Member Info for NoEasy

Do we need it?

'Under the terms of the Production Sharing Contact(“PSC”) governing OPL226, Essa rNigeria is required is required to seek Ministerial consent for the “change of control” transaction. Application has been made and the parties to the transaction are awaiting its approval. Shorecan has control of the Board of Directors and Management of Essar Nigeria'

The recent dispute settlement means there has been no change of control.

Yacht, An appraisal well and sidetrack cost $50m in 2013. Shallow water Nigeria but deeper drill. Same company was looking at a single appraisal well in the same area this year costing $65m.

All projects will have different needs to get a drill down but I guess we can't be looking at much change from the $50m that Essar M are prepared to put into the first well. Will that get us the two sidetracks that were being considered? I don't know, maybe Art can update us on that. If I was a betting man I reckon we will get a drill down to the 6100' & 7200' sands and if they hit pay then we will have to raise capital to progress sidetracks and further development from there. Could be there is a need for more than the $50m to get the first drill down, they might already know that but that's probably one of the positives of having a reduced percentage of the project up to the crucial first drill.

Maybe others here have knowledge of likely costs.

I'm not too sure Art will have too much of a say in the timing to be honest.

As an aside I have been following LEKoil for some time. Not because I am invested because I am not but because they have OPL 310 in Nigeria and have had an ongoing commercial dispute with a partner and they required a PSC extension. Ring any bells!

Interesting to note that they settled their dispute on 30th August 2019.

'Further to previous announcements, there has been an ongoing dispute as to the legitimate ownership of a 22.86 per cent stake in OPL 310. This dispute has been the principal reason that development of the Block has been delayed.'

Only four days later this happened:

LEKOil.........'is pleased to announce that pursuant to a letter dated 4 September 2019, the Federal Government of Nigeria and the Ministry of Petroleum Resources has approved the extension of OPL 310's ("the Block") exploration licence for three (3) years, subject to the holders of the licence paying an extension fee of US$7.5m ("Extension") within 90 days effective from 2 August 2019. '

As mentioned before I think there is a reasonable chance of the performance bond being requested within a set timeframe as a condition of the extension.

'........just hope they dont have funding issues like sxx!' Wonder why the government wouldn't back them? Jenrick the man who had a meeting with a property developer and then rushed the decision through against planners with one day to go before the developer had to pay an extra £40m in community payments.

https://www.theguardian.com/politics/2020/jun/25/robert-jenrick-faces-questions-over-meeting-with-israeli-mining-heir

I've seen a pension fund take just over a 10% stake in a company and still has it and the company is on AIM. The company isn't producing, it has no income, its looking at Coal Bed Methane to generate power for the Southern African region. I won't name the company on this board. Might be something or not in the scheme of this thread.

Yacht I missed your 09:00 post. In case you want to use the figures again the two lower zones 'each' have the amount quoted. You'll find the info on page 6:
http://www.canoverseas.com/wp-content/uploads/2017/07/CHFeNewsletter_2017-Canadian-Overseas-FINAL.pdf

Your welcome Yachtmaster

Just adding to Jiving's post that the PT5-B licence in Moz is in the Pendame-Temane area.

'Pande-Temane’s operator Sasoil announced a light oil discovery and the construction of a crude oil and LPG processing facility in an area to the east of the licence. Due to its proximity to Pande-Temane and evidence contained within historic 2D seismic data, ShoreCan believes PT5-B could offer the potential for gas and light oil resources.'
https://www.valuethemarkets.com/2018/10/11/canadian-overseas-petroleums-millholland-progress-nigeria-rough-patch-continues-copl/

Mozambique has its problems at the moment with rampant corruption but also tensions between the ruling party and the opposition (hangovers from a civil war). Hasn't stopped Sasoil doing well out of the country exporting gas though. If we do get the go ahead at some stage in the future Arthur has stated that because it is an on-shore licence development would be relatively quick. I won't be holding my breath on that one.

Worth noting that the best estimate of 533m barrels of gross unrisked prospective resources and a high estimate of 1billion barrels is provided by the 2017 independent NSAI report but that only looked at the 6100’ sand on Noa-1.

The last presentation of 2019 mentions, 'The balance of the Block holds significant exploration upside'. But what is that 'upside'. The upside potential is substantial.

