The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Silversprings,
I have no idea how this is going to play out as the management seem to have left the field early. According to the company interested parties have been lining up so there is absolutely no guarantee that a secured lender would get either BFU or the large discovery. That would be down to the administrators to take the best offer if it comes to that. But we're getting the bare basics from the company. Like how much is the default in the liquidity covenants, basics on the JV. They cannot refinance 40.5mmbbls of independently verified reserves at $75+, they need to get their act together sharpish and get that injection rate back to where it was. Some leadership along the way would be nice, an unexpected bonus.
Regards,
Ed.
Chitta,
I made a mistake here, I got my information from the RNS releases and interviews! RBL was coming last year/this year, restricted production on the gas flaring, on the GGS upgrade etc etc. But look they've defaulted before only this time Anavio is in deeper and still unsecured. Will they or someone else step up to the plate this time? We'll know in a few weeks. Saving grace is that the company have a large NI51-101 to help dig them out of the hole of their own making. Some information from the company would be useful too, like why is it taking so long to get the injection rates back to where they were? That would be s good starting point.
Regards,
Ed.
Leew,
If a company like ANGS can get that sort of deal then you'd think our lot if they had any management or finance skills between the lot of them would be working very hard over the next three weeks to sort out their own mess. One or both of these parties need removed from this equation. Time for our illustrious leader to come out of defence again and go up front as our main striker has left the pitch for some reason, put the ball in the wrong net? Trafigura will be in the little black book from the Nigerian days.
Regards,
Ed.
FF,
Right up until yesterday you could have said the very same thing about ANGS and they don't have much in the way of reserves to RBL! There are two main opposing parties here going head to head, both with large quantities on the line and it will be interesting to see which one gives way first. This isn't the first time COPL defaulted on SL.
Regards,
Ed.
Guys,
Market is still sleepwalking where CRCL is concerned:
"Progress on the ground in Angola has come quickly after the reporting period year end, with initial drilling on TO-13, the first Well having concluded, and the rig now having moved and spudded TO-14 at a second location. The Company is very pleased with the results of the first well, which despite being drilled downdip encountered the full 120m horizon of the Binga targeted, with oil shows and multiple potential production horizons throughout. The Company and the block consortium as a whole, led by the Angolan State Oil Company, Sonangol, believe that these early results point towards significant hydrocarbon potential remaining and dictate a move towards an early production system at the field, targeting first oil during the course of 2024. This will clearly be an important milestone for the company."
Hopefully be lots of tea spitting opportunities in the coming weeks. As a matter of interest, given what was talked about earlier, we have a potential bowl on the chart to 2 pence back in March 2022. Just a note of interest to the chartists/tea leaf readers out there. :)
Regards,.
Ed.
DR,
Personally I would class a micro cap as a company with less than £10m cap, small cap up to £100m, £100m- several billion mid caps and above that the large companies and majors etc. Personally I wouldn't class I3E with around 22kboepd and 182mmboe as a small cap, circa £120m.
Regards,
Ed.
RL,
My market cap target is £100m+, I3E for example £120m. I think some have posted on here that Mr Karam wants a several hundred million market cap, but that's just from what I've read rather than got that from the horses mouth. Not a question that I've asked as its kinda hard to judge as the guy only started months ago, If next year is as good as the last 6 months who knows where we'll end up. Exciting for sure.
Regards,
Ed.
Nige,
Well you pretty much answered your own question in your last message! I would personally use two current case examples.
1. AET came from nothing (they do have experienced management too) but are heading for mid cap from acquisition of offshore Angolan production, I don't hold those currently.
2. SRSP delisted has acquired assets in Nigeria, Tunisia and Angola, Angolan interests come with circa 10,000bopd (Angola still to complete). But recent AGM reports suggested a relist between 3-6p being targeted, so a mid cap vs their £20m basket case before delist (I do hold some of those).
So with those two cases and the fact that there could now be significant hydrocarbon potential remaining in Tobias we are well positioned to grow organically through development and always have the possibility to expand on that with debt based RBL to acquire production. Believe me if SRSP can do it anyone can!
Regards,
Ed.
Nige,
I agree. He seems very professional in his replies, staying within the rules of what he can and cannot say. Believe me I've tried to squeeze what I can get from the questions I've asked so far. :) I'm really looking forward to the update on forward plan post drilling TO-14. He does come across as very confident in the RNS releases and emails etc
I did ask about the implications of the larger oil column downdip etc, he did give a very good summary of that in results as there is only so much he can put out there as an NOP.
I have a 3-5 year outlook here and I believe we could see mid cap status from our current blocks. Establishing a base production from Tobias and Galinda would play a major part of that. There's also other undeveloped discoveries onshore Angola. So scope for farmin exists, there's very little expo done so far in Kwanza, especially pre-salt, so large potential to grow the company beyond Tobias and Galinda from our current blocks. With more seismic we may be able to get our prospective up beyond the current net 297mmbbls by maturing more targets. Also company has also hinted at further acquisitions in Angola with several under consideration (one of those may be KON-15).
Mr Karam has us very well funded and he's a very successful guy. So I'm locked and loaded waiting fr the next updates and really looking forward to 2024.
