Member Info for jcgswims

A little bit from Predator's finals results this morning

"In Trinidad Predator, through its Pilot C02 Enhanced Oil Recovery project, is seeking to utilise some C02 emissions from one of Trinidad's ammonia plants which would otherwise be vented into the atmosphere. A significant proportion of the C02 utilised in the Pilot will be sequestrated in the ground. The potential for upscaling enhanced oil production using C02 injection within Trinidad's large inventory of mature oil fields may potentially provide further business development opportunities.

Predator was formed during the year to consolidate the acquisition of an existing non-operated, potentially revenue-generating, business opportunity in Trinidad and an operated exploration and appraisal portfolio offshore Ireland. During the year progress was made on adding an exploration project onshore Morocco. A successful public listing raised GBP1.3 million of capital primarily to develop the Trinidad project. Predator's public listing was the first by a junior oil and gas company in 2018.

Trinidad is a core asset in the Predator portfolio as it offers the potential for early cash flow from production revenues with which to provide medium-term contributions to Predator's balance sheet. During the year the emphasis has been on prudently moving the project scope from infill drilling to enhancing oil recoveries and production rates using C02 injection, a process widely used to good effect in the United States. Commercial rationale for this was based upon reducing the quantum of capital investment per barrel of oil
produced and the payback time on investment, whilst increasing forecast production rates per well. Securing exclusivity to the C02 supply was an important primary objective in order to have the opportunity to be in the prime position to upscale C02 EOR operations after a potentially successful Pilot."

"Recognising the changing environment in which we operate, your Board and management's most recent strategic review has concluded that Predator must focus the majority of its cash resources on executing and developing its short-term production capability in Trinidad whilst maintaining in good standing an attractive portfolio of material high quality gas assets to facilitate de-risking the financing thereof through farmouts and potential M & A transactions."

https://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/30830/vsa-capital-market-movers---colombus-energy-resources-30830.html

I know SWP could be the "biggy" but just a reminder of how many fields we actually operate in, not just a one trick pony anymore that's for sure. Leo and the team have been very astute with their purchases, hopefully this will soon start to reflect in both profitability and the SP.

https://columbus-erp.com/operations/

SP currently up 6.3% - all buys so far.

CERP Tweet

Columbus ERP? @Columbus_ERP · 18m18 minutes ago

Looking forward to meeting investors at the UK Investor Show tomorrow at booth 51 where Gordon Stein, CFO of #Columbus, will be available to answer your questions #UKIS #CERP #SWP

Malcy's Blog

https://www.malcysblog.com/

Predator/Columbus

Heritage Petroleum Company has confirmed to FRAM (CERP subsidiary) as operator of the Innis-Trinity field in Trinidad that it has given consent to the conduct and operational plan for the CO2 EOR project on the AT-4 block on the field. Predator has the right to buy FRAM from CERP for $4.2m.

This means that Predator’s operational plan for the block can be progressed, the delivery window for first CO2 gas sales to the field has been extended to 30th April and agreed with the supplier. Guidance has been issued at a combined scoping production rate of 300 b/d by the end of 2019.

Predator say that operations ‘ are forecast to remain profitable at current WTI oil prices generating an average of $10/brl net back after operational and CO2 costs royalties and taxes. It should be borne in mind that scope for reducing CO2 and operating costs may exist as the initial prod data is collected from pilot operations and thus facilitate planning for economies of scale. Capital costs of less than $600,000 remain as previously guided and are funded from the set-aside cash reserves of the company.

This is indeed an ‘important milestone ‘ as described by CEO Paul Griffiths and with which I concur. The fact that Heritage has validated the technical and commercial model for CO2 EOR is good news from a third party and one who is the largest holder of mature onshore producing fields on the island.

Predator are in an incredibly strong position here, with a successful pilot they can upscale very profitably, the Government has clearly endorsed the strategy to boost onshore production and PRD has exclusivity over CO2 supply. All in all very good news for Predator shareholders and this stock is very much on the radar screen.

That was quick Smithy!

From VSA

https://www.proactiveinvestors.co.uk/columns/details/30713/vsa-capital-market-movers/vsa-capital-market-movers---colombus-energy-30713.html

Columbus Energy (LON:CERP)
Columbus Energy Resources (CERP LN) has provided an update regarding its Inniss-Trinity Incremental Production Service Contract (IPSC). Following the receipt of approval for conduct of the CO2 Enhanced Oil Recovery pilot project from Heritage Petroleum Company, Predator Oil and Gas (PRD LN) will commence first injections in Q2 2019, subject to the receipt of the remaining regulatory approvals.

