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RL,
Nope, not employed by CRCL, but for clarity I do hold quite a chunk of their shares though and am excited to see how they develop over the next 12 months and beyond. Yeah I agree, the results will come when they're ready.
Regards,
Ed.
Hi confounded.
Most companies do pressure build up tests to determine how productive they are over time, do they lose pressure quickly or return to full pressure again quickly. These can be 48 hour tests. Also they may isolate some of the productive zones rather than perforate the whole lot in one go. That can mean setting a cement plug etc between zones. Also rig will need de-mob and move to test TO-13 too, perhaps 3 days to a week to do that. They could also do LPT, i.e put wells on extended test, but that would require storage tanks etc for that, especially given how productive these wells could be. I am thinking we should hear something before the end of this month, but if it runs into February I wouldn't panic. Slow and steady may win the race here.
Regards,
Ed.
Good morning Confunded,
Well without the RNS we can only guess. Yes that is a possibility at this stage, all we know is what we were told on the 28th of December:
"Well clean-up and flow testing now begins on TO-14"
"Therefore, the consortium is proceeding to testing of the TO-14 and then the TO-13 wells, with the objective of flowing the wells and then moving on to the next phase focused on designing the early production system."
They have informed the market that they're moving forward to well clean up and testing, so technically they don't need another RNS to say testing has commenced. We don't know yet if its gonna be tested with the drill rig or a workover/completion rig, but that's not to say they're already testing. Sounds to me as if they're testing with the drill rig given the statement in the recent RNS as above. I would imagine that we'll get test results in the coming weeks, hopefully before the end of this month. They were slow and careful with drilling both shallow wells, likely the same with the testing too.
Regards,
Ed.
Cheers VIP and Luke for those links, all bodes very well for the flow tests. Definitely confirms what many of us have been thinking and great to see it on the Sonangol site.
Regards,
Ed.
Morning Nige,
Yeah he's certainly putting forward his ambitions and hopes for the share price up to Dec 26. It certainly is very positive, while we know which blocks that we have but we've still to find out which blocks Mr Karam wants to get into (except for KON-15). We should do, hopefully the wider market will also become aware of Mr Karam's plans too! These next couple of months and years aren't going to be boring that's for sure.
Regards,
Ed.
Hi Calder,
Yeah I've seen that from the July presentation. Suggests seismic from Q1 24 on KON-12 and seismic on KON-16 from Q2. With drilling from Q4 on KON-12 (I'm hoping that seismic and drilling is on the Galinda field). It is exciting as the upside beyond Tobias and Galinda on these blocks is currently 297mmbbls of net prospective oil. That's all without further blocks or acquisitions. For management to set options to acquire shares at 6.4p suggests their ultimate target will be beyond that. It will be interesting to find out.
Regards,
Ed.
Good morning Calder,
Cheers chap, you'll do well on those too! There was a point where this company was trading at only £3m, it was before there was any mention of the Angolan assets and when the warrants were repriced to 0.21p. It was quite easy to accumulate at that point in time within the spread. I did most of my buying around then for the JV with IBM on the large Ni assets that weren't priced in at the time. Subsequently they agreed to sell those for much more than the previous £3m cap. But you'll be well aware of what has happened since. Mr Karam came in and brought in the Angolan assets and its now a whole new ball game now. Substantial upside and clear path to revenues, when they had Mambare and Wowo gap they were still years away from revenues.
Be interesting to see what Mr Karam does between now and how close he'll get to that 6.4p target within the next two years. My gut feeling tells me the best is yet to come here, but lets see.
Regards,
Ed.
RL,
I don't know about you, but my average here is in the 0.2s, so options vesting at price of at least 1.6p per share, 3.2p per share or 6.4p per share are aligned with investors interests to see much higher share prices. So if the share price is over 6.4p wihin 2 years I'd be delighted. I've seen many companies set vesting targets around their current share price, the firt target of 1.6p is around 80% above the current share price, the final target is around 700% higher than the current share price. That is the kind of music long term investors want to hear let alone short term traders. If he gets anywhere close to that over the next two years he'll have earned those options. I'll be one of the first to congratulate him too. I just wish all of my AIM holdings set as ambitious targets.
Regards,
Ed.
SJ,
Like Nige said there will be profit takers along the way. My last top up here was on the spudding of TO-13 and the share price back then was still in the 0.2s. So we've come a long way in a short time.
