Member Info for jimtheknow

Further reporting from credible outlets, nothing new. Extract taken from this weeks Bassoe Analytics Weekly Rig Market Round-Up (Week 38).

Rig Mobilizations

"Ultra-deepwater drillship Stena Icemax has today departed Gibraltar and is bound for Las Palmas, Gran Canaria. The rig has new contracts lined up off the Bahamas and in Mexican waters."

It's going to be interesting to know where they will fly helicopters out from, feels unlikely our operations will be supported from a specific 'GoM' heliport given the near 900 mile one way journey from say, Fourchon. Something from Miami is possible if going from US soil is a must but that again is significant at c. 250 miles, around 2 - 3 hours depending on head winds. They don't mind a walk-to-work set-up on that side of the pond, maybe they'll employ that method, time at sea could be used as monitoring/quarantine and be of benefit? I'm sure all options are being considered.

24/7 working is why they have a 180 - 220 PoB.

Some difficult financial number crunching and fleet planning from Stena to work out the optimal strategy for fleet deployment and any investment decisions required has no doubt occurred. If the ship hasn't been operational during COVID and then to make it 'COVID Secure', then comply with all the SOLAS requirements, etc and keeping all customers happy - well done. Not something that would have sorted itself out over night. I suspect persuading Repsol to foot a significant part of this bill was also part of negations, Stena in return making their best-in-class ship available will have no doubt helped in this process. Fair play to Stena.

BPC will have been a passenger in this process so it feels they have at last had some luck and the rub of the green, being in the right place at the right time. The decision to walkaway from Seadrill looks even better now.

CoMan, it's good to talk. Things are much clearer to me now having been made aware of a c. 60 day work program and it all seems to all fit nicely. I would have thought if fabrication work is required to the davits, which will no doubt have it's niggles like all jobs do, plus all the other statutory work required and then approvals from the DNV's of this world, then I think Stena will wait until they are about half way (30 days) into their program before declaring anything to BPC. It's far too early now and any hitches would require renotifications and then it all starts to look like people don't know what they're doing, no one will want to be in that position.

30 days from now takes us to 17th October, which is roughly inline with the first decision that needs to be made on the Bizzell CLN (15th Oct). I think what will happen with the Bizzell CLN is that the unconditional subscription option will be taken for the smaller amount, deferring the big decision until 15th November, this will be approximately when the IceMAX is due to sail and most things in play will be known by then.

When you look at it like this it's almost like there's a plan, the missing piece to the puzzle to understanding this was the 60 days information. Thank you very much.

All my speculation of course from a very rough bit of working out.

CoMan,

Pure speculation on my part and a question to the BB for debate. The IceMAX datasheet states a 180 PoB, upgradable to 220. I wonder if they are taking up this option, not necessarily for the Bahamas drill but more likely for the longer duration Repsol drill, to allow people to self isolate and quarantine on arrival and also to try and get people down to single man cabins if this is not the case already.

Without doubt COVID is going to be a hot topic in any pre-mob campaign preparations and for the longer duration campaigns e.g. the 1 + 3 for Repsol, these big players are going to look to mitigate risks where at all possible.

CoMan, that's great and feels very close to what we believe our timeline is.

c. 60 days work takes us to 17th Nov.
I estimate about 26 days at sea for crossing, taking us to c. 13th Dec.

Does anyone who has a bit of industry knowledge and has been following Stena in greater detail know if the lifeboat works requires modification to the davits or is it straight change out of the boats? And why are they being changed and is the whole fleet due the same scope or only the IceMAX?

I need to correct a lazy fingers mistake. £8m @ 2.5p = 320m new issued shares, not 200m. If they waited until their last possible date (1st Dec) to take these options then it would leave 2 weeks for them to sell any and the closer it gets to drilling the higher the SP, so the strike price will likely be above 2.5p. They obviously don't have to opt for the full $10m either, they can go in lower than this.

Only 4 weeks today for some announcement on the CLN Bizzell funding path, I suspect they will go for the option of subscribing to the lower amount in October and kick the final decision to 15th Nov.

The options open to Stena are very interesting and are worthy of a bit of discussion.

Option 1: Stena take 10% interest in asset. A lot of investors would like this given it seriously mitigates any additional funding and potential equity placement, it also means Stena have some serious interest in the drilling pf P#1 and are no longer a pure service provider, they have unbreakable skin in the game and I feel helps mitigate against any glitches which may occur during drilling should it not go exactly to plan or increase in duration because of e.g. stuck drill bit.

