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2 if 2 copy of Blackstout's post
So let's consider by example how close we'll be to breakeven by mid March. If 1500 bopd or thereabouts is being produced at BFSU on an 85/split that's 1275 bopd net to COPL. And if 350 bopd is being produced at CC we have 1625 bopd in total. Now let's say WTI is at $77/ brrl.
In this example then we have 1625 x 365 = 593125 bopy and 593125 boo x $77 to give us $45.6m annual revenue.
Royalties and production tax works to about 30% given most of the production is on private leases and under special conditions. So $45.6m - 30% gives us $31.9m annual netback at this stage.
Debt payments are approximately $16m/annum and G&A etc a further $10m. So $31.9m - $26.0m giving us $5.9m annual netback after debt and G&A etc.
Finally production costs at BFSU should be minimal given the gas is already paid for. So 465375 x $4 to give us $1.86m and that should cover it.
Costs at CC will be slightly higher as shipping is by tanker lorries. But 127750 x $9 should suffice from which adds a further $1.15m. We then have virtually $3m/annum as a total production cost leaving us $2.9m annual netback before notional Federal tax . Federal tax is 22% which although unlikely to be paid should be accounted for to leave us with $2.26m final netback/net profit/earnings.
In conclusion I believe it's correct to say that COPL will more than likely be producing positive cashflow when it's producing from both the BFSU and the recompletion wells at CC even if they're in an early unstimulated state..
In both cases it's wrong to say COPL isn't a going concern at the moment. It's very unlikely to be classified as such given its ability to raise cash and the fact that it's just at the turning point of producing sufficient boo in any event is my view
If you consider the recompletions being fracked in short order at minimal cost I see no reason why COPL shouldn't be producing over $1m/month positive cashflow at that point which would be easily enough to cover its debts and support its ongoing Capex.
If I'm near right, and with conviction I believe I am, then it's little wonder AM isn't communicating with shareholders at the moment. He's sure to be in an NDA in the JV and given he thinks the new discovery presents such a rare opportunity he's unlikely to risk saying anything to anyone.
At the same time I believe he knows he has several options when it comes to raising cash if he needs to. So I very much doubt he's losing any sleep at the moment unless it's through the excitement of developing the new discovery.
This post is not meant to be a ramp or to encourage anyone to buy. I just wanted to lay down some of the facts and share them whilst also suggesting how AM might be feeling.
AIMHO and GLA.
1 of 2 copy of Blackstout's post
This post is about COPL's cash position in the very short term as it continues to trade as a going concern. Yes it is able to pay its debts and therefore it is trading as a going concern. The post I've put together is fact based and supported by math where I've been able to.
Firstly on COPL's shirt term cashflow. As of the date of the Prospectus COPL calculated that if it did need to raise finance at it it would not be until the end of March. This is stated very clearly in the document. So no not at the beginning of March as propositioned by some. They're simply being mischievous. The long-stop is the end of March.
There are several options available to COPL to raise cash.As we know we have the RBL and the JV which are in the latter stages of agreement. We've been told that term sheets from at least two banks were scheduled to be received by COPL in December. And on the JV were told terms are being addressed. These two options are obviously the preferred ones and perhaps the RBL won't be necessary if the COPL's needs are satisfied in the JV.
Then we have the accordion facility of $20m within the existing loan agreement, subject to terms if for any reason it's needed.AM has said he would prefer not to use this option as it locks COPL into the current contract for a longer term.
Next we have gas pipework under COPL's ownership. It was first highlighted in an early Analysts report. It's said to be worth around $10m with cash becoming available on a sale and lease-back basis. I believe it was installed by Atomic at a cost of $9m in 2019. So perhaps 10m is about right.
Then we have the cornerstone BH who undoubtedly would be supportive. Followed by other BH's if needed and last on my list of options we have a placing.
So now let's look at how much finance COPL needs. We're told in the Prospectus it's just over $15m spread over the year starting from the Prospectus date. That is if circumstances don't change and as I say not all at once.
But circumstances are changing.We can see that. COPL is working to recomplete three of the many existing wells at CC and is more than likely producing from two now. Unstimulated, these three wells appear to be collectively capable of producing 350 bopd unstimulated. That is if the results of the first one is anything to go by and possibly 4x that so 1450 bopd when stimulated
This extract from the RNS supports the integrity of RBMinvest's info
Financing Initiatives
The Company is working closely with its professional advisers to negotiate and secure a new senior debt facility, which the Company is targeting to draw down prior to 31 March 2023. The Company has engaged with numerous US and International banks and institutional debt investors and expects to secure a term sheet based on its 2022 year-end RESERVE REPORT for the Wyoming Assets, which is expected to be AVAILABLE late February 2023 and, will be published in late March 2023 at the time COPL files its 31 December 2022 annual audited financial statements.
The Company is also actively negotiating and intends to issue additional 2025 Bonds and warrants pursuant to a second tranche of the Winter Bond Financing (announced 3 January 2023), which is expected to close in February 2023 to support its near-term capital requirements for the Company and its affiliate, COPL America.
Interesting contest being played out.
COPL and in need of assistance of JV partner... versus... the opportunity afforded to the BH's to gain as big a slice of the action as possible , by the short term cash requirement.
Suffering PI's stuck in the middle with a temporary low SP.
Lets get this JV done , issue buy back notice to Bondholders and rid ourselves of all this nonsense.
Similar scenario was played out at Hurricane Energy PLC.
The negative influencers work for the Bondholders.
TW got the nod and assisted in the smear campaign.
( They are good at what they do - Morals of a skunk )
JV cash &/or RBL , bye bye bonds
courtesy of RBMinvest @ 06:52 Thread : MORNING BOYS & GIRLS
I received a response from AM last night, snippet below. Don’t understand the ‘surprise’ he refers to, not given the RNS wording made it sound like an imminent issue. Looking at previous prospectus, it’s not the first time they’ve had to issue such warnings, but they’ve clearly underestimated the reaction to this one…no one predicted yesterday, despite many ‘told you so’ posts.
‘We had to file a shelf prospectus yesterday. As such the working capital statement in the prospectus was flagged by the FCA. They required an RNS outlining the worst case scenario which we complied with. Read the RNS carefully, you should see all is not as bad as the market thinks.
Our lender was surprised by the reaction as were others.’
Have to agree shaa - this SP is so detached from reality that when the JV agreement is announced it will be accompanied by a temporary share suspension.
Just don't think the market gets the scale or significance of what's happening.
Stay of execution for Maris & Chaffe.
But keeps the pressure on .
Current sentiment - Bye Bye Maris & Chaffe , just pay that 3p before you resign !
Let's see what the dynamic duo say in tomorrow's RNS
Current sentiment - Bye Bye Maris & Chaffe , just pay that 3p before you resign !
Let's me what the dynamic duo say in tomorrow's RNS
https://www.youtube.com/watch?v=hlFIFiQ4Ddo
well worth a watch
Santa's came early.
baserite
"All a manipulated situation by the finance boys in collusion with short spread betting firms and Market Maker's
to screw this down to the floor aided and abetted by their Negative Influencer's on bulletin boards."
So true .
Needs broadcasting.
Witnessed it at HUR as well.