RE: Strategy1 Jul 2020 10:13
Long time reader first time poster.
My eyebrows raised when BPC's Uruguay acreage move was announced. It made sense - having all your eggs in one basket is not a good idea when frontier commercial success rates are <20%. Uruguay would give BPC (future UPC?!) a reason to live on even if P#1 is dry, and opportunity to drum up excitement all over again. There is no merit in blindly assuming P#1 will be a success.
The CERP merger gave me a different idea. This is a bold move for BPC - so much so, it makes me doubt whether BPC will actually go ahead with P#1, and has taken the company in a different direction to leave some value when P#1 is cancelled.
Understood the rig contract was in place and it's a commitment well - but it wouldn't be the first time a company has got out of drilling its commitments (or its rig contracts!). Loads of examples in Brazil, Australia, Mexico, Morocco etc. It's also not clear what penalty BPC would have to pay Stena to cancel - it's only listed the other way round.
I bought in May and happily sold in June. Would love to see P#1 drilled but I will believe it when I see it. Until then there is probably lots to be made in day trading, but I'd be scared having any major holding long term.
Go well.