I get the bit of fun and psychological significance of days to drill. However, what I find a bit more exciting about this share is there are only about 31 possible days left now to release an RNS on for things like the; EA permit, Rig contract, Well Services contract and Subscription take-up for the convertible loan. In this time we will almost certainly hear on the Bahamas Mutual Fund and everything is likely to be reported on by the likes of Vox, Proactive, Malcy, etc.
There’s a lot of news due in the next few weeks and there should be no reason why any news due is negative. Exciting times after all these years.
Happy New Year and all the best to everyone in this company defining year.
Time may prove me wrong but I think there’s a lot of hot air and unnecessary concern about this Convertible Loan Note. From what I can gather even the term ‘loan’ is a bit misleading and in all honesty I think the reason why the company have used the term ‘loan’ is to save a bit of face and dampen potentially irate shareholders. There’s nothing really loan about it, Bizzell are essentially buying a huge tranche of shares at a very good rate so they are not offering something on the hope of getting their money back, they have secured their money against something whilst picking up a nice percentage on top. It’s more like a mortgage than a loan.
Bizzell also hold the keys to this mortgage and are also thick as thieves with BPC management. Bizzell are not some random money market outfit BPC have gone cap in hand to, this is all about making money for the boys. Because of the relationship between BPC and Bizzell, Bizzell have given BPC time to go out and find something better or at least mitigate the full ‘loan’ amount but be under no illusions, when it’s time to push the button on the ‘loan’ all conditions precedent will be satisfied or waived.
It’s a win win win for Bizzell. They have been given a big tranche of shares as a sweetener for making this available without doing anything, just by simply demonstrating capacity. They will get a nice percentage on any subscription and they can convert at a cracking rate later in the future.
Assuming Bizzell are still required on 15th Feb they will approve the loan, this unlocks everything, share price will easily be 4+p. Bizzell are handsome winners.
Does anyone know about any developments with the BPC drilling team? I’m sure there was at least one name mentioned on the BPC website before it’s recent rehash and now I don’t seem to be able find anything. As we know the company have now opened an office in Houston, it would be interesting to know some more about what is going on there.
I read today the new power generation units supplied in conjunction with Shell NA are now in service at Clifton Piers Station A. This is maybe something that could sugar coat a potentially devise announcement for oil drilling in the Bahamas?
This new generating capacity is supplied by multi fuel engines that can burn natural gas if it became available. Possibly another piece of the mosaic falling into place?
As it stands the Seeking Alfa article needs to taken and understood in exactly the manner it was presented without extending to tenuous possibilities.
The article is warning investors to be cautious about putting money into Seadrill at this moment in time and a good example of why can be found in recent history.
Around September 2017 Seadrill filed for Chapter 11 in the US, the result of this was a massive debt restructuring program with the big losers (as always) being the ordinary shareholders where the existing share equity was effectively wiped out and replaced by new shares, of which existing holders came out with less than 2% of their previous holding. This restructuring created free cash flow and pushed debt off into the future. Seadrill emerged from Chapter 11 around the summer of 2018. As far as I’m aware though there was little impact on actual operations and during the 2018 period Seadrill still engaged in campaigns with the likes of Repsol, BP, Eni, Statoil, etc.
I believe Seadrill still has access to immediate free cash flow and I don’t think anyone is suggesting it is on the verge of imminent collapse but because they are currently not generating profit in these troubled times that future debt burden is looming.
From some basic research Seadrill have approx 52 rigs with an apparent 17 currently looking for work. The best way out of this for Seadrill is for it to come out fighting and take on all work that it can get and to me that means the BPC job is more likely to go ahead than not, everyone concerned needs to try and make this work.
As for any perceived delay in contract notice that could be a number of reasons but again from basic research there would appear to be two rigs in the region suitable for BPC. The Sevan Louisiana was pictured in the BPC presentation but I believe the West Sirius is also available and in close proximity. There may be some debate as to which they release for their own business reasons, who knows.
