Member Info for Edgein

Sienna,

Yes they have the Canegrass option which is for exploration of mapped pegmatites for lithium in Australia. There's lithium discovered by another company about 1.4km away so highly prospective acreage. But these are legacy assets, the main focus of the company is oil and gas in Angola and Brazil. That may eventually also fund exploration on the lithium asset at some point in the future. Lets see how Angola progresses in the really near term.

Regards,

Ed.

Luke,

I would imagine about 1-2 weeks drilling time. Its only 700-800m or so down so would be fast. However its likely to be a very high pressure well as the field had a previous peak flow rate of 17,500bopd from 7 vertical wells, so very high pressure for the depth. Also factor in that this well is of national significance, could be a return to oil production from the Kwanza basin, oil minister paying a visit. They want tp use it to attract other players into the onshore bid round imo, so they're not going to rush it, but I'd still estimate an update this month. We can relax though as we've still got a tiny market cap and very exciting assets in Angola.

Regards,

Ed.

Nige,

Good to see Corcel very active on social media with the pics and short video posted today. Goodness even big Davy Lenigas getting in on the action too!

Regards,

Ed.

Good morning Shaa,

True the majors can pick us up with some of their spare cash or quarterly profits. I still think the most likely outcome is likely the JV route with the outside bet being a total buyout if the JV stalls, they do by all accounts want the assets.

Yeah to have a find this size onshore USA is a prime asset especially in the PRB, kinda explains in part why the major seems so keen to get something done and get exclusivity. Beats offshore hands down from many angles.

For a company to buy just the CCU would complicate things a bit, as if this is one big field that spreads from CCU to BFFDU and beyond then there's nothing stopping injected CO2 for example moving into the BFFDU once the CCU is pressurised etc. Like when North Sea oilfields cross blocks, companies normally come together to split or share interests development etc. Luckily in this case COPL pretty much own both (with the exception of 15% of BFFDU). So they're currently in a prime position. I still think the most likely outcome is a JV on CCU and an eventual deal on BFFDU if its big enough once delineated. CCU remains the place where most of the wells are and where the logs have shown the oil to be, the obvious place for the JV to start.

Regards,

Ed.

Mike,

I'd personally value African oil reserves in the ground at around $3-5/bbl. West African light oil will tend to trade around Bonny light prices, so similar to Brent rather than WTI. Tobias had excellent flow rates back in the 1990's so we could get similar with horizontal wells, its a large field lots of potential for sure. Looking at peer companies like AXL, ZPHR, PXEN, BCE, UPL etc you can see they're all valued higher than us, multiples of CRCL's cap. I guess partly due to the fact that we've only transitioned to oil and gas. Once the market figures out the redevelopment and exploration potential of these assets we'll start to see a more realistic valuation imo.

Regards,

Ed.

Stewad,

I have a slightly different view on the Fed Deeps. Imo the major interested in the CCU wants the whole lot as has ben said before. That is either going to be a straight up cash offer before JV. Or let COPL rip on the Fed Deeps with the growing production from BFU and CCU (post-JV) and once sufficiently delineated, they'll be after what effectively would be an extension of CCU. I wouldn't be surprised if the respected industry leader wanted right of first refusal on BFFDU depending on drill results tied into the CCU JV.

Regards,

Ed.

As this article by Luke and SP71 posted shows this is an important well to Sonangol and Angola as the gov minister doesn't show up to every well. They're hoping this well revitalizes their onshore oil and gas production and encourages more companies into that onshore bidding round. So I'd expect the state oil company to take a cautious approach to drilling this well as it could be the first well that reestablishes oil production in the Kwanza basin since the 90's.

Regards,

Ed.

Nige,

All wells are different. Take AXL for example, they drilled a recent well to about 9600ft and it took them just 10 days to drill that. Its a low pressure heavy oil and water well though in a sandstone reservoir. But to do almost 10000ft in just 10 days was impressive. Our well is only about 2300ft so way less, however our carbonate/limestone reservoir has been much more over pressured. AXL's well had excellent reservoir quality, 28% porosity and multiple Darcies permeability (something like 4 darcies), so likely lack of pressure gave them the low flow rates (pressure normally increases with depth).

So with the Binga limestone we've got fracture porosity of 4-14% or so but the wells have produced at way higher rates than that AXL rate, 7 producing wells had a peak rate of 17500bopd. So that's highly productive for a shallow limestone, so must be high pressure down there. So even though its a very shallow well they'll have to take their time through the potentially very high pressure pay. This is a large field, some 13.7 sq kms in size, if the scale on the presentation is right it looks something like 30km x 6km for the 3400 acres. So as a rough guess I would say a cautious 2-3 weeks but may vary, I wouldn't be shocked if we get a TD rns during September, but lets see. The well is an infill well positioned to confirm their volumetric numbers so exciting times for sure. As the company said, if this well is positive there will be one or more wells drilled for early production.

