Good morning Dan,
Well we only have limited information to work on. So we don't know if they took open hole samples before casing, we also don't know if they did sidewall coring before casing and testing. So is it possible that they have hit a water filled compartment in the deeper part of the well, perhaps. Water zones in a well, once identified, can be isolated and plugged. So yes what folks are describing does happen, we currently don't know how much of the 80m has been perforated to date. Wells are tested from the bottom up as its fairly straight forward to isolate and plug off lower sections while continuing to test upper sections. Clearly TO-14 is unfinished business otherwise they would have just plugged it now rather than return there after TO-13. Nitrogen is used in clean up operations, so it will be interesting to see what further updates come from both wells. The fact that Sonangol want to return to TO-14 after TO-13 is certainly positive.
The company does remain optimistic and positive given recent statements
15th April
"our ongoing optimism regarding the reactivation of the historic Tobias field in Angola."
28th March
"we remain positive, knowing we have encountered oil in the well and don't yet know its ultimate commercial prospectivity."
Its still a case of wait and see, we still don't know why Petrofina only produced from the top 8 metres of TO-4. There will be lots more news to come and hopefully we won't have to wait as long to get the flow test results from TO-13.
Regards,
Ed.
Sienna,
There was significant volumes shifted yesterday after the announcement came out, even today volume is still higher than normal so there is stock available or we would be back trading much higher again. Volume could potentially remain high as the test gear is to be at TO-13 next week. Hopefully results will come much quicker from that one than TO-14, even though its got a much longer oil column.
Regards,
Ed.
Good morning Nige,
Everything that CRCL do in terms of funding seems to be at a premium to the share price, not unexpectedly either given the tiny market cap and significant asset potential here. Cap is circa £7m and both TO-14 and TO-13 are unfinished business at the moment. Sale of the Ni assets covers most of the cap now too. With them debt free they are unencumbered when it comes to acquiring production/reserves too. So a long way to go yet and likely a good reason for that put option at 0.75p and like you say the placing at 0.5p also being at a premium too.
Yeah yesterday was a nice change to Monday's weather, I spend most of it outside, so wasn't around when all the action was happening on CRCL yesterday.
I'd imagine so Nige, TO-13 to get fully tested first then back to test TO-14 again. Be interesting to see what TO-13 does on the flank as company statements are still bullish on the Tobias development.
Regards,
Ed.
Smkr,
Yeah great to see that Put option in place at 142% premium to the closing price. Shows how keen EXT are to get those 99m shares from Mr Jennings. If completely flies in the face of the gloom and doom mongers we've had on here recently. Obviously the largest shareholder is still very keen on upping their shareholdings at the expense of Mr Jennings after the recent market overreaction. Hopefully we'll get some flow rates from TO-13 in the coming weeks.
Regards,
Ed.
Dan you're welcome. Yeah the typical thing would have be go down the discounted placing route and from today's comments they still believe that TO-13 will aid them to getting commercial production in the near term and develop Tobias over the longer term. Not much priced in now even though Tobias remains a work in progress and the Ni assets are still pending sale etc.
Regards,
Ed.
Hi Dan,
That's a good question as neither drill result mentioned any water. So far they haven't made it clear that its drill fluid or formation water. I'd guess its formation water. Nitrogen clean up won't cause water by itself, it'll just turn back to gas as it returns back up the well. During well clean up wells often produce water/drill fluid before producing oil. In this case they may have hit some of the water previously associated with TO-4. The TO-14 results did suggest that the well had re-pressurized and recharged since the TO-4 days. Clearly the results remains inconclusive as they plan to return to TO-14 after TO-13. They do mention nominal oil and oil shows again, yeah likely the water is coming out in force on test, but no mention of quantities of bwpd etc. True working off partial information again, no mention of how much had been perforated, did they test the entire oil column etc? Were the most potentially productive zones tested? When they return are they testing the same zones or others? A lot still remains unanswered.
TO-13 next and then a return is on the cards so again more waiting to see. We might get a conclusion to the sale of the Ni assets over the summer too and that would help pay for some of these ongoing costs. Interesting that CRCL now still maintains the debt clear balance sheet.
Nige,
Yeah the weather has been horrible this last 6 weeks, wettest spring that I can remember. Hopefully we'll get some warmer weather again soon. They sure are making it clear that they're not done with either well yet and still talk about first production from Tobias. So the company remains more positive than many on here. They're not running a charity so the fact that Extraction and Geraldine are happy to pay a premium for a large tranche of shares is certainly a positive. Clearly they see good value going ahead on these blocks and the lithium assets.
Regards,
Ed.
Morning Nige,
I sure did, hope you did too. I agree, they'll see what happens after they test TO-13 and take it from there. They could potentially sidetrack TO-14 towards TO-13 or towards the eastern flank, it would be much cheaper than drilling TO-15. But like you say we'll have a definitive conclusion to TO-14 once the return to re-test likely over the summer.
They didn't have to place at a premium, they could have done so at 0.35 or even 0.4p. To raise at such a level suggests that they're still positive on the outcome of these wells. Even Sonangol hasn't given up on TO-14 yet, they must think that more nitrogen stimulation it may still flow at commercial rates. TO-13 was described as the cornerstone well of the EPS when it was first drilled, so lets wee what happens there in the near term.
Regards,
Ed.
