The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
It’s not being sorted in Q3, they are hoping to have it done in Q4.
If it’s not achieved by Boxing Day, the CB conversion price drops to 13.25p. Tick-tock…
32% premium. Imagine that.
We’d be bought out for 24p… Good to it rejected and the sp went up more than that amount anyway!
Don’t forget how many times he’s said he’s raising funds for operational purposes, then just comes back for more.
They can’t wait for any drilling and a Reserve Report before signing up to an RBL. It will be based on current reserves
They have to drill to move any numbers into reserves. You think they’ll wait on the RBL for that to happen? How exactly are they funding any drilling?
The RBL won’t take take the 993m barrels into account.
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