Member Info for Edgein

Tuvok,

Hopefully no buyout for a while yet, better to get the 2P way up then sell out if they wish. That's why I was a little surprised that they'd go for the jv this early. I thought they would get the first 3 BFFDU down and then JV so that they would then have horizontal frontier wells on both CCU and BFFDU. The jv terms should be good enough to get us to fully funded regardless. It certainly slams on the accelerator if/when Art agrees terms with the recognized company.

Regards,
Ed.

ASM,

Hopefully the wait is nearly over. Cuda and Atomic in the bag, wax and pressure that restricted flow both being dealt with and material news on the horizon too.

Poppy agree, most will be fully loaded now, there's been no excuse given the huge discount to reserves we've been on since acquiring Atomic let alone Cuda (similar to JSE, SQZ etc). Market was totally oblivious to the significance of buying Cuda and getting Cole Creek and the non unitized lands up to 100% and BFU/BFFDU up to 85%. That was buying the 2P for next to nothing and getting the deeps for free! There have been many here adding continuously, there may still be a few fence sitters waiting for even more de-risking as we could well see if one/both of the material news items drop. Those flaring permits will allow those restricted wells to flow, so production numbers from mid October onward should raise a few eyebrows. Remember too that Art just needs about $10m to get out from that old hedge. Judgement day for fence sitters coming soon imo too.

Regards,
Ed.

ITD,

Yes I know that some of us discussed that on here just the other day. I'm not talking about the October presentation, I'm talking about the August presentation (RS report). The RS report covered the area of Cole Creek (is frontier) and the western flank of the BFFDU, if you think that the RS report only covers the green area you need to rewatch the August presentation again.

Regards,
Ed.

ITD,

I suggest you re-watch the presentation regarding the RS report and you'll see which areas it covered.

Regards,
Ed.

ITD,

What I would see as a fair JV structure would be 50/50 on the CCU, so $50-75m cash payment for those 2P reserves. It would reduce 2P by about 6-7mmbbls approx. That's only the basics covered as we now know there's more Frontier sands and Dakota there too, so perhaps $50-100m free carry to get into the additional CCU sands and perhaps 42.5% of at least the western flank of the BFFDU. To get the whole of the BFFDU at 42.5% and 50% of the non-unitized lands too I would like to see the top end of that scale or above as that would be all of the future upside into a jv. Those sorts of numbers would be piddly cash to a recognised company.

I'm hoping that the jv is just on the CCU/bulk of the RS report discovery and we keep most of the BFFDU and non-unitized blocks for a later date (see how it goes type of deal and jv at a higher price later all being well).

Regards,
Ed.

LLP,

Exciting times for sure, the recognised company could be any one of those willing to hit the accelerator on the deeps. We're not due to start drilling on the BFFDU until next year so still time yet to get a deal concluded. In the mean time though what's the BFU production profile gonna look like, hopefully exponential.

Regards,
Ed.

Tiburn,

Agreed chap, they've done well to finance these acquisitions in a weak market. We've now assembled 40mmbbls 2P (gross before royalties) at bargain basement levels and have the huge Frontier/Dakota development as described by the company (confimed by the RS report). But the market has yet to acknowledge the significance of getting that flaring permit, its really now the starting flag for this operation.

Not only the progress to date in getting the assets on the cheap but Arty has been overcoming the challenges, the waxing and the clear response of those wells once cleaned up (all in recent presentation). The flaring permit was the key to solving the pressure issues as we know, but now he's doing it at 85% interest given the strategy to date. As Art hinted we're now back on that steep incline curve as there's a lot of restricted production, so well done to those getting in at the start of the journey still to come. Just imagine if they do complete the jv on the mammoth discovery. Companies like BOIL just show how cheap we really are.

Regards,
Ed.

Hi Tiburn,

Well the way that I look at these assets is that they're divided into 3 as highlighted by Art, BFU, BFFDU and CCU. Cole Creek is Frontier and if you look at the slides (Page 4 and 19) none of the BFFDU overlaps with CCU, its all under and beyond the SE of BFU (mapped as green boundary area of the presentation), called BFU below 3000 ft. RS report area covers CCU mainly and western flank only of BFFDU. So if a recognized company wants into the massive discovery they'd have to jv over the CCU, potentially the BFFDU too, but the bulk of the area assessed by RS was on CCU and clearly defined as separate from the BFFDU in the October 2022 presentation.

Regards,
Ed.

Just to clarify what I mean small is that say half of our reserves attributed to CCU could be worth the bulk of, or perhaps even greater than our current market cap. Even take $8/bbl at the current $ exchange rate.

Regards,
Ed.

Opulentia,

More so than that it significantly increases our asset value when the oil price is this high. Worth noting too if Art does farm out part of our 100% owned CCU it has reserves. Those 2P reserves will cost $$$ for a jv given the high oil price, would that make refinancing of the current debt a little less important, perhaps. Those $$$ would be small for any recognized company but likely very meaningful for us, especially at a time when COPL are upgrading the facilities.

Regards,
Ed.

Not all long term holders hate it, some of us saw it as irrelevant, just noise. If you prefer less stupid comments, good or bad, perhaps just post a little less frequently and the amount of stupid comments will fall off a cliff.