An important part to the Seadrill BPC story is that the agreed day rate is reflective of market conditions and fair, if it were too punitive to Seadrill they could very well pull up stumps and decide it’s not worth their time and be compounding their issues but a competitive day rate along with a minimum contract duration, which is what Seadrill and BPC have agreed, should benefit all parties.
These are all my own views based on easily available information. Do your own research if it’s your own money at risk.
Dutch, this is a high risk high reward share with a number of things outside of the companies immediate circle of control that could conspire against it. It is right to raise concerns like this and for people to weigh up the risks and invest accordingly.
Can you back up why you ‘think’ BPC has done no or inadequate due diligence? By anyone’s understanding of business it would be thought unlikely BPC didn’t even do the basics here given that Seadrill’s previous Chapter 11 was so recent and public. It would be extremely unusual for people in the industry to not know what was required about this.
To get a feeling for rig rates I would suggest the following links. BPC are highly likely to get a semi sub.
If the link gets scrubbed it’s on ihsmarkit dot com. We’re about right.
Based on their published accounts Seadrill have plenty of free cash flow to see them through 2020. Yes the industry is in a downturn and we all know that, there’s nothing surprising there and it’s why companies like BPC can now pursue drilling at much lower costs. It’s a cyclical business.
As for the posts about how we have got an exceptional deal in the price for drilling, that is not exactly true if you look around the industry. From the BPC investor presentation we believe the day rate is $215k/day, I know of comparable drills that have been in the mid $100k and also ones in the $300k’s, so we got a deal that was about right. It’s certainly a lot cheaper than rates 10 years ago but in today’s climate it’s about fair.
BPC also knew what they were dealing with when they signed up with Seadrill with them recently coming out of Chapter 11 and BPC now have drilling offices open in mainland US and everything is moving at pace.
A reason we can afford to drill is due to companies like Seadrill struggling. Not sure we’d be on the same path if day rates were still over $600k+/day
As I have posted previously I don’t know how this new fund will acquire its equity and the way I see it it could be either or. I know Simon said in a recent interview this was not intended to be a money raising exercise and it almost certainly isn’t money required for drilling but I think they’ll still take it if it’s on offer. Should BPC receive any income from this then I’m certain this would be a secondary purpose, the primary being to gain sway and appease those in country.
Also, I definitely wouldn’t put it past the company to not issue a new block of shares for it simply because it wouldn’t be consistent to the BPC story to have something unconditionally good, smooth and positive come in for us. We all know now there are twists and turns with everything that happens in the BPC world. Nothing is ever easy.
In all honesty I think for us on AIM this mutual fund is a side show and will have no direct bearing or significance to us as long as it achieves its intended purpose in getting locals onboard. If it does issue shares these might as well be locked away and treated separately in every way from the main market.
As for the coming weeks, I feel we are due one more significantly positive RNS before the year is out, one which should move the this up to a new trading range. If we don’t get at least one RNS this year then it’s going to have to be an RNS flood come January to early Feb.
That leaves one big question for people on the sidelines, how long dare you wait before taking a position?
There are factors in play as we stand that if they come good we could easily see the share price treble from its current position. The Seadrill contract must be in very advanced stages now along with Halliburton’s, it’s very possible they could be announced this week.
Everything we need to know is likely to be announced within the next 8 weeks, not long by anybody’s timeline. As Malcy stated timing is everything now.
It’s exciting times being a shareholder at the moment.
I’m not sure how this mutual fund is going to acquire its equity to enable people to invest. I’ve read people’s comments and tried to do some research to find a comparison but to no avail, yet.
It could be buying existing stock in bulk from a broker, it could be by buying some direct from BPC, I don’t know the answer here. However, I was wondering if this could be one of the four funding options that hasn’t previously been disclosed?
I’m not too bothered if it’s either as it feels like it’ll be small numbers however it’s shaped. I can’t see it being bigger than 100m shares.
If it is around 100m and it is from new shares issued it’ll easily satisfy and be a nice solution to the operating cost requirement I think.
