They then make their profit via the spread.
I don’t think it’s a case that somebody MUST buy my shares directly off me. So, if I choose sell my shares, it’s a sell. If I choose to buy, it’s a buy. The only reason it’s not clear every time is because transparency isn’t the end game for those who could make it happen.

The sell is likely a cancellation of the trade yesterday. The timing of the 850k makes me think it’s just Spread Betting getting balanced (there’s one for the same time for another of my shares)

Not sure that volume can be called “on the move”.

Right direction of travel though!

R_DUNC - the RNS today said:
“ COPL's net crude oil sales before royalties remained consistent at an average of 1,114 bbl./d” and “ Petroleum sales, net of royalties increased to $7.1m”.

Weirdly, I make that around USD$71 p/b - I think I’m misssing something as I also then calculate CUDA’s Q1 number to be USD$63 p/b, I’m just not sure how I get a lower price per barrel for CUDA than for COPL!