Member Info for HH1983

Do you have a link? I've lost mine!

I've given up anticipating the share price, but 80p sounds unrealistic - as does 8p! Somewhere in between IMHO. (Very wide range!)

Agreed, Pilot. At 5kboed COPL is making serious money even with the hedge, expensive finance and $70/bbl oil. However, reading everything together, I reckon that won't be until 2024. They need to finish the gas-gathering, finish the work-overs and build up the miscible flood.

My target for year end would be more like 2.5k-3kboed, which would mean COPL should be in decent profit even at $70/bbl, and making good money at higher prices. (My guess is, with the hedge, at $70, we need c.1,800/day for break even).

I suspect we will get something just before or at the AGM (perhaps some last minute update docs). At least to take the heat off the CEO! Slow progress, but we should start to see results over the next few months. First the delayed recompletion, which if successful should bring more 2P reserves, an extra c.80-100bpd and allow investment in the other recompletions. Second the gas gathering system, which should allow more injection into the reserve and increased production towards the end of this year. Fingers crossed that will coincide with oil back in the $80-$100 range, which is what most professional forecasters seem to predict for Q3 and Q4.

Re-reading - I've been a bit pessimistic there! Add a couple of pence to the first two figures.

I think we are tied to a few things:

- oil price
- flow rate
- RBL/JV
I think, and assuming max dilution along the way by bond conversions/payment in shares to senior lender:
- As long as oil price stays over $70/bbl+ (and I think we all think it will), we will top 6p on current production (1,700/day). Might take until the end of April for see the March figures for the market to be convinced, however.
- Another successful recompletion, plus the flaring, and we could be back to 2,000bbls/day by June, in which case we are 7-8p min
- RBL on better terms than the Senior loan could give a little lift, or double the shareprice - depends on terms
- Sometime in early 2024, with gas gathering system done, c.4k-5k bbls/day - we are back to 15-25p, even with 700mil shares in issue.
- A good JV along the way - who knows. Could be a small uplift. Could triple.

Equally, another production shut-down, and the price will fall further. I'm betting that won't happen now the weather is better. My 2 cents

Surely it's for the gas gathering (although not sufficient on its own).

I don't buy the conspiracy theory. Much more ****-up. They didn't expect such a big reaction given the 'going concern' warning has been contained in all the previous financial statements, because the company is planning to spend more in the next year (including CAPEX) than it has or is likely to get from sales. The other point was the new news that production had basically ceased for a few days because of the weather, which hit vital cashflow further. Unfortunately, in a very liquid stock such as this, there was panic.

There is a risk here - no guarantees of investors/lenders stumping up more cash - but IMHO it is way oversold. The risk is, there, but is small in my view (perhaps 10%). The real questions are what the cost of the additional working capital finance is and what is the effect on the JV (happening and terms)? Lower share price doesn't help. Would be an ideal time to buy in now - if only all us LTHs had timed it better!

Tiburn, I wonder if the delay on the RBL is that:
(a) The RBL would not permits as much borrowing as the company needs to grow on its own two feet, i.e. pay off the senior lender AND fund gas gathering, drilling etc. - or at least not on good terms (higher rates/more restrictive terms for a larger sum). They hoped that waiting would allow more reserves to be booked and a bigger RBL.
(b) the JV has a big impact on the requirements for the RBL (up or down) and so it was too risky to sign up until tied together.

I suspect one or both of those is the explanation. I agree confirmation of that in due course would be helpful to understand.

There is, of course, one further option, which is that production and the oil price increase sufficiently to get us there without any further financing at all - or perhaps just another short extension of the liquidity reference period (say to end of March). Looking unlikely but not inconceivable

The big plus is that, once short-term finance sorted, negotiating the JV/RBL if still not complete should be much, much easier and the company will be secure. The re-rate will come, but we just have to wait a while.

I have big holding and hope this will be a multi-bagger. However, we have to be realistic about what we should expect in the next two weeks - otherwise this is just driving an unnecessary panic if there is no JV.

The 14 March 'deadline' is the new end-date for the liquidity covenant measuring period - that is the period during which the company must have an average of $2.5mil cash in the bank. The point of the extension is to avoid breach due to the very serious weather which rightly caused temporary shut-down for safety reasons. The extension is therefore 2 weeks to make sure the average cash is back up. That could be:
- RBL - hopefully paying off the senior loan
- JV - with some cash element
- extension of the senior loan
- further bond
- placing

If none of those, then we might just get a waiver - for which there will be a fee.

