Member Info for Edgein

No guarantees on that. It could potentially land in Canada on an evening before London was open cause I get the feeling Art doesn't like the shorters very much, like comments about burning them etc. It could as you say land after Canada opens some day.

As for structure of the JV, I'd expect it to be materially better than that obtained by LBE in May (which I don't hold and have no intention of doing so). They have a $50m payment which is part contingent on exploration success and a $100m facility for acquisitions from a Japanese company. Their current assets are of insignificant size compared to COPL's and COPL's Frontier 1 and Frontier 2 aren't exploration with multiple wells drilled though those and oil recovered from the formations at CCU (target for the LOI). Like LBE COPL has reserves so it shouldn't be structured like its some west African exploration JV of just a simple carry. Judging by the recent deal with LBE and the Japanese I'd expect the quantum of any deal between COPL and large listed established company to be very material compared to our present market value.

Regards,

Ed.

Eazy,

Agreed. Previous issues with the GGS not fit for purpose have now been resolved and production currently increasing. We know that a number of our best producers had to be restricted. We've seen in the past how the rise in oil production was tightly linked to the increase in gas production from those previous charts provided by the company, Once the company can get a stable rate from these wells we'll get a production update imo and forward guidance for the rest of the year and next year. Exciting times for sure, they company has never been in as strong a position as they are now. Moreover late stage of the JV negotiations is the icing on the cake for sure as it too could be 40-50% recoverable as well as a large cheque.

Regards,

Ed.

AdN

"We do not have faith in the 5000-7000bopd this year, yes the BFU, PDP and PUD have will play their part but when?"

Not sure who was saying that we'll get 5000-7000bopd this year? Not read that post. Previous guidance was based on FFD which include more vertical development wells and two injection wells. So no we won't reach peak production in the next 4 months. They don't need to reach peak production to have material levels of free cash flow. 2000-3000bopd would do that given the current price of WTI.

The PDP are already of vital importance currently as that is where current and imminent production increases are coming from. The PUD reserves will be those that allow the BFU to reach peak production of perhaps 7000bopd+, could be even more when they model in the higher permeability, 10mmcfd and 12mmcfd respectively, we may hear more about that in September.

Yeah there seems to be a group of shareholders that don't realise the current value of our assets, in fact the most of the market doesn't seem to realise the value of the BFU and what that means for the future of the company, but hopefully a lesson they'll learn before year end and well before we get close to peak production rates. Some will want to detract from this though as its these current reserves that make this one so over sold. Its the current reserves, infrastructure and injected methane/Butane at BFU that makes this market cap so ridiculous. The massive prospective is just a very large bonus.

As for the rest of your post, a few questions, how did you all manage to buy at 60p average when you're in from 2018? COPL only briefly hit 60p when it relisted after Atomic. Also you've held for five years and only started your account in April this year? Did you post with any other accounts before this? Just curious. But we'll both find out in time what the BFU and its production and reserves are worth when the production is optimized without the pressure restrictions. I'm sure that's something your group would like to see too.

Regards,

Ed.

"If there was a JV in the offing wouldn't production increase infrastructure be put on hold as the if the JV partner was Exxon then they would be much better placed with economies of scale to carry out the work?"

Its already too late for that, the GGS has been upgraded and the latest comments were:

"The Company has implemented several measures to mitigate the circumstances and is currently observing increased production rates, however the overall operation continues to be unstable. Once stable, the Company will be in a better position to forecast its production going forward."

So the upgraded production infrastructure is already working, we just don't know how well yet.

There are three assets in COPL, BFU where the GGS upgrade has been completed allowing the company to optimize production, something they were previously unable to do. Then there's the large discovery that covers the CCU and BFFDU. There is production infrastructure on the CCU but no MF or EOR infrastructure, but a letter of intent with a large listed established company. You're likely correct, should JV complete potentially Exxon could fund the installation of infrastructure, larger sales tanks than the ones on CCU and EOR. Not only would they be getting 2P reserves and contingent resources but also access to lots and lots of prospective. As for the BFFDU, Art said that the infrastructure used to inject gas into the Shannon would also be suitable for use on the Frontiers, whether that outcome happens will be dependent on the performance of the Shannon over the longer term. But currently upgrading the CCU infrastructure, should the JV complete would be in addition to BFU upgrades rather than an either or situation.