Well they were clearly trying a nitrogen clean up of the first well and did get water flow and oil shows. They must still think they can get something from it as they'll return after testing TO-13. Be interesting to see what the flows are like on TO-13 as its a possibly undrained area of the field. Be interesting to see what the results of TO-13 turn out to be and what more they do to TO-14 to get it to flow. They may even return for a sidetrack depending on the results of TO-13, that would still be cheaper than drilling another well close to TO-14.
Interesting to see the raising at a premium too and the company's overall take on Tobias and the rest of the assets, seems they're still buoyant on the outcome with the fund-raise at at 37% premium and the warrants set at 1p per share.
Regards,
Ed.
Bladey,
Very true, they're a large very successful company. No one will know more about the geology of Angola both onshore and offshore than Sonangol and absolutely it continues to be positive that they continue to test the well. Once they are in a position to update they'll do so. Given the drilling results of TO-14 they'll likely do everything at their disposal to get the well fully tested.
Regards,
Ed.
Leew,
It hasn't sailed yet as no offers have been announced yet, I was suggesting that if a price is agreed that the funds could potentially be frozen based on the evidence gathered to date. However if a package did arrive that would allow the restructuring of the company then that would clearly be unwise to do so as that could eventually lead to the full development of the large assets with a potential new partner. That I would imagine would be a long short given the time remaining. But lets see. I was just referring to a straight up cash offer and a potential gross undervaluation of the assets/reserves. To complete on that it would have to go through a legal process etc and that was the timing that I was referring to, so there would be time to act on that yet. As for contacting those big companies, even if many junk mail it, some may not.
Regards,
Ed.
Guys,
Agreed. The only info CRCL are allowed to release is that approved by the operator. That's all they were able to say, did CRCL request an update on testing just to add to the interim results? Perhaps. Since the update has generated more questions than answers they could have just said testing ongoing in the results. Was the Mt Weld update put out to coincide with the Angola update? Again perhaps. We have know for some time that the Mt Weld grades weren't as good as the initial results from Canegrass for example so that update wasn't totally unexpected either. Hopefully Sanangol will approve a more comprehensive update on the completion of TO-14 once testing completes and then they can move over to TO-13.
Regards,
Ed.
Hi Nige,
I'm good hope you are too. Good man, its always nice to get away for a few days. Well without being informed it could be anything really. Could be a well integrity issue, could be a blockage around the perforations shot to date, could be some sort of intervention (acid squeeze or the like) on the part of the well perforated, could be a compartmentalisation of the bottom of the reservoir that they may need to sidetrack to get beyond. Could be any number of issues, but without the information from an RNS its just guesswork. We certainly need a more comprehensive update at some point regarding the flow testing. People had a knee jerk reaction on a sentence in an RNS that didn't give much in the way of details. Flow testing of TO-14 remains ongoing.
Regards,
Ed.
Regards,
Ed.
Kenyan,
They sure were filling orders last week at 0.39p, they may have more at this level, depends on if they are able to hold the price. We'll see if the price responds to buying later, we'll find out in due course whether they'll have willing sellers to fill any orders placed.
Regards,
Ed.
Maidit,
That would be ideal if the CAG and their representatives could put a freeze on any sales proceeds until the case has been heard. As Stas says it won't do any harm for folks to contact companies they think might be interested in developing COPL's large reserves and resources.
Regards,
Ed.
Hi Luke,
That's possible, we may see some ISA loading going on here again over the next 12 months. Would be nice if we got another update on the asset sale process as we await the flow testing results on TO-14.
Regards,
Ed.
Smkr,
Yeah it looks like the 4m at 0.39p was the last of the cheapuns. Hopefully Sonangol will progress with this engineering solution and get the flow tests for TO-14 completed. As the interim results suggested all still in play at the moment:
"TO-14 currently undergoing flow testing having encountered weather and engineering delays, testing work continues on the well with oil encountered and ultimate commercial prospectivity is yet to be determined."
Regards,
Ed.
In their latest RNS from last Thursday they said:
"We believe that early 2024 finds Corcel on the verge of a material transformation, with the groundwork for these developments having been meticulously laid over the final six months of 2023."
I doubt very much that they were referring to 70bopd, but more likely the scenario of the presentation. I'd imagine that we'll have a better idea of this material transformation as the year progresses.
Regards,
Ed.
Plumbs,
They're still testing TO-14 and the commercial outcome of the well has yet to be determined. They're still expecting this to be a transformational year from the interim statement. So its still in play at TO-14 yet, they have yet to start testing of TO-13 (they described it as a cornerstone well when drill results came out).
"We believe that early 2024 finds Corcel on the verge of a material transformation, with the groundwork for these developments having been meticulously laid over the final six months of 2023."
Not nearly as negative a picture as some are trying to paint, seems the company is still positive on the transformation. This is the current situation:
"TO-14 currently undergoing flow testing having encountered weather and engineering delays, testing work continues on the well with oil encountered and ultimate commercial prospectivity is yet to be determined."
We're still waiting to hear if the well is commercial once fully tested and then they'll move on to test TO-13. Its just some more waiting.
Regards,
Ed.
Breq,
Possibly. This well reached TD, whereas TO-4 only penetrated the top 8m of the Binga. Oil companies test from the bottom up so you could be correct in saying that they've been trying to get the deepest parts of the well to flow first and spent the last number of weeks looking for a solution to that.
Regards,
Ed.