Member Info for Edgein

Woah, all that balance from that post. You're going to need to provide a lot more of your "balance" over the rest of the year given the way the assets are performing. What do you make of the new 100% discovery and the fact that production increased by 24% in two weeks! Another rise like that and they'll be passing 2000bopd net.

Moreover peak gas injection rate was planned for the end of August, what impact is that likely to have on the net production by year end?

Regards,
Ed.

I think what you mean is thin brown oil as these reserves are light oil with high API, not thick heavy or even intermediate oil. Its the reason the stuff flys out of the ground under miscible flood. But the 6 formations and opening up a possible new field development at 100% wi net to COPL is very significant

Regards,
Ed.

Wow what a way to deliver beyond everyone's expectations!

"COPL's Wyoming assets continue to perform significantly ahead of expectation

o Current Oil Production at August 31(st) is 2,720 bbl./d (gross), 1,604 bbl./d (net) a 24% increase from the operations update on August 17(th) , and an increase of 123% from 1,220bbl/d (gross), 706 bbl./d (net) at April 1(st)."

Production continues to sky rocket well beyond anyone's expectations and gained another 24% in just two weeks! Also their 100% wi BFU deeps well came in with over 200ft of net pay in 6 formations. Didn't take them long to get that BFU deep well drilled that's for sure. Looks like they're on for multiple thousands of bopd net by year end!

"Oil discovery at the 100% working interest Barron Flats Federal Unit (Deep) exploratory well expected to open new field developments. Six (6) oil bearing sands totalling 246' (net porous sand)/282' (gross sand) intersected. Production casing is currently being set to total depth of 9,220'."

"Oil production at the Barron Flats Shannon Unit will continue to increase due to strong gas injection response"

During the above period miscible flood rate was just 6.5mmcfd, from the end of the month they expect to inject 10mmfcd. I guess that's why Art is expecting such a strong end of year!

"Reviewing other value enhancing asset acquisitions in Wyoming"

Good stuff, looking forward to more of the above as the company moves towards mid cap.

Arthur Millholland, President & CEO, commented:

"Our Wyoming assets continue to perform well beyond our initial expectations as I indicated in the August 17(th) operating update. Crude oil production has increased 123% from April 1(st) , and continues to increase weekly. In fact, crude oil production has increased by 24% from our last update just two weeks ago. The increase in crude oil production is due to the ongoing enhanced gas injection program, commencing on April 1(st) . As such, oil production will continue to increase as the surface well site production facilities are enhanced to handle the increased oil production rates and associated higher working pressures.

"We are excited about our 100% owned Barron Flats Federal (Deep) oil discovery announced today. Our next task is to test all six of the sand intervals through casing over the next several weeks. This well is a testament to our team which identified substantial upside below the Barron Flats Shannon Unit, further demonstrating the value of the Atomic acquisition to COPL. The Company's enviable block of leasehold as well as its production facilities will allow for additional significant oil production growth. Associated gas production from these reservoirs will be utilized in our miscible operations thus continuing with the Company's net zero gas flaring production operations."

Regards,
Ed.

The upside here is x2 at best! lol from which part, the BFU, CC, Frontier 2, Dakota, acquisitions, 226? You do realize that Atomic was picked up at just $2.18/bbl and what is WTI at now? Also that's on bare bones of the Wyoming asset not accounting for addition of potential reserves from asset consolidation or drilling. Art is looking to drive this to mid cap which is a lot higher than x2. I thought you were supposed to be realistic? :)

Regards,
Ed.

Because the old adage is true, the market is a way to transfer money from the impatient to the patient. The market is littered with fast buck merchants these days and that ends up in folks chasing high risk stuff that severely lack any fundamentals, typically no production and no reserves. Getting rick quick rarely happens, but getting rich slowly in the right companies often happens. I can use EUA as a good example of that, I held that one for around 3 years and sometimes the share price was below my average there (0.37p). Traders here that bought below 0.1p probably thought here about how well they did, likewise those on EUA that sold at 1p per share thought they were a genius (share price peaked at 44p). But because there was market recognition in the end for EUA's large reserves it eventually popped. My average on these is sub 0.1p, if I were a trader I'd be long gone though, but I've not sold a single bean.

Why? Not because COPL isn't the only over sold company out there, but because its at the start of its transformation, why sell something that's oversold and on the verge of significant and obvious success. Even if COPL doesn't find another bbl over the next 30 years its going to produce a lot more value from the BFU than its current market cap. So I'm perfectly relaxed to see how the field outperforms the RS model. I'm in no rush, I'm not one of the multitude of traders that COPL attracted before suspension. Who knows what will trigger the rerate, growing production, possible consolidation of asset, further acquisitions. I see it as only a matter of time and my investment style over the last 10-15 years has been buy cheap and hold. 25-30 years ago when I first started I was also one of the price chasers like Pan Andean Resources etc, the 88e at that time. But folks eventually learn to make money at this game (also over the years been in the likes of Endeavour, Valiant, Paladin, Ithaca, Encore etc). So moral of the story is stick to the ones that are doing well operationally and don't go chasing fluff. Eventually COPL will get the recognition it deserves, again its only the start of the journey. Lets see how popular it is at the end of next year for example (when its due to peak from BFU).