Any of these ensures the companies' ongoing survival. My bet is actually on either a further small loan amount on the senior loan or a further bond on the tap facility by 14 March, not necessarily the JV. If it is the JV/RBL, then brilliant, and we will be quids in. However, any further financing is likely to be good news as it removes the risk that the market appears to have priced in of going bust or seriously diluted. The market is firmly overdoing that risk IMHO, but we should know more by around 14 March.

I've previously done some rough and ready calculations. I previously reckon we hit break-even on cashflow (excluding CAPEX of course) at around 1,500bbl/day and $70/bbl. We should therefore be positive with the oil price 10% higher than that, and only 6.7% less production. Rough and ready, at 1,400/day the break-even oil price is prob $72.

I therefore agree the company is not making big money, the point is that money is not going down.

Add to that, one successful recompletion (of the several to come) would add 100bbls/day+ without stimulation, and in excess of $100k per month positive cash.

?? I'm confused. What's wrong with that view? In cash-flow terms, that's a crucial date. Even that could be moved if the hedge were re-negotiated etc. but no guarantees of that.

Until then, the company has positive cashflow and so, as long as the small hole in working capital caused by the weather issues is fixed, the company is good to go. More funding required for the major CAPEX of course, but that's what the JV/RBL are all about.

Please explain, with some reasons, if you think this wrong.

I'm going to repost, to get back on topic. Critique the below all you like - a balanced position I think, which is we are back where we are in December (no more, no less) but with reasons to believe production will increase that the financing issues that caused the big drop on 1 Feb are now both smaller than the market priced in, and should be clearly defined - therefore managable.

"Basically, it proves Jan was a weather related blip - we are back to December production figures already, and that's despite the slow down in works to de-wax etc. which the weather caused. We just have a small hole in the finances from the lost production (my guess is $0.7-1.0mil down from where we should have been). Hence the extra 14 days to get the average cash back up.

Also should mean that any short-term capital raise is very small indeed. The point of the 1st Feb RNS was that, at that time, production was largely shut down. The accountants therefore had to say that, if things didn't improve, the company would run out of working capital by end of Feb as they couldn't say how long it would take to come back. Production is now back where it was, so the precise capital requirement will be known - and will be small."

Basically, it proves Jan was a weather related blip - we are back to December production figures already, and that's despite the slow down in works to de-wax etc. which the weather caused. We just have a small hole in the finances from the lost production (my guess is $0.7-1.0mil down from where we should have been). Hence the extra 14 days to get the average cash back up.

Also should mean that any short-term capital raise is very small indeed. The point of the 1st Feb RNS was that, at that time, production was largely shut down. The accountants therefore had to say that, if things didn't improve, the company would run out of working capital by end of Feb as they couldn't say how long it would take to come back. Production is now back where it was, so the precise capital requirement will be known - and will be small.

It's certainly possible. End of Feb was my thinking on the earliest date when the JV was being talked about around Christmas - March seems fair. No one should panic if it doesn't come though - as Blackstout has pointed out, these things take time. It might be we need an additional small bond or loan to tide the company over if negotiations continue into April, but nothing that will break the company. The real deadline is June when the hedge comes back.

I said yesterday we needed current production figures to work out the impact of weather, and couldn't wait until April for the March production figures. Hey presto, an RNS! Perfect timing on this one.

We know the production blip is temporary and weather related. A pain - probably put a $0.5mil+ hole in expected revenue, hence the terms of the 1 Feb RNS, but likely to have been fixed by mid-Feb latest. We won't know until we get either an update from the company or the March figures (i.e. the first unaffected month) which will be late April. Hopefully the company will opt for an RNS or interview as that is a long time to wait.

Pilot - two reasons to convert:
(a) To get the conversion payments at this very low share price
(b) To give instant liquidity when the share price does rise

I also wonder if they are trying to avoid any risk that the bonds simply get paid off - although I am unclear whether they would have that option anyway if COPL had the cash to do so - I am not banking on that. Anyone able to find an answer to that?