Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Actually there is a up-to-date graph regarding COPLs production as of October release showing the positive correlation between gas injection and oil production…
The last time COPL increased injection rates they hit a peak of 2,700 bopd and that was with the system limited to the upside to protect the inadequate topside equipment at the time…
https://x.com/eazy_investor/status/1727671856713388108?s=46&t=OVzGJM4-LaH6nhPXzhnQyQ
Latest updates provided in the October release…
* Injection rates were an average of 4 MCF/D during October which is an increase on September
* Injection rates were increased further during November
* Number of injection wells online increased from 4 to 6 during October
* The upgraded gas gathering system is working very well with increased gas intake and very minimal gas flaring
Things certainly look to be heating up here…
It’s possible we have news landing imminently… Production news or JV announcement with a major oil company? Hmmmm :D
Trolls now need to make a decision…board the train or get left at the station
Here’s to VERY blue day :)
Unusual buying activity…looks like we’re near the end imo…
GLA :)
RNS on 24th July 2023…
“London, United Kingdom; Calgary, Canada: July 24, 2023 - Canadian Overseas Petroleum Limited and its affiliates ("COPL" or the "Company") (XOP: CSE) & (COPL: LSE), an international oil and gas exploration, production and development company with production and development operations focused in Converse and Natrona counties, Wyoming, USA, is pleased to announce its COPL America Inc. ("COPLA") affiliate has signed a Non-Binding Letter of Intent ("LOI") for a Joint Venture with an established energy company to develop and exploit its oil reserves and resources at its Cole Creek project in Converse and Natrona Counties Wyoming.
COPL and an established energy company ("JVCo") have entered into an LOI for the negotiation of definitive agreement(s) for a Joint Venture (the "JV") to develop and exploit its oil reserves and resources at its Cole Creek project in Converse and Natrona Counties Wyoming. The LOI grants exclusivity to JVCo for a period of time to allow for the negotiation of terms, and structure of the JV to be agreed, which include the consents required by COPLA. The LOI is subject to confidentiality provisions in a Confidentiality Agreement entered into by COPLA and JVCo in October 2022. These confidentiality provisions will terminate concurrently with the exclusivity termination, and other contractual conditions. The contemplated JV does not include the Company's Barron Flats Shannon miscible flood EOR project.”
RNS on 15th November 2023…
"The negotiations regarding a possible joint venture announced by the Company in July 2023 are ongoing and the parties are working to agree all outstanding matters."
Why would production stay over the coming months flat when there’s is data showing that increased injection results in increased oil production which COPL are currently engaging in…
Post from yesterday…
Facts below…All data taken from the WOGCC October production release earlier this month
* Injection rates were an average of 4 MCF/D during October which is an increase on September
* Injection rates were increased further during November
* Number of injection wells online increased from 4 to 6 during October
* The upgraded gas gathering system is working very well with increased gas intake
Increased gas injection = Increased oil production
Very easy to understand :)
Stas Canada is also getting on the carbon capture train…COPL is in the right place at the right time with Wyoming leading from the front…
“Alberta Energy Minister Brian Jean said CCUS is the "only viable option" to cut emissions of hard-to-abate industries, such as oil and gas, cement and petrochemicals.
"Not only will this technology help preserve our position as a major bitumen producer, but our whole economy will depend on CCUS for large volumes of reduced emissions reductions," Jean told a news conference.”
https://www.reuters.com/markets/carbon/alberta-government-announces-carbon-capture-storage-incentive-program-2023-11-28/
JV talks have progressed substantially since COPL were first approached last year :)
RNS on 24th July 2023…
“London, United Kingdom; Calgary, Canada: July 24, 2023 - Canadian Overseas Petroleum Limited and its affiliates ("COPL" or the "Company") (XOP: CSE) & (COPL: LSE), an international oil and gas exploration, production and development company with production and development operations focused in Converse and Natrona counties, Wyoming, USA, is pleased to announce its COPL America Inc. ("COPLA") affiliate has signed a Non-Binding Letter of Intent ("LOI") for a Joint Venture with an established energy company to develop and exploit its oil reserves and resources at its Cole Creek project in Converse and Natrona Counties Wyoming.
