Member Info for Edgein

Harry,

First thing I would say is sit back and wait for RS to complete the Resource report/CPR. As Art pointed out they've noticed a few things that his team has missed. So wait for that. Art also said that the Frontier is about 8% recoverable, but with the use of MF (the current infrastructure sits above the first 16 permitted well locations), that increases to 40-50% recoverable. That is a much more direct comparison than comparing 2P with Nigeria. The large discovery under BFU is now 85% wi and CC 100%.

Stas,

I disagree on I3E. Folks by no means have missed that one, they've not even done a full year of drilling on those stacked targets and they've another 450 development well locations. This is their first full year of properly developing Canada and we're just out of Q1. I won't be surprised if/when their production and reserves multiply in the future. Like COPL its very early days for them.

Regards,
Ed.

Absolutely he just bought Cuda's 2P for $1.54/bbl and the Atomic deal at $2.18 looked like a great one when oil was at $39. WTI is a lot higher than that now! Of course none of that current 2P covers the Fed Deeps discovery, its just BFU and CC.

Regards,
Ed.

They picked up around 13mmbbls of 2P for lower than the metrics of the Atomic deal, well played Art! As a result the underlying value has risen to $380m. Should get refinanced later in the year off the back of that. In the mean time though they can use the bookbuild and increased cashflow from the acquisition to resolve the production constraints. At least everything is much clearer now. BFU 85%, Fed Deeps 85% and CC 100%. Happy days, onward and upwards, unleash that production Art!

Regards,
Ed.

BB2,

Yeah that's a possibility. If you take a look at SRSP they've been pretty much a never ending story in terms of their RTO, they lined up $200m from Trafigura to acquire a Nigerian licence. Before that they had no reserves and a dreadful operational performance. So if they can get their hands on that sort of finance I can't see financing for Fed deeps/Cuda being a big deal given the level of 2P reserves and NPV we have here. SRSP were a cash shell, pretty much like COPL back in the 0.04p days (their licence in Nigeria had also expired). So COPL in a much stronger position.

Regards,
Ed.

JtD,

Well said. I wonder is it purely coincidental that the results will be published after expected financial close of Cuda USA time (after working hours). Could be quite an interesting read tomorrow, lets see. :)

Regards,
Ed.

DB,

There is a company that currently has 175k boepd and over 400mmbbls of 2P. If all goes to plan and as expected I don't see why COPL couldn't be up there with those reserves at least by 5 years (60 months). By the way that company is capped over £4bn and almost $2bn in debt. If all goes perfectly and as expected with the new discoveries in the Frontier and Dakota I don't see why COPL couldn't be on at least 50-100k bopd and 300mmbbls within that timeframe, especially if they secure Cuda's interests in all these assets. Securing Cuda could allow a future farmout of any one or multiple of these assets for at least a portion of free carry etc. For example if they get Cuda they would have 100% of CC.

Regards,
Ed.

Doug,

Yeah I agree, I would imagine that Art has bid enough to weed a lot of the smaller players out of contention. A bid of around $30m would be around $3/bbl, that's a damn fine price when WTI is circa $115/bbl. Would anyone bigger be interested given the current stats of the assets or would they outbid Art based on the future potential. I guess we're gonna find out soon.

Regards,
Ed.

That's very sad to hear about Jay passing away. I just knew him for years on these COPL threads and through PM's about various stocks. He certainly was one of the decent chaps on these threads. Like others have said I hope that his legacy in COPL pays out big time over the next couple of years as Art gradually reveals his plans here and his family can see the benefit of that.

Regards,
Ed.

So I don't see there being any issues financing Cuda should they win the bid. The debt for Cuda would just be like that of Atomic based on the independently verified 2P. Cuda are the same assets after all too. With the cash raised previously and at the current oil prices, cash and cashflow should cover the equity part of any deal imo. they would likely need a new senior debt package for the rest. But that adds around 12mmbbls of 2P, if successful, therefore at the current oil price there's likely willing lenders. We're talking half the size of Atomic. But cart before the horse, lets see who gets Cuda.

Regards,
Ed.

BB2,

In terms of discovery, not a big lot of difference, both COPL and PANR are going to need to drill lots and lots of horizontal wells to prove up reserves to 2P. COPL as many as 3 wells per acre per formation (as they're horizontal). The real difference is the value attributed to that. PANR lots of oil priced in for a 60bopd well, COPL very little priced in, not even current 2P let alone what might be in the massive discovery.

Regards,
Ed.