Regards,

Ed.

Hi Nige,

Very true we still have to see the numbers on our first Brazilian acquisition, we might even be an Angolan oil producer by then, fingers crossed. One thing for sure between now and the end of Q1 24 won't be dull. In fact given how shallow this well is, September could turn out to be a corker yet.

Regards,

Ed.

Joe,

I can partially answer your question, yes I've been adding more today, took a while for my broker to get it filled. I held millions of shares before today, how many million I hold is between myself and my ISA provider. :)

I can tell you why I bought though, this is part of it:

"The Tobias field constituted 12 historic vertical wells, and Corcel and the operator believe that revised interpretation of the existing structures along with the application of modern drilling and completion technology, including potentially horizontal drilling will lead to a higher Original Oil in Place ("OOIP) figure in the reactivated field being achieved."

Modern horizontal drilling was only starting to come about in the 90's, this field could be transformed with modern horizontal drilling. If it does lead to higher oil in place numbers that's likely to lead to a reworking of the contingent resources too. If they get enough production wells on the field booking of 2P too. Obtaining production from the two brown field redevelopments is key to opening up this:

Page 9 of the July presentation:

"KON-16 exploration work programme to unlock 1,500 MMbbls gross unrisked P50"

Tobias could well be the starting point for CRCL but may not be the main goal. :)

Regards,

Ed.

Here is the July 23 presentation that lays out the new strategy, page 7-8 are most relevant today.

https://www.corcelplc.com/wp-content/uploads/2023/07/20230706_CRCL_PPT_FIN.pdf

Great assets for such a tiddler.

Regards,

Ed.

Davey,

Yes very overlooked little company, many that followed this one were mining or battery metal investors, its yet to really get on the radars of oil and gas investors. Our core investors and new Chairman came in with these assets so hopefully the market will soon catch on that this is an entirely different company, one that's getting on with things. Look at the speed of progression to date on Angola. This will be a fast well for sure so we're in for an interesting month. This could lead to one or more wells and early development, what's not to like!

Not only could these two field redevelopments be transformational to CRCL but the three blocks all have significant exploration upside. Looking forward to seeing what this one will look like this time next year. Remarkably we're only at 0.24p and the recent fundraising was all between 0.35 and 0.4p so folks can still buy at a large discount to our core and big investors. Lets see for how long though. Well is perfectly placed between two previous developmental wells, exciting times.

Regards,

Ed.

Daniel,

Well summarised and agree. Revised hedge, tweaking of the gas injection efficiency, then introducing more NGL/butane injection this month sounds like they're varying the injection rate and type. The last time they went hard on the gas and butane injection we peaked oil production.

"Completion of the Financing is expected prior to the end of September 2023 and is intended to sufficiently fund COPL in to the first quarter of 2024 for production growth and to conclude the previously announced joint venture (the "Joint Venture") negotiations."

We now know this is with a respected industry leader, so that rules out most of the very large established companies in the PRB.

Now the company is starting to soften Anavio up to take a lesser whole amount payoff for those bonds, that suggest that as a result of the possible JV the company expects to be quite well off. :) Don't feel too sorry for them though as they'll get a premium in the pay off plus these bargain basement 4p shares and warrants. Clearest signal yet that the bonds are going to be taken care of as a result of the JV.

"Through further geological study, he and his team have revealed a vast area of bypassed oil pay in the Cole Creek area, adjacent to the BFU. The prospective horizons are currently under Joint Venture negotiation with a respected industry leader."

So with all the DD work done, the large respected industry leader is still as keen as mustard, and as stas posted we saw some values as to what largely undrilled acreage got. But the Frontier-2 wells drilled through the Frontier-1 at Cole Creek, plus the recompletions proved live oil, so certainly not undrilled acreage here and enough to keep a major interested approximately one year after approach.

Mr Cowan:

"It is my simple aim to drive maximum value from them, whilst also ensuring that if the interest being shown by certain third parties in joint venturing with us matches our own views on value, we will seek to further scale through partnership."

Lets be seeing some of that scale and the colour of their money. Some of us are looking forward to Anavio's payday as much as they are.

Regards,

Ed.

That makes an already nice change to the past. Lots an lots of positives in that update. Hedge gone until Jan next year to allow the production to increase as they inject more NGLs from September. Whole amount payment under negotiation now as we close in on the end of the JV discussions, not just with a large listed established company, an industry leader, Exxcuse me but that sounds very promising. Lets see how far they can push this production at BFU, the focus of COPL America and mangement (I get the feeling someone else will be running the show at CCU). Fully funded through the main production growth phase, awesome.

Regards,

Ed.