COPL and an established energy company ("JVCo") have entered into an LOI for the negotiation of definitive agreement(s) for a Joint Venture (the "JV") to develop and exploit its oil reserves and resources at its Cole Creek project in Converse and Natrona Counties Wyoming. The LOI grants exclusivity to JVCo for a period of time to allow for the negotiation of terms, and structure of the JV to be agreed, which include the consents required by COPLA. The LOI is subject to confidentiality provisions in a Confidentiality Agreement entered into by COPLA and JVCo in October 2022. These confidentiality provisions will terminate concurrently with the exclusivity termination, and other contractual conditions. The contemplated JV does not include the Company's Barron Flats Shannon miscible flood EOR project.”
RNS on 15th November 2023…
"The negotiations regarding a possible joint venture announced by the Company in July 2023 are ongoing and the parties are working to agree all outstanding matters."
Facts below…All data taken from the WOGCC October production release earlier this month
* Injection rates were an average of 4 MCF/D during October which is an increase on September
* Injection rates were increased further during November
* Number of injection wells online increased from 4 to 6 during October
* The upgraded gas gathering system is working very well with increased gas intake
Increased gas injection = Increased oil production
Very easy to understand :)
Last update from COPL via WOGCC release…
* Injection rates were an average of 4
MCF/D during October which is an increase on September
* Injection rates were increased further during November
* Number of injection wells online increased from 4 to 6 during October
* The upgraded gas gathering system is working very well with increased gas intake
The above gives visibility of production increases arriving imminently…
They also continue to be in late stage talks with a major oil company for a JV on their billion barrel plus oil discovery in Wyoming, USA :)
Last update on 15th November…
"The negotiations regarding a possible joint venture announced by the Company in July 2023 are ongoing and the parties are working to agree all outstanding matters."
Pilot you’ve been here long enough to know those percentages were out of date lol…website is still clearly undergoing some changes…
Current up to date working interest below…
“The Company operates the Cole Creek Unit 100% WI, Barron Flats Shannon (Miscible) Unit 85% WI and holds Barron Flats Federal (Deep) 85% WI in addition to non-unitized lands 100% WI.”
In 2022 COPL experienced a a normal winter and managed the below flow rates during Q1 with the BFU under gas load…
January- 1,960 bopd
February- 1,807 bopd
March- 1,794 bopd
COPL started increased enriched gas injection during October so expect oil flow rates to keep rising over the next weeks and months with the new winter rated equipment in place :)
I wouldn’t say things are as bad as they’ve ever been when it comes to operations…things are looking very bright imo
~ COPL are now in a period of increased gas injection on the field not done since 2021
~ Gas injection rates were increased further during October to 4 MCF/D average for the month
~ 6 injection wells are now online after 2 injectors were brought back online(1: Offline since June, 2: Offline since last year)
~ The upgraded gathering system continues to perform very well with increased gas output with minimal flaring being done on the field
Production will rise over the coming weeks!
There’s also the big one…
~ COPL are in late stage talks with a major oil company for a JV on there billion barrel discovery
Following the production release yesterday it looks like everything is now going full steam ahead :)
~ Gas injection rates were increased further during October to 4 MCF/D average for the month
~ 6/6 injection wells are now online after 2 injectors were brought back online(1: Offline since June, 2: Offline since last year)
~ The upgraded gathering system continues to perform very well with increased gas output with minimal flaring being done on the field
Tick tock :)
“Folks like Eazy aka Eazy Investor on Twitter (Recommended Strong Buy at 19p / Now 90% loss)”
Did I buy in at 19p or earlier? lol
Moving onto more important things… You fancy doubling our wager up to £1000 FF?
Focusing on oil production…
Major upgrades were done throughout the year to the gas gathering system(GGS) installing new equipment and steel piping to serve all the high producing wells…
6th October RNS:
“The company plans to spend over $500,000 on NGL injectant in each of October and November to increase the density of NGL's in the gas injection
The company expects to see initial results from the higher density NGL's before the end of November 2023.”
