Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Zak Mir chart 44 secs in
https://www.share-talk.com/share-talk-bulletin-board-heroes-5th-october-2018/
CERP tweets
Columbus ERP @Columbus_ERP · 2m2 minutes ago
#CERP will be releasing its quarterly update on the 10th October when there will also be an evening shareholder presentation and Q&A session in central London, venue to be confirmed
Columbus ERP @Columbus_ERP · 2m2 minutes ago
We will be announcing our #InterimResults this week for the six months ended 30th June 2018 #CERP
http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/30049/vsa-capital-market-movers-vsa-morning-flow-test-100918-30049.html
Columbus Energy Resources (CERP LN) has announced that it has been granted an extension of the license for the Cory Moruga Block until 2032. The extension of the license provides CERP with sufficient certainty to bring on a new field before the end of 2018 subject to completion of the acquisition which is expected Q3/Q4 2018. The combined group will then have six operating fields which will provide CERP with a more diversified and stable production base.
CERP anticipate that unaided production would resume at around 100bopd at Snowcap following natural pressure decreases after initial testing between 2011-15. These resulted in flow rates of 1,100-1,450 initially in 2011 and sustained rates of 250bopd latterly in 2015. CERP anticipates that artificial lift could support production levels from the natural flow rate. Certainly, in the initial period after completion we expect CERP to focus on this type of low cost intervention although the company is actively assessing the license area for further opportunities.
The license extension is an important step for CERP since it enables long term commercial planning to take place as the company sets about fulfilling its ambition of a stable and robust production base.
We reiterate our Buy recommendation and 25p target price.
Columbus Energy
CERP has announced that it has received an extension for its Cory Moruga Block until 2032. This will allow Steeldrum Oil, which is in the process of being acquired by Columbus, a chance to commence commercial sales from the Snowcap-1 well. It seems that the well will produce at around 100 BFPD with unknown water cut due to the length of time since it last flowed. Nevertheless, the shares at 4.55p are well off the 7.35p high from last October and I would expect some better performance in the future.
Will CERP ever move into South America? If so, how?
Columbus is actively looking to expand into South America as it has the same operating environment in Trinidad with an established oil supply chain. The reservoirs are part of the East Venezuelan Basin and we understand the geology and exploration potential. The Company is looking at opportunities in Trinidad, Colombia, Guyana, Suriname, Venezuela and elsewhere and have identified a number of opportunities, both at a corporate and asset level, which meet our strict investment criteria of onshore: operatorship, easy export routes, mature oil provinces in the Caribbean or South America: and close to infrastructure. Any acquisitions will be financed through innovative funding strategies and the management team has much experience in securing funds in such a manner.
What are the realistic chances of success in the SWP?
One of the reasons that Leo joined Columbus was because he was excited by the opportunity for exploration in the South West Peninsula. He believes that the assets we have there are the type of assets found in a major oil company’s portfolio given the potential resource size.
The assets in the SWP are near to, and geologically a part of, the prolific East Venezuelan Basin, offering significant exploration, development and production optionality and the assets have the potential to deliver transformational growth.
From an exploration perspective it ticks many of the boxes given its proximity to a proven oil play and is located in a well-established oil province with easy access to export for any successful development project. It offers, from an onshore location, large scale, exploration potential that would typically be seen offshore where the drilling costs would normally be 3-5 times that of Columbus’ onshore exploration wells. In addition, the SWP is relatively shallow, keeping exploration and development well costs down.
All these reasons make us believe that this is a relatively low risk play in exploration terms, improving the chance of success on what would certainly be a material play in worldwide oil terms.
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Is Spain a millstone and does the company genuinely hope to gain a new licence or is it looking for an exit strategy at minimum cost to the company?
Trinidad is our core area and focus but Spain still provides potential upside. We hope to apply for the new license for Spain as soon as possible, either on our own or with a partner, and are awaiting the instigation of the tender process by the Spanish authorities. In the meantime, we continue to keep our costs in Spain as low as possible. In the event we are unsuccessful in the tender, we will continue to execute our growth strategy in South America.
Will Steeldrum make a tangible difference to the bottom line? BOPD may increase marginally but so will costs/overheads?
We believe Steeldrum has the potential to make a tangible difference to the Company’s bottom line. The acquisition increases and consolidates the Company’s acreage position in SWP, giving Columbus six fields to play with and will generate further cash for the business. It also delivers optionality and flexibility to the Company on where it invests its cashflow to deliver the greatest returns for shareholders.
The Columbus management team recently spent some time in Trinidad reviewing the Steeldrum fields and have identified numerous opportunities to establish “quick-win” production growth through a programme of well optimisations, well reactivations and also some infill drilling activities, all to be funded from currently available resources. This would be in addition to our already announced activities at Goudron, Bonasse and Icacos. Further information on these planned activities will be announced in the near future.
Both companies are already working together on plans to obtain real production growth in the near-term and an integration process, bringing the two companies together, is currently being progressed involving management and staff from both companies. Some of Columbus’ operations staff are already working with Steeldrum staff on early optimisation targets on their producing fields through a short-term contractual service arrangement. The Company is seeking to complete the Steeldrum acquisition within the next few weeks and has made good progress to date on the outstanding matters required for completion to come into effect.
As with any acquisition, there will be an increase to overheads in the short term but there are a number of integration and natural cost synergies. The integration process continues at a pace and management are hopeful it will be completed in the not too distant future.
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Is the Steeldrum acquisition a key component of the company growth strategy or more for show to investors that something is happening?
