Funding at the 'premium' is agreed but not exercised. The strike price for the convertible loan was done at 2.5p, which was a premium on the days rate it was agreed. This means there's another 410m options in the waiting and they have 3yrs to take up those options.
As we stand today quite a few people could argue there is still a degree of uncertainty as to whether we will drill with all the factors in play and that's reasonable. For me all this disappears on successful Open Offer as i believe the only impediment is money and the rest, including permits, will be a formality.
The next question then is will we get a farm-in? Post successful Open Offer the chances of a farm-in drop to 1 in 3 as this is the predicted CoS of a drill and this is the ultimate basis of investment for any farm-in partner.
Successful Open Offer = 1 in 3 chance of a farm-in.
Without a drill rig, without a date for drilling, etc, etc, etc..... on pure hype only of a farm-in we reached a market cap of c. £132m. With our increased share circulation that's about 6p in new money. No reason why the same shouldn't be achievable as soon as drilling becomes a certainty.
The suspense will also increase significantly on news of a potential farm-in partner. We know there is at least one sniffing and the Company have made noises in all the recent interviews it's one of the big ones hanging around, this potential suitor could then make a move at any time post successful Open Offer.
Oldbut..., i think it's a fair point about the Bid now moving to 2p. At 11am today i think the axe falls doesn't it on the Open Offer for normal PI's so all the brokers will know their positions then, the markets are a very very very leaky place. It'll be interesting watching the trades at the close today, could be the last chance for people to pick up shares around the 2p area?
I don't think it's low expectations, it's just being realistic. Without the convertible loan we will have c. 2.2bn shares in circulation come Wednesday next week. If the Open Offer is fully taken up i expect the new norm for the sp to be between 5 & 6 without any further new news.
I also think the farm-in will happen at some point post successful Open Offer with a very significant re-rate given that will bag a multi well campaign. Potential farm in partners are waiting to see if the Open Offer is successful, if it doesn't get away as planned they will keep their low ball hard offer, if the Open Offer flies we'll see a sensible percentage split and money in the pot for multiple wells.
Trek, i think you're be about right there in your thinking. I'm going to say 9p at the time of spudding i think if we are still doing it alone on a single well campaign. Nibble into the early double digits as anticipation builds during drilling.
Stewart, the number you see in your account is not necessarily the amount you will be credited with come Tuesday next week. They will take all your money now and if you aren’t successful in getting your excess you will get a refund at a later date, which could be around a week after. This is how it works unfortunately. No one will know for sure what they have got until Tuesday next week. Anyone who gives you the impression of anything else is lying. Simple.
As many will know i've supported and been pro this share for a long time and i am still positive about it but when i see all this early overly ramptastic postings i'd like to remind everyone that our greedy, and to large extent incompetent board, have seen to it that we now have approximately ~2.7bn shares either in circulation now, or excise-able at some point in the near future. It may only show 1.69bn in circulation now but with the 2.5p strike price for the CLN @ £10.25m (410m), the 200m 'Options Pool' for employees, the 360m Open Offer issuance..... it starts to add up and the board have insulated themselves from this with more shares for themselves.
I want this company to do well and i'm invested because the below ground structures are potentially so impressive, but we've largely had a group of idiots leading the way on this. All will be forgiven and forgotten if we strike oil but they have stumbled and bumbled their way to this point and it leaves a bitter taste.
I write this now as a process is underway which can not be stopped and that process will certainly not be influenced by anything written on here, to think so would be stupid. Just remember the above will impose a ceiling on any sp, that ceiling is down to your own judgement.
Good luck all and roll on the 6th November!
Maybe, just maybe, the phrase “there’s a major in the data room” is Simons overly polite code for needing a Tom Tit?
In a similar manner to having a; turtles head, mole at the counter, (needing a) Paula Radcliffe, etc.
There is absolutely no reason for any major to show their cards until the Open Offer has concluded. Having put all the recent effort in BPC will now be asking to retain a high percentage which is not going to soften unless something serious happens to BPC's fortunes e.g. an unsuccessful Open Offer. BPC can pretend to be the tough guy and say they'll want more post successful Open Offer but there's only so far they can go and everyone in this process knows BPC will snap a majors hand off for fair percentage and 2 well campaign.
For the time being the major will sit and drink cups of tea in the data room. If the Open Offer is successful, which is looking likely in my opinion, the major will make an offer before the year is out, i'm going to guess by the end of 1st week in December.
I still think it's the Exclusive major and that they've been 'in the room' almost as long as Julian Assange has spent in an Ecuadorian embassy bathroom.
