Member Info for in4cedros

Briggsy - for clarification I’ve cut n pasted the “ drivel ” from my previous post:-

Classic, Timeless, Drivel from John Briggs - #nocredibility


“ Why on earth would anyone want to give their money to a company with no credibility and run by amateurs and most importantly who on earth would want to partner with them ”
 


JohnBriggs - flights of fancy are clearly your specialty subject :-

In4cedros 

Posted in: CEG 

Posts: 6,004 

Price: 6.00 

No Opinion 

RE: RE: $12.5M banked12 Nov 2024 20:55 

Briggsy - to you it may appear tripe but for curious onlookers it’s interesting factual information which changes the investment proposition, particularly the downside risk factor. 

Surely even you would agree that CEG were desperately vulnerable prior to the completion of the Chevron deal - the state even stimulated your famous quote 

“ Why on earth would anyone want to give their money to a company with no credibility and run by amateurs and most importantly who on earth would want to partner with them ”
 
Now with cash in the bank CEG can plan for the future with free cash they would have had little hope of raising in the market - absolutely transformational! Long term shareholders are certainly better served having good fundamentals than a SP based pretty much on hope. 

I’m sure shareholders are pleased you are concerned about their SP but I doubt they place much reliance on your predictions based on your history #nocredibility ! 

As we hadn’t heard from you for a while I was thinking you may have come to terms with your loss but you clearly need more comfort from me. Thanks for giving me opportunity to reply and make my points!

Laallee - Dacia have shown they can successfully build from a Duster to a Spring - maybe CEG will surprise you!

Die Hards @ Merseyside Pension Fund sticking with CEG - I hope their loyalty will be vindicated along with all who are currently riding this!

Druid - Full details are in 04/11/24 RNS. I’ve cut n pasted part of it below. Looking like $1.5 million being spent out of the $12.5 million with other fees being success related.

I believe most shareholders expected some cash would have to be spent on this and it was obligatory under the license.

· The Company has entered into a licence agreement to secure access to necessary historic 3D seismic data over AREA OFF-3, for the purposes of reprocessing.

 

· The program of reprocessing work is underway, and the Company expects preliminary outputs prior to year end, with the work expected to be fully completed in Q2, 2025. 3D seismic reprocessing work will be supplemented with a range of other seismic workflows including Amplitude Variation with Offset, which was utilised successfully on AREA OFF-1.

 

· The objective of this work is to mature the available data set for AREA OFF-3 in an accelerated time frame, sufficient to enable a robust prospect inventory to be mapped and for potential drill locations to be identified, in support of a formal farmout process which the Company is targeting to commence in mid-2025.

 

· The Company and the vendor of the seismic data have agreed an uplift licencing model, whereby agreed licence fees will become payable only if/when a farmout for AREA OFF-3 is concluded. The total of other costs associated with the AREA OFF-3 work program in 2024 and 2025 (reprocessing, interpretation, mapping and complementary technical work) is expected to be in the range of US$1 million -$1.5 million.

 

Eytan Uliel, Chief Executive Officer of Challenger Energy, said:

"Over the last few months, while focussing on finalizing the farmout for our AREA OFF-1 licence in Uruguay, we also have been preparing the initial AREA OFF-3 work program, centred on reprocessing of existing 3D seismic in support of defining the block's prospect and lead inventory and possible well locations, which we believe will be the key inputs into the farmout process we are aiming to begin in mid-2025. Following the close of the AREA OFF-1 farmout, we have now moved to immediately accelerate work on AREA OFF-3, given our view that the block has significant exploration upside and scope and, like AREA OFF-1, presents an exciting near-term value-creation opportunity. We will keep shareholders informed of our progress".

If they can increase bopd from Trinidad by say 200 it would likely make the company profitable, including BOD expenses, whereas, at the moment there is a monthly drain of around $1800.

Regarding the humongous additional benefits to shareholder value I’m referring to the Chevron deal - the main financial benefits I’ve cut and pasted from the RNS:-

· Chevron will pay to CEG US$12.5 million cash on completion of the Transaction, these funds will be used to support the further development of the Company's business.

