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Art,
Perhaps you weren't in here at the time. When most of these warrants came into existence that was the share price at the time. Then Mr Zhou and Mr Karam came in as cornerstone investors and took shares and warrants at twice, yes twice the share price at the time, the 0.4p warrants. So yes that also was an excellent deal for those of us who had accumulated at 0.2p and below. The company needed the money at that time to clear historic debt and get the Angolan assets in. All Mr Karam and Co have done is create shareholder value since at a rapid pace, hence why its multibagged. Not sure what you are expecting. So these old warrants held by Mr Jennings, Mr Zhou and Extraction, I say well done to them, they greatly helped this little company at that time and Align are now cashing in. Very early imo, but heck a profit is a profit so Mr Jennings choice.
Regards,
Ed.
Art,
I guess you are probably aware that CRCL are an NOP, the timing of the flow test results will be set by the operator not CRCL. In the mean time if their largest shareholder wants to put in place an option to buy 99m shares from a seller in the market they can by all means do so. As a holder I'm not sure what you're making such a fuss about, the deal was done at a significant premium to the share price at the time, neither Extraction nor CRCL are in control of the news flow. So if the flow rates come out and confirm that CRCL are an E&P and the share price goes above 1.5p and that option auto triggers are you suggesting this is a bad thing for shareholders? We'll see if that happens how many will be complaining.
As for dilution, these warrants have been in existence for almost a year now, did you forget about those or just want to be dramatic now? These don't come as a surprise to anyone who has held for at least a few months and did at least the basic research. Most holders will be delighted that the warrants are being converted and being taken out of the market by the largest shareholder at a large premium to the share price. These boards are a strange place at times that's for sure. Shareholders complaining about deals at a premium, that's a first I have to say,
Regards,
Ed.
Confounded,
Exactly, back when all that was happening they just had a possibility of completing the Ni JV and that's about it. I remember days it dipped below 0.2p. Folks then were able to get large orders filled at or below that warrant exercise price. How things have moved on since then with the drilling results in Angola and now the company describing itself as an oil E&P company. Like you say, no wonder those warrants are now in the money. Mr Jennings like all other holders can buy or sell as he pleases. Some will get off at the start of the journey and some much later.
RL yeah that about sums it up, debt cleared and now possible overhang removed from 1.2p. Extraction cannot convert more after that option completes without going over 30%. They must see good upside from becoming a production company to offer such a premium. I guess the market will catch up eventually, perhaps even quite soon.
Regards,
Ed.
Looks like Mr Jennings/Align have exercised those 100m warrants ahead of filling that option.
I do like the sound of our new title:
"Corcel Plc (London AIM: CRCL), the Angolan focused exploration and production company"
Regards,
Ed.
Hi Nige,
I sure did. A lot of the vimeo video was also directed at the battery metals side of things too. They're seeing at least another 15 years on the oil and gas assets and also want to run the battery metals alongside that too. So I reckon they'll still play an important role for the company for the foreseeable future. Those Ni assets are still Corcel's at the moment but they're listed in the presentation as divestment in progress so they'll likely still get a mention until the sale completes, but the in production assets being looked at in Angola and other African countries are likely to be oil and gas. Will they pick up more mining assets in the future beyond that, lets see.
Regards,
Ed.
Art,
Not really sure what you mean by complete silence as during that time there's been multiple RNS releases, articles, vimeo video and a presentation. That presentation showed that some wells on Tobias had outstanding production and some had more normal flow rates. The normal wells flowed between 2500-3000bopd according to that article, very commercial for a shallow well, the outstanding TO-4 flowed at 12,500bopd. I'm sure we'll find out in the near term what TO-14 and then TO-13 will do. But yes it looks like the flow rates from the past wells have been anything from very good for a shallow onshore well right up to world class Kurdistan type flow rates (TO-4). If you think you can find better out there for this cap, then go for it, there's a lot of listed O&G companies. I'm staying put though.
Regards,
Ed.
Art,
That is per well! Those would be the sort of rates that AXL get per well and many times what BCE has got. A few of those and they'll be up there at their gross production target. Personally I would count that as a very good start considering the company is current doing 0bopd.
Regards,
Ed.