Regards,

Ed.

Don't put it in the bottom drawer for too long as you'll learn the impact of the GGS upgrade between now and year end and what that cashflow means for not only future drilling plans but also the repayment of bonds and SL. The company is already cashflow positive, they make money at the operational level. The extra $1.5m cost cutting will make a small difference too. But opex will drop as the bbls go up from the same amount of wellheads and surface infrastructure. We could see what injection rates of up to 10mmcfd can do, we just about saw what over 3mmcfd did. They couldn't maintain 8mmcfd for very long.

Have you thought of what 5000-7000bopd would do to our netback, cashflow and profitability? Once you do you'll understand why the BFU and its reserves are currently a core asset to the company and worth many times our market cap. Yes its also great to have the prospective of 993mmbbls-1.6bn of largely prospective too and to be talking to a large listed established company for 11 months about that subject. But its the BFU and its PDP and PUD reserves that are going to be paying the bills and that will fund the first phase of this re-rate towards fair value. If we multibag off the outcome of the JV talks too during this time then great. 30p per share currently wouldn't cover the infrastructure, injectant and reserves of the company currently.

Regards,

Ed.

Shaa,

Possibly when you think of how things have changed since the 90's with horizontal drilling and fraccing. But in the mean time we can see how they get on with the current reserves and the very large discovery. Sell on news brigade will move on but we'll still be left with the GGS upgrade. Eyes now peeled on the production for August and beyond.

Regards,

Ed.

Shaa,

"Also, to quantify our find, 10K BOPD over 100 YEARS is 365M barrels, how much oil under our land?"

According to Ryder Scott around 993mmbbls in place for the CCU and western BFFDU, according to the company up to 1.6-1.9bn in place for the entire area. Art has also stated the reservoirs are similar to the Shannon and 40-50% would be recoverable using MF.

So when the maths is done it equals a very very large amount of recoverable oil, no wonder a large listed established oil company apprached COPL last September. To top that all off folks keep selling at the bottom even though we trade at a large discount to our current 2P reserves of 40.5m

Regards,

Ed.

Good afternoon Tiburn,

Yes its starting to look that way. Its only through watching those videos in hindsight can you see things progress with the two horizontal wells, all almost ready to go. Book build at 20p raised to buy Cuda, then all of a sudden Cuda paid for with the convertibles. Then all goes quiet on the horizontals and then you discover the two confidential wells on the Wyoming website with details held confidential. Yeah its possible that CNOOC has contributed to both to maintain their position in the BFFDU.

Most obvious explanation would be its due to the NDA that the logs and test data would be kept confidential to reduce the chance of counteroffer before LOI. Certainly if two BFFDU wells had come in around the same time as the CCU recompletions it would have been compelling evidence for the deep discovery running from CCU to BFFDU. It could potentially also be confidential from the large established listed oil company, whereas COPL and CNOOC drill those wells, keep the data confidential as the large company was apparently after the whole lot, keep the talks to CCU only and then allow talks on BFFDU after CCU completes and they've drilled more wells. It'll all likely come out at some point, concluding the JV talks and ending the NDA will be a good starting point to unraveling all this. Will COPL sell part of the pie but keep the rest.

In the mean time though it'll be interesting to see how quickly the production profile pushes us up towards fair value. Little BFU isn't priced in here let alone either CCU or BFFDU. We all want to see how close Mr Goozee gets to his 100 bags.

Regards,

Ed.

Stas,

Thanks for the clarification as I haven't gotten around to reading the Sedar release just yet. It sounds as if they may have upgraded the compressors as I thought current infrastructure could only handle 8.5mmcfd. If they can do up to 10mmcfd now then that would speed up the pressure build up phase.