Regards,
Ed.

Unless they hit multiple stacked oil prone reservoirs and the same geology then the two wells aren't comparable in terms of rate of progress etc.

Regards,
Ed.

Goodness my other post had gone through, thought I had lost it. Ah well two versions of the same thing. :)

Regards,
Ed.

There's certainly some fundamental differences between COPL and 88e in the old days and currently.

Old days COPL was risky, just based on a licence in Nigeria with a contingent discovery and largely unknown value. If Essar secures the licence extension and has a successful drill campaign it can still add material value to COPL due to the size and scale of the 226 licence (one of the larger blocks in Nigeria).

Here's where the material change is though, COPL now, as a result of Atomic has picked up circa 30mmbbls of onshore US light oil. That has significant underlying NPV compared to the current market cap here, the NPV of that at $66/bbl is circa $300m. But that's the starting point. We know that the miscible flood is exceeding expectations and its got even more potential as they've only really started on the western flank of the field:

"Due to much better-than-expected injectivity response in mid-April, injection volumes were increased ahead of forecast peaking at 10,000 Mcf/d in the second week of June. Increased gas injection volumes commenced on the eastern portion of the field in April, balancing to the western area of the field through the period."

Eastern portion of the field may also exceed expectations, we'll see in due course. That's a fundamental difference between COPL present and 88e, we've commercial reserves and flow rates. Its like chalk and cheese these days. What the market is only figuring out now, thanks to the prospectus is the significant upside to the Wyoming asset (not just the possiblity of consolidation to 100%) but also the drilling upside. The company has a large acreage position and has the possibility of containing significant volumes of Frontier and Dakota reservoirs. We'll find out more about that from the current drilling in due course. The prize then is potentially 10's mmbbls more recoverable 2P, hencec the significant upside of the Frontier and Dakota described in the prospectus, similar could also like under the BFU in the BFU deeps (if that 1950's well is anything to go by. The above reasons are why COPL remains my largest holding.

Regards,
Ed.

Its not exactly like 88e that's for sure. COPL in contrast have commercially recoverable volumes of oil and commercial flow rates. So unlike 88e we have a firm underlying value for circa 30mmbbls of light oil. That's got an NPV somewhere in the region of $300m. Value of Nigeria is somewhat speculative at the moment with the licence requiring extending and the reserves there being contingent, but that could all change rapidly through Essar. But the underlying value of US light oil is very clear.

What isn't so clear just yet is the ultimate size of the prize on the current Wyoming assets, its quite possible that the Eastern side of the field may respond as well as the Western side of BFU:

"Due to much better-than-expected injectivity response in mid-April, injection volumes were increased ahead of forecast peaking at 10,000 Mcf/d in the second week of June. Increased gas injection volumes commenced on the eastern portion of the field in April, balancing to the western area of the field through the period."

The field is responding better than expected so far so reserves might get upgraded as a result, similar might occur on the eastern flank of the field. Also folks are getting a feel of the large potential of the recoverable oil potential of the Frontier ad Dakota at the Cole Creek and BFU deeps. Again there could be 10's mmbbls recoverable from the large acreage position as the recovery factor there is modest to date, similarly at BFU deeps (we'll find out about that from the current well being drilled).

So 31mmboe 2P reserves is a great place to start, but with possible asset consolidation to potentially 100% and the reserve potential across BFU and the deeper reservoirs its no wonder the company talks about the significant potential of these Wyoming assets. This is very much the start of things to come. COPL remains my largest holding for the above reasons.

Regards,
Ed.

Mach 10mmcfd by the end of this month, we've seen the prequel of 6.5mmcfd and what that did over 3 months, it'll be interesting to see what the main show is like at 10mmcfd injection rates does over the next three. Next 3-5 year outlook looks very sunny indeed. With the reservoir taking gas in better than expected then the porosity and permeability must be higher than modeled too, I'm sure we'll see in the future if that changes the peak in the RS model and ultimate oil recovery of the current BFU 2P reserves.

Regards,
Ed.

At the end of the Q1 report the company had $29m approx in cash on hand and had acquired Atomic for $54m for a total knock down price of $54m from a distressed seller ($2.18/Bbl). The cap is barely that now and its not that the assets haven't performed, they're by far exceeding expectations. Also time and time again when wells out perform there tends to be reserve upgrades. This will add to the frustration in the short term for sure for some.

