Member Info for Edgein

Shaa,

Just to follow up on the 2P reserves of CCU, here is what it says on the COPL website:

"Third-party reserves auditor forecast gross production rate plateau of c.3,500 bbl/d to 4,000 bbl/d under the 2P reserves case starting in 2026. Additional production increases from a miscible flood project would be in addition to this."

Shaa true, current reserves not reflected in the share price and if the large discovery works out 2P could be a magnitude higher than that. True the GGS should be the start of the production incline at last and due to be completed this Q and will hopefully unblock the entire process. Of course we could be going flat out with a possible JV by then too. Will be interesting to see if COPL can book those 8000 acres of Frontier 1 in the mean time.

Regards,
Ed.

Shaa,

Not sure about the empty wells as such, yes CC has been under primary production for some decades from the Frontier 2 only and will have some void space, but around 10mmbbls of 2P (from memory) plus contingent remains in Cole Creek in current recoverable reserves. These are old historic vertical wells, not modern fracked and completed wells. So still lots of 2P, contingent and prospective in the Frontier 2 for a new potential JV to exploit with modern horizontal producers. Likewise the Frontier 1 is starting to shape up the same way and if Art and co can also book some PDP reserves in Frontier 1 as well as Frontier 2 (the CCU recompletions) then the entry price goes up even further. Oil reserves certainly aren't free to be given away to a potential JV regardless of its size. As COPL has shown some of these old wells can still be reentered for cheap recompletions etc.

Regards,
Ed.

Bob agreed, the CC and possible co2 injection into cole creek is an exciting prospect for sure. As we're still priced as if we're going bust we've a long way to just get to value in our current reserves let alone reserves based on possible EOR such as Co2 injection. Some day, hopefully soon, the market value will start to reflect current assets.

Regards,
Ed.

Hi Nige,

I'd imagine that the rebrand will come on the first oil and gas acquisition, lets hope that's soon. But we might see Mt Weld drilling first though.

Regards,
Ed.

Nige,

I think that's way too steep for our 41% share of Mambare. I was thinking the entire JV (IBM) might list at around $20-30m as a highly attractive valuation, perhaps $5-6m of that going towards Mambare, a few mill for the Argie asset and the bulk being Wowo gap as its got indicated. Anything over $1-2m means that CRCL are majority cash and Mt Weld et al is in for free (once the recent £1m placing completes in full etc. It'll be interesting to see if BM Pty will match the valuation of these assets and how much that will be. Would be nice if we get a Mt Weld RNS next week (fingers crossed).

Regards,
Ed.

Nige,

Well that would be really impressive if they landed that volume of cash considering the current cap. Management did say:

"Restructuring its PNG nickel assets, positioning them in a broader portfolio, on a fully carried basis, ready for a standalone listing which we expect to be at a highly attractive valuation."

So they must have an idea what that might be. The pre-emptive rights should be at an equal value to take that into account. It would be great if that amount was anywhere close to £8m. At least it should be releasing value from something the market is pretty much not putting a value on. Lets see.

Agreed chaps, good news from Riversgold, hopefully see some action on Mt Weld near term.

Regards,
Ed.

Nige,

They have right of first refusal. All they have to do is put in an equivalent offer and its theirs. We just need to know what the quantum of that offer is. Well Nige its not as if its priced in, market has been ignoring these large Ni assets for several years, they didn't support the price when they shelved and eventually got rid of those low margin FGS assets. So lets see how much of our cap will be covered by cash. That cash could be put to good use towards an oil and gas asset, perhaps eventually Mt Weld (after the first carried stage if they hit commercial REEs) or Canegrass or even Dempster. Yes it would have been nice to see those Ni assets be priced in eventually but currently market is happy to ignore those and the possible JV. So lets see what happens.

Regards,
Ed.

Nige,

In the coming weeks I'm hoping to see Canegrass acquisition complete and fingers crossed we'll get mt Weld drilling commenced through Riversgold. By end of May second tranche of the cornerstone funding coming in. Could be a little while yet before they announce an oil and gas acquisition as these things do take time, but you never know, previous interviews suggested they were down the road on this already. Near term we should hear more about how much is being offered for our share of Mambare. So still lots to get updates on near term.

Regards,
Ed.

Regards,
Ed.

Luke,

The resolutions were authority to place more shares, firstly to complete the Canegrass acquisition and then an enlarged amount likely for completion of the recent cornerstone investor and the potential oil and gas production.

Regards,
Ed.

Shaa,

It sure has cut down the cost and time when they're not planning more than one main line to do the job on the BFU. Yeah it'll be interesting to see what happens to the production in Q3 once these wells are all tied in and injection rates heading back for 8.5mmcfd again.