Yes they could use CO2 instead of methane/butane in both Shannon and Frontier, both of those reservoirs and likely the Dakota could be used for CC. We'll just have to wait and see how the JV talks progress over the coming months to see if CC is an option on the assets. One of the interviews I watched this morning suggested using the GGS on the Frontier so they're interchangeable. Also he mentioned that MF on the Frontier could recover 40-50% of the oil in place.

Regards,

Ed.

Tuckman,

Definitely, August numbers should start to show some green shoots of what's to come. Q3 should show some improvement over Q2, with Q4 being a full Q of improved rates. Also JV could land any day, but the GGS and production should give us lots to talk about before year end.

Regards,

Ed.

Just to add to that, coincidentally your production numbers are quite similar to mine for year end 2023. Lets see what happens over the next 5 months of unrestricted flow, hopefully both of us will be wrong! :)

Regards,

Ed.

Stas,

We know that the mobile mounted until that they use to dewax those wells was on site recently (thanks to the guy that posted the video), that's the one that Art got in to reduce dewaxing costs. So as you say dewaxing treatments are still ongoing. But they have planned for that.

The current upgrades to the system allow for 8.5mmcfd and an additional compressor unit will bring that up to a total of 12mmcfd capacity in the future. So I don't expect any higher than previous peak injection rates of 8.5mmcfd. What that did previously is spike production up to around 1950bopd over a few months after injection rates had increased. Now the high pressure gas can be returned down the new pipe and the wells can operate safely under high wellhead or flowing pressures too. That will remove pressure off the rest of the system. Focus was to be injection in the western flank with a future 9 development wells and two injectors to be drilled in the south west of the field. Yes pressure is directly proportional to production profile. As field wide pressure builds so will production, its probably not as simple as 40% increased injection equals 40% more bbls, as gas has to move from the injectors sweeping the oil towards the producers. So there will be a lag between injection and field wide pressure build up. As the field achieves the increased pressure the production incline will occur. There's two natural drive mechanisms in an oilfield, water/aquifer and solution gas, the MF just artificially mimics the solution gas so adds the drive to get the oil out.

So I would expect that with continuous 8.5mmcfd that can be achieved we'll see that previous peak and then pass it, last time the high injection rate was only temporary, this time it should be permanent. With new peaks as the field wide production this time will be based on 8.5mmcfd rather than what averaged about 2mmcfd last time (they stopped and stared injection at various times to model field performance). With injection starting again late 2022. So it will be very interesting, especially for us holders, to see what it does this time with full injection rates maintained over the long term. I'd imagine that their previous models will look realistic. I'm pretty sure RS is remodeling for the new GGS upgrades, that'll likely be more interesting.

Regards,

Ed.

Shouston,

Well if you go back ans watch a lot of those old COPL videos, it was clear that they quoted the money needed for the GGS upgrade even back then. Also there were firm plans for drilling those two horizontal wells last year, they did a chunky bookbuild and still didn't fund the GGS upgrade until this year. Bonds paid for both the Cuda acquisition and the GGS upgrade. All went silent on the horizontals until Tiburn uncovered the record for two confidential wells (it even says on their site that well permits can't be kept confidential, so they're more than just well permits to drill. So whether they're confidential off COPL's bat or due to the NDA with the JV is uncertain. But it certainly would explain why all that bookbuild money didn't go into the GGS upgrade at that time.

Regards,

Ed.

Yes exactly, the GGS has been designed to allow unrestricted flow from our 9 best producing wells and to allow the rest of the system to flow under the lower pressure. Eliminating the need to flare while production rises, we know what the production profile was from how the wells responded to 8mmcfd previously. We also know from the last production update we were doing 1250bopd approx 150bopd higher than the Q2 average and that is before the GGS upgrade. So with the bottlenecks now removed and the whole system designed for the current model (I'm almost sure there's a new model of the reservoir production profile coming next month too) the production incline is now expected. That improves netbacks and cashflow and at the current wti price very positive.

