Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
"This has required careful measures to ensure the wellbore is in a stable condition whilst continuing to drill"
I for one am glad they are taking the time, assessing the well carefully and not going gung-ho like previous management probably would have. It may take longer for the results to be known, but hopefully it will be worth the wait.
Some people have short memories and seem to forget "John" was the biggest troll of all under his alter ego(s). Be careful what you wish for.
They've sold just over 8 million. Had 116,428,571 on 26th Sept, now have 108,028,571
1st Lind drawdown
https://www.lse.co.uk/rns/CERP/issue-of-equity-total-voting-rights-986khgq518j2cba.html
"Tight hole" meaning, with regards to what Leo referred to in his interview this morning
"In the oil and gas industry, any well is deemed as a tight hole when its drilling data and other drilling parameters are not widely available with the E&P organizations or if it is related to the geometry of the well. The tight hole status is sometimes granted by the states which helps the companies in keeping the information secret with respect to a well. Mostly, the drilling information is not shared just to get a competitive edge over other E&P organizations. This secrecy is related with the benefit that the organization will reap out and thus, the exploration wells are termed or designated as tight holes."
https://columbus-erp.com/news/videos/
Makes complete sense to me to split the roles. Leo explains the rationale behind it with some snippets about Saffron. A small progress montage at the end of the interview
"Similar to the Inniss-Trinity IPSC, for which an extension and modification was recently granted, the Company looks forward to working with Heritage to agree a mutually beneficial work programme and fiscal regime for the Goudron IPSC so that we can continue to produce from Goudron for many years to come. This will need to be for the benefit of both Columbus and Heritage, taking account of the Trinidad regulatory and taxation environment affecting IPSC's such as Goudron. We will update the market as soon as the longer term extension is agreed."
Chesh, they always put that in the morning report, nothing exciting.
VSA
https://www.proactiveinvestors.co.uk/companies/news/906838/vsa-capital-market-movers---colombus-energy-resources-906838.html
VSA Morning Flow Test, 12/11/19
Columbus Energy Resources (LON:CERP)
Columbus Energy Resources (LON:CERP) has announced that the Incremental Production Service Contract for the Inniss Trinity has been extended to enable the full implementation of the CO2 injection pilot project from January 2020 to December 2021 providing the project is implemented by 28 January 2020.
Perhaps most positively, the Minimum Work Obligation has been amended to be fulfilled by the implementation of the pilot project as opposed to the prior condition of drilling seven wells. This is particularly beneficial to CERP’s partner Predator Oil and Gas (PRD LN) who are responsible for funding the MWO whilst CERP is operator. As well as a lower financial burden, not having to drill seven wells will enable CERP’s management to focus on capitalising on a successful CO2 test, should that be the case.
CERP is continuing to make progress on delivering on its three key aims in H2 2019 with SWP drilling, new country entry and the CO2 pilot project.
We reiterate our Buy recommendation and 21.6p target price.
https://www.malcysblog.com/2019/10/oil-price-savannah-coro-nu-oil-gas-columbus-and-finally/
Columbus Energy Resources
The long awaited new country entry from CERP is…………………Suriname so no surprise there then. But the company seems to have done a pretty fair negotiating job as they have a very large onshore block with 24 MMbbls of STOIIP and with no upfront payment at all. Indeed it gets better as they can set the pace on the Weg Naar Zee block with a phase 1 exploration period of up to three years and also they can use EOR techniques as they are doing in Trinidad as well as using EWT’s.
They have a good data base and the block has had money spent on it so shareholders need not worry about burning cash in Suriname. With two Extended Well Tests and a bunch of G&G studies to do the acreage they have become exposed to is pretty complimentary to that in Trinidad and of course there is a fair bit of upside exploration potential.
(cont'd)
Although Staatsolie already has daily production of around 16kbopd, as a national oil company in an underexplored region, it has limited resources to develop the country’s full potential and in response to the increase in activity in the
region has been tendering additional blocks to international companies. Furthermore, Staatsolie plans a bond sale next year to capitalise on the Guyana boom and fund further exploration. Near term catalysts specific to Suriname also include the offshore well currently being drilled by APA in Block 53 while back to back discoveries for TLW and ECO in neighbouring Guyana have driven a significant rerating of those shares.
The background of CERP’s management has been key to winning the tender and aside from his technical credentials, as a Dutchman, Leo Koot, has been at a significant advantage against competing bids for the block given that Suriname is a former Dutch colony where Dutch is the official language. Furthermore, CERP’s Trinidad management team have previous on the ground operational experience in Suriname, which is another positive and highlights, in our view, why CERP has been able to gain a foothold in the region alongside more established players.
We believe that today’s announcement represents an important step for CERP as it executes on its longer term strategy. The announcement demonstrates how this management team is genuinely capable of executing on the ambitious strategy it has laid out with exposure to a region which has gained genuine global attention from the oil and gas sector. We look forward to further updates in relation to the geology and technical understanding of the asset which will enable us to incorporate Suriname into our valuation.
We reiterate our Buy recommendation and target price of 21.6p.
http://vsacapital.com/wp-content/uploads/dlm_uploads/2019/10/10-04-flow-test.pdf
Columbus Energy Resources (CERP LN) has announced its new country entry following the signature for a Production Sharing Contract (PSC) for the Weg Naar Zee Block which is located in onshore Suriname. This gives the company exposure to one of the most exciting regions for exploration, the Suriname-Guyana Basin where the likes of ExxonMobil (XOM US), Repsol (REP SM), Total (FP FP), Hess Corporation (HESS US), Apache (APA US), Cairn Energy (CNE LN), Tullow Oil (TLW LN) and Eco Atlantic (ECO LN) are currently highly active in offshore exploration. XOM has discovered over 5Bboe in Guyana, through 13 consecutive discoveries to date highlighting the region’s prospectivity.
