Barnyards - you are misrepresