Member Info for Edgein

Share price before the deal was annouced was about 0.17-0.19 so no 50% discount to share price. You would have to go back several months since COPL traded at 0.4p.

£12m valued added with £9m raised, yes share price is up from 0.2p

Regards,
Ed.

Shaa,

Exactly, empathises the point that equity and debt is the way to go to possibly secure this asset.

Regards,
Ed.

Jiving,

I really wasn't sure whether to post this reply or not as you just don't seem to get it. COPL has neither the luxury of a mid cap nor $54m in cash nor booked 2P for RBL. Right before this announcement it had a £9m market cap and a possible option over 226. Since the deal and securing $12.2m they're now at £23m cap approx. Their options where to dilute at equity level or asset level. Diluting probably at least 50% of this asset would cost in the long term way way more than $12.2m, if the oil price keeps rising multiples of that. Simply put at 7,000bopd these assets would be producing $12.2m in free cash flow in short order (assuming a wti price at $50/bbl). Art has said in several of those interviews that he intends to consolidate the asset to 100%. That pretty much left one option to get the cash element of the Atomic deal. For a risky £9m company to have raised $12.2m easily is an outstanding effort.

Regards,
Ed.

Its in the mid December presentation when wti price was significantly lower:

Operating net-backs are c. $21.50/bblwhich is inclusive of cost of gas and propane purchase (Note: as production increases operating net backs will increaseas a large proportion of the operating costs are fixed, gas injection rates will plateau then drop in 12 months thus increasing overall netbacks.

Regards,
Ed.

No, Art hasn't released cost oil yet. He did say during those interviews that netback was something like $21/bbl at lower oil prices than we're seeing today. He has also commented on the fixed cost nature of the gas injection EOR used on this field so as the oil price rises so does the netbacks. Along the lines of profit, profit, profit as he was talking about per quarter. Check out the recent proactive videos on youtube.

Regards,
Ed.

Well actually Jiving my history with Art goes way back further than that as I was in Oilexco from the very first well appraisal well on Brenda, followed by Nicol, Huntington etc etc. So I most likely know more about this CEO than you possibly every could. I didn't come into COPL until much much later though after the Liberian expo as I don't invest of pure wildcat (226 being appraisal), apart from the odd punt. I'll give you a couple of recent examples though of what I'm talking about so it sinks in for you. Firstly like EUA when it was capped at just £12m (even though it has several £bn on pgm reserves) signed a deal with Sinosteel. Its one of the best terms I had ever seen for a non-producer, it included a $50m sub contract back to EUA. But this $176m deal was dependent on EUA raising $24m equity! Another example is at the asset level, KEFI need around $200m to develop their TK pit, so far its arranged on the back of a 35% asset level dilution, that's giving away 35% of all future profits from this asset. But I accept that as its all part of getting large projects to production.

Art has so far chosen the equity route and the market cap is now £22m after raising $12.2m, with 35 years+ investment experience I do realise how that impacts on the market cap going forward. But the alternative way to fund this deal was an asset level dilution which would have meant equity sharing or something similar where Art would have had to give away a percentage of future profits and future reserve upside to get this funded. Equity element given the small cap is much more desirable than asset level dilution. If you're here long enough you'll eventually see what I mean, that's if you can see through the red mist in front of your eyes. :)

Regards,
Ed.

Jiving,

I'm perfectly relaxed about the placing and about triggering you with my last post. Oh poor you, dilution. You want to list the companies that didn't have an equity element when raising cash on this scale for acquisition or development. Once you get out there and get a bit more investment experience you'll realize that the norm is about 25-40% of the required funds. That's either asset level dilution or equity level dilution. Moreover had he progressed 226 and not done the USA deal that would also have required at lest $6m to earn in plus ongoing drilling costs for additional appraisal wells. As a non-producer the only way he could have done that is with equity, convertible loan notes etc. If you hold non-producing companies and don't expect dilution you're deluded. If he secures the remaining debt to conclude this deal then he's got instant profits and further cash flow to complete other deals and drill 226, even at 15%. I'm not ruling out any future dilution for additional deals.

Regards,
Ed.

