Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
VSA
https://www.proactiveinvestors.co.uk/companies/news/902108/vsa-capital-market-movers---columbus-energy-resources-902108.html
Columbus Energy Resources#: H1 2019 Interim Results
Earnings Performance
Columbus Energy Resources (LON:CERP) delivered robust H1 2019 results, continuing its steady progress in earnings improvement despite sluggish WTI oil prices which traded within a narrow range averaging US$58.24/bbl in H1 2019. In H1 2019 CERP received an average price of US$57.6/bbl (down 6% YoY) which was partially offset by a 3.7% YoY increase in sales of 92kbbl resulting in net revenues after royalties of £3.4m, a 6% decline YoY.
However, as we have previously highlighted the impact of the Supplemental Petroleum Tax (SPT) in the current US$50-60/bbl WTI trading range has resulted in a keen focus on costs and despite the reduction in the top line a reduction in COGS resulted in a 61% YoY increase in gross profit to £691k. Furthermore, the impact of one off costs which impacted SG&A in 2018 in relation to Spain and the Steeldrum acquisition has been significantly reduced meaning that EBIT improved from a loss of £2.4m to £1.3m YoY while the loss from net income narrowed from £2.5m to £1.7m YoY.
Set for Stronger H2 2019
As can be seen from the interim results CERP has continued to progress towards positive cashflow and profitability, however, the combination of the SPT impact and rising rig rates in Trinidad necessitated a significant reduction in workover activity. To combat this CERP, as announced at the recent AGM, have purchased a second rig which was shipped from the USA during Q3 2019 and is now in country and due to be operational later in the quarter alongside the other company owned workover rig. This will mean that CERP can carry out workover activity at a much lower cost meaning that despite ongoing rangebound oil prices an increase in CERP’s H2 2019 output and earnings performance remains our base case.
Recommendation and Target Price
Although the interim results demonstrate the ongoing improvement in earnings performance the major activity in H2 2019 relates to the drill programme on the South West Peninsula and with CERP on track to commence in September we continue to see a successful well as the primary driver for transformational earnings growth going forward whilst we expect additional catalysts from the CO2 project and new country entry.
We reiterate our Buy recommendation and our target price of 21.6p.
Malcy's blog
https://www.malcysblog.com/2019/09/genel-columbus-predator/
Columbus/Predator
CERP has updated the market with regard to its work with Predator on the CO2 pilot project on the Innis-Trinity IPSC. Workover operations have now been successfully completed to survey downhole the AT-4 and AT-13 wells in preparation for future CO2 injection and enhanced oil production.
Predator has confirmed to Columbus that based on the AT-13 survey results the Herrera #2 Sand has been selected as being accessible for CO2 enhanced recovery operations. This is a significant step, particularly for Predator as they forge forward on the project but also for CERP who may use any proceeds from a sale, should this happen to add to their SW *****ula programme.
Malcy's blog
https://www.malcysblog.com/2019/09/oil-price-columbus-wentworth-and-finally/
Columbus Energy Resources
Interims from CERP this morning but as always they are of very limited interest particularly as the oil price was firmly stuck in the SPT range. The first half has been used in preparation for what will be a most interesting second half and cash flow optimisation has been at its peak.
This has all been leading up to the drilling of an exploration well in the SW Peninsula expected in the late part of Q3 and is the culmination of ‘many years of commercial negotiations, technical analysis and operational planning to get to this point’. The South West Peninsula has been the holy grail for Columbus and hence the concentration on this important part of the island.
Elsewhere CERP have been continuing with the technical and commercial preparations for the commencement of the CO2 project with Predator and success here could have a number of potential positives for both companies. We have been expecting an announcement with regard a new country entry for some time now but still believe it is imminent….All in all an interesting second half coming up for CERP and with the assets of Range Resources having been franked at a high price the valuation looks light.
http://vsacapital.com/wp-content/uploads/dlm_uploads/2019/08/22-08-flow-test.pdf
VSA Morning Flow Test
This Morning’s News
Columbus Energy Resources (CERP LN)
#
Columbus Energy Resources (CERP LN) has provided an update and is
continuing to make strong progress in combination with Predator Oil & Gas
Limited (PRD LN) to advance the CO2 pilot project on the Inniss-Trinity field.
CERP’s wholly owned subsidiary Fram Exploration (Trinidad) Ltd (FRAM) is
operator of the Inniss-Trinity field and workover operations at the At-5X well
have now been completed in preparation for CO2 injection and subsequent
enhanced oil production.
A target interval of reservoir section has been identified and has been
successfully isolated from the deeper reservoirs using a cast iron bridge plug.
This means that the preferred and most efficient methodology which involves
injecting CO2 into isolated intervals of reservoir sands can be used.
The use of CO2 for enhanced oil recovery in this programme will enable CERP
and PRD to understand the potential not only at Inniss-Trinity but also on
similarly suitable fields in Trinidad.
With the programme fully funded by PRD we continue to believe that this structure offers CERP a very attractive risk reward profile and provides a further potential catalyst for the shares in addition to the upcoming drilling programme on the South West Peninsula.
We reiterate our Buy recommendation and 21.6p target price.
@Columbus_ERP
5m5 minutes ago
Follow up on this link: https://bit.ly/2LVFd0g to read @VSACapital latest note on @Columbus_ERP
https://www.proactiveinvestors.co.uk/columns/details/31071/vsa-capital-market-movers/vsa-capital-market-movers---columbus-energy-resources-31071.html
Columbus Energy Resources: SWP Maiden Voyage
Columbus Energy Resources (LON:CERP) has announced its intention to drill a low cost well in early Q3 2019 with a second well likely to follow soon after. Each likely to take two to three weeks to complete and are located within CERP’s wholly owned licenses on the highly prospective South West Peninsula (SWP). We highlight the high chances of success for these exploration wells of 45% and 65%. One initial target indicates a mean prospective resources of 66mmbbls and our analysis suggest a NAV of US$81m with the potential to deliver near term and transformational growth which could be largely funded internally based on management guidance.
Private Petroleum License
YTD oil prices have traded broadly within a narrow range of US$50-60/bbl bar a brief break out in April. This price range is uniquely challenging due to Trinidad’s Supplemental Petroleum Tax (SPT) which has hampered CERP’s workover programme on its established production base. As a consequence, we have reduced our near-term assumptions to a more modest growth trajectory and assume 650bopd for 2019F (plus 20% YoY). However, the terms of exploring the SWP are far more attractive and a renegotiated private petroleum license held over the Bonasse field includes very attractive commercial terms for the initial 10mmbbls recoverable resource meaning the economics of producing from the SWP are significantly more attractive than at CERP’s IPSCs.
CO2 Injection Progressing
CERP’s partner on the Inniss Trinity field Predator Oil and Gas (LON:PRD) announced that a Certificate of Environmental Clearance (CEC) has been received by CERP (the Operator) paving the way for final permitting and field preparations for CO2 enhanced oil recovery testing in Q3 2019. PRD has announced that the recoverable Contingent Resource is estimated at between 5.3mmbbls to 8.9mmbbls (6.8mmbbls best estimate) and PRD has the right to purchase the CERP subsidiary which owns the field for US$4.2m up until 31 December 2019.
Recommendation and Target Price
In addition to strengthening the underlying production base towards a sustainable operating position it has taken two years of preparation to get to this point to ensure that CERP shareholders are positioned to receive maximum benefit from exploration success on the SWP. Now with three major and near-term drivers for value creation; SWP drilling, CO2 injection and a new country entry with a discovered onshore development opportunity we believe that CERP is well positioned for a significant rerating through H2 2019.
We reiterate our Buy recommendation and adjust our target price to 21.6p.
@VSACapital
7m7 minutes ago
Update note on @Columbus_ERP just published. H2 set to busy with SWP drilling, new country entry and CO2 Injection all providing potential catalysts. We have upgraded our SWP valuation on back of latest data.
CERP have now added a timeline on the AGM presentation video so you can easily access the parts you're interested in
https://www.youtube.com/watch?v=MfvnG_VDS68&t=
Yes I posted that this morning from Northpole but with all the posts about betting and the like it got pushed down to the previous page ....
