George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
I do recall thinking that there would a possibility that the RBL would be delayed beyond September. Finally figured out why...
https://www.youtube.com/watch?v=RyFYDyvUOrE&t=250s
5:12 - "We HOPE to have a term sheet for the RBL either at the end of this month OR EARLY IN OCTOBER"
Hoping it will land pre-interview tomorrow but wouldn't be surprised if it came early next week based on Arts comment.
Appeal - Application*... Apologies for the confusion.
Intothedeep - Fair point; my trail of thought was regarding the short term impact a potential unfavorable decision on the *application to flare* could have on production. Therefore, I thought COPL would have wanted to clear this up before securing the RBL. Hence, successful application to flare, followed by securing RBL.
'The RBL is secured on the field as an asset and based on the new NPV of $492m.' - This makes sense...
The only *potential* downstream impact of the delay in appeal I can see at this point, will be to securing the RBL. I imagine they will want to resolve that prior to securing funding in order to achieve the most favorable finance package. That being said, even if that is the case, this would push the RBL update by 2 weeks into mid October.
Hopefully the appeal decision is not significant enough to RBL and we remain on course to receive an update by end of September, as originally promised. Would have been nice to have received confirmation on this point in the most recent RNS, in order to alleviate any doubt.
3. Reasons for Flaring. Applicant’s operation typically involves flooding the reservoir with a mixture of dry methane gas and NGLs (“Injected Gas”) to create a miscible injectant used to raise the reservoir pressure and mix with the oil in the reservoir and thereby increase oil production from the Shannon formation. Starting on April 1, 2022, Applicant commenced injecting a lean gas blend of dry methane pipeline gas and rich produced gas. The dry methane gas is purchased from Tallgrass Energy and transported to the Barron Flats (Shannon) Unit via an 8.7- mile pipeline. Some, but not all, of the Injected Gas returns to the surface via the production wells and is then recycled back into the formation to maintain pressure.
Applicant’s flood operation has resulted in better than anticipated production from the Shannon formation. However, it has also resulted in surface pressures much greater than anticipated. Due to these high pressures and in order to continue its oil production, Applicant needs to flare the Injected Gas that returns to the surface that it is unable to recycle back into the reservoir through the gas gathering system. The gas to be flared is the purchased Injected Gas, rather than gas native to the Shannon formation.
Applicant’s current surface facilities are inadequate to recycle all produced gas back into the formation. Its long-term plan is to add surface facilities and new gathering lines with adequate capacity to recycle all gas and eliminate flaring. However, construction of these facilities is estimated to take up to a year due to supply chain shortages and constraints. Applicant has commissioned a full study and design of the surface facilities and gathering system to a third-party engineering firm. The study is scheduled to be completed by October 2022. Applicant is hopeful that approval of this request will enable it to sufficiently reduce surface pressures in the area of the field that has seen significant response to the miscible gas injection.
Applicant was granted supervisor approval to flare up to 45,000 MCF or for 180 days, beginning July 8, 2022, from each of the following wells:
Well Name
BFU 21-35-76 ST A SN 3H
BFU 44-21V
BFU 22-27V
BFU 34-20V
BFU 23-27V
So looks like there are a number of interested banks for the RBL and the revised RS report opens the door to securing the best deal for COPL. This indicates that it is no longer a matter of 'if', but more a matter of 'when' moving forward IMO.
5:10 - 'We hope to have a term sheet for an RBL either at the end of this month or early October. We do have SOME banks interested but again, they were waiting on this reserve report'
Interesting weeks ahead, GLA
Based on the presentation they gave, they are targeting RBL by the end of the year with an update on progress by the end of September. Given their track record for meeting deadlines... Expecting RBL to be anywhere near finalised by the end of September would optimistic at best. That being said, expected upcoming news in September:
- Outcome of flaring appeal
- Update on production
- Update on RBL
Anything else? Hopefully AM will stagger the news to build some good momentum as we approach Q4. If all 3 are positive, that puts us in a strong position to see a long awaited decent rise. GLA
* Next Steps with regards to financing: COPL is targeting draw down of a Reserve Based Loan in Q4 - 2022
— Proven Developed Producing Model supports a 5 year term
— Target borrowing base of $50 million to $60 million
— Proceeds used to refinance current senior debt and for infrastructure / facility capex
— Scope for junior tranche for capex and drilling to augment borrowing facility
* Update on Debt Process and Term Sheet Negotiations by end of Q3 - 2022
It may be several weeks before the next update and *significant* visible uplift in production numbers. Admittedly a little disappointed with the presentation yesterday, couldn't help but feel that AM focused more on disagreeing with elements of the RS report than setting out a clear timeline of events alongside communication strategy. Fundamentals remain the same so holding on, unless they miraculously change... GLA
Extracted from todays slide deck:
Senior Debt Re-Finance Update
* In 2021 and 2022 COPL successfully acquired control of producing, long life oil reserves in Wyoming, USA for
less than $2/bbI of 2P Reserves*
* COPL is working with a Specialist Oil & Gas Debt Advisor to secure a Reserve Based Loan supported by its
Wyoming, USA asset base. In discussion with national and regional US banks and other E&P lenders.
* Cuda Acquisition was a key milestone to the debt process:
— COPL now has majority ownership and no bankrupt partner
— 2P reserves increase by 47% to 38.2 million barrels*
— COPL NPV10 increased by US$122 million from US$258 million to US$380 million *
* Next Steps: COPL is targeting draw down of a Reserve Based Loan in Q4 - 2022
— Proven Developed Producing Model supports a 5 year term
— Target borrowing base of $50 million to $60 million
— Proceeds used to refinance current senior debt and for infrastructure / facility capex
— Scope for junior tranche for capex and drilling to augment borrowing facility
* Update on Debt Process and Term Sheet Negotiations by end of Q3 - 2022
Pretty much... Seems as thought they are currently holding on for life at the moment. Just looking at the most recent flow of news at least.
https://ca.finance.yahoo.com/quote/CUDA.V/
In other news... 0.35 about to be tested. Getting quoted 0.35 to buy now. GLA
Brel - Fair point, however, I was somewhat quietly optimistic that we had turned a corner and the ambiguity would evolve into a little more certainty but its still early days I suppose...
0.349 paid now so its moving the right direction now. Guess will have to sit back and enjoy the show in the meantime. GLA
Apologies if I have missed something but having reviewed the recent 'Q2 2021 Results and Operations Update' RNS I cant seem to ascertain when we expect to receive the next update. Appreciate that there are several moving parts at the moment but wanted to try and derive a provisional timeline for news.
Q3 update will be one of the main ones to await but is there anything in between? Thanks in advance. Neeko
Just as a reminder... At this stage, we should have submitted the application for the EL to the Minister. Final approval regarding the EL is expected imminently. I would expect momentum to build in anticipation
"Timing: With the Lunar New Year lockdown now over, we are looking to complete all the necessary steps and to submit our application for the Exploitation License to the Minister by the end of Q1. The Company will endeavor for this to be submitted as soon as possible but given the slow progress we have seen in the process to date, this is an aggressive target and slippage into Q2 may occur, although it will not be for want of trying on the Company's part."
I'm not as concerned with the EL coming through, the key element in my mind is the 'when'. The company have clearly stated that they can run on fumes until the end of Q2 2021 (within the next 3 months). What happens if funds run out before the EL is granted? I'm holding but accept that there is a legitimate risk here, one that I'm willing to take but others may not have an appetite for. Placing at these levels pre EL approval wont go down too well unfortunately. Just my thoughts... GLA