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I listen to a lot of Audioboom podcasts, Casefile being my favourite.
It's been noticeable for 6 months or so that zero adverts have appeared on Casefile. However, they have returned on the most recent episodes with adverts from big & small companies alike. Good to see (hear)....
It's a good post by Blackstout but the content completely falls down because it contains the line "fast forward to March 2024..."
Mismanagement by Art & Ryan has led us to the point where we have no money. Our outgoings far outweigh whats coming in because of bad finance, bad decisions & p**s poor BOPD. And thats before we even consider how low January's BOPD is going to be because of the enforced shut ins.
I cannot believe how this has panned out, I'm £30k in the hole & have written the money off. Psychologists would have a field day with the number of people who still excuse Art even with all the evidence of mismanagement & down right lies staring them in the face.
So "fast forward to March 2024" has little relevance here because as things stand right now, we won't even be a solvent company by this date.
RBL was a key company goal in 2022 which was not achieved. Was this wholly due to the market conditions? Possibly, but the fact its dragged on since those peak days of market uncertainty in September/October scream theres something else holding back a bank pressing the button.
If that is the case, the only reason for a lender to hold back can be a concern regarding repayment. Our dire BOPD has meant that (pre-hedge restructure) we’ve not been making enough money to cover costs. Art can preach all he wants about how great the field is performing but that’s worn thin & the only thing creditors care about is how much ££ is coming through the books right now. I was initially of the impression the reserves would be the most important thing to bank (Reserve Based Lending duh!) but I’m no longer of that opinion. A bank doesn’t want a lender faulting – even if they get the asset its too much hassle – they just want their repayments.
The company deserves credit for the hedge restructure as for sure its given us some breathing space but the flat lining of the Shannon production (and I’m being polite there) doesn’t show any signs of increasing (despite promises about flaring adding 300-600bopd immediately etc etc). You have to start thinking this is not going to change until the gas gathering system is brought into place for which we have no concrete dates.
Equally, due diligence from a potential JV partner will not just be looking at the fed deep field but at us as a company & the above will be as much of a concern to them as it is to us shareholders.
The re-completions at CC came a bit out of nowhere & I’m starting to think the results are incredibly important. We’re on the cusp of being profitable & if these wells push us well into the black then any qualms from the bank are eased which in turn satisfies any company due diligence from a potential JV party.
All my opinion of course but if I’m correct then we could be looking at a bit of a lull in news whilst CC works are fully completed.
Stas, agree that any comms via email should be taken with a pinch of salt but think we all know that. I replied a month later trying to get some reassurances regarding our cash balance & refinancing but didn't receive a response.
Mergers & acquisitions are ridiculously slow moving. However, a JV is neither of these and is something that is carried out with regularity throughout the industry.
I saw someone mention on here or in the TG group about a service provider potentially being the JV partner. This would make sense to me.
I had comms with AM 2 months ago and he said of the approach "Their intent is not predatory, but clearly opportunity driven to place themselves in a very large conventional resource project that they would otherwise be unable to generate. I believe this path will generate far larger returns to our shareholders as the resource will be maximised from the outset."
I didn't really understand what this meant but a service provider trying to take their first steps into owning a % of a producing asset would make sense with that statement.
Would also make sense from the pov we need materials (they will have them) & that AM likes to stay in control (COPL more likely to retain a higher % if the JV is a minnow). I think people need to drop the Exxon stuff, you’re only setting yourself up for disappointment. Maybe they’ll come knocking in a few years once its (hopefully) got 20 wells drilled which are all flowing a bucket load of oil. A major like them won’t be getting involved at our stage imo.
Outside of JV talk - there simply HAS to be a company update in the next week. As things stand the bonds reset 21 Dec , we are supposed to be working on CC Dec/Jan & we need to drill 2 wells in Fed Deep by 31 March. We need to know the state of play with all this things.
I think we also deserve a more detailed breakdown of whats going on with individual wells at Shannon & why all the workovers/gas flood/flaring/de-waxing etc has yet to increase BOPD as we've been led to believe it would.
I think most LTH's will be in the same boat. You can only average down so many times - I'm with you at a similar average.
The bonds have been a double edged sword. The price at which the bonds are set has contributed to dragging the SP down to this level but the cash the company has received when converted has kept us ticking over.