Inniss Trinity has been identified as being a suitable reservoir for CO2 injection and Trinidad’s ammonia production plants mean a potential easily available source of CO2. Due to the differing oil API’s and structural nature of the reservoirs across Trinidad CO2 injection has only been considered at certain reservoirs. The pilot project will, however, provide important data as to the viability of this alternative process and positive results could potentially unlock significant value at Inniss Trinity as well as other similar reservoirs in Trinidad.

CERP has an interest in Inniss Trinity through its fully owned subsidiary FRAM Exploration (Trinidad) Limited. Through the agreement and as previously announced if the project is successful, Predator has the option to purchase FRAM for US$4.2m and is funding the pilot project.

We reiterate our Buy recommendation and 21.4p target price

Predator RNS mainly about Morocco but a little bit at the end

"We are excited by this opportunity and by the potential for cash flow from Trinidad C02 EOR operations through 2019, which can underpin our plans to become a significant gas player connected to the European gas market.""

https://total-market-solutions.com/2019/01/25/malcy-talks-oil-gas-vii/

10mins 40sec - A little bit from Malcy on CERP

Updated faqs

21/01/2019
Does the wet season disproportionally effect Columbus’s production compared to other producers in Trinidad?

Production operations are not in normal circumstances disproportionately affected, however planned incremental wellwork operations can be delayed by road access problems which are a bigger issue in the rain forests where Goudron and Trinity Inniss are located.

Columbus’s assets have been producing, in some cases, for over 100 years and the Company is better equipped than ever to deal with the disruption brought about by the annual wet season in Trinidad through back-up power generation and 24 hour in-field operations personnel. Despite this, the exceptional rainfall and resultant floods experienced in Trinidad in Q4 2018, the worst the country has experienced in over 50 years, did delay some of Columbus’s incremental production initiatives in October and November. The Goudron and Trinity Inniss Fields are located in the Trinity Hills range of south-east Trinidad which are more prone to roadway wash-outs in the rainy season, affecting transportation critical activities such as workover rig movements.

For more information on the extreme weather, please see this article: https://newsday.co.tt/2018/10/21/pm-a-national-disaster/.

21/01/2019
How will the wet season affect South West Peninsula drilling?

We do not expect the wet season to adversely affect the drilling planning in the South West Peninsula. The flatter relief and more accessible South West Peninsula terrain compared to the Trinity Inniss and Goudron Fields allows easier access in the rainy season while still being intermittently affected by flooding and power outages. Columbus is an experienced Trinidad operator and has carried out multiple drilling campaigns during the wet season with minimal disruption in the past. Drilling operations tend to be self-contained for both power generation and pre-delivery of on-site materials allowing pre-planning for weather related disruption compared to short duration multiple workover operations. The Company continues to plan to commence drilling from mid-2019 onwards once the ongoing technical analysis and normal well planning activities have been completed.

I wouldn't take too much notice of those rumours, RRL released a RNS stating they know of no reason etc for the SP movement.

Alternative link https://www.youtube.com/watch?time_continue=731&v=gm6Cgyw2CV0

https://www.stocktube.com/video/11759/-it-s-the-year-we-ve-been-waiting-for----columbus-energy-s-leo-koot-on-2019-11759.html

Malcy's blog

https://www.malcysblog.com/2019/01/oil-price-president-soco-echo-columbus-faroe-and-finally/

Columbus Energy Resources
A full update from CERP this morning including the achievement of the year end production target of 1,000 b/d in December. The average was 670 b/d which given the atrocious weather conditions was quite an achievement under the circumstances. The Steeldrum assets and personnel integration and the Icacos deal were completed in the quarter and are adding to the broader attraction of the company. Indeed the company are still looking for ‘value accretive’ acquisitions in both Trinidad and more broadly in South America.

Despite the dreadful on site conditions the company maintained its cash flow positive position and also completed a £2.5m raise in the period. This leaves them with cash of $2.6m and $0.48m restricted. With an exciting drilling campaign in the South West Peninsula scheduled plus the integration of wells acquired and a number of workovers and appraisals to assess the outlook is very positive. With six fields operating plus exploration upside the company is heading towards the transformation that many feel that management is more than capable of.

In addition, CERP is the operator of the Innis Trinity field and the current work programme is funded by Predator Oil and Gas (PRD LN) through a farm in agreement. Workovers in the quarter continued to make progress although CO2 injection has not yet commenced with the submission of the Certificate of Environmental Compliance completed in Q4 2018.