Regards,
Ed.

No surprise really, there will be those that are short here too. Its not reached the sheer panic of those shorters on EUA during suspension, but one RNS here could catch them out here too. I wonder which one it may be.

Regards,
Ed.

ASM,

Sure its still in play at present, but as Shaa says its in limbo. I have to say though if it were to come back into play now I'd like COPL to sell it and use the cash to pay off debt or drill BFU/BFFDU. They now have much bigger in the USA than in Nigeria as well as much better economics/taxes, also onshore vs offshore. Every $ spent would have a much better return from the US assets.

Regards,
Ed.

wwal,

More likely to be a partial free carry than a loan imo. Also both of these things will need significant DD and legals etc so will take some time. Hopefully as the company has hinted we'll get updates on both this month, fingers crossed.

Regards,
Ed.

Shaa,

lol very true, Mr Karim is certainly missing in action when it comes to Shorecan, so much for building that company into something meaningful. Too busy with Shoreline etc to give us a second look it seems. They could have pursued other assets, I'm very glad the other assets that Arty has pursued have been in USA as we've now got a dream scenario. Art has taken us from a perilous situation teetering on the edge with a disputed OML226 to literally multi billion bbl (in place) potential in the USA. Quite a feat indeed. Leave the African stuff to someone else I say, we've enough to concentrate on.

Regards,
Ed.

Good morning Shaa,

Yeah I reckon its only a matter of time before we see fair value plus some potential valued in here. Several potential triggers coming up, not just sorting out and upgrading BFU back onto that steep incline curve but the RBL and JV. Once we are on monthly production increases and annual reserve increases the momentum will be there (especially if that's accelerated by a jv). We all know that the potential here is off the chart in terms of production and reserves. CCU and western BFFDU already determined to be massive, as Art said in an interview its just mechanical risk as they know what's down there.

Well as this is basically 100% a USA company now a listing in the US makes sense for sure. I'd imagine that progress on the BFU with RBL and jv would see us well towards $100m cap. Certainly if a jv starts month on month churning out horizontals on the massive find we'll get there and beyond. So I'd certainly give a thumbs up for a US listing, I see the CSE listing as pretty irrelevant. I'll be interesting to see the terms of any potential jv, lets hope Art does indeed make progress on that this month.

Regards,
Ed.

Bigbench,

Not sure that Art would agree to those terms. But I could see a large company with a lot of drilling experience in the PRB looking for operatorship of at least one of the assets. I hope the jv is just for the RS report/CCU area, as it was this large discovery that sparked their interest. That would leave COPL to work on the rest, but retaining a material interest in the massive discovery.

Regards,
Ed.

Bigbench,

It sure would be a cheap way in at present even compared to a jv etc. They have 31mmbbls of 2P so at a modest $9/bbl in the ground (x10 that flowing) that's an impressive £249m or currently 93p/share. When you add in the gas injected to date at current value it adds another £70m bringing that up to £1.19/share. That doesn't include the massive discovery or the upside on the BFFDU and I doubt at the moment that Art would be willing to give those away for free. As there's been a further £107m spent on infrastructure I would put fair value around at least £1.20-1.50.

But then lets see what happens with the possible jv on the massive discovery and if it also includes the area around the BFFDU too.

Regards,
Ed.

These threads get more and more ridiculous by the day. How are they going to buy anuyone out for £20-50m when the cap is already £40m when they have 31mmbbs of light oil 2P reserves? What idiot would think that is even a remote possibility? They have £70m of gas injected into the field, £107m net spent on infrastructure (through Cuda and Atomic and upgrades since). Even at a ridiculously low $5/bbl for USA light oil that would still be £138m. Its not all about the massive discovery, they also have production and reserves at BFU. COPL aren't selling from a position of weakness, in fact production is due to surge as they upgrade the gas gathering and selling oil into strong prices.

Regards,
Ed.

Angus,

I currently see core value here at around £1.20-1.50 based on current 2P. Take their recent presentation there's scope to increase these BFU reserves through field performance and existing contingent resources. Of course it would be worth more than that if they hit their peak 9,000bopd gross target (assuming exchange rate and oil price stay stable).

Now comes the harder part, what's Cole creek and the BFFDU worth. Well that could be determined by the terms of a jv or if they go it alone. Take 993mmbbls in place and 10% recoverable, well that already would be x3 the current size of BFU in terms of primary recovery. There has also been talk of up to 40% recoverable on MF of the Frontiers, that would translate anything up to 400mmbbls recoverable without even looking at the BFFDU. So pick a number, there's transactions into the billions in the USA for companies with less than 400mmbls recoverable. Even the 90mmbbls is well into mid cap/large cap territory. So pick a number and make it a large one if that plays out.

Sometime in the future we may be valued at our core value, perhaps even higher, lets wait and see. Valuing in some hype like most of the rubbish on AIM (I know this is main LSE listed before anyone chirps in) maybe a bridge too far. But a fair asset value would be a good start. So lets wait and see the terms of a JV if they sign it off this month or near term.

Regards,
Ed.