I just happened to watch some old COPL videos this morning again post-JV approach. I'm now more than ever convinced that the two mandatory wells (3 verticals or 2 short horizontals), in this case two short horizontals were funded by COPL. Most of the long lead items were funded prior to the JV talks around the time of funding Cuda, the bridge loan and book build. All they need at that time was some intermediate casing the rest had been secured. Cuda was subsequently paid for by the bond issue/Anavio etc. It looks quite likely that the 20p book build went towards drilling the two confidential horizontal wells. It'll all come out eventually, likely after the conclusion of the JV. Did the JV contribute anything or were these COPL wells.

All eyes will be glued to the August numbers now that the GGS was completed in July, as we know there was a lot of production restricted as a result of the high pressure and well restrictions. It varied between 300bopd and 800bopd restricted. As others have pointed out these increases are likely to be incremental as the pressure increases again across the reservoir from the increased injection rates, but they're there to be had and there to boost the netbacks and the cashflow.

Regards,

Ed.

Regarding CawCaw etc and anyone else that got impaled on the Liberian exploration, they should have learned their lesson on the risk of exploration drilling by now. That's not what COPL is about now, its about two field developments.

Great to see that the GGS upgrade completed on time and under budget, that's very significant for COPL's future. Even though some come on to suggest they're not making money etc, they had a relatively healthy netback at 1100bopd. That will improve significantly, not only from the cost cutting side, but also from previous guidance of 5000bopd and 7000bopd. We're now on the road to peak production and beyond now that the issues that arose last time have been resolved. It'll be interesting over the next 12 months to see if they need to flare any gas from other wells not attached as they greatly increase the injection rates back to where they were.

As others have pointed out the telling tale will be the monthly production updates and our incline curve now that the best 9 producers on the field have their own kit installed and are now on the high pressure system. Cash balance at the end of Q2 very healthy too, lets see what the next 5 months of production and a potential JV does to that for year end. :)

Regards,

Ed.

Good morning Oxygen,

Absolutely, the large company won't want to miss out at the final stage given the time and money they'll already have spent getting this far. There certainly is more than one large company in the PRB so they'll have competition for acreage. Hopefully progress with the GGS and JV will send us up towards fair value again and beyond our current asset value (long way to go yet).

Regards,

Ed.

Oxygen,

Yeah very true, not only did the tech analysis of Cole Creek not turn up any surprises but it built confidence in the resource. What some fail to understand with the LOI is that the large established oil company approached COPL LAST September, its almost a year on now. Yes we did get the LOI in July. But that was after the company announced back in April that they were discussing commercial terms AFTER ADDITIONAL substantial technical work had been completed which increased their confidence of the resource. So lots and lots of work (maybe including two confidential wells) had been done prior to July. They've been at the commercial terms stage since April then the LOI in July and around 11 months in from the initial approach. Final stages now I'd imagine.

Regards,

Ed.

To quote the RNS from April 20th:

" · Frontier oil Joint Venture discussions are continuing, now focused on commercial terms.

Joint Venture Discussions

Discussions with a large oil company who approached the Company regarding the exploitation of its Frontier oil resources are continuing with current focus on commercial terms. These discussions, as well as the identity of the party involved, will remain confidential until their disclosure is appropriate by agreement. Substantial additional technical evaluation has been undertaken during this period, which has led to a better understanding, and increased confidence, of this resource."

Sounds like back then they had completed more than one stage of technical evaluation and were discussing commercial terms, 3 months later we get the LOI

Regards,

Ed.

Roxi,

Well done on your top up. However I would say that the talks with the JV are already in the final stages. Substantial technical due diligence was completed months ago and even the commercial talks were ongoing before April. some 4 months now and counting. A blockbuster RNS could land any day imo.

Regards,

Ed.

Yeah they're starting to chip away at 4.25p now that the bus of last minute larry's has arrived at the station.

Regards,

Ed.