Member Info for Jiving

Not sure what you mean by approved Opulentia? The NNPC extended the OPL226 amended drilling licence till October 2020 back in October 2018. So the Nigerian Govt is firmly behind Shorecan on getting OPL226 up & running. The strategic investors now in place were needed to bring the Service Provider in with the project finance, so in that crucial sense we are one step nearer.

Sure Riverfort is small, that doesn't make it 'bad'. Venture capital & private equity companies generally target & invest in small companies in need of cash - its what they do. Relative to Riverside's size this will be a significant investment - great they will focus on it & expect progress and crucially be in a position to force that issue. We investors have needed this for some time. It is also not the case that venture capital style investments are bad for existing shareholders, for the reasons given above they can push for progress way better than PI's & they want to make a big return on their COPL investment just like we do.

Longside. Well Riverfort are a specialist venture capital style company. This investment will represent a major investment for them - therefore they must be very sure that Arthur's story is true & coming to fruition shortly. They are just the type of activist investor we have needed, they are hands on, not hands off like traditional fund managers. This is way way better news than just another placing churned straight back into the market.

We know the main downside here was potential bankruptcy, that has been averted not just in the short term but the medium term as well. IMO that removes a very serious negative for the company & the share price.

It also means that Arthur has convinced a serious professional investment company of OPL226's potential & crucially the likely imminent announcement of project financing. It also means there is now a major institutional shareholder involved with the company who Arthur will not be able to ignore in the way he has retail investors in the past. That changes the dynamic between shareholders & COPL/Arthur in a positive way at a crucial time.

Goldman said it thinks that energy fundamentals have bottomed and that there is potential for a lasting recovery depending on the pace of the demand rebound.
https://markets.businessinsider.com/commodities/news/oil-price-buy-energy-stocks-why-goldman-lists-reasons-plunge-2020-4-1029139451

Brady you have been here a long time & I have always appreciated your historic perspective on COPL & Arthur. On the points you raise I think there are a number of issues to ponder. First, the Essar 'legal' challenge is potentially moot & in reality could be a desperate gamble to stop a deal that for Essar might mean any loans attached to the OPL226 asset in their name would finally be called (as they clearly & categorically lose control when the Minister signs the ownership transfer). Second, I am not sure who or what has been supporting COPL since November when the money ran out, but its not just Arthur's loan. I 'suspect' the only party able or willing to lend COPL money against their only meaningful asset (ie their holding in Shorecan & by extension the OL226 license) is in fact Shoreline.

The dynamics of the oil industry in these extreme circumstances - are well extreme. We know a 'service provider' has & is expected to be the major provider of some $100m+ of project finance. The same service provider is also obviously the provider of the rig & attached services. So the service provider is simultaneously able to lower their costs (due to the absolute collapse in demand for rigs) & also due to those lower costs able to cough up less finance to do the deal & lower production costs! Somehow within that equation I think/hope there is room for a deal.

That we can actually have a sensible discussion about COPL's prospects in very tough market conditions without the clowns posting dozens of nonsense messages. I take this as a good omen.

Bold move MK hope for all our sakes its also the right move. Looks to me like you are not alone. The Essar dispute blew up what end May 2018, so nearly 2 years ago. Arthur & Kola surely must have allowed for the possibility it could end up in court & prepared for this eventuality. Just as importantly it is a public dispute so all potential partners must also be aware of it & figured it into their thinking.

IMO this is a not a fatal blow & indeed may be beneficial in clarifying the situation. Incidentally Essar have had at least one case dismissed in the UK & received a hefty cost award against them & scathing comments from the judge.

That thought occurred to me as well RK! Amidst the gloom it looks to me like we have some serious buyers as well as anticipated sellers. A total collapse we would have gone essentially offer only but we have stabilised & bounced off the bottom.

Those two giant orders for 57m & 61m appeared as sells as they were on the bid side but I just wonder if they were not actually worked buys ?