Caw Caw,

Exactly! Art has a real opportunity to turn this into a mid cap company. Reading the NOP website shows the upside of these assets from the stacked reservoirs. You can only assign 2P to areas of a field that have been drilled and with Art's confidence of securing 100% of these assets, with that 7000bopd target its every bit the game changer that Art has suggested. That's before any WA EOR acquisition, 226 or another licence. Hopefully next RNS will be a large debt element, while we cannot rule out any more placings to secure these assets then bulk should be behind us. If/when secured the effective date is back to Dec 1st and those oil revenues and instant profits that Art describes have been mounting up.

Regards,
Ed.

Oh its not just the traders that are happy the the Atomic acquisition is proceeding. I'll hold more COPL than most on these threads and no I'm not trading it. It shows the strength of these assets that investors and instis have now shelled out over $12m to get in on this action. The first part of Atomic secured as a result. As anyone could Art got his hands on $12m last summer and most holders would have laughed. The only punters on here that think that raising debt and equity for a deal like this is a bad thing either haven't looked at the Atomic deal or don't understand it. Noone is gonna give a company 100% on any asset. There is always proof of liquidity or equity or asset level dilution. At £22m or £24m a $185m ($39/bb) isn't priced in, so come on Art get those term sheets in chap and get that debt element finalized before the bedwetters throw many more hissy fits!

Regards,
Ed.

Good interview from Art as he moves towards mid-cap.

He confirmed again they're going for 100% of this asset and they can double the rate of gas injection once in control of the asset! Cap still tiny and assets still large. Come on Art bring it home!

Regards,
Ed.

The share price should really have been much higher, so its great to see the market finally giving some value to the game changer acquisition. These were above 0.5p on the negotiations with Essar, this is much higher impact news that the market pretty much ignored since the announcement, but that seems to be changing fast!

Happy Christmas all and an insanely lucrative 2021!

Regards,
Ed.

There is some serious upside from these assets as can be seen below from the Cuda's operations page. Lots of stacked sandstone reservoirs in these fields. From the amount of wells drilled in the recent COPL release its clear the amount of heavy lifting (wells drilled) by Atomic and partners to date. Both of these companies have been hit hard by the lower COVID oil prices early in the year. Now when Art is stepping in wti is back near $50/bbl and as one of the previous articles suggested, fields in Wyoming have some of the highest netbacks onshore USA.

"Positioning for Growth
Portfolio of Scalable Opportunities

Wyoming – High Impact “One-off” Acquisition Delivering Low Risk Organic Growth with Visible Upside

70+ gross infill locations to be drilled over the next 3 years.

C$50/bbl netbacks at US$65 WTI

Drilling inventory delivers <1-year payouts and 125% ROR based on primary RF recovery

Gas Flood will increase the recovery factor from 10% to 15% to a potential of up to 50%

5+ deeper zones where offsetting competitors (Anadarko, Chesapeake, EOG) have licensed 10,000 locations (Wyoming Rig Count has increased from 8 to 30 in the past two years)

Proven Muddy & Frontier on land base w/ 2 vertical wells (each produced >100 Mbbls)

Recent Cole Creek Asset Acquisition offers significant Frontier 2 and Dakota horizontal upside."

Regards,
Ed.

Cole creek is currently shut-in but it sounds as if there's more opportunities for upside from these assets as suggested by Art. Luckily for COPL a lot of the heavy lifting has already been done as you can see the number of wells drilled on the COPL release. COPL are now targeting two financially weak companies for a great asset. As one of the previous articles said, these fields in Wyoming have some of the best netbacks onshore US. See the relevant parts of Cuda's operations page below (We're not $65/bbl for wti just yet but circa $50 is a good start):

"Positioning for Growth
Portfolio of Scalable Opportunities

Wyoming – High Impact “One-off” Acquisition Delivering Low Risk Organic Growth with Visible Upside

70+ gross infill locations to be drilled over the next 3 years.