Malcy's blog
https://www.malcysblog.com/2019/07/oil-price-columbus-aaog-infrastrata-gulfsands-and-finally/
Columbus Energy Resources
I noticed that CERP put up a detailed presentation last week at its AGM and with an exciting second half to come thought it was worth saying a few words. There is little doubt that the last two years have been a hard exercise in clearing the decks and it looks now as if the company is in much better shape. CEO Leo Koot concentrated on the South West Peninsula with its attractive economics backed up by appealing numbers from EPI.
Two exploration wells are to be drilled in the SWP starting in late September and those numbers I mentioned, EPI has given a 45% COS on the deeper Saffron well and a 66% COS on the shallower Clove well. Indeed EPI give a 100% COS of the presence of both reservoir and charge on Saffron, and bear in mind these are exploration wells we are talking about.
So, the indicative economics are ‘compelling’ for the deeper well and they show, conservatively I’m told, a 10m barrel recovery case of $80m NPV 10 at $60 oil giving an unlevered IRR of 118%. With any oil likely to come onto production ‘almost immediately’ one can see why the prospects look so attractive. Indeed it gets potentially even better as apart from Saffron there are apparently 11 additional prospects which the company plan to go to work on, starting with the biggest, in 2020.
CERP has also mentioned a number of times that it plans to make a new country entry and the CEO mentioned it in his AGM video. It is clearly imminent as he said that at one stage he had hoped to announce it on AGM day but due to signing formalities it would be coming up ‘this month or next’. All in all whilst it has been a longer than expected warm-up for the team, CERP look as if they are moving towards an interesting phase in their development.
(Cont'd)
"In addition to this, CERP has acquired a second workover rig in the US which is expected to be in country and operational by September. This allows it to be master of its own destiny and avoid any local service sector issues/cost inflation as state-owned oil company, Heritage, ramps up its activity levels – with plans to move from 12 to 23 workover rigs.
This company has been operating under the radar for the last 18 months, but management has done a good job over that time of restructuring and cleaning up the business (Spain, Trinidad legacy issues, improved leaseholder terms, new personnel). It now has a stable production base as a launch pad for its pursuit of material growth opportunities across multiple areas – exploration, M&A, and secondary/tertiary recovery. Time to get onboard!"
With thanks to Northpole2 on the other site
"Spotted this extract from an "Energy Matters" note put out by Finncap this morning, they send a daily note to all their clients on what's happening of note in the oil & gas space. Makes interesting reading.
"Columbus Energy Resources AGM update
CERP has been on a tear since our Trinidad & Tobago deep dive report in mid-June, with the shares up 22% since publication. Last Friday’s AGM proved a key catalyst, with the company providing greater clarity on its upcoming SWP (South West Peninsula) exploration campaign.
CERP has so far identified 12 prospects in this region on seismic, two of which have been matured to drill-ready status:
- Clove, a shallow prospect (2,200 ft) targeting the Upper and Middle Cruse with P50 oil in place of 1.7 mmbbls and a 66% Geological Chance of Success (GCoS).
- Saffron, a deeper Lower Cruse prospect (4,000 ft) with P50 oil in place of 53 mmbbls and a 45% GCoS. The P10 upside case is 133 mmbbls!
These are very low risk factors for exploration wells, reflecting historic drilling and production in the area. In both cases the biggest risk is the trapping mechanism due to geological complexity and compartmentalisation.
Drilling of these prospects is cheap – US$0.5m and US$0.8m respectively – and a high powered Trinidadian rig has been selected. This rig has been idle for a year, so will need to undergo extensive testing before being used in the field. Nevertheless, drilling is expected to start in September and the wells take just 2-3 weeks each to complete. Critically, these prospects are close to existing infrastructure, so can be hooked up and start producing cash flow very rapidly. In addition, the potential economics of any development have been greatly enhanced by the renegotiation of the terms of their leaseholder licenses.