I slightly disagree that the 'odds of success are reducing by the day'. I think with the bank balance being what it is we'd have had to raise already if refinance wasn't going to come through. I take further confidence from the drill permits going in together with the plans of re-completing the CC wells because as things CURRENTLY stand there's no way we'd be able to pay for these activities.
The company are going to fail with one of their 2022 goals to increase BOPD (very unlikely to better the 60,000 in Jan). As LTH's we just have to hope & pray they don't fail on arguably their most important goal - refinance.
Eazy, we have to drill two wells by the end of March in the Fed Deep to satisfy the agreement.
The email to Jiddy from Art said about asking the BLM for an extension to this using the RS report as evidence of development. Think we all know what that means....
1509, I've also been worried about the cash position for all the reasons you state but because there's been no cash raise (bar bond conversions) the conclusion I come to is that financing HAS to arrive soon.
Art & the board are the only ones who truly know how its all progressing & to me if they had any doubts of it either not happening or dragging on even further then they would have had to cash raise before now.
Have to take slight umbrage with "As time goes on, doubts set in on if RBL will be gained -understandable but also without basis...'
I disagree with this as I think there is basis for doubt.
The fact AM has gone from only having eyes for an RBL (Banks knocking on OUR door etc etc) to the refinancing being either RBL OR Senior Debt says a lot. Also chuck in the well known delays together with edging ever closer to the bond reset date & I've already prepared myself for the RBL not materialising.
I just hope if/when that happens its not spun as good news by AM & this board. I also hope if/when it happens that Ryan Gaffney is given his marching orders.
All true, Edgein, but you're missing the important point that 88e are debt free and we are not. They also have a large Mcap (God knows why) which means they can continue to raise money for operational costs if required.
It's great to see so many people positive about the share & I sincerely hope you're all proven correct.
The very real issue here though is that come Dec 21 if no RBL is in place (or a financial instrument that takes out the current arrangement) then we are in a bit of trouble. The SP will take a hit & as we are not pulling enough oil out of the ground to generate profit our bank balance COULD be in a really bad position.
I saw a comment on here about a death spiral & whilst I don't agree with that CURRENTLY we can't bury our heads in the sand - our funds are dwindling. If no RBL is in place by Dec 21 the SP will take a hit (likely to below the bond reset of 13.25p) and if Art needs to raise from that SP or below - well - it doesn't bear thinking about.
I really can't see any company wanting to JV until they know we are financially secure in the long run either.
I'm no deramper but I'm objective & tbh I'm seriously worried about my investment here. It feels like I've been saying this for years but its a huge 6-7 weeks for this company.
Would encourage any come back to this post but please don't come back with what could happen in a years time - the period between NOW and XMAS is pivotal - we all already know the long term positives if we navigate this tricky period.
We look forward to unlocking the potential of OPL 226...
Ryan will be a great addition to the company…
5000bopd by Xmas..
Fell off my chair…
RBL (3 banks queuing up!)..
Dewaxing will increase bopd..
Flaring releases 300-600 near immediately..
1600bopd (when its 1400bopd)..
Strap yourselves in..
I sincerely hope anything JV related is not added to this list....
Cannot believe we haven't secured some re-financing. $400k a year Ryan Gaffney gets & all he's delivered is bad deal after bad deal for us shareholders. We've been led to believe we've had lenders knocking on our door to offer us an RBL and in the last interview we'd decided to focus on 1 out of the 3 banks that had approached - what happened to that?!?!?
The RBL is so key here as its the current financial instruments that are holding us back - this would retire these instruments & let us fly.
The rest of the update is very good - excited about Cole Creek & the better understanding the company now has of the Shannon field. Art is right that any increase in BOPD will take time but IF the company are correct with their new thinking this should be great for us.
To compare ourselves with BOIl & 88E (historically) -
It illustrates very well how draining our financial arrangements are. The above companies have had many runs on only a sniff of oil because they're not held back by expensive debt & warrants. Here we are actually delivering oil to market & with a nice find under our ground yet we can't catch a break with the SP.
Obviously we wouldn't have been able to get to where we are WITHOUT taking on debt but please don't buy from Art that they're all genius' for what they've arranged. The current financial instruments in play are what is holding this back - RBL asap please....
There's a constant clash on this board between the optimists & the pessimists.
The optimists focus on long term prospects - the field, the infrastructure, Wyoming, the find, the oil price etc.
The pessimists worry about the short term - monthly cash burn, poor financial terms, warrants, missed deadlines, low BOPD.
