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Good day Pilot, if you do not agree with metrics, please just use your own, preferably without the rude comments.

My post is there to make people realise there is more to our position than just a possible JV.

Big oil with deep pockets will not wish to have little old COPL as the majority owner, I am sure sooner or later they will want it all.

My comments about fertiliser plants, power plants, CCS and IRS 45Q payments were included to provoke honest debate about the future direction that big oil must take, and the billions of USD available for the Co with vision.

COPL can offer much more than just oil, we can offer a 40 year journey to earn 100’s of billions in Uncle Sam’s backyard, whilst offering a very Green opportunity to level up the destruction previously caused by these same massive oil Co.

Big oil need us, they will pay a premium, that they will recoupe for decades.

I expect a curve ball or 2 (in a good way) very shortly to demonstrate my thinking.

We all need to think like the CEO of EXXON.

Timelines are far more tricky to pin down.

I have arrived at that figure because we still have loads of scope to explore/discover much more oil.

Plus any CPR by its very nature is conservative.

I believe that we will sell all our US assets.

You can use any amount you wish, any metric.

Turning Potential in to Production I agree takes time, but I suspect AM will get an offer for all our US assets, hence my guess of 24-30 months to see maximum value creation.

It is not going to happen tomorrow, but sooner or later we will see a large offer.

Sorry I was cutoff.

Across all our US assets, 3-4 billion barrels, some shallow, some deep, but all onshore, if you allow for the lower value of $4 per barrel in the ground, RF of 60%-65%, nil contribution for CCS payments 45Q scheme, 2.275 billion barrels at $4 = $9.1 billion or £7.28 billion M/Cap.

SP if you want to talk SP. Divide that by the number of shares in issue = £24.26.

Recently we witnessed $7.60 paid per barrel in the ground.

I will let you do the ‘math’ but $7.60 x 3.5 billion at 65% RF divided by 1.25 USD to GBP

= a M/Cap of £13.83 billion or assuming 300m shares £46.10

It’s all about what a large multi national will pay not just for the assets, but what add-ons they can gain.

Onshore, US tax regime, Safe jurisdiction, possible further exploration, CCS etc.

To put everything in to context look at what the oil Co can gain at say $90 per barrel, excluding any CCS billions (and we are talking billions for CCS, so much so, I expect the CCS payments will exceed the payment COPL might achieve for the sale, the new owners would only to have CCS 3,500 tons per day to gain £3 billion over a 40 year field life, across say 40 drills, as CO2 pumping stations, back to economies of scale)

3.5 billion x $90 = $315 BILLION less CAPEX/OPEX

Now ask yourself why we should ONLY get £2-3 billion ? Or £10 per share.

AM knows exactly what he has built and he will get offers of much more than £2-3 billion, likely 3 to 4 oil Co giants looking at COPL.

What I cannot advise is timescale, my guess remains 24-30 months to see full value for our US assets, possibly much quicker.

Then AM would have the cash to find and fund a billion barrel asset in Nigeria.

£10 is too cheap, remember the asset, I am hoping AM can achieve £4-5 billion.

Welcome to hear proper arguments, for and against.

HNY.

I will pose one question….. can you afford NOT to own some COPL ??

MEM

In order to arrive at a sensible valuation you need to look at all the Co N. American assets, I shall leave Nigeria to later in my post.

First of all what would another/much larger Oil Co see in our assets and what other added value could be found to create absolute VALUE CREATION.

COPL have huge acreage, but do not think just in 2D, amongst the huge acreage, there is plenty of scope to find much more oil, deeper down in different layers/thicknesses.

Then there is gas, hugely valuable.

Remember the CPR’s are very conservative in nature, my educated guess is COPL are probably the owners of 3 to 4 billion barrels of oil and perhaps with luck on our side, 1-2 Tcf of natural gas.

In addition you must factor in ever improving RF as technology improves, plus new horizontal drilling techniques of up to 10,000ft perhaps 15,000 ft.

Plus ‘octopus’ pads, linked to horizontal drilling, this reduces CAPEX enormously, ultimately reducing costs per barrel down to silly levels.