Recent share price performance has been soft and while we believe a combination of broad-based equity market volatility and a reduction in WTI oil prices have exacerbated the weakness the progress that management has made operationally and financially was not fairly reflected in the share price performance in 2018. A 67% YoY increase in production is an impressive and significant achievement and we expect continued progress in 2019. Although this was lower than originally anticipated at the start of the year and legacy costs associated with Spain have hampered financial performance we continue to forecast a reduction in the net loss from £5m to £3.4m in 2018 and a return to profit in 2019 demonstrating that the operational improvements are having a meaningful and tangible positive impact on the group financials. We believe that at the current share price CERP’s production potential, exploration upside and capital discipline is simply not reflected and continue to see significant upside potential.

We reiterate our Buy recommendation and 21.4p target price.

https://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/30452/vsa-capital-market-movers---colombus-energy-resources-30452.html

Columbus Energy Resources (LON:CERP)
Columbus Energy Resources (CERP LN) reported Q4 2018 production averaging 670bopd resulting in full year average production of 615bopd in 2018 which was up 67% YoY and ahead of our full year estimate of 600bopd despite the impact of severe weather and record rainfall in Q4 2018. Quarterly production was 9% lower QoQ as moving workover rigs and routine operations were prevented by flooding which made roads impassable in Trinidad. Gross revenues of US$3.23m were down 16% QoQ owing to lower production and lower oil prices which averaged 5% lower QoQ at US$57.58/bbl.

That said, CERP achieved its year end target of 1,000bopd with peak production of 1,021bopd in the quarter. This included the initial production from the Snowcap 1 & 2 wells which achieved 70bopd after three years of shut in status. CERP had guided to an expected 100bfpd with part of the appraisal intended to assess the volumes of water production. After a successful appraisal we now expect pumped production to commence at Cory Moruga. We expect CERP production to bounce back from the impact of severe weather in Q1 2019 and workovers are continuing to progress across the operating fields, indeed the second pilot injection well at Goudron is ready for conversion to water injection in Q1 2019. CERP has guided that average production is likely to remain within the recent peak level in the near term which is line with our current expectations.

This unseasonably severe weather does in fact demonstrate clearly the importance of CERP’s acquisitions through 2018, at attractive valuations, which have diversified the operating base to six operating fields. With a reduced reliance on Goudron the company is better placed to withstand one-off shocks such as this while the investment made in operating infrastructure such as backup generators has meant that production was able to continue despite a temporary loss of grid power. Indeed, despite the reduction in output CERP continued to generate positive operational cashflow from its Trinidad operations of US$0.37m (US$0.54m in Q3 2018) which is a strong positive, in our view, and a clear demonstration of the company’s capital discipline and more robust asset base.

Cash at year end 2018 of US$2.6m (£1.7m) was broadly in line with our estimate of £1.5m while gross debt was further reduced to US$0.4m. This includes the net impact of the £2.5m fundraise in Q4 and repayment of the US$1.25m loan associated with the Steeldrum acquisition. This leaves CERP well placed to continue the optimisation of the six operating fields as well as make preparations for the major catalyst for the shares in 2019; exploration of the SWP. Based on our forecasts, CERP is fully funded for planned operations and drilling at SWP represents a potentially transformational event for the company given the estimated prospective resources of 1.3Bboe.

19/12/2018
How is the recent drop in the WTI oil price affecting Columbus?
Like all oil companies, Columbus is affected by movements in the international oil price but not necessarily in the same manner as other companies. Columbus sells most of our crude production to Heritage Petroleum Company Ltd (the new state company in Trinidad which is the successor to Petrotrin) and receives a sales price for each month based on various factors as calculated by Heritage. This has historically included factors affecting costs and throughputs of the Pointe-a-Pierre refinery in Trinidad, where our crude ultimately ended up, but we understand that this situation has now changed with the closure of the refinery which commenced recently. Historically, Columbus has received a monthly sales price which was at a discount in comparison to the international WTI price for that comparative month, with the discount averaging between 6-7% over the past year. However, for the November 2018 crude sales, Heritage has confirmed that Columbus will receive an oil price of US$58.397 which signifies a premium of around 3% compared to WTI for that month. We hope that this trend continues in future given that the ultimate destination for our crude is no longer the refinery in Trinidad.

In addition, as previously reported, Columbus is exposed to Special Petroleum Tax (SPT) in Trinidad for oil sales averaging above US$50 per barrel for each quarter. Please look at the answer in another Q&A below which notes that an oil price of around US$61 per barrel would be required to obtain the same level of profits from sales at US$49.95 per barrel if capex is zero for that period.

The recent reduction in the international oil price has therefore had minimal impact on Columbus’ ongoing cashflow from sales as a result of both of the above factors (ie. changes to our sales destination and the effect of SPT)

An update from Predator yesterday re Trinity Inniss

https://www.youtube.com/watch?v=6zfchI3I0tU

At least that website is now showing there are no charges, you must be relieved LLL as you did point out the existence of it on numerous occasions and appeared concerned it was still outstanding...