Todays RNS may not be needle moving for some but for those who have not been under the skin of this company and project you should know that opening BPC up to the Bahamanian people is a significant step and validation of the project. For many years Bahamians have made a lot of noise about wanting to invest but this was kept at arms length from them as it was seen as being at a too immature stage with extremely high risks and therefore essentially gambling, which is something the authorities wanted to avoid.
Opening this up to in county residents now is a huge validation of the project.
This is a big step in the right direction and again further demonstration of the company delivering on it's timeline of activities.
It's starting to feel like the buying is starting. Not a huge volume of trades but some significant sized trades going through.
Probably some of the industry web bloggers/analysts/pundits taking positions before they give their blessing that it's now worth investing in after the next RNS arrives.
I don’t think there is any mystery as to why a Major has not come on board yet. This is business and they are doing their duty to drive the best deal they can for their company and they will be no different to why this share price hasn’t broken out yet.
A Major sees this in exactly the same way as the more risk averse investors and some commentators see it at the moment, they think BPC aren’t quite over the hurdle to funding it yet and they are hoping BPC fail so they pick up the pieces. Once it looks impossible they will fail their hand will be forced to make their decision. And Eytan is wrong, it doesn’t get that much more expensive for a Super Major to get involved because such a company is almost priceless and invaluable to be involved and they have deep pockets anyway. They can wait as long as they like.
I think we’re due another RNS this week and I ’m going to guess Thursday or Friday.
As for the stagnant / stable SP. I’d have liked to have seen it a little higher but maybe it’s about as expected post a pretty large issue, this has often been the case with BPC. Given the availability of shares and that everyone who is comfortable at entering at this stage is probably now already in then the supply and demand scales haven’t tipped in our favour yet. As we start to tick more of the boxes for the Convertible Loan, which won’t be long now, we’re likely to see new entrants.
With regards the farm-in. I think it’ll be progressing but I think any potential suitor has a bit a breathing space before committing while BPC go through the motions of ticking the boxes for the Loan. Unless that is the Major in the data room sees a threat from another company, that would be a catalyst to complete.
The latest target date set for the EA is end of January so there’s only around 9 weeks left before we know pretty much everything we need to so given that I still think we’re cheap. We are only expecting good news from until Feb, all the big concerns are now gone.
I also think this is much less of a binary play now. The company will drill now and will therefore pay to retain its licenses. Even if it drills a duster the company will obviously take a hit on the SP but it’ll be a bottom draw share again and won’t fold, hence why Bizzell want operating funds for the near future.
IK, Yes i think you are right in what you say in that i think we can expect at least one more positive RNS between now and the 30/11, possibly even two.
Today's RNS was obviously already priced into the SP, which is of no big surprise or concern. It's good now simply watching all the pieces of the puzzle slot in as the Company delivers on what it has set out in previous announcements - this is all confidence building.
Something which is worth bearing in mind now. The company has been notoriously quiet on most things over the years, even when it had potentially upbeat things to talk about. It could never be accused of being a leaky ship. However, the Company now needs to interact with a lot of third parties and it will lose tight control of the information it disseminates.
Also, if a Major is still hanging around as the Company have stated then it wouldn't surprise me if they took a very keen interest in the proposed well plan even if they have no skin in the game themselves now. Shell & Equinor have both had preferences for BH products and services on recent projects.
IK, in answer to your question earlier about whether a Major would use Baker Hughes. Yes, absolutely they would. BH are one of the big players in this field along with the likes of Tenaris, Weatherford's, etc. With BH now being a part of GE that should have also strengthened them.
All of the big players in this field of engineering are probably on an equal and comparable footing with each other with no discernible difference. However, what i would say is each major usually has a preference for one supplier and usually strikes a long term supply contract with one of these companies, either globally or regionally.
If someone wanted to have a bit of fun in trying to second guess the mystery Major that is still in the data room then trying to marry-up a potential Major with who they are currently using for their Wellheads & Tubulars might not be bad game.
The design for a well with respect to things like the (reducing) casing sizes as a bore hole penetrates the different stratospheric layers of rock is often arrived at in conjunction with the suppliers well design engineers, therefore, they would need to be someone who is on a Majors 'approved' list so to speak.