· Chevron will carry 100% of CEG Uruguay's share of the costs associated with a 3D seismic campaign on AREA OFF-1, up to a maximum of US$15 million net to CEG Uruguay.

· Following the 3D seismic campaign, should Chevron decide to drill an initial exploration well on the AREA-OFF 1 block, Chevron will carry 50% of CEG Uruguay's share of costs associated with that well, up to a maximum of US$20 million net to CEG Uruguay.

As the current market capitalisation of CEG is just over £13 million and the recent banked cash is $12.5 million I don’t believe I’m outrageously ramping this in suggesting that the SP doesn’t reflect the value of the Chevron additional benefits plus the value of Trinidad assets together with any value for OFF- 3 !

If the Seismic is favourable and Chevron confirm they will drill OFF- 1 the pre drill value of CEG will increase as minds of investors become more focused on the potential benefits of success- it’s a phenomenon that’s pretty common in Oil Exploration. In that scenario those shareholders who don’t want to take the risk of the drill may well find they can exit the share at a good profit, thereby benefiting from the humongous additional benefits of the Chevron deal, without oil being discovered!

As I have mentioned previously I watched a video from Eytan post Chevron where he ventilated the idea that CEG would have the option to sell part of their 40% interest in return for a free carry on the drill costs. If that happened and for example Company XYZ agreed such a deal for say 20% it would be apparent to the market what the cash value of CEG remaining interest was - it would be equivalent to the cash sum Chevron billed CEG for the total 40% interest drill cost.

Outside investors note these details and do their own calculations on CEG NAV - should logically lead to a substantial pre - drill SP increase.

Glad to have this opportunity to explain this concept to you Garry - I suspect you weren’t the only one who couldn’t understand the exciting potential here in the pre - drill phase!

I’m thinking this is quite a revelation for you as it seems like you’ve invested in this share on a shyte or bust basis - It occurs to me this may make you more comfortable with your shares but, as always, DYOR Garry!

GarryGraham - many thanks indeed for your enquiries.

Your first enquiry was rather strangely worded as you’re asking me to confirm when shareholders will be receiving a dividend from the share of the $12.5 million. I haven’t previously indicated dividends will be paid hence the strangeness of asking me to confirm ‘ when ‘. I do not foresee CEG will commence payment of a dividend for many years to come, even if the Uruguay drill is a big success!

If this company continues to trade successfully with a succession of positive RNS I expect the SP to rise to reflect those achievements. If the SP does not rise to reflect the true value of the underlying assets the company will become vulnerable to a Takeover bid from another company who have appreciated the value and believe they can convert that for their own shareholders. A T/O bid is a very common way of dealing with smaller companies.

At the moment CEG have the $12.5 million but, as I suggested previously, it’s likely they’ll spend some of this on developing OFF- 3 as that’s obviously sensible and would be fully understood by most shareholders. I’d also speculate some cash will be spent on Trinidad as I believe it’s likely they will have a priority list of projects that have been discussed for years and agreed as being very worthwhile on ROI basis - just waiting for the cash to fund it. Before readers become alarmed I must stress this is merely my own opinion - I have no evidence from CEG to back it up so it could be complete tosh!

To be continued:-

JohnBriggs - I’ve just had a very disturbing thought - what if Eytan had taken your “ Why on earth “ ridiculous assertion to heart and given up - shareholders would be poorer by $12.5 million plus the humongous additional benefits - would that have been enough to purge your disgruntlement?

In4cedros

Posted in: CEG

Posts: 6,004

Price: 6.00

No Opinion

RE: RE: $12.5M banked12 Nov 2024 20:55

Briggsy - to you it may appear tripe but for curious onlookers it’s interesting factual information which changes the investment proposition, particularly the downside risk factor.

Surely even you would agree that CEG were desperately vulnerable prior to the completion of the Chevron deal - the state even stimulated your famous quote

“ Why on earth would anyone want to give their money to a company with no credibility and run by amateurs and most importantly who on earth would want to partner with them ”
 
Now with cash in the bank CEG can plan for the future with free cash they would have had little hope of raising in the market - absolutely transformational! Long term shareholders are certainly better served having good fundamentals than a SP based pretty much on hope.