Hadron selling out so quickly hasn't helped the short term price and the fact that COPL before suspension was saturated with traders as could be seen with the stress levels of many who posted on this site and what they were gonna spend the booty on after relist! :) I've long term outlook here so current price is still irrelevant, the only thing that is relevant to my position here currently is asset performance and we've got that in spades. Its a generally weak day on the markets again which doesn't help the short termers here either. Once this turns its likely to turn equally as swiftly as there's several ways that the company can increase both production and reserves here (two of them are ongoing at the moment, drilling and miscible flood). Plus peak rate miscible food at the end of this month potentially again too. Sentiment can change on a pin head will they be here next month, year end, next year etc. They're valued at rock bottom with several ways to scale this mountain. While the traders disappointment is out on show at the moment there's likely sun shining on CawCaw's Wyoming peak. 5-10p lets wait and see.

Regards,
Ed.

He doesn't seem to figure out our current cash on hand or the NPV of circa 30mmbls of 2P light oil onshore USA either for some reason. Glaring omissions when coming to value an oil and gas investment. But then what he's invested in doesn't get much attention. So he'll be off touting his wares on tomorrow's popular share (that may be COPL again with the largest volume though).

Regards,
Ed.

Oh I see our Egyptian snake oil salesman is back, it cures all especially removes your wealth.

Here's a helping hand for you, the fact you cannot work out COPLs current market cap tells me even more about your investment prowess:

Http://www.canoverseas.com/wp-content/uploads/2021/02/COPL-Atomic-Corporate-Acquisition-Presentation-02-21.pdf

Combine the above with the prospectus and today's update and it'll tell you everything you need to know.

Regards,
Ed.

I'm sure you chaps are well aware too that there are two main mechanisms that drive oil recovery from a field. 1) solution gas/gas drive 2)aquifer. The fact that the infrastructure already needs upgrading to handle the pressure and volumes of oil being produced even though they've only averaged 6.5mmcfd rather than 10mmcfd bodes very well for the production profile and ultimate recoverable from the BFU. We really couldn't have had a better operation start, no wonder why Art wants to consolidate these assets when the show is only getting on the road. We'll all be looking out for the results of the current well into the Frontier and Dakota, likely excellent upside if oil is present in commercial volumes, could be as good as the CC deeps. Art will give us that info in due course.

Regards,
Ed.

PJ,

Debt is around $45m from the recent facility, they also have an accordion facility on that and can draw an additional $20m. From memory they had $27m cash at the latest Q1, you can check that. They also have rapidly increasing revenues from the outperforming BFU field. Also they've started litigation against Cuda due to default on payments so they're after their share of that. Also Wyoming acquisition trail likely includes CNOOC's 15% wi. They're doing some low cost recompletions and drilling one well currently. So well cashed up, you'll get updated numbers in the Q2 due around the end of the month.

Regards,
Ed.

Earl,

The more you keep repeating doesn't make it true though. You just have to look a little deeper at UOG and you see that the Egyptians take around holf of their production and leave them with 100% of the production costs. Moreover gas prices in Egypt are tiny. You ever wonder why UOG have such high production and such low turnover? COPL don't have that problem in the good ole US of A. Also COPL are immediately targeting more oil reserves if the $300m+ NPV here wasn't high enough already. I sold my UOG many months ago as they're not in the same class as COPL.

Regards,
Ed.

Bob,

From the previous interviews that Art did it sounds like they need a meeting between all parties in Nigeria to conclude the next stage, hopefully the final stage before they possibly extend 226 into a new term. Hopefully the covid restrictions will lift between, UK, Nigeria, India etc and they can get the show on the road. In the mean time though plenty of action coming from the US of A. Its getting more interesting by the day it seems too, today's news was an interesting move for sure.

Regards,
Ed.

Read the prospectus, the agreement between COPL and Essar has been extended to October 2021, the extension of OPL226 requires further meetings between all parties including NNPC and DPR and is expected that the change in ownership and ministerial approval will follow, that would allow for the possible extension of 226 providing all parties meet their obligations, licence fees paid etc.

Regards,
Ed.

That's around $6m from memory, also 226 hasn't been extended yet let alone rig contract signed by Essar and whichever contractor they choose (providing NNPC/DPR extend the licence). By the time they have to make this relatively modest payment (given their current cash on hand) I would imagine it shouldn't be an issue given what's currently going on with the miscible flood production increase.

Regards,
Ed.

There's likely to be a JVC/JOA between the parties which would have agreements as to what happens in event of default etc. I don't believe that today's events that started to brew in July were as a result of an offer to Cuda, but rather the mounting debts/default between the parties. It sounds like Cuda didn't make the May payment to SWP/COPL for the field operations, adding almost $2m to what they already owed. Straw, Camel, back, court proceedings etc.

Coincidentally the example below happens to be Nigeria rather than USA but same principle applies, gives folks an idea of what these things generally tend to cover:

Https://www.academia.edu/32040142/JOINT_OPERATING_AGREEMENTS_IN_OIL_AND_GAS_INDUSTRY_THE_CONSEQUENCE_OF_SOLE_RISK_AND_NON_CONSENT_CLAUSES_TO_JOINT_OPERATION

Regards,
Ed.