Member Info for Edgein

Nige,

Yeah its all been very positive so far from CRCL and the flow rates are eagerly anticipated for sure, especially what they said about TO-14 and the nearby TO-4. It was great to read that article too from the Sonangol site that has sent us over 1p. To get a positive update from the operator and national oil company is a big plus too.

Regards,

Ed.

Breq,

There is a formula out there to calculate reserves and it will include other things like oil saturation values, also pressure plays a role, there is also an oil shrinkage coefficient etc etc. You can find that formula online. Also we currently know the oil down to point from TO-13, but they have still to drill beyond that point. 120m of oil containing reservoir doesn't sound very much like reservoir pinch-out to me! So likely continues downdip of this point too. Also is oil still migrating into the field? Has the oil sampled got the same biomarkers as the historic oil produced, therefore from the same source rock. Is that oil still migrating from source into Tobias causing the re-charge, re-equilibrium and pressure build up, leading to the comments from CRCL and Sonangol about the significant remaining hydrocarbon potential in the field?

They'll need more wells and an independent CPR to answer all of the above. How big is the reserve going to be is a good question and worth thinking about especially as every release being put out suggests the wells have found more than anticipated.

Regards,

Ed.

Confirmation*

I still don't proof read my posts! :)

Regards,

Ed.

Nige,

I'd prefer to see some flow rates first though before I would like to say we are the same value of some of the other £30-50m listed companies out there. So flow rates first and hopefully reserves next and then sure we could be £50m+. It sure does look and sound like we have the assets for that at the moment. But it would take conformation to get us there imo, could news/momentum take us there ahead of results, KON-15 etc, perhaps. I'd not rule anything out on AIM; I've seen companies with much lesser assets trade much higher.

Regards,

Ed.

Nige,

Yes, I'd imagine we could hear something regarding the onshore bid round results next week. While certainly not vital for CRCL given what's happening on Tobias right now, it would be a welcome little boost for future options. By all accounts Mr Karam seems keen to add to our future options, regardless of Tobias, Galinda and our large exploration inventory.

Regards,

Ed.

Good morning Guys,

Different people will have different ways of pricing oil in the ground. At $2.5/bbl that would be very low even for African oil. Look at possible transactions around, some US transactions will be even above $20/bbl for 2P. Depends on the development status, i.e PDP assets fetch a premium etc. Personally I'd class African PUD assets at about $5-6/bbl, some might value these a bit higher. If an asset has exceptional economics, high flow rates per well, they could get a premium to that for sure. Tobias might fit into this category, if it flows like it did in the past it would be exceptional. Certainly if the wells flow at economic rates then establishing 2P and drilling more wells would be a natural next step. There is always going to be a discount for geographic risk, although that shouldn't matter too much for us as I don't want to see the possible future reserves sold, I want to see them produced.

Personally I now see 11.7m of unproduced oil net to CRCL as very conservative, water appears to have been displaced and the field recharged and re-pressurised. With mobile oil thoughout the reservoir, all that bodes well for recoverable volumes as hinted at by both CRCL and more recently Sonangol (recent article posted by VIP).

So if we get flow rates as expected I would easily say $5-7.50/bbl would look reasonable, but I also expect a re-calculation of the resource potential to swiftly follow. They need to know not only how much it can flow, but also the ultimate size of the prize to come up with a plan for FFD. Certainly they should have enough information from the two wells for the EPS, that's pretty much a given now (see all RNS from CRCL and the recent Sonangol article).

Regards,

Ed.

Good morning Nige,

I guess that Barno is referring to the results of the onshore bid round. As SP71's link showed the results are due on the 22nd.

The Align research shows a low valuation per bbl for sure, $2.50/bbl is still modest, by all accounts Sonangol and Corcel have been suggesting there's more oil there than expected too. Where did the water go from these two connected wells that have just logged oil, one on the crest and the other about 1.4km down the flank, both showing oil shows throughout the reservoir and no water. TO-13 drilled further downdip than the rest of the previous producers too.

We may also hear about Mambare sale and Ozzie assays soon too.

Regards,

Ed.

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.