I’m sure shareholders are pleased you are concerned about their SP but I doubt they place much reliance on your predictions based on your history #nocredibility !

As we hadn’t heard from you for a while I was thinking you may have come to terms with your loss but you clearly need more comfort from me. Thanks for giving me opportunity to reply and make my points!

JohnBriggs - I speculate that it’ll be used for the benefit of shareholders because I haven’t seen the evidence that it won’t be!

The core of management here is ex Bahamas Petroleum they were on a mission to drill offshore Bahamas, as the name suggests, and my observation, coming over from Columbus, was that shareholders were very committed to that objective so management acted with their full support. They tried to achieve a partnership deal with a major but failed.

Some speculate that a deal was there to be had with a major but I’ve seen no evidence that’s the case. In the absence of a deal management decided to go it alone, again with support of shareholders, cobbling together an optimistic minimum war chest.

That war chest didn’t allow significantly for unforeseen eventualities and in the wake of the last minute environmental/legal dispute the company put in place a borrowing scheme which was clearly detrimental to existing shareholders.

Speaking personally I didn’t fancy the risks of the Perseverance drill and didn’t invest. Even though I didn’t invest I would have been pleased for shareholders if it had been successful.

We all know the drill failed and the failure would, almost certainly, have totally wiped out the company had it not been for the Columbus assets, which had sufficient potential to encourage shareholders to re-capitalise the business, largely through the Australian cohort.

The drill turned into pretty much shyte or bust for the Bahamas Petroleum management. This time, with Uruguay, the management has many more options and has experienced the reality of nearly losing their jobs so, hopefully, it will be different.

Shareholders put their trust in management when buying into a proposition - no one is twisting arms to stop shareholders selling if they don’t like it but I don’t see wide scale selling here and clearly most shareholders liked the Chevron deal.

When I decided the Perseverance drill was insufficiently attractive that was my business - I didn’t see the need to be posting against it on a regular basis because there was still a possibility of success, which would have deified the management, if I believed some of the posters, at that time! Obviously if I had a financial position against the drill trolling would have made sense but I doubt anyone is shorting this stock now!

In a nutshell I’m suggesting that the disenchanted should have got over it by now. You know who you are!

Laallee - I want to apologise to shareholders if I’m seeming exuberant. Similarly to GarryGraham for appearing excited.

I know that any suggestion of positivity regarding CEG appears to trigger the legacy troll contingent and the cohort of disgruntled existing shareholders. Quite frankly, however, I’m at a loss to understand why me merely citing a succession of facts about the company together with some reasonable speculations creates such negative comment on here.

On this board there seems to be a preponderance of negative posters, seemingly because, historically, they have chosen to invest in a high risk proposition which failed to measure up to their optimistic expectations. This share remains in the high risk category but that $12.5 million cash payment has certainly favourably changed the fundamentals here!

ATB to all shareholders!

GarryGraham - many thanks for your kind tribute.

You might regard $12.5 million as paltry but if I’d have come on here a year ago and posited the idea of $12.5 million in the bank, Chevron funded seismic plus a 40% retained interest I’d have been hounded at every turn for being the most evil ramper on LSE!

Yet look at this, almost magical, transformation of the company’s fortunes. I’m surprised that the SP doesn’t yet reflect the change in fundamentals here but I fully expect that situation to change over the coming months as folks get used to the idea that the begging bowl has been firmly tucked away and that company announcements are to be viewed with excitement rather than foreboding.

Whilst I’d like to see a higher SP I certainly prefer a company with strong fundamentals to one reliant only on a wing and a prayer.

Re gripe 1 - it follows, to those with even a very limited grasp of mathematics, that at a run rate of $180,000 monthly the $12.5 million will last many years!

In reality I can’t rule out it may be spent more quickly on other projects, the BOD, after all, have a free hand, but they do have to answer to shareholders and I doubt the Australian cohort are going to be supinely tolerant to just using it for BOD salaries for 4/5 years!

Obviously you, as a vocal shareholder, will have your opportunity to criticise the BOD if that’s the case!