C$50/bbl netbacks at US$65 WTI

Drilling inventory delivers <1-year payouts and 125% ROR based on primary RF recovery

Gas Flood will increase the recovery factor from 10% to 15% to a potential of up to 50%

5+ deeper zones where offsetting competitors (Anadarko, Chesapeake, EOG) have licensed 10,000 locations (Wyoming Rig Count has increased from 8 to 30 in the past two years)

Proven Muddy & Frontier on land base w/ 2 vertical wells (each produced >100 Mbbls)

Recent Cole Creek Asset Acquisition offers significant Frontier 2 and Dakota horizontal upside."

Regards,
Ed.

226 is the juicy asset that Art was hinting at yesterday and he did also reiterate that they're not leaving west Africa. Also previous interviews suggested that all parties are still keen to move ahead with 226. Probably even more so now give the recent moves in Brent.

That $4m in shares is due on closing of the deal and already these small sellers are starting to dry up, not as much volume today. That would hardly be diluted to dust even if it were at 0.2p given the upside from these other assets that Art is hunting (including 226).

As for relationship with Shoreline, that's more speculation on your behalf, by the way I would class Nigeria as west Africa too. So before jumping to conclusions about Shorecan, perhaps wait for a relevant announcement about this target acquisition or 226.

Its going to be an interesting 6 weeks for sure as we approach 31st Jan 2021.

Regards,
Ed.

We could be quite close to this acquisition too. Art let slip yesterday that they've been after this project for years and its the first time its been mentioned anywhere (although the about the company statements have mentioned further acquisitions in Africa). But while talking about this company making deal Art has decided to add in details about this project too. If they've been looking at it that long it could be very close. What helps too would be the closing of the game changer, as Cawcaw points out again the effective date is 1st of Dec with a closing date some two months later. Look at the price of WTI. Providing the deal closes on current terms then COPL owned these assets since the start of the month. That would certainly strengthen their position to acquire the WA EOR project. Can't wait to see where the company's share price will be at the end of 2021 with all these assets potentially on the go. Large US production, WA EOR and potentially 226! Likely relentless news flow too from production increases to negotiations with the NOP and CNOOC.

The future's never looked as rosy for COPL as it does now. For those that don't know about Art and his deal making I suggest they take a look back at Oilexco.

Regards,
Ed.

Cheers for posting that, that interview with Zak was even better than the proactive one.

Regards,
Ed.

Not only did he cover the fundamental upside of the acquisition, that presentation fills in a lot of the blanks too. NPV is based on just a $39/bbl wti price, well its about 20% higher than that now. Also the NOP is in diffs and COPL will likely own their share of these fields at closing of the acquisition or shortly after which would leave only CNOOC as their only partner in the asset. Also the presentation shows the number of wells drilled that COPL can work with.

When you thought the acquisition couldn't get any better they release that presentation!

Regards,
Ed.

Shaa,

Yes they likely want in on the action. COPL is gonna become very popular very quickly as a result of the game changer acquisition. The new market maker will just want their slice of the trading volume to come. I wonder if Art has anything up his sleeve to further increase the price before the closing date of 31/01/21. Only 6 weeks or so to find out. Anticipated licence perhaps, or a meeting in Nigeria perhaps. :)

Regards,
Ed.

Should have said market cap £30m and rising.

Regards,
Ed.

These are two separate assets and two separate deals they're not connected in any way. This asset is vast majority debt funded and RBL based on the reserves and production from these two fields. Its at a cost similar to or lower than what you might pay for risky South American or African assets. Way below what you would pay for assets in the likes of North America, Canada or the UK North Sea. Art has made it very clear in the RNS how the asset is to be paid for, $8m initial debt, $26m further debt and finally a mix of $15m of cash and debt before closing of the acquisition. It will have an effective date from now and a closing date about a year away. The free carry and option on 226 isn't in any shape or form linked to this deal. This is mainly a pure RBL deal with a modest cash element. Its clear why the RBL provider(s) have went for it, its 31mmboe for $54m, they're likely stumping up around $45m of it. Cheap as chips for those reserves and growing production. A game changer for COPL regardless of 226.

My only slight suprise after today's RNS is why the share price isn't £30m and rising from there. Shorters have gotten off the hook very easily today. In fact it might make the Nigerians take them more seriously now that COPL has acquired this deal. Art the deal maker back on form it seems. Roll on the rest.

Regards,
Ed.