Smkr,
Yeah absolutely, they're doing everything in the right order, not rushing into things. Ambitious and aggressive but not reckless. It has the feel of the next Tullow about it, except onshore, if Tuenza comes in then it'll get there sharpish. Infrastructure for the FFD could make it easy to tie in developments on KON-12 or KON-16 quite easily. The fact that they could soon be in the market for more production is a perfect progression. Possible flow rates and CPR coming to progress to reserves as a good base to build on including more acquisitions. I'm waiting on another tiddler to come in over the summer and if this one hasn't gone too far by then I'll add some more.
Regards,
Ed.
Smkr,
Good find! Another bit of PR to reinforce the production by Q4!
Also my favourite line in the article:
"Karam said the company could soon be in the market for additional projects in Angola or elsewhere in Africa, most likely already-producing ones."
These guys and gals are not hanging around. Sounds like they're being careful what they pick up in Brazil too, not making any rash decisions.
Regards,
Ed.
Morning fellas.
Nige I cannot speak for CRCL so cannot say what they would be happy with per well. But what we do know is that the target is 17500bopd gross by year end from Tobias. Presentation states EPS may require additional wells. If they hit that target I'm sure the company would be delighted, I know I would as that should way more than pay for the FFD costs. That would equal substantial long term revenues to the company with rock solid netbacks according to the presentation economics.
Luke,
Exactly. A very good way to promote the conference on the 19th if they can do that off the back of some good flow rates. Give their presentation a real boost and possibly get more US involvement in the bid round planned for 2025. Hopefully CRCL will be in for some more then too. Getting the word out there and getting CRCL's name out there is all good. Our PR has been getting stronger in recent weeks with the short intro on here, the vimeo and the recent company presentation.
Regards,
Ed.
Its not all about Cameroon at TRP:
6 March 2024
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its subsidiaries, the "Group")
Strategic Farm down in Block 3B/4B Orange Basin South Africa to TotalEnergies and QatarEnergy
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX ‐ V: EOG), ("Eco") the oil and gas exploration company focused on the offshore Atlantic Margins in South Africa, Namibia, and Guyana, is pleased to announce it has signed a Farmout Agreement ("FOA") pursuant to which Azinam Limited ("Azinam"), its wholly owned subsidiary, will farm out a 13.75% Participating Interest in Block 3B/4B, offshore the Republic of South Africa as part of an aggregate 57% farm down transaction along with its Joint Venture ("JV") Partners Africa Oil SA Corp. ("Africa Oil") and Ricocure (Proprietary) Limited ("Ricocure") to TotalEnergies EP South Africa B.V., who will become Operator ("TotalEnergies") and QatarEnergy International E&P LLC ("QatarEnergy") (the "Transaction").
Upon completion of the Transaction, Eco will retain a 6.25% interest in Block 3B/4B.
Come on Jeremy get us some action from South Africa and remind everyone its a valuable asset! CEG also got a deal with Chevron today so it seems like its farm-out season again.
Regards,
Ed.
Good morning Luke,
Thanks for posting that article on here. Makes interesting reading that the Angolans are promoting their activities in the US. Hopefully that will bring in more investors before and after the 19th, specifically naming us alongside Exxon won't do any harm that's for sure! Wouldn't it be great timing if the flow rates of TO-14 were known before the 19th (fingers crossed).
Regards,
Ed.
Hi Nige,
Yes AET are on around that, I think their next acquisition when it completes will take them to around 6k bopd, but ye as you say they'll end up with more debt than CRCL. Makes us look very cheap for sure. When you look at the likes of UPL, BOIL or AXL then very very cheap.
Regards,
Ed.
Nige,
Good man, exercise is as important as making the cash! It'll be nice to see the warm weather coming back in again soon.
Exactly, when you read that presentation £50m looks quite easily doable when they predict over 3000bopd net to CRCL in the near term (2024).
If they go over 30% they would have to make an offer, personally I don't see them going over that limit. Mr Karam talks about making a unicorn on AIM,
Confounded,
I would imagine that over the next 12 months or so all of the in the money warrants will get exercised, some of those are held by Extraction as well as Align and Mr Zhou. So the shares in issue are likely to increase. That may allow Extraction to convert some more. But with those loan notes they can also take cash plus interest rather than conversion, so that's another option rather than convert. The warrants I do expect to get exercised at some point though. Yeah that's a good point, they prevented a possible overhang, put the shares in solid hands as you suggest and may mean less conversion of the notes.
Mr Karam and CRCL are showing others how its done, very well organised and executed so far. In terms of comms up there with the best of them on AIM. A clear and concise path so far on how they'll grow the company. Looking forward to the move on to C. :)
Regards,
Ed.