The US railroads play their part in reduced shipping costs moving crude to the processing plants.

Then there is the recently much improved US IRS 45Q CCS payment scheme. Do not scoff at the payments of $35, $50 or $85 per Ton of sequestrated CO2.

This is the icing on the cake for the very large petroleum Co, with the deep pockets to get the setup costs covered and start reaping multi million USD dollar guaranteed payments from Uncle Sam, currently NO UPPER LIMIT to the claims. Exxon have set up a huge team of Lawyers, Spin Dr’s etc to maximize their new Carbon offset payments.

For true value re CCS payments, economies of scale are required.

Anyone looked to see if there are large fertilizer plants in Wyoming ?? Yup there are 3, enormous CO2 ’emissions, how about power plants ?? Yup 6.

They can see that not only are there millions, maybe billions of USD up for grabs, but they tick their annual ESG report, increase oil production through CCS and they can claim their oil has ‘green credentials’ WIN WIN WIN.

Some experts are predicting oil produced through CCS will in the future carry a premium price as you can prove the providence.

Nigeria is offshore, but very shallow water, offshore actually is far safer in Nigeria, shipped offshore, not in to pipelines that are illegally tapped in to.

Nigeria will come of age, AM has a vision, but I feel it is some way off, we require cash to make real progress down there. AM might be able to fast track progress once we have a substantial cash payment re a N.American JV.

As for values on our US assets, given the above (lets not talk share price, lets only talk M/Cap)

Across all our US assets, 3-4 billion barrels, some shallow, some deep, but all onshore, if you allow for the lower value of $4 per barrel in the ground, RF of 60%-65%, nil contribution for CCS payments 45Q scheme, 2.275 billion barrels at $4 = $9.1 billion or £7.28 billion M/Cap.

SP if you want to talk SP. Divide that by the number o

TBH I expect much more than £10 per share, £10 ps only equates to less than £3 billion M/cap, that is very cheap for our total assets.

To gain a true valuation you need to look at the wider/fuller picture.

I will post more later

Who do we think holds shares in PRD ???

Thanks

Hi HH, can I ask you to post GRH twitter post please, as without that post/trail, it is difficult to understand your response. I do not have a T a/c.

Thank you in advance.

MEM

Currently up 16%

Very good point

Surely an RNS should be a statement of fact, full transparency, with no grey area’s.

If PRD said that the rig is about to commence drilling in the next 36 hours, however due to public holidays in the UK, no RNS can be published at the exact time of spud.

With a further clarification, any delay to the 36 hour window will be promulgated by RNS after the bank holiday, if no RNS published, assume all is going ahead as per schedule.

MEM

Very hard to believe our M/Cap is only £47m with all the different positions in play.

Expect a flurry of RNS in January, one or more transformational, and the SP to move up strongly, not a straight line, perhaps 3 steps forward and 1 step back, to allow for some inevitable profit taking.

As I type 18p breached.

No 18.1p now

DYOR

MEM

So Denbury paid $7.88 pb

1.5 bn x $7.88 divided by $1.25 = £31.55 per share, discount for time value, ie the time taken (therefore risk) to extract the oil.

Devalue by 90% and £3.15 per share

We are sitting on a massive massive opportunity.

Thanks for the research Illusion and posting Tiburn

In theory you are correct, but the SP/M/Cap tells a different story, look at the M/Cap over the last 4 years, well before Covid, down, down, down.

If you want make your losses back I suggest you owe it to yourselves to DYOR in to

PRD

COPL

Both on the cusp of multi bagging.

I sold all my BMN, made up my losses and now in a healthy profit.

GLA with whatever you decide.

Enterprise value might change dramatically for the better if the JV is as good as I suspect it might be.

Look at the volume today to judge for yourself where the SP is going, I think much larger volumes will materialize in the NY.

A timely reminder, should anyone not appreciate the figures in a CPR.

Respectfully May I add that a CPR is ALWAYS very conservative in nature.

No company or third party Co wants to produce a CPR which later on proves to be wildly optimistic, otherwise there will be claims of over egging, liability, litigation, reputations ruined etc.