GarryGraham - it’s a relief to hear from a committed shareholder occasionally- it speaks volumes for the potential of OFF-1 that you continue to hold and decided to double down despite having more reservations than most of our trolls!

Re gripe 1 - Eytan has stated the monthly loss for admin is around $180,000 monthly. That was before they settled the dispute with the land owners of the South West Peninsula field in Trinidad. Those that follow the company know they have declared some assets in Trinidad ( geographically to the South East ) to be core, with the other fields in Trinidad up for sale.

You seem to be reluctant to acknowledge that the fields up for sale could yield substantial sums - the deal struck with PRD certainly underlined that. I look forward to you having a better understanding after you’ve read the RNS relating to that deal, which I have previously referred you to.

Re gripe 3 it’s an interesting opinion and it may well prove correct. Closure there wouldn’t devastate me as Eytan has to make fine judgements. The BOD now have a good understanding of the assets and viability. Your suggestion is, however, based on no published briefing from the BOD. I prefer to give more credence to what they say and do - we only have to consider the Chevron deal and the pile on from trolls against that to learn it can make commentators here lose credibility very quickly when they attempt to plough their own furrow, based on no information, which conflicts with the BOD statements.

Re gripe 2 ( OFF-3 ) I understand it’s difficult for you to see the potential but I believe most shareholders are happy for the work to continue there. Obviously if you can guarantee it’s of no value I’d support you being paid to make such a presentation to the CEG BOD as it would save money but I’m doubting, based on your posting history, they would take you seriously!

I’m still basking in the comfort of that bank balance and the magnificent potential here!

Probably not game changing information for most readers as it’s improbable that Chevron won’t proceed with seismic after paying CEG $12.5 million a few weeks ago but I guess the disenchanted have to try and hang their hat somewhere!

I’m still basking in the comfort of this transformational bank balance and intrinsic value of the remainder of the Chevron deal, not to mention the potential of OFF- 3 and Trinidad.

Thank you Chevron and thank you Eytan!

Garry - I didn’t mention the possibilities of cash from sale of some of the Trinidad estate - could be significant, check out the deal with PRD!

GarryGraham - there’s going to be plenty of time to discuss all the permutations before any drilling occurs.

Don’t forget it may well be that CEG achieve another fat credit to the bank account in respect of OFF-3 farm out in the meantime, that may affect decisions on how much of the 40% CEG retain!

I’m sensing you’re salivating at the prospects here!

GarryGraham many thanks for your post. I’m quite flabbergasted you believe, from reading my posts, that I’m relying heavily on success here. I’m certainly celebrating the success Eytan and the BOD has achieved for CEG and i don’t care how many trolls want to play it down it’s a phenomenal triumph.

Do you not accept receipt of the $12.5 million is transformative for CEG, don’t you feel more comfortable, as a claimed shareholder, with that cash in the bank compared to the pre Chevron completion situation, where I seem to remember you were very flaky about the deal getting over the line!

Looking to the future it occurs to me you may have missed the video where Eytan discussed options available to CEG should Chevron decide to proceed with a drill, after positive seismic. He said that having a 40% interest opened up the possibility of trading a portion in return for payment of CEG share of the drill cost effectively leaving CEG with a free carry for their reduced share.

Whether CEG does that depends on the perceived attitude to risk of shareholders. Although you ventilate considerably on here and claim to be associated with a group of shareholders I can’t help thinking that the Australian group are likely to hold more sway and if they want CEG to keep their 40% by fundraising that will probably be the preferred route.

You speculate on the odds of success and you’re entitled to your opinion. I’d prefer to wait and see the COS produced by CEG at the appropriate time but I certainly wouldn’t dispute it will be a gamble . As I suggested previously I don’t believe this is a share suitable for widows and orphans!

Lastly CEG don’t need me to defend them - their actions speak for themselves but I don’t mind chipping in from time to time when trolls get overly busy with tosh Garry!

Briggsy- it would have been even more magnificent if it were £12.5 MILLION rather than $12.5 MILLION but you won’t hear me whinging or whining about that - it still puts CEG in a wonderful position compared to the pre Chevron era doesn’t it John?

Thanks again for giving me the opportunity to reply!