There is no excuse, nor any reason, for people to not take up their full basic entitlement if they can now sell their holding at or above 2p. It is not possible for them to do any worse than their current exposure. It is junior school math, it is a short term zero sum game for the holder with only a potential positive to come from it, that being a successful Open Offer and subsequent rise in the SP.
People should not need to find money for their basic entitlement, they already have it! As long as they can sell at 2p. Even a tiny marginal loss selling at just below 2p should reap a greater benefit post Nov 6th.
Buying any extras is obviously a different ball game but the basic entitlement is a given.
Assuming the Open Offer gets away in full as planned this will be an enormous catalyst for changing the dynamics of the Company and it should not be understated.
With such a relatively low target set for success on the Open Offer, that being to move only 20% of their share capital and with Shore Capital committing to picking up approx. 18.5% (62.6m) of this and the Board potentially picking up another 3.7% (12.5m) if required, Qualifying Shareholders need to cover ~263m shares. A target well within grasp with such high potential rewards on offer. ~260k shares by ~1000 holders? A £5k punt each!
Once the money is banked (5th Nov), the convertible loan unlocked and the path to drilling cemented, BPC & Macquarie will then be in the driving seat for Farm-Out negotiations and potential suitors will then need to decide whether to take the plunge or risk missing out on a rare super giant oilfield find. It's worth noting there have only been fewer than 40 super giant oil fields discovered ever.
It has been no secret BPC have held a very weak negotiating hand until these recent times and without doubt the Oil companies held the keys to funding, they knew this. This is soon to be a thing of the past.
Expect a slow trickle up in the sp towards the 5th Nov. A little re-rate on confirmation of successful Open Offer. Another little re-rate on the Long Form Rig contract and we're away!
Possible successful farm-out in December/January?
In the context of accidents and oil spills it needs to be remembered that the Bahamas geology is not the same as that at Macondo.
The Macondo prospect is a HPHT (High Pressure High Temperature) reservoir that was drilled in the Miocene epoch some 4000 to 4500m below the sea bed.
BPC are targeting reservoirs and structures up to a terminal depth of approximately 2400m. These are not HPHT conditions and any discovery is likely to require artificial lift from the well. This basically means the well will not flow freely of its own accord like that at Macondo.
The risks and and any resultant hazard are vastly reduced.
Excellent and correct posts there from Hopin, Greens & Bapuk, exactly right in my opinion.
One thing I would add is that it’s unlikely the sp will go above 2p while the Open Offer is live as people are likely to sell into anything above 2p and existing holders will be able to oversubscribe IMHO.
I’m hoping the company are going to surprise us with something clever relating to the Open Offer but I’m not holding my breath on that. There’s a brilliant opportunity here for them to do something really clever to ensue this gets away but if it turns out to be a straight Open Offer then it’s not bad as long as it flies.
I agree any shortfall would not be picked up by institutions at 2p and they would insist on w discount.
BPC have raised a few million at 1.6p in the past with ease so if the same were required again with certainty of a drill I think it would be a formality.
Different proposition trying to move 200m than 1.8bn.
The interview seemed to reflect Malcy's view earlier in the week of a bloody minded attitude to get this well done and the share price will look after itself.
Eytan mentioned in his interview about listening to shareholders and what they want. With such a well defined and set criteria now for drilling (£7m) then in order to gain our trust and therefore our money, why not come to an agreement where if all the funds aren't raised we get our Offer money back?
£6.75m is what's required from the Open Offer, £250k by management. Raise as much as you can by the first two options and then go to the II's for the shortfall, at a different price if required. But if the £7m is not raised then we get our money back.
This puts to bed all the arguments about the company taking our money and running.
Heid, that’s one way of doing the math. Or, all shareholders need to only put c. 22% of their holding in.
The reality is it’ll be somewhere in between. I’ll be putting in my % in.
Also, I know we have a large PI retail base but I’d have thought there will be appetite from the none PI holders to protect what they have, not suffer dilution and see a potential to increase their stake. They will take up a big proportion of this as they know 2p will be crossed if Open Offer successful.
PI, why do you think you’ll get abuse for your post? It’s very good and fair, nothing wrong with that.
As you mention a ratio may be stated in the Open Offer but they have said people will be able to apply for more and I highly suspect they will take everything they can get should there be an over subscription. If the spread comes in tight and we stay close to 2 have you thought about selling a few and buying back at 2p? I know this isn’t the hardcore money man approach but it would allow funds for drilling to be accrued whilst keeping your exposure virtually the same.