Morning Nige,
I sure did, hope you did too!
My thinking is that it depends on the flow rates. EPS is for 17500bopd according to the presentation, it will be how many wells that get us there. If its two then fantastic what a result, if its 3 or 4, no worries our 20% gross cost is likely to come from the notes yet to be drawn. So its now all down to how many wells to get to target production. For the FFD it will take quite a few wells to drain the field if like suggested its fully recharged.
Extraction are an investor and looking to make money. They wouldn't buy at a 37% premium unless they see upside well beyond that imo. Mr Karam set is options to vest right up to 6.4p, if they were to hit on that 628mmbbls exploration target on KON-16 that would look cheap.
Regards,
Ed.
Good morning LoP, guys and gals,
My thoughts on flow rates? Imo both wells should flow quite well, personally anticipating thousands of bopd for each of TO-14 and TO-13. We may get an update sometime during the test period or may have to wait until the end (around the end of the Q as per presentation). Drilling results were certainly very positive with multiple potentially productive zones in each well, return to original pressure, mobile oil and oil shows throughout the Binga in both wells. TO-14 being very close to an outstanding production well (TO-4). We then see the comments that they may require additional wells for the EPS and there is an addition appraisal slot in the presentation up to the start of Q3. That could fit in one or more wells depending on rig availability etc. EPS is scheduled to do 17500bopd (gross) approx in Q4, so that is where the target is from these planned wells. Could the current two wells do that, perhaps given what TO-4 did, but I'm still thinking one or more additional wells at this stage to get that target. I'd be happy with much lesser flow rates due to the fact that when I bought in here this was a £3m company with some mining assets and no sight of any revenues, just a JV pending. So if it takes them a while to get to FFD no issue for me.
We'll know in the coming weeks just how good these wells are and how many more wells between now and the EPS. Either way CRCL are well funded.
RL,
What are my views on the recent trading? I agree there's likely to be a good week ahead. The announcement from Extraction SRL to acquire 99m shares from Align removes the potential for an overhang at 1.2p and it was done at a 37% premium to the share price at the time. That suggests that Extraction SRL views 1.2p as cheap currently. That deal and the approach to flow rates should keep volume and demand up imo, higher than normal as we approach results. Given the year end production target and how well funded CRCL is during this time I see 1.2p as very cheap too. Interesting few months ahead for sure.
Regards,
Ed.
Hi Guys,
The economics are in the presentation. They set out a case for $70/bbl and $80/bbl. Not sure if there is a domestic oil rate for Angola, but with the mono buoy they do have an export route as they mentioned. They should be able to sell at a price around that of other west African oil such as bonny light. I'm nearly sure I read somewhere that Tobias oil is 31 degrees API therefore also light oil. So I'm currently using a sale price of around $80/bbl and $20/bbl opex, so an NOI of about $60/bbl. As for net profit per bbl, that's harder to judge right now as you need to know how much per year is cost oil, i.e recovery of devex, how much their debt would be, you would get cost oil recovery before paying tax etc. Then there's amortization and depreciation of reserves to factor in and for that you would need to know how much was produced and therefore their 2P position. So not going that deep into the economics at this stage. But for the economics given recently of Opex $20/bbl, Sales of $70-80/bbl, IRR of 71-89% (from the presentation), netback of about $60/bbl, the term potential cashcow is hovering around my mind for some reason. :)
Lets be having some flow rates first though, lets hope they are as exceptional as what Mr Pi is thinking earlier today.
Regards,
Ed.
KS,
Not quite true though, the agreement for the option is for shares not unlisted warrants. If for example that VWAP mechanism is triggered around 1.5p, Align/Mr Jennings has to sell 99m shares. Personally I wouldn't class 1.5p as well north of 1.2p. At the moment Mr Jennings would have to exercise warrants to fill that option as he doesn't currently have 99m shares.
PB,
As for Mr Jennings/Align suggesting they're not causing an overhang then why has he been reducing via TR1's recently and then also agreed to sell another 99m shares in the option? Without the option in place looks like a 99m share overhang at 1.2p to me. Good move by Extraction to lock in Mr Jennings to June though (or until the VWAP passes 1.5p like the RNS suggests). The 1.2p option certainly does partly take a large seller out of the market at 1.2p and removes what would have been another block on the price at/above 1.2p.
Regards,
Ed.