Option 2: Stena take 10% shares equity. We know this will be on terms similar to that of an equity placing so I don't think it's unfair to assume 2.5p. Doing some very basic math; $10m = £8m @2.5p = 200m new shares. In my opinion this is a very small increase in issued equity that would be swallowed up very quickly and such an issue would keep us aligned with the 1.8bn issue authority we granted the BoD. However, Stena's ability to dispose of these would be very limited as they would become 'insiders', they certainly couldn't sell any whilst drilling operations were underway so they wold have to sell most before Dec 15th, which would place a lot of downward pressure on the SP and I don't think Stena would be in it for that. Holding means they are in it for the drill results but a duster makes their option virtually worthless [I hear the crying from CERP holders - boo hoo :-( ]. I therefore see Stena taking 10% share equity the least probable but if they do then this would be a massive boost in confidence to the project and perceived CoS.

BPC would be 3.64 today without Saffron. Expensive free ride, for me anyway.

Phoebus, where do you get this figure of $3.97/barrel for ECO from? Can you expand on that?

Prior to the discovery announcement ECO would appear to have had a market cap c. £120m, after announcement of discoveries they were c. £300m for what turned out to be about 600m barrels net to ECO. Is that not roughly 50p per barrel? WTI was around $55 at the time.

I’ll be happy with 50p/barrel and ecstatic if more. Would love your thoughts on this.

We’re only about 1.5p/share behind TXP. Another 2p and we’ve overtaken them.

BPC love a 7am Thursday RNS.

It’s true to say today’s presentation wasn’t one of Eytan’s finest but it was a very difficult gig being virtual and there were some big players present so undoubtedly nerves will play a part and not having the immediate feedback and interaction of an audience and being first makes it so difficult.

I don’t think today’s presentation mattered so much about how it he came across and I also think today’s presentation was not about announcing themselves, Jesus, we should have had enough companies through the data room now to know it exists. Surely today’s presentation can only have been about building up to a big positive announcement due soon and maybe there was a hint to those who’d courted BPC but ultimately wasted their time.

One thing is for sure, you can’t do an average presentation, with no new information and then drop those three bombshell words in at the end if you have nothing up your sleeve. You would look an absolute clown saying something like that and to have nothing to back it up, you’d never be taken seriously again and it would be career aspiration limiting for the rest of your days.

I’ve had my doubts with this BoD with regards speed of progress and contempt shown with communication to shareholders but I have never taken them as fools or incompetent professionals. I therefore expect some big news to justify that closing statement and I’m sure it will come.

Good luck and all the best everyone, can’t be long now.

Watch This Space!!!

Robbla,

Absolutely spot on, no truer words could be said. It’s walk the walk time.

Repsol, Equinor, BPC & Stena would have a nice feel to it.

I find the following comments interesting on what was reported by Repsol, they stated:

"the existence of oil generation in the basin as well as an excellent carbonate complex" but the well was dry.

This could suggest oil has migrated up towards BPC's license area and traps.

https://www.ogj.com/drilling-production/drilling-operations/article/17275006/repsol-declares-cuba-deepwater-wildcat-dry

Statoil (now Equinor) were partners with Repsol at the time and Statoil obviously had an interest in the BPC license area at one time. There is a lot of knowledge of the geology in this basin tied up in Respol, Equinor & BPC. They make a good fit.

An ongoing debate on here which helps pass the time has always been speculation of who might interested in joining BPC in any farm-in and with the news that the IceMAX is going to Repsol post drilling in the Bahamas it adds to that debate.

Repsol were heavily involved in drilling on the Cuban side of the maritime boundary many years ago for Cupet and I recall BPC fielding some questions at a BPC roadshow once (possibly answered by Simon) from a gentleman who worked on the Repsol project asking why BPC thought they would be more successful than Repsol were. Maybe Repsol saw something in their drill results and cores that may lead them to think if they moved c. 20 miles North they may get better results. More food for thought.

The BPC roadshow with the Q&A session is on YouTube I think but I can't remember which one it is, it's an old one, 2014 maybe?

I’m really looking forward to this week

Harry, you’ll be going in filter soon as your posting is far too prolific and it’s getting a bit tiresome. Just before you go on filter though I’d like to answer the dilution thing.

We mostly all voted for a 1.8bn share issue to get drilling done, it wasn’t an easy thing to vote for but we’d been treading water for far too long and it needed something drastic so we held our nose and voted it through. If, and it’s a big ‘if’, we get this well drilled with roughly the same amount of shares in issue as would have occurred with the 1.8bn authority then we can’t complain too much.

I, like you, still don’t see where the value is in CERP but if someone is willing to secure a loan against this pitiful production rate and it ticks someone’s box on a loan sheet somewhere then that’s their prerogative.

We are all as frustrated by this situation as each other but we are so very close to the end game now we need to switch off and see where the chips fall. Other than the investment company offloading there will be few who dare sell now as it’s pretty clear this is being managed at 2p and almost certainly found its bottom so surely the only way is up from here.

I wonder if that’s why the extra broker was brought in to share some of the burden and exposure of the large disposal by the investment companies who want to exit fossil fuels.

We will 100% get some significant news on or just before 15th October and then there is a mere 6 weeks to cram in all the company changing news. After that it’s all about who’s got big enough stones to hold for drill results, very few will.