With all of the above in mind, in all likelihood COPL are probably sitting on at least 25-40% more OIP than declared.

Possibly a lot more than that.

Everything to play for.

Do not underestimate the size of the prize. The trick is to find a balanced JV, so both parties are happy.

Thanks

What are we sitting on ??Sat 16:18
Please allow me to try and put things in to perspective.

Lets forget about all of COPL’s assets except the large find, currently subject to a possible JV.

I am going to assume a very conservative calculation. Prior to any corporation tax, petroleum levy etc, and nothing built in to clean up the site.

I have excluded any CCS EOR earnings that might be a very lucrative part of the business or gas sales etc.

Assume the following please.

1 billion barrels, RF 60% ie 600m barrels.

Extraction of 150,000 bpd (11 years)

OPEX of $27 pb net profit $47 pb

Average POO $75 over the lifetime of the field

300m shares in issue

USD vs GBP of £1.25

600m x $47 = $28 billion

Allow $3 billion for CAPEX

Therefore $25 billion

Let us assume we sign a 50% in a deal

Leaving a possible 50% of $25 bn = $12.5 bn

Minus our contribution of CAPEX = $1.5bn

Net $11bn possible earnings over the next 11 years, or $3.34 dividend pa

$3.34 divided by 1.25 Forex = £2.66 pa.

Having excluded all other aspects of the business, and assuming nil contribution for the JV !

What will COPL shares be worth if something close to the above occurred £14, (average P/E for a UK listed oil Co 5.5) £18 maybe £21

Using the lower figure of £14 share price, that is a 93 bagger from the current SP

Whilst you may wish to change the various figures, I believe the above is a very conservative indication of where the SP might go, in time.

It displays what an enormous asset we are sitting on and likely to double in size, in time.

AM is a superb negotiator- let us see what deal he makes for us SH, I think there might yet be a number of deals to be had.

Now to be ultra ultra conservative and reduce the above SP by 50% and another 50% and you end up not at £14 but £3.50.

Need I say more, DYOR, if happy, load up in the NY ahead of any JV announcement, 2023 should be hugely profitable.

MEM

I could also add I had an email from someone suggesting my figures are too optimistic

Well lets say my £14 per share case and 300m shares = a M/cap of £4billion

Or my £3.50 per share valuation = M/cap of just over £1 billion

You decide, but look at valuations of oil in the ground, average of $5 to $8 pb onshore, safe country, normal tax regime.

I have made zero allowance for any CCS payments, US Tax credits of $85 per ton, known as the 45Q Tax credit, these newly expanded payments could become a huge source of secondary income for US oil Co, when they sequestrate millions of tons of CO2 to provide EOR. Win, Win, increased production and RF and Tax credits :)

A M/Cap of £1 billion is easily achievable, quite frankly I will be very surprised if £4 billion is not reached.

Enjoy Boxing Day, the next 15-20 trading days I expect daily volume to ramp up.

Hi Bamb,

The way forward to extract maximum VALUE is to control the TIME element, normally the longer the timescale the lower the return, due a wide range of CAPEX elements.

As you know COPL have taken a long time to reach the next big step, on the first cusp of greatness/transformational change.

What I hope and expect from any JV talks (there is certainly more than 1 interested party) is cash on the table, a substantial amount, an agreement to provide 2D/3D survey used to expand the OIP figure, a new CPR, and agreement on a minimum number of exploratory drills, all to be executed in a given timescale, with hopefully zero cost to COPL.

Then a decision, on exactly how best to move forward, again timescale is critical, FDP covering how best to achieve maximum production at minimum cost in minimum time = maximum value creation.

Whilst all of that is proceeding COPL should be debt free, able to twin track our other projects, ramping up production, creating a compelling investment case, all in the background of a rising SP, a maiden dividend from our own projects and then the JV starting to create a steeply rising income and therefore a increasing divi.

Timescale is everything. Go back and read my post yesterday, if the right JV partner is found and they throw their best teams at this, with a big budget, we could see some big numbers production wise inside of 24-30 months.

Happy Xmas