Following the completion of these works gas injection rates were lifted by 37% in September and were doubled during October…
15th November RNS:
"Since the third quarter in 2023, COPL was able to use working capital to increase NGL injection at the BFSU at double the rate compared to recent periods. This miscible flooded field requires injection of NGLs to enhance oil production and field recovery factors as capital restraints in earlier periods restricted the rates of NGL injection. A technical review of the oil response to increase NGL injection will be monitored closely this quarter, and it will form the basis for future production guidance and 2024 plans."
Gas injection rates have now been lifted to levels not seen since 2021 and was the same year COPL reached peak daily flow rates of 2,700 bopd…
Latest oil flow rates given by COPL were 1,136 bopd and this will be rising as we speak as the field feels the effects of more gas being pumped into the field…
Increased gas injection = increased oil flow… The data does not lie :D
7 of 7
We know that the credits for CO2 are different depending upon its use. But to keep it simple let's assume a netback of $50/t after costs. Again a p/e ratio of 12 which I think is reasonable. So we have 13mt's x $50 x 12 giving us a market cap contribution of around $7.5bn.
But CO2 doesn't stop there. We should A
also consider how much CO2 can be captured in the abandoned wells. So for now I'm going to say the contribution for CO2 should be around $8bn.
So in 4-5 years time I'm at a MC for the JV of around $80bn. On that basis and assuming COPL would have kept 70% I think we could be looking at COPL's notional value to COPL at that time of around $55bn.
If we discount that to say Q2/Q3 next year at a rate 30% ROI I think a fair valuation of COPL's holding could be around $15bn.That would be in a takeover situation.
I'm at 2bn shares in issue, or thereabouts by then.That may change of course. But that would give us a notional SP of roughly $7.5 or 617p.
From these calculations I don't think we should be thinking of less than 400p a share and perhaps 500p as a minimum if the BFSU also forms part of the deal.
AIMHO and let's hope we have the news we've all been waiting for very soon.
6 of 7
Now my take is that the JV party will see the next nine months or so as an appraisal and honeymoon period before making a takeover offer for the assets under their part ownership. I believe COPL's BOD are well aware of it and both parties will be going into the JV knowing the JV Parties intentions.
The method of valuing the assets at Takeover stage however, is likely to be very different. I believe it will be done on a discounted cash flow or NPV basis. Here's my take what that might look like:-
If we assume we have 4bn boip with 50% recovery using CO2 as a stimulant. So oil recoverable on that basis should be around 2bn barrels.
To keep the math simple let's also assume an oil price of WTI @ $100/brrl and an "effective life" of the several fields is 30 years. That would give us an average production of around 80m boo/annum.
Annual revenue from that would then be $8bn and netback or earnings of at least $4bn/annum. As shocking as it may seem then, we could be looking at a $60bn market cap for the JV excluding CO2.
There's sure to be several ways of looking at what CO2 could be worth, but here is a simple one. Production of 80m boo/y is pretty much 10.5mt's of oil per annum. So if the JV puts back the volume of oil it extracts in tonnes that's 10.5mt's/y of oil extracted vs putting back around 13mt's of CO2.
5 of 7
But I think the story doesn't end there. We also have non-utilised land and possibly new licenses to consider.
So where I am is we could be looking at between 4bn boip and 5bn boip! As shocking as that may seem I can tell you I've done my “checks and balances” in drawing that conclusion! As best you can I suggest you do the same.
The oil in place and how it flows will have been key fundamentals the JV parties must have been appraising now for a while. It's been a moving feast - hence the two confidential and appraisal wells currently operating under seal.
I wouldn't be surprised to hear we're looking at $6bn - $7.5bn in total value for the assets if we include the CO2 potential. But some of that will be because of who the JV Party is and what they bring to the table.They will know by and that will have an impact on both the value and what they're prepared to pay for their share.
As a guess I think COPL will hold onto 70% - 80% of the value initially and I wouldn't be surprised to see our SP run up to more than 100p by the beginning of the new year for the first phase. We're looking at a completely different market and catchment area for a start.