Art's buying time absolutely & who can blame him but the whole world is 'buying time'. Until the virus stats go down nobody is really open for business (Pharm co's aside), but China stats show there is an end to this.

Soup thats great research. But a bit depressing for us awaiting payment. I hope we are going to be getting some test results soon that may help lift the gloom.

Opulentia. I agree its a tough ask, but the oil price shock is having an extremely damaging knock on effect on service providers & rig operators. The US shale industry is heading for hard times under virtually all reasonable price scenarios, we know service providers are central to our financing & should assume they will be keener than ever to start operating on a new relatively low cost field. The Nigerians also recognise they need to lower overall costs to facilitate new production.

I think both Kola & Arthur have had little to do for much of the last 18 months whilst they awaited an end to the Essar saga. Kola is critical to keeping the NNPC on side, & that in turn will be crucial to all those considering financing OPL226. Many of suspect Shoreline is extending financial help to COPL, possibly against Shorecan shares as collateral. COPL has no other meaningful asset, & Shoreline is the only entity that could realistically gain legal ownership of the collateral, something that would likely prohibit third party finance.

Opulentia this doesn't have anything to do with the Nigerian senate. Its all about fixing the terms of a complicated project financing that is primarily being conducted in London.

The problem many of us had with Suhail was not about whether COPL would rise on good news - duh thats why we invested here. The problem with him was his relentlessly offensive messages abusing other posters, combined with his flooding the board with drivel, sometimes with up to 10 pointless messages in a row.

LB28 - you got it, you can take over from the great man. Millions of % for us all....

It is pretty amazing that they announced that on Wednesday there were no new cases in either Wuhan City or the whole of Hubei Province. The Chinese will be planning some mega stimulus, last time they led the world economy out of 2008-9 crash, same again?
https://www.bloomberg.com/news/articles/2020-03-19/china-s-virus-epicenter-sees-no-new-cases-after-two-month-ordeal

RK the sums are quite stark for Russia & Saudi. If you just take rough figures, the oil price has collapsed some $20 since the OPEC fallout. If you take Saudi/Russian production of 11m bod thats a revenue loss of $220m per day. Annualise that & its $80b per year loss for each of them. This is mutual assured destruction & somebody will be stitching together a dirty deal. Shale will certainly take a big production hit.

China has got new cases down to 13 today! They must be quickly approaching the time they decide to kick start their economy, which of course will impact oil & CNOOC's oil project pipeline.

The oil price fall obviously hurts oil producers selling at the market price. But the other category that is massively affected are the service providers and rig hire companies. So a slowdown in exploration & production causes massive knock-on effects to that sector.

Now at the centre of the OPL226 project finance is a service provider "SP" (we have had hints of Schlumberger & CNOOC in the past), the only reason the SP is providing finance is to secure work for their equipment & services. That need has not disappeared with the collapse in the oil price, indeed the with short term plans being curtailed projects like OPL226 that are already well advanced become more not less attractive. The oil price clearly negatively impacts revenue but costs may also be falling in tandem in terms of both direct equipment hire cost & just as importantly in terms of financing flexibility. I suspect the spreadsheets are buzzing but that Shorecan are not the only ones desperately trying to keep the project alive & viable.

Ploppy. I agree with your take on oil prices & also Shoreline. I believe it may have been the Heritage deal that bought Shoreline to COPL's attention. Luckily Arthur had just done the Liberia deal with Exxon so was on a roll at the time.

It seems many in the industry take the oil price collapse as a short term hit that effects short term activity but not long term planning. An article about Brazilian giant Petrobas made these points:

""We're looking at the need to adjust the plan in the short-term, but in the medium-term, we think the situation will normalize," said the source, who requested anonymity to disclose private discussions....
The source added that Brent crude could recover by the end of the year to around $50-60 per barrel."
https://www.nasdaq.com/articles/brazils-petrobras-may-adjust-five-year-business-plan-source-2020-03-17