COPL have carried out seismic inversion and both the 7200' and 8000' zones and these zones have been calculated as having circa 2.6 billion barrels of oil in place (each) with a conservative 25% recovery factor.

One development scenario Art outlined was dropping the first vertical drill down to both the 6100' and 7000' zones for dual production with two further horizontals into the 6100'. Hopefully we will get an updated presentation on the FDP that will tell us what the plan is and whether we are going to drill the lower zone as well.

In fairness I knew the answer to my question but the devil took hold of me Berta. I also knew the error of my way and the reaction one or two could possibly give by posting but carried on regardless. I'm ashamed to say the replies chewing my head off gave me the much needed release of merriment I was craving. There's only so much repeated positivity saying the same thing over and over that a man can take, especially one with my weak disposition. Even an optimist needing a shower would find chinese water torture breaks them eventually. Insanity was creeping in but that's the aim of water torture.

Just one or perhaps two posters dialling it down a bit will actually make more people consider investing here not less I reckon. If investors are anything like me (and I hope for their sake they're not) high energy rampiness can come across as desperation to increase the value of a share. We will do alright here without it I feel.

I'm hoping the PSC lands within the next 16 days accompanied by other news to give us some meat to chew over.

Guitar spot on. Placings are always needed for explorers without any income stream. How else would they exist. Positive news that Art got it away at the price the he did and that has happened because the two main threats to this company were recently and thankfully overcome.

Still work to be done. The PSC should be nailed on and will confirm the government's acceptance of the dispute settlement . The real signal for movement, for me at least, comes with the payment of the $7m performance bond. Will that happen at the same time as the PSC extension? Good chance the government will ask for it as part of the extension ratification. I would.

LMAO Berta. You are a cheeky chap.

It's full on here at the moment, gets rather overwhelming for some of us LTH's. We're not used to the depressing positivity. I'm almost longing for the old days.

Baserite that's Berta throwing in a much needed light hearted moment.

P.s Berta I nearly added the Art bit to my post but didn't want the whole board to explode. seems you canuck's are not as reserved as us polite Brit's.

Not deramping but can anyone tell me if there's still going to be a placing at .07p? I will be able to get four to five times the amount of shares I can today if this goes down to that placing price.

This placing is £200k more than was expected. Given the increase in SP it is the right thing to do. I can see that that extra £200k builds in repayment options for the £600k in debt that is coming as part of the agreement with YA/RF. I don't see that we need to take the debt until the raise money has been expended. This negates interest at 10% being paid unnecessarily and also push's back full payment of each individual £100k tranche which is due 6 months after each tranche is issued.

Would have snapped the hand off a .03p raise a month ago.

Maybe a bit too pessimistic Brad;-)

My view still stands however that any talk of Botswana being a progressive country looking to greener energy than burning coal are wholly without merit. This impacts on us as I see it because investment is more and more being tied to governments who are progressive in that field. Regardless of the time taken for completion of power stations to burn coal, Botswana in a single stroke and by a ratio of 825MW to 2MW, has lost that mantle.

Secondly the situation surrounding Orapa and indeed Lesedi actually supports the concerns I have. Why would they give coal burning licences out of that magnitude, and it's the size of these licences that is key here, when Seskaname and TLOU could deliver the way forward for themselves and others in terms of CBM fired generators. I would guess our progress has worked its way into their thinking at some level.

That's Botswana's green credentials and all their rhetoric well and truly out of the window. To actually give licences to construct new coal fired stations of that size is a clear message that they don't expect those very coal seams to generate the CBM to take them away from burning the coal. I can't read it any other way. Coupled with the increase in our own rhetoric regarding solar and the lack of commercial flow rates thus far my antennae is starting to twitch on CBM for Botswana and TLOU.

Four days ago the company delivered a presentation that was extremely heavy on the 'Market opportunity".

'Move to cleaner power is vital for sustainability and to attract foreign investment.'

'A Changing Environment - Momentum towards cleaner energy to prevent environmental degradation'.

'Internal generation is primarily from high CO2 emitting coal or diesel.'

'Environmental cost of coal and diesel fired generation potentially far more expensive.'

'...progressive government.'

'Growing risk that the South African power utility Eskom may be unable to meet Botswana’s import demands.'