The high level terms of the PSC which have been outlined by CERP indicate a flexible and low risk opportunity, on attractive terms and with no upfront cost. The first phase of exploration which lasts for up to three years requires CERP to spend US$250k as a minimum work obligation covering G&G studies and an extended well test on at least two stratigraphic oil bearing units. Subject to the results of these tests CERP then have the option to progress to phase two and three which again have low MWO costs but will focus on 2D seismic and further wells. This gives the company significant flexibility in terms of the pace of development.
Whilst we highlight how positive the exposure to this basin is for CERP, we also recognise that as a smaller player, and consistent with the strategy in Trinidad, the company is maintaining its focus on lower cost onshore development opportunities commensurate with the resources of a company of its current size. The key advantage, in our view, is that the low MWO cost in each phase of exploration and the length of time for each phase will enable the company to advance development and appraisal at its own pace while the profit sharing and marketing agreements appear to be unrestrictive and CERP will be able to benefit from successful development of the fields. CERP will commence with a 100% interest in the block although Staatsolie will have the right to buy back in for up to a 50% interest while funding its proportional share of costs.
Aside from the terms of the PSC which are low in relation to capital intensity, by entering a discovered onshore field with a resource of 24mmbbl (STOIIP) the project has already been significantly derisked from a technical standpoint. Clearly, however, CERP has greater ambitions and there is likely to be significant further potential within the 900km2 block. Indeed, in its tender process Staatsolie highlighted the exploration potential in the North West and South of the block where limited exploration has been carried out. In total 70 wells have been drilled in the block since 1968, largely by Staatsolie which has intercepted oil shows in the Cretaceous and Paleocene and conducted a small number of well tests.(cont'd)
VSA
https://www.proactiveinvestors.co.uk/companies/news/903738/vsa-capital-market-movers---columbus-energy-resources-903738.html
Columbus Energy Resources (LON:CERP) has announced that it has been granted approval from the Ministry of Energy and Energy Industries to drill the Saffron Well and commence its drilling programme on the South West Peninsula (SWP). The company is now close to spudding the well with the mobilisation of the rig now in process.
The well provides a potentially transformational catalyst for the company and we continue to believe that the current share price of 4.25p/sh. does not fairly reflect the potential. Our 3.4p/sh. risked valuation for Saffron, which covers the near-term prospects within the SWP only, has not yet been priced in ahead of drilling.
We reiterate our Buy recommendation and 21.6p target price.
VSA
http://vsacapital.com/wp-content/uploads/dlm_uploads/2019/09/25-09-flow-test.pdf
This Morning’s News
Columbus Energy Resources (CERP LN)
Columbus Energy Resources (CERP LN) has confirmed that civil works and
contracting are underway enabling the rig to be on site for the end of
September ahead of the upcoming and potentially transformational drilling of
the South West Peninsula (SWP) and we expect the well to be spudded shortly
after the rig is on site.
The key factors which underpin the potential transformative growth arising
from a successful Saffron well are the prospectivity of the SWP, contiguous to
the prolific East Venezuelan Basin, and the attractive terms on which the
company would produce due to the acreage being covered by Private
Petroleum Licenses rather than IPSCs.
With regard to the prospectivity, this is the first of a number of attractive
targets although CERP has announced today that EPI Group has upgraded its
estimates Pmean STOIIP for the Lower Cruse from 66mmbbl to 77mmbbl
therefore enhancing the recoverable volumes by 15% to 11.5mmbbls. This has
a positive impact on the company’s internal economics for the project which
on an unrisked NPV10 increase from cUS$79m to cUS$88m. Based on the
updated presentation this appears to result from higher production rates from
years 6-10 in particular.
Our previously published analysis based on the original 66mmbbl resulted in
an unrisked NPV10 of US$83.8m for Saffron. We subsequently applied the
Chance of Success of 45% determined by EPI Group resulting in a risked
valuation of US$36.7m. Although the announcement clearly demonstrates the
increasing confidence and potential of Saffron our risked valuation approach
does minimise the volatility of such changes and therefore we conservatively
maintain our current estimates. The major catalyst for realising the potential
remains a successful well, however, and we highlight that on a per share basis
of 3.4p/sh. our risked Saffron valuation continues to demonstrate that little of
that risked valuation is currently priced in, despite the recent rally in the
shares.
We reiterate our Buy recommendation and 21.6p target price.
Maybe just have an updated list, say at the end of the day after your updates, or every other day, it's a long list to scroll through multiple times, especially on mobile.
2nd RNS re management fees.
"The Executive Salary Scheme has, over the past two years, helped the Company preserve its cash and align the Executive Management with shareholders. As we head into the third year, it's appropriate for the Executive Management to return to receiving 100% of their fees in cash. This will have the benefit to shareholders of limiting the total number of shares in issuance. The Executive Management intends to continue to invest in the Company using all or part of the salary currently allocated for the Executive Salary Scheme, through the purchase of shares in the secondary market, which obviously benefits all shareholders."
LGO-fan - I would rather have all my finger and toe nails pulled out whilst listening to Justin Bieber on loop than that happen...