I've been here for 5 years & have bought more & averaged down along the way because of what the optimists are excited about - someone is going to make serious money out of this ground & I'd like to think it'll be us.
The real issue here though & the reason for the appalling SP is exactly what the pessimists are worried about. Lets drop this talk of market manipulation & shorters etc. The fact is IF we continue on THE CURRENT financial terms pulling the bopd we CURRENTLY are then we are in serious bother. This is the fundamental reason for the downward trajectory.
This is why the RBL is so key. It will unlock exactly what the optimists are excited about. I really hope Art is playing a game to get the best RBL terms possible - to not get it after everything he's said & all the warrant ramifications & penalties it would bring should at the very least result in the resignation of our CFO & some serious fronting up by Arthur about what has occurred.
I was extremely dubious of the JV initially. I thought it was Art's way of potentially glossing over missing out on an RBL (sorry about that - but look at THIS!). Watching the interview back though, he's not that good of an actor for it to not be potentially happening. He'll know he needs to make hay whilst the oil price is high & it's just too much for us to do at current mcap. Whilst I don't trust our CFO, I respect Art as a deal maker for any JV & think if (when) one is announced we'll come out of it very well.
RBL sorted this week please COPL - no excuses - I don't want to think where we'll be if one doesn't come.
The comms have gone from RBL to RBL/Senior Loan.
Things like this are never done by accident by AM.
I knew the writing was on the wall & we wouldn’t be drilling this year as soon as he mentioned about the casing & tubing being more difficult to locate than expected. That’s how he works - mention a slight negative/doubt & it usually ends up playing out.
Unfortunately, I’m reading the shift in finance wording to mean we won’t be getting the RBL & the out of the blue mention of a JV is an attempt to soften the blow.
I asked a couple of questions which were ignored:
- Why has Art changed his mind about a JV.
- If we are to JV, what is the money raised on 19th April for 'drilling activities' going to be used for.
- Why has it not been RNS'd that we are not drilling this year (its been the plan since January) & how does it affect the license as I thought we HAD to drill at least twice to meet license requirements.
- As the 24p warrants are due to expire in 2 weeks - will he instead cash raise if this SP is not reached (a cynic might conclude all this JV talk is a push to reach said SP).
- Can Art justify Ryan's $400k salary and tell us how he's benefited the company.
Some defo good news regarding the flaring, de-waxing & seemingly short term confidence that production will be increasing.
I totally understand the buzz created by the potential JV but a concern for me is that we were supposed to be drilling these wells ourselves - what has changed?!? Art was dead against a JV saying it was more dillutive than fund raising.
Once again, my COPL LTH pessimism is coming to the fore & telling me this is just a creative way of communicating there'll be no drilling this year which goes against what we've been told.
The meeting will be a general discussion relating Natural Resources and their role in a modern world. Can't see there being any specifics about COPL, ANGS & LUR - its not an investor presentation.
5 year LTH holder here. Maybe my frustration and the big red number next to my COPL shares is influencing my pessimistic viewpoint but my expectation for the next couple of weeks is:
- SLIGHT BOPD increase to a still unprofitable 1600 gross (nowhere near where we should be or what we were promised - I love how Art always fails to mention our appalling recovery numbers are squarely down to our highly paid 'expert team' pumping the wells too full of gas too quickly).
- RBL announced (about time & undoubtedly good news). I fear it'll come with a load of warrants that hold the SP back though and won't be the amount of money we need to pay off current debt facilities, install gas recovery system and drill. (How will we then raise further money? Hmm).
- Speaking of drilling, I can see the RBL RNS including a line buried in there about drilling being pushed back until next year. The silence around drilling plans is deafening. AM's shift on drilling as the year has progressed has been annoying - start of year the rig was sorted, then it wasn't - but he had one in mind, then there was a shortage of tubing/casing but he was pretty sure it'd be okay. All nicely setting us up for a delay in my opinion.
One more vent - salaries. How is our CFO on $400k a year?! Ryan Gaffney has been a disaster - bad deal after bad deal. It's literally his only job!
Sorry to vent but I'm incredibly frustrated with this stock. If the asset is as good as we were lead to believe we should have meeting up for the £1 party 9 months ago.
I sincerely hope I'm proved wrong. In theory, the next glut of news should be the springboard this company needs. Let's hope Art is reading this with a big smile that he's about to put me in my place but history tells me any 1 step forward is usually followed by 2 back.