Yes management and the cornerstone investors and some PI's are tightly holding a lot of shares which reduces the free float and makes the share price more sensitive to lower volumes. This imo is much better than a pi driven stock which will be traded to death. Volumes still tend to be modest.
I agree that we've had some coverage, some have linked interviews that Mr Karam has done, but they do need to promote the heck out of it on potential field development, after the outcome of the flow tests are known. Hopefully then we'll see some video interviews with the likes of LSE, or Proactive, investor meets company etc. New presentations too would help in the future. While these would all help to get the message out there, the company cannot stop PI's or whomever taking profit along the way.
Regards,
Ed.
Nige,
I agree on Mr Karam's ambitions and pace for CRCL. What he has achieved in 6-9 months has been very impressive, looking forward to see what that amounts to after 12 months in charge! :) Once the timing is right I reckon he will move to secure more assets in Angola. I agree once they know the size and scale of the development at Tobias they'll have a better idea of spend and potential cash flow and that will dictate our direction.
I believe that the £250k conversion was just of the notes that have been already drawn, so not additional cash into the company, but just a reduced liability of the small amount of notes drawn down to date. The cash from the warrants was small.
Yeah I believe so, the current loan notes can be drawn down for the development of the EPS etc until they establish cash flow. Then we'll see from there, going to be an eventful year and his comments of succeeding where others have failed are very confident.
Regards,
Ed.
Just to add to that, when Mr Karam came in he consolidated and got rid of pretty much all of our debt. We have a pretty clean balance sheet now with really just those partially drawn loan notes. That certainly helps when acquiring additional assets, compared to the likes of AET we are pretty debt free at present.
Regards,
Ed.
Nige,
Good question. Mr Karam did say in the results they're looking to acquire more assets in Angola, so possibly in active discussions at present. I reckon we'll not get any more assets until we see what scale Tobias is and what our work commitments are for KON-15 if we win a share in that imo. Going forward the company then would have a better idea of what spend they have for Tobias and KON-15 (if they win a working interest in it).
An asset may require a cash/equity element from the company or may be pure RBL if its a producing asset. So clearly the more they can get from Tobias the better, especially from initial production rate from the possible EPS. That would certainly strengthen the company's position for future acquisition. When you look at Mr Karam's online info he has links to many African banks so perhaps they would be willing to enter an RBL for producing assets which would have reserves.
So to summarise I think we'll get more updates before we see our next Angolan acquisition(s).
Regards,
Ed.
Hi Nige,
Either way we're only talking a couple of weeks to find out. As long as they stump up the cash I'm sure you also don't mind whether its IBM or BMA that get it. I would imagine that if its BMA it would be a cash offer rather than an equity alternative, but lets see.
True lots in the pipeline from Angola updates to KON-15. Fingers crossed we'll hear about KON-15 next week, especially if all those block winners have to be signed off for March. So we do have some really near term news expected over the next couple of weeks. Last update on TO-14 was around two weeks ago, I would imagine that we'll hear something within the next two weeks.
Regards,
Ed.
Hi Nige,
You're welcome. I was thinking about that again since this was previously discussed on here. The 45 day period may be working days, its not quite clear from the RNS so that puts it from anywhere between 22nd Jan to about the 9th Feb. So if we haven't had an RNS suggesting a $4.1m eqv offer from BMA by the 9th Feb we should be clear to proceed. Would they leave an offer to the last day though? You would think if they were really keen to get the counter offer in they'd do it asap, they know what it will cost them.
Regards,
Ed.
Good morning Nige,
"16 October 2023
Corcel Plc (London AIM: CRCL), the Angolan focused exploration and production company, announces that it has received a revised offer from Integrated Battery Metals ("IBM") to purchase the Company's 41% interest in the Mambare nickel/cobalt project. "
BMA have 45 days from the GM, the time of shareholder approval to preempt the current offer on Mambare, that means they have to match the existing offer for Mambare. Failure to do so within the legal time frame means that the company can proceed to complete the sale with IBM. If BMA match the offer on the table they would get first dibs at completing the sale to them instead. Either way it looks like its getting sold on the terms agreed.
Regards,
Ed.
Mr JS,
Yeah not the one we've been waiting for, when I saw the 1 appear beside CRCL on my monitor I thought here we go, but not yet. They've now been cleaning up/testing TO-14 for almost two weeks now, how time flies. Thought it may also be a pre-emptive offer from BMA, perhaps they're going to run it to wire or let IBM have it.