Hi Nige,

Well I'd hope to hear news very soon on the forward plan for the Angolan drilling now that preparations are being made for the drilling. We should get spudding RNS and forward programme RNS very soon hopefully, also further news from Angola or Brazil could drop at any time (acquisitions). As you say the well won't take long once they get started as its only 700m, therefore if all goes smoothly very low cost too. CRCL will just have to fund 20% of these wells, so should be pretty cheap after the sale of those mining assets, also cash burn will be lower now that JP and SK have gone.

Regards,

Ed.

Nige,

Very true, Mr Karam has a lot of contacts with national banks and financial institutions across Africa and the middle East which will come in very handy I'd imagine. Last week when taking a poke around on the prospectivity of the Kwanza basin I also found a link to a company promoting another onshore block and looking a minimum of $10m bid (it had undeveloped oil discovery). So who knows what Mr Karam and the co are looking at in Angola, if these blocks are the starting point it sure is exciting, these areas are under explored and could contain a lot of oil. The two field redevelopments are a great place to start too to get an established cash flow to chase after those deeper prospects. A lot of the big offshore fields are pre-salt (deeper than Tobias etc) but our blocks are pretty much unexplored. Its too early yet to call us the next Tullow but they too had to start somewhere!

Like you say, from the presentation lots lined up between now and Q1 24. this time next year we could look like a different company, fingers crossed. When Tobias-13 is close to depth there'll be excitement building especially if that leads to further developmental wells.

Regards,

Ed.

Yeah that pretty much sums it up. Whichever metric is used, infrastructure, injected gas/butane/condensate, reserves, 1.6-1.9bn in place they all result in market caps multiples of where we are right now. It may be risky to add all of these together though as it may result in a broken calculator or ripples in the space time continuum. It'll get real interesting real fast if the market is forced into placing a value on these all, either by a JV or a buyout.

Regards,

Ed.

Nige,

Hard question to answer. As others have pointed out it all depends on how much oil they discover in that time. Certainly the 16mmbbls of contingent if proven up would support a cap of at least £40-60m for African oil. But could be higher depending on the peak rates that they can get from Tobias, might it exceed 17500bopd like it previously peaked at using horizontal wells? Lets wait and see, plenty of gross contingent down there according to the company. The low hanging fruit on the Angolan assets could provide a decent production base for CRCL to look at the much bigger pre and post salt targets. The net prospective to CRCL is almost 300mmbbls so if a portion of that were to come in from the under-explored licences (the article I posted showed how few pre-salt wells are on our blocks), then the potential is mid cap (not within 12 months as the expo period is up to 5 years on the agreements for spend).

According to the presentation, not only are they expecting early production from Tobias, but they're also expecting further Angolan consolidation and Brazilian acquisition(s). So we can't put a price on those before we see the details. But I'd expect us to be multiples of our current £3m ish cap over the next 12 months. Not sure if we're likely to see Joe's 30-50 times 2.1p (I'd love that as I also hold millions of these in my ISA). But we'd do very well to see close to Align's 10p target. £30-50m cap should be doable if the early wells on Tobias are positive, again depends on the pace of the drilling, last RNS did mention one or more wells depending on result of the first (T-13). But certainly the potential is very large from our first three blocks, lets see what happens next. More to come, plus Brazil?

Regards,

Ed.

RT,

It sure is about time we had a rerate, and that's just the Tobias redevelopment that you're talking about, there's a lot more to these assets than that too. So its clear why this was a must have for CRCL and their first oil and gas asset acquisition. This first well (Tobias-13) is gonna be an exciting well as its well spaced from the other development wells on the field, plus the fact that our cap is less than £3m.

Since you haven't been paying close attention to CRCL you might find this link useful:

https://africaoilgasreport.com/2021/04/geosciences/angolas-onshore-kwanza-basin-offers-an-underexplored-basin-with-a-world-class-petroleum-system/

Corcel are looking to consolidate assets in Angola and Brazil this year according to the latest presentation, you're not alone lots of folks haven't been paying attention to this one currently, but for how long? Lets see what happens over the rest of the year and early next.

Regards,

Ed.

Eazy, Stas20,

Yes very true the PRB is prolific across a vast area over multiple formations including the Turner. That is a great well for Hartenergy for sure, its a high GOR well so plenty of solution gas as that's around 700boepd coming out with that 2600bopd, plus the NGLs too. It shows how prolific the PRB is over a variety of formations and why its attracting big money deals.

IP rates for the Frontier tend to be from around 600-4000bopd, with wells closer to CCU doing around 1000-1300bopd. AM has said that our Frontier is like the Shannon, not much in the way of natural gas drive. But if the CCU and BFFDU wells get close to 1000bopd that would be an excellent result as that would clear plenty of void space for early EOR (CO2 or MF). The company has said they believe that the Frontier will also be as recoverable as the Shannon, i.e. 40-50% when using EOR. So while our IP rates aren't as likely to be as high the ultimate goal is massive 1.6-1.9bn in place, the pace of getting there might change also if we get the right JV partner! :) Big partner would equal multiple rigs, lets see what happens.

Regards,

Ed.