Member Info for Jiving

Not sure where you get Monday for news releases from Aim. The last 3 important RNS releases have been on Tuesday & Fridays:
NXP001 Pre Clinical Milestones: Friday 14 September
NXP002 New Patent Filing: Friday 28 September
NXP001 Expansion of Agreement & Payment. Tuesday 27 November.

IH. As you are obviously not a ramper I take your comments on the prospect of a rise in January on the NXP001 bioequlivelance results seriously, also that you are topping up. Sure hope you are right, we will have waited long enough for a sustainable rise to the placing price of 4p and hopefully beyond.

Bob. You are 100% right.

Good discussion on where we now stand - as far as we know - given the lack of info coming from Arthur.

Most of the information we have received regarding the issues of the last 6 months have actually only emerged because the tough disclosure requirements in Canada forced Arthur to disclose the Agamore & Essar problems & also the NNPC extensions. I am with Rift on his interpretation of the 'package' announcement we are supposed to get, instead of separate announcements for SPA (clearly outlined by Arthur in August) then NNPC. It is designed to provide cover for Arthur in the event of failure & nothing else. He tells us how NNPC demand strict confidentiality regarding negotiations which is why he can never disclose anything to us, then on the August podcast sets out the NNPC's wishes for an expanded first drill etc.

IMO he needs to get this done & dusted before the year end. The elections will dominate everything after that. If the opposition win then its all change at the NNPC, which means chaos yet again & months of delay whilst they find their feet etc etc etc

As others have mentioned there are definitely positives - the NNPC extensions being crucial, the back-end finance, the interest from service providers. But we have had a significant slide in the oil price (continuing?), the Brexit shambles is about to blow (remember post '16 vote the global market slump?) and there is a desperate need to get a deal signed ASAP. The wild card is the 'Arthur Factor' his record on delivery over COPL's dismal history has been dire, we must pray that changes. Quite frankly COPL is literally trading at 10% of the value it would be at if this were in the hands of another CEO & thats down to Arthur's track record.

0.263p just traded, welcome relief from the 0.23-.25 zone we have been stuck in.

Haven't seen this posted before, Kola on CNBC on how to unlock investment for Nigerian/African oil:
https://www.cnbcafrica.com/videos/2018/11/12/kola-karim-speaks-on-africas-oil-and-gas-potential/

Thanks R-Dunc thats critical info. Not sure its best for overall share price appreciation versus news in stages, but it is what it is. So we should be getting two important announcements in the next few weeks/months - a big holistic OPL226 announcement covering all aspects & news on the Mozambique PSC negotiations.

Great summary NoEasy. But I wonder when we can expect notification of any successes - ie SPA, approval of FDP by NNPC etc. Is Arthur planning to release good news as it happens or keep it back for one all encompassing release?

Sadly we have often only been informed of major events via the filing that accompany the Canadian quarterly statements - ie both the Agamore & Essar disputes came up in August & the NNPC license extension in November - presumably due to tougher Canadian reporting requirements.

IH. It seems to have just bounced off 2.10p again, so that hopefully is the 'bottom'.

R_Dunc. I think we are pretty much on the same page, $40 oil is also the level where I fear we could have problems closing the deal. Our service provider is also one of our sources of project finance, so one company undertakes two separate functions. As a service provider they are aggressively seeking business for their idle rigs, as a project financier they have to ensure the viability of the project & their repayments under different oil price scenarios. We may have talked with SPs back in 2017 at lower oil prices but they never seemed to actually bite until summer 2018. We really do need Arthur/Kola to get this signed ASAP, some four weeks to Xmas!

R-Dunc. Well the only revenue the project has is from oil sales, so the price of oil is clearly critical to the overall size of the revenue 'cake'. My assumption is that the SP & the back-end providers (Bank Mauritius et al) will contractually take the first slice of oil revenue from the project, what is left then goes to the operators/owners ie Essar Nigeria/Shorecan. At $80 oil there is a presumably a lot of 'surplus' above simple operating costs but at say $35-40 the whole thing becomes more marginal. What is the total revenue needed to make minimum payments back to the SP, the backend guys & the Nigerian Govt? If you say in Year 1 its $100m, then the project 'has' to produce that to pay the SP & others, IF the oil price fell to a level where revenue was below that then where do the SP & others go for the shortfall ? Surely its elementary that in 'project finance' the finance comes from the 'project' and there is no recourse to the operators (except to potentially take ownership of the field at some stage), & these guys are not BP, where would COPL or Essar get money from the fund a shortfall? My point is at some level the oil price determines the project viability, we are not there yet but there is an oil price where the sums do not work. It is less than 3 years ago that Brent fell into the mid 20's, I have no idea where the price of oil is going over the next 1-2 years, but neither in practice does anybody else.

On balance at either side of $60 I think/hope we are still OK, but lets face it a collapsing oil price is not good for a small oil explorer trying to become a producer with no capital, its not even neutral, its plain bad news.

Rift. When the oil price was around $35-40 we seemingly got little interest from service providers, what seems to have sparked real interest from service providers was when the oil price was around $80 - this gave everyone profit & lots of room for error. Consider the following simple examples:

Oil @ $80, 10,000 bopd, 300 days production (allow for down time etc) = $240m revenue
Oil @ $60, 10,000 bopd, 300 days = $180m revenue

The oil price has made that kind of move in just the last 2 months, quite a dramatic effect on cashflow. People must be allowing for the slide to continue, thats only sensible, price could go either way from here. OPL226 is less attractive entering December than it was entering October.

Brent trading below $60:
https://www.bloomberg.com/news/articles/2018-11-23/oil-set-for-seventh-weekly-loss-on-signs-of-global-supply-glut

Re-oil, Saudis etc. But hasn't MBS done a dirty deal with The Donald whereby he traded lower oil prices for his neck?

Indi. Dan has stated back in the early summer he expected NXP002 pre-clinical results in late 2018.

As Rift pointed out a relatively low oil prices the old one-well plan was still cash flow positive. But just being cash flow positive does not guarantee financing. It seems the breakthrough in financing came at a time when POO was mid $70-80s, when presumably the expanded scheme was massively attractive & the cashflow meant all parties could anticipate meeting their targets (+ a safety margin). Now with substantially lower POO, what around 25% off 2018 top, the figures are necessarily that much worse with less safety margin for even lower prices.

20-30p means a market cap of what some £90-140m? Which is either side of two times the mkt cap of of companies that have not just great results but actual buyout deals - Pharmaxis being a pertinent example mentioned by Dan.

Its a 'done deal' thats not been done, ie paid. The Chinese are not coughing up after 68 days for whatever reason or excuse or whatever.

The further results for NXO001 & NXP002 are still not released - for whatever reason, they have been long promised but.....

If we don't get out £500k soon (now Day 68 & counting), we will be lucky to hit 2.50p again this year. Careful not to get too aggressive with your price targets Indi.

We are now at the end of November & have seen Brent down from circa $85 in early October to around $63 now - not great for oil field cashflow spreadsheets! Wall Street also looking dicey, just reinforces the whole point that 'time is of the essence' & you can't dawdle or hang around hoping for a marginally better deal. Arthur please note.