The larger and deeper of the two prospects in particular, Saffron, is a potential game changer for CERP. Even assuming a conservative capex and production profile, CERP estimates Saffron has an NPV10 of $79m in the success case. Moreover, the development can be funded from cash flow if so desired. This is by no means the biggest opportunity in the drilling inventory either – the largest is ~400 mmbbls, but CERP needs to think about whether to pursue a farm-in partner for something on this scale.
On the M&A front, a new country entry is expected over the next two months. The block being negotiated on ground floor terms is located onshore in a proven hydrocarbon basin and is adjacent to a producing field, so is close to existing infrastructure. It also has existing oil in place, so sounds more of an appraisal/development opportunity than pure exploration. "
(cont'd)
AGM video is avalable
https://columbus-erp.com/news/videos/
IreneKrapp - stop being a dick towards someone who makes the effort to go to these meetings, asks the questions and takes the time to report back to us.
AGM PDF presentation on website
https://columbus-erp.com/investors/reports-and-documents/
https://www.malcysblog.com/2019/06/oil-price-igas-vog-egdon-columbus-and-finally/
Columbus Energy Resources
Delayed from yesterday the finals from Columbus for 2018 which show a very solid if occasionally I suspect frustrating year. Revenue was up 58% at £7.57m and the year was cash flow positive, the company ended the year with cash of £1.71m and debt of £0.67m after some sensible decisions on exceptional payments and the Steeldrum debt.
Production was up 47% at 541 b/d with a peak of 1,021 b/d and the company admit that the average could have been higher but for unforeseen circumstances and only profitable production is good production. With the company being hit by SPT, which had a ‘disproportionate’ impact, and the unexpected Spanish decision on the La Lora concession it was occasionally a difficult year. But with the integration of the important Steeldrum assets completing in Q4 of the year and better terms in the SW Peninsula the outlook is positive. Indeed the SW Peninsula exploration has the potential to be transformational for the company.
CERP is funded for the exciting drilling planned for 2H 2019 especially in the SW Peninsula and with its keen eye on costs, including management pay and only profitable production mantra, is indeed building a foundation for the future. The M&A into another South American country may accelerate that process should the right deal be found
Malcy's blog
https://www.malcysblog.com/2019/05/oil-price-hurricane-columbus-jadestone-and-finally/
Columbus Energy Resources
CERP have announced that they have been granted a Private Petroleum Licence for the Bonasse Licence Area in S W peninsula of Trinidad. This formal recognition by the Ministry that Columbus has the right to exploit is needed to continue with the company’s operational and drilling campaign. CEO Leo Koot said that ‘any discovery, even a modest one here would have the potential to transform the company in this hard fought licence’. I believe that this is indeed ‘critical’ for the prospects for the area and thus is of significant importance to the company.
https://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/30899/vsa-capital-market-movers---columbus-energy-resources-30899.html
Columbus Energy Resources (LON:CERP)
Columbus Energy Resources (LON:CERP) has announced it has been granted a Private Petroleum Licence for the Bonasse Licence Area in the South West Peninsula of Trinidad. The licence, which includes the Bonasse field is granted by the Trinidad Ministry of Energy and Energy Industries and formally recognises that Columbus has the right to exploit any oil and gas in the licenced area. Having previously announced that a well location had been chosen this is an important step in terms of regulatory clearance and confirms that the well will be drilled in 2019.
CERP is undertaking the necessary pre-drill activities to commence drilling in Q3 2019 and this continues to be one of the key catalysts for the stock. Drilling does however remain subject to obtaining Governmental approval; however, the grant of the Private Petroleum Licence is an important step towards this.
The granted licence has a term of 20 years and can be renewed upon an application by the Company for further periods of 20 years. As part of the requirements of the licence, the minimum work obligation includes the workover of three existing wells, with the addition of the drilling of one well in 2019. This confirms that the exploration of the SWP will commence in 2019, funded by existing cash resources which is a major step, in our view, in the development of CERP.
We reiterate our Buy recommendation and 21.4p target price.
Nothing we don't already know but publicity nonetheless
https://www.proactiveinvestors.co.uk/companies/news/219803/columbus-energy-resources-plc-ready-for-next-leg-with-south-american-acquisition-219803.html