Regards,
Ed.
Nige,
There sure could be much more to come yet.
"The encouraging results of the TO-14 well constitute a significant milestone toward development of an EPS and providing line of sight to near-term revenue generation for Corcel."
"The initial results of the TO-13 well are an important moment for Corcel and highly encouraging, having successfully demonstrated hydrocarbons across multiple potentially productive zones and multiple intervals. TO-13 looks to cornerstone development of a future EPS and provides Corcel with line of sight to near-term revenue generation"
All sounds very promising. The company has also mentioned several times about the significant hydrocarbons remaining and the TO-14 result RNS was very positive, especially no water in the well offsetting TO-4. So yeah it does sound like there's a lot of oil remaining in this field and the company are emphasising their belief of the importance of these two wells for the EPS and early revenue generation.
Agreed Nige, great job by Mr Karam et al to get our hands on these blocks in Angola, potential company makers at present. I'm also looking forward to this next couple of weeks and what lies beyond that.
Regards,
Ed.
Nige,
Yes that is a real possibility as I cannot see the model for Tobias to have included a recharge of the reservoir, re-equilibrium, oil shows throughout and no water. All that in the RNS releases to date suggests to me its at least matching or exceeding expectations, especially on the pressure and oil recharge of the reservoir. Previously they've suggested 65mmbbls of yet to be produced oil.
No that's not possible, they cannot get an increased resource or reserve number at this stage and announce that with the test results imo. They may hint that they think there is more oil there than before and flow tests my suggest there is. But this then needs to be independently verified by a reserve audit company based on flow rates over time and well data from a number of wells. They could do that by initiation of a CPR on the field, that would be completed some months after the flow testing imo. We'll likely hear more when the test results come out. But certainly if the wells produce and sustain flow, a reserve upgrade from contingent to 2P would be the next step. That might also require side tracks or further wells, we'll likely hear more in due course. They do have a lot of historic info from this field, so this could all be done quicker than a company that has just made a new discovery that needs appraisal.
It would be interesting to hear if any of the older wells could be re-entered for horizontal production leg(s) etc.
Regards,
Ed.
Good morning Nige,
With the current assets and the sale of the legacy mining assets and the funding position I would say £20-30m looks reasonable right now. Of course that can change rapidly through acquisition or even the flow rates. We have a decent sized prize to go for at the moment, with the modern drilling and 16mmbbls net contingent at Tobias and Galinda there is a solid base to aim for and it might get bigger. If we get strong initial flow rates from these wells we may then be valued on times cash flow. A lot of investors use x3 NOI for example, so technically we could go to over $100m cap on top end flow rates from these two wells.
Our closest rival at the moment in terms of scale is AET. We've the potential to catch up to them on production and reserves (hopefully), and potentially pass them with future drilling of the prospective resources. Given the information to date we may have more oil than first expected from Tobias, I couldn't have imagined that the pre-drill model included no water in TO-14. So I've my fingers crossed for a resource upgrade for Tobias, pending flow test results of course. The companies have yet to determine just how much oil will be recoverable through modern drilling, Tobias could get really big really quickly depending on the flow results of these two wells. They know it already covers 3400 acres, its a large area if there are significant hydrocarbons remaining. All of the information released to date will have been approved by Sonangol.
Getting strong early cash flow will enable them to develop Tobias and then look at some of these other large leads they have on KON-11, KON-12 and KON-16. The company has said numerous times its looking to build on these blocks through further acquisitions in Angola. So exciting times ahead and I'm still looking forward to see these at mid-cap at some point.
Regards,
Ed.
Hi Nige,
I sure did, hope you had a good one too!
Well I think we are building a name in Angola while helping to bring production back to Kwanza. This field produced 29mmbbls over a period of around 30 years, developed in the 60's and 70's and shut in from the 1990's throughout that time oil was around 1/2 the price it is now. So it will be a big thing to reestablish production from this large field.
We may do, lots of news can hit at any time, looks like we should hear about the bid round next week, also if I'm not mistaken the preemptive offer for Mambare has to be made by mid Jan too.
"Following Corcel shareholder approval, the Company will formally notify BMA of a bonafide offer for its interest, starting a 45-day period in which BMA can legally pre-empt the transaction."
Also Canegrass assays from the November sampling could land any time. So yeah given the potential of news on many fronts £20m looks very reasonable, hopefully after the test results very cheap (fingers crossed).
Regards,
Ed.