This is the third acquisition of the year following the Icacos and BOLT transactions and we continue to make good progress. The Steeldrum acquisition is another piece of the puzzle with more to come. As stated in the Annual Report and detailed further below, the company has begun a screening exercise for M&A opportunities in Trinidad and Tobago and elsewhere in South America.
The so called transformational growth is suggested will come from a successful drilling campaign in the South West Peninsula (SWP). How will this be funded and will it involve any significant dilution of current holders?
The Company’s strategy for over a year has been to fund our initial exploration activities in the SWP from cashflow generated from our operations. At the end of 2017, Columbus became cashflow positive from operations and is currently following an active campaign to grow production and cashflows, including through the addition of the Steeldrum assets which the Company believes will provide many new areas for early production growth. It is intended that future exploration activities will be funded by this cashflow and from existing resources, with the initial drilling campaign still being planned for mid-2019.
Management are 100% aligned with shareholders and are investing in the Company on a monthly basis by taking 50% of their remuneration in Company shares. They have no plans to introduce measures which result in significant dilution for shareholders.
On exploration success the Company would seek to progress innovative additional funding arrangements in an accretive manner to appraise and then develop the SWP and has had discussions with numerous parties interested in assisting the Company unlock the huge potential of the SWP. There are plenty of financing options available to the Company that would not result in significant dilution should the Company see success in its exploration activities.
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Remember that if funds become available from Predator that this also involves a large share issue on top of the shares that will be issued on completion of the Steeldrum acquisition. There is no such thing as a free lunch!
There is no guarantee that Predator will exercise their right to acquire the Innis-Trinity field. However, in the event the Innis-Trinity field is sold to a third party (including Predator) for no less than US$4,200,000, the Company is obligated to issue 16,920,083 additional shares in Columbus to the Steeldrum owners, this representing approximately 2.3% of the 743 million shares which will be in issue following the completion of the Steeldrum acquisition. Assuming a share price of 4.0p at that time, those 16.92 million shares would be valued at approximately £675k (or US$860k), which is significantly lower than the US£4.2 million Columbus would be receiving from the third party. If these funds were received, the Company would look to use these funds in other value-adding opportunities, including exploration activities in the SWP and on our other assets. Columbus’ management agree there is no such thing as a free lunch but believe that this lunch would be very palatable for the Company’s shareholders.
Cerp Tweets
Columbus ERP @Columbus_ERP · 4h4 hours ago
All our thoughts are with those affected by the earthquake in Trinidad last night. Our staff are available to assist any aftermath requirements should they be called upon.
Columbus ERP @Columbus_ERP · 4h4 hours ago
Following the earthquake, the Company Emergency Response Team reacted to establish the wellbeing of staff and families. They reported no injuries to personnel and operations in the field are so far unaffected.
A couple of tweets this morning with photos
https://twitter.com/Columbus_ERP
Leo's thoughts about the Predator deal, in a previous interview last week - from 4mins30
https://www.youtube.com/watch?v=QFUeJ3UODJQ&t=
Leo's parting words at the end of his interview "We are a safe bet and a safe bet to make a lot of money"
Leo on LSE https://www.youtube.com/watch?v=Gy31LhLLNSo
https://www.youtube.com/watch?v=VnLdlAV7J10&t=310s
Leo from the Investor Evening from 4mins 10secs
London South East Oil & Gas investor event…
Last night I was invited to speak to a jam-packed room in the city where Leo Koot of Columbus Energy and Steve Williams of Reabold Resources spoke about their company’s prospects. With a slight interruption as the cameraman fainted and came crashing down to the floor, it must be the first time that the police had been called out to such an event.
Both speakers were first rate, Leo Koot explained the Columbus strategy of building his business both organically and by acquisition in the South West peninsula of Trinidad with his usual confidence and passion for the company.
http://webcasting.brrmedia.co.uk/broadcast/5b436a88b648f6302b14d00c
Malcys blog Columbus Energy Resources Columbus has announced the acquisition of Steeldrum Oil Company for £4.4m to be paid in 92.7m in shares plus add-ons. The acquisition, which seems to be a pretty good fit, bring with it 200-250 b/d (5.6m bbls) from the Innis-Trinity and South Erin fields plus a 83% WI in the Cory Moruga development (1.1m bbls). The sellers will hold around 18% of CERP shares in the enlarged company and have a lock-in period of only six months which should be noted. Columbus are also raising £3.25m via a convertible with Lind AM excersisable at 8.1p as ‘the establishment of such a facility would, in effect, provide an appropriate “financial insurance policy” for the Company for the next six months whilst the new integrated organisation beds-in’. All in all this is another sensible deal by Columbus which is synergistic and paid for with shares as per their ‘financial discipline’ regime. I think that Leo Koot wants to build the company and has very high ambitions and whilst this is relatively small, it is part of the grand scheme to expand. Keeping his new shareholders on board will be important as I’m sure there are plenty more deals down the road
https://www.malcysblog.com Columbus Energy Resources Columbus has announced that it is rolling over the practice of paying Directors and senior management partially in shares which will now be done at 5.1p. I think that there is little doubt that CERP are doing the correct thing here although the market has trimmed the shares this morning. Later this month I am on a panel with Leo Koot amongst others, the link is here and the evening should be most interesting… https://www.eventbrite.co.uk/e/oil-gas-investor-evening-with-malcolm-graham-wood-malcy-and-aim-listed-ceos-tickets-46763627268
https://www.theoilandgasyear.com/articles/improve-performance-in-trinidad/