He should be the headliner at the likes of proactive one2one forum displaying the new discovery for all to see, it even flows more from a secondary formation than PANR does, let alone the other proven and probable reserves. We've even much more short term production potential too through the mf of BFU and CC. So after Cuda comes to a conclusion I want to see Art out doing a publicity tour. Where for art thou Art? :)

Regards,
Ed.

Kdogg,

As for the contents of the upcoming finals its hard to say exactly what will be covered at this point, buy we do know from the timetable released from the receivers etc that Cuda is coming to a conclusion soon.

I disagree with this statement though:

"People are getting ahead of themselves with the discovery imo - the lack of significant SP movement since its announcement is telling. I just want us to get CUDA for a good price and start ramping up production ASAP - I'm getting tired of waiting now, patience really starting to wear thin..."

All the share price tells me since the 10th of Jan announcement is that the market is still completely oblivious to the 2P here. Partly due to the lack of comms imo, also having an up to date website is also essential as most "investors" these days have the attention span of a gnat. As for COPL getting ahead of itself of any of its investors, it should be about 3-4 times higher based on Atomic, that would be a good start. The likes of 88e, PANR, EME etc etc that's investors getting ahead of themselves, I'm looking forward to COPL catching up to its 2P.

I have a gold investment and the management there do about 5 or 6 conferences per year, let alone presentations and PR. Something that AM seriously needs to work on after Cuda as imo the wider market is totally oblivious to the 1.5bn bbls etc.

Regards,
Ed.

Harry, possibly, the results sure will make for some interesting reading. Operations more so than financials of course, also acquisitions do have an effective date before the closing date too (if we're the winner). Not that it matters much as Cuda are likely still in arrears to SWP over the mf anyways. But all will become clear soon.

Regards,
Ed.

as they unleash the winning bidder of Cuda. Shocking that we've currently 2P currently in excess of $400m from the Atomic deal and a cap a fraction of that, let alone potentially being in the running for more 2P at Cuda or the 1.9bn bbl discovery. Once this one pops it will be time to pick a number.

Regards,
Ed.

Pondering,

"Marcellus, Eagle Ford, and Haynesville accounted for approximately 47%, 22%, and 18% respectively, of our estimated proved reserves."

That's all shale oil which has vastly different production profile and economics to conventional light oil. Shale oil has a significant decline curve even within the first six months of production. Conversely BFU is on an incline production curve. Hopefully on a much steeper incline curve between now and August, come on Art lets be avin it.

Regards,
Ed.

Tradinglad, many years ago when oil was previously $100-140/bbl companies would pay approx $15-22/bbl of 2P in safe areas, but also the metric of approx $65k/bopd of PDP could also be used. Saying the target for example was a company with 500bopd and say 10mmbbls 2P would fetch around $32.5m for that or about $65m for 1,000bopd. There could be a very good reason for the snails pace, especially if you had your sights on said target. Be interesting to see what happens to BFU and CC production once Cuda has been resolved. I reckon there will be every effort made to get production up with oil circa $110/bbl. Light at the end of the tunnel about to appear?

Regards,
Ed.

Daceon,

Yeah I agree chap, with the oil and gas prices where they are M&A activity across the sector is only a matter of time and they'll be offering more than COPL had to pay for its reserves! :)

As for the bidding game, if COPL were to win the bid for Cuda my guess would be similar to 3littlepigs, I'd go for $30-35m and a new senior debt facility given the current oil price. Just can't see anyone paying more and being at Art's whim on development.

Regards,
Ed.

Bolton,

Agreed, many will be happy just to see the Cuda issue finally resolved either way. Should open the doors to the planned much higher BFU production. The first step towards lots of Frontier and Dakota wells.

Regards,
Ed.

It sure will be interesting to see what happens to the price here once it passes 40p for sure. Yeah its great to be a producer but the market might eventually catch on that USA onshore 2P is worth more than £2.39/bbl at $127/bbl (our market cap divided by our gross reserves). And lets just pretend the announcement of Jan 10th didn't happen, just like the market is currently doing too. :) But for how long. Just like EUA reserves cannot be ignored forever.

Regards,
Ed.

You think the rise in COPL is unexpected? Personally I see the rise in COPL as fairly inevitable given what's happening in the oil and gas commodity market right now, its just rather a case of when not if. But then I've always been a case of glass half full. With the oil price up over three times since they acquire Atomic, and since they acquired the 2P at 2.18/bbl, if they sold it now as is they'd get a heck of a lot more for it.

We're overdue ops updates, we're sitting almost on top of news from Cuda, I'm just surprised that the speculative buying and bargain hunters didn't appear sooner.

Regards,
Ed.