The development with these licences has undoubtedly taken away one of the main pillars that supported this investment. The last quote above highlights that succinctly. In respect of Botswana the presentation talks of, 'Average Maximum demand 610 MW.' Our pitch was we were going to supply both Botswana and the greater region. These licences without TLOU are looking to generate 825MW. That is without other external players seeing investment in power generation. Suddenly from being a big player (talk of 100MW) in a small pond we are a small player (2MW-10MW) in a big pond.

We can't have it both ways, extolling the virtues of green energy of a progressive government when the government has clearly looked at our progress & prospects and swerved in a totally different direction.

If I had the info that Art has then I might break the habit of a lifetime and give a forecast MrN. Guess for the same reason I have never recommended stocks to friends or family as much as I have been tempted on occasions. Wouldn't want to think anyone made a loss because of me.

I'm with you guys on this. Still many things to sort out or still to be communicated if they have been sorted out.

My view for what it's worth is that firstly the Essar Nigeria (OPL 226) company structure needs to be sorted. Kola was the CEO, Art was the COO and the three other board members consisted of Kola's brother and two from Essar M. With control being ceded to EM I don't see that remaining the same. Legal control of Essar Nigeria will also need to transferred

From the dispute resolution announcement we know conditions have been set by Essar M. We only know one of them. The PSC to be extended within 35 days. The PSC was due to end 2nd October so that would indicate but not necessarily dictate a drill going down after that date. EM may just want some leeway to ensure Phase 1 is completed on time and there is no haggling with the government over the previous conditional PSC extension being met. We don't know if the government will want the $7m performance bond (PB) being settled immediately as part of the deal to extend. We were previously on the line for $1.75m of that, is that unchanged?

What are the other conditions EM have set and also what were the conditions set by the government to conditional extend the PSC. Have they been met? Will meeting them cause any delays or impact upon the shareholders (dilution). For me much of this can come under a missive saying we are still expecting to drill this year and what our financing plan is to take us up to the completion of Phase 1 without going into minute detail.

Does the FDP remain the same? Have EM a different approach. We know they have sat as minority players on the board and I don't expect they agreed with everything we were planning, or maybe they did as the direction of the FDP was being led by the government. Be good to know either way.

We previously had an off-take term sheet with Trafigura/commercial Bank of Mauritius. That has obviously gone forever or at the very least gone in the format it was in. What has replaced it?

What is the agreed figure for historical expenditure by EM on OPL 226. The exact figure will undoubtedly have been part of the settlement. We need to know what we (COPL) are liable for. Is it more or less than our estimates of $6.3m.

Bit more meat on the August equity raise would also be welcome. Not a sum that worries me to be honest. Moving forward comes at a price.

I suppose I could have saved you the trouble reading the above and just put timeframe for drilling and how much is it going to cost us.

I'm sure there's more questions to be answered but at last they all revolve around going forward not going backwards or standing still. Been surprisingly hard after so long to switch back on to talking about all the technicalities that lead us to drilling but that's the new reality and its plain to see the effect it has had.

I was supposed to be over your way last weekend to see some rugby league but that got scotched.

How you feeling today mate. Hopefully that dicky tummy has gone:-))

There are other obvious benefits to an increase in the SP here. Four weeks ago a £500k equity raise would have added 1.5bn shares. Today at .27p it adds 185m.

Regardless of how things are going with the SP at the moment, going forward the dispute resolution has left a strong partnership company. Essar Mauritius (EM) have the cash and are funding first drill. What EM didn't have is/was a good relationship with the Nigerian government. Shoreline have a great relationship with the Nigerian government so they will be the go-between. They also provide the indigenous element to the project, that is critical to allow fast track production without which this project would have to follow a much more laborious route. COPL didn't have the money nor the government contacts. They provide the expertise to plan, appraise and develop an offshore oil field and their work has led to the submission of an enhanced Field Development Plan (FDP) as encouraged by the government. So a very nice fit all round and I can see why the parties decided to settle rather than take the dispute to the brink and break up.

That FDP is also ready to be enacted now, as it should be given the length of time they have had to perfect it. Also worth considering that the bugbear of paying 'loyal' staff to do very little and shareholders bearing the brunt through payment of wages (dilution) for work not done now turns on its head. Those same staff are highly experienced and cannot, given what time they have had, have any excuses for not getting this drill right. No stuck drills because they haven't used the correct size drill, incorrect drilling fluid system or mud weight, missing the sweet spot etc, etc. Whether the oil gives us our payday or not there can be no excuses for the standards they perform to from here on in.