Yeah it sounds as if they're at the show me the money stage of the JV. With actual reserves in the Frontier it'll be interesting to see how this deal is structured, also given the size of the resource too as covered by RS (almost 1bn bbls n place on part of the assets).

Regards,
Ed.

CW,

The only thing they've done on the massive discovery is look at logs of historic wells and one vertical completion. The production mainly comes from the Shannon reservoir at the BFU and its restrained by infrastructure and waxing, something that the company is suggesting is about to be overcome.

The massive discovery comes from the Frontier at CCU and BFFDU and those wells need horizontal fracced/stimulated producers and that's why its very handy to have a large company approach us, a company that apparently operates in the PRB and therefore will have experience in completing these types of wells. When Mobil oil first drilled these wells they didn't have directional drilling or frac technology let alone modern logs or completion techniques. COPL did prove that they can get live oil from the Frontier 1 for the first time in this area and to date have only reported on return of water based drill mud as well as oil and not formation water. Therefore it will be interesting to see what the first modern day horizontal completions into CCU Frontier will do. Fingers crossed not long to wait for those.

Regards,
Ed.

Good moring shaa,

Sounds like a radial GGS as there is only mention of one 5 mile central line mentioned so far with the wells being attached to that one line. Previous designed suggested more than one main line like a trunkline syetem, but from reading today it suggested radial.

Regards,
Ed.

That should have said CCU and BFFDU, rather than BFU.

Regards,
Ed.

based on the RS report showed the areas of the Frontier at CCU and BFU that contain the 2P reserves, contingent and prospective resources and the well placement to exploit those. I'll be interesting to see what commercial terms those attract. As the CCU recompletion has show that this is far from an exploration target at the Frontier 1. Moreover the Frontier 2 at CCU already has reserves let alone resources. Looking forward to seeing those commercial terms.

Regards,
Ed.

Stas,

Even better still is that as that miscible front moves across the field they can tie in individual wells to the 5 mile pipe as and when their pressure increase like these first 8 wells. Therefore hopefully this first stage upgrade will allow those high rates of injection that you mention.

Regards,
Ed.

Current timetable for the low cost $4.5m upgrade to the GGS is quite near term. Construction is to start in just 9 days and is to be complete in June/July and that takes 8 of the current high pressure producers onto the new system. The possible JV partner won't be interested in this as they have clearly said in today's release they're interested in the Frontier which rules out the BFU and Dakota.

"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."

Also this statement shows how irrelevant the bb guess the netback games on here are:

"To increase average daily oil production from these wells, they will be converted to pumping-flowing wells with enhanced pressure rated wellsite equipment to permit safe and efficient operations. Field operating costs will also be reduced measurably due to the reduction in well interventions to remove paraffin blockages."

Not only are the netbacks going to increase due to the improved infrastructure they also change on the bopd produced and the current wti price etc etc.

Come on Art get that final stage of commercial terms done and get those Frontier wells started this year. Yes we've read today that the current Frontier 1 well is showing no decline and expected to add 100bopd when brought back online.

Regards,
Ed.

Nige,

lol that'll do!

GGekko,

Yes all placings are dilutive to shareholders, but can be accretive to company value. Yes the share price and the fact that the new holder is a cornerstone investor is important as none of these shares are likely to see the market any time soon. Its not a discounted placing by a money lender, its a new guy being brought in who seems to have a lot of financial contacts (likely to acquire oil and gas assets). So this isn't the case of shares straight away are dumped and hit the price as you were expecting. No reason for the share price to drop when the placing is at the current share price. Also people were buying a little regardless probably due to the small market value here and the amount going on, plus the current assets. I expect any further dilution linked to the potential oil and gas production asset to be highly accretive, lets see what they reveal.

Regards,
Ed.

The placing price is 0.35p from memory, also this new guy is a cornerstone investor, therefore a holder of stock not a seller. No reason to expect a drop in share price as a result.

Regards,
Ed.

Steve,

Yes, I should proof read some of my posts! :) yes its potentially an RTO, reverse takeover.

Regards,
Ed.

Nige,

The example I used there is still pretty small. Two of my holdings have done or are doing RTO in oil and gas. I3E picked up around 5000boepd on their RTO, SRSP are in the process of signing up a 10,000bopd net Angolan asset, plus a Nigerian production sharing contract. So off the chart upside on on where the companies were prior to RTO. Brazilian assets could be anything from a redevelopment of an old field right through small or larger producing assets. When they talk £15-35m cap as mentioned in that interview (15-20-25m early on and 30-35m late in the interview), that suggests a smallish asset, perhaps around the size mentioned in the previous post. If its a mature field they may grab a bargain from one of the large operators. Will be interesting to see how the rebrand goes.

Regards,
Ed.