Regards,
Ed.
Good morning Nige,
Definitely, 2p next year would be a good base to build on from with the possible development of Tobias, plus potentially additional assets. Certainly my longer term target would be much higher than that.
I don't think that there will be much more said at the AGM compared to the GM as they cannot discuss in detail anything that isn't out in the market. So all depends on whether we get an update in the next two days.
But there's no stopping those attending asking about the possible horizontal wells, are they still a possibility as they were to be pending outcome of TO-13 result? Is the geophysical analysis of TO-13 almost complete? Things that have been put out there by the company etc. Poke the bear and see if it growls etc. :)
Regards,
Ed.
Good morning Sans,
Thanks for posting your summary of the GM. I wouldn't worry too much about DL on this occasion, he's just a shareholder, he's not on the board here so likely to have zero influence on operational decisions. Regardless of what he tweets or whatever its just one shareholder's view. The small turnout still suggests we're not well followed yet, but hopefully have a much greater profile next year.
Very interesting to hear Mr Karam's view on 2p per share, I'd be happy with mid next year for sure. He's still clearly got a very bullish outlook on the EPS and these recent wells! I do agree though with my communication with him so far he seems like a very shrewd clued up guy and has got shareholder interests front and centre. Not really surprising given his personal shareholding and that of his company Extraction SRL.
Hopefully he'll be even more bullish at the AGM on Friday as we're fast approaching the TD of TO-14.
Regards,
Ed.
Good morning Nige,
Due to the quantities of money involved and type of activities etc there won't be any holiday down time. They cannot leave sections of the hole open for any longer than necessary. Angola is majority Christian so they will celebrate Christmas, maybe they'll put some tinsel on the rig (joking). :) But that's about it. They'll do crew shifts etc but they will operate 24/7.
Regards,
Ed.
RL,
It all depends on what your outlook on soon is. If soon means end of January then there should be update on management appointments, Mt Weld test results, TO-13 and TO-14 (analysis and testing), application for KON-15 outcome. Assays to come on the rock chips from Canegrass too, but looks like we're gonna have to wait for the lab results now rather than early expo results from the field work, so hopefully early to mid Q1 for those results. So plenty of news to come soon imo.
Regards,
Ed.
Banksy,
Sure anyone with any amount of shares here would be disappointed that today didn't give them the exit they've been waiting for, especially for the LTH which there are still quite a few; likely holding way more than many of these traders that come and go. But those that have been here know we've seen worse, like the Essar Vs COPL RNS of a few years back. This one has felt more like a TO than an JV for some time imo. With their relaxed approach to getting the GGS upgraded and the injection rate back to previous highs, its 2 1/2 years and we're still getting back to where they were. Does that make it as frustrating as heck to share holders damn right! BFU alone has NPV into hundreds of $m, but yet here we are sat at £9m! So yes, me and many others hope that the new strategy statement that's coming in a change of strategy as the current way of enhancing shareholder value doesn't seem to be working very well.
Regards,
Ed.
Banksy,
Comments sure. Its a bit disappointing the the talks have currently terminated with the industry leader. But then does that devalue our 2P reserves or the NPV of BFU? Nope. The company recently said they were focusing on the last outstanding issues with the JV negotiations and increasing production. Well today we have heard about one of these
Shaa,
Yes 8.5mmcfd was in play with the plastic pipes but only very temporarily. Ryder Scott had after all modelled 5000bopd and that was repeated again during those Wyoming gas hearings. So even two years on we've still to see what peak rates the BFU can achieve. They didn't get to inject at 8.5mmcfd for very long before better than expected permeability was transferring a lot of that reservoir pressure into wellhead pressure. This time hopefully a different story entirely. I guess that's why they're taking so long this time to get back up to those previous injection levels. Ready to intervene on any wells not currently connected. But I guess they'll stick to central and western injection patterns until they're ready to upgrade phase 2 etc. But getting this from the company would be a good start and we wouldn't need to guess.
Yes the JV is a different ball game, its approx 10 times the size of recoverable to the BFU, company stated there could be as much as 50mbbls recoverable from the BFU. That's an irrelevant amount of oil to an industry leader, in fact if they were to acquire COPL I could see them selling off BFU. Our neighbours would be getting 5000bopd from 3 or 4 wells, it the CCU and BFFDU is as big as RS and the company suggest its more like a 100-150 well development. That is why the JV/transaction talks are with an industry leader and not a mid tier.
Regards,
Ed.
Hi Nige,
When I was referring to the M&A its just really the the A part of that I was thinking of. Acquisition is much more likely than a merger. It would at present be hard to find another cheaper company with this much upside to make it very favourable on our side to do a merger. I'd like to see these assets priced in first before any business combination would be attractive. The acquisition trail however is very much ongoing from many of the RNS releases.
Regards,
Ed.
Shaa,
That extra gas is being injected into the field and returned back through the upgraded GGS. I'd like to see them get back to 8.5mmcfd injection rates as the current capacity is currently 10mmcfd. Production just has to average 2000bopd to fund the company next year. So plenty of scope to get there again, hopefully this time at 8.5mmcfd there won't be any further issues and they can add those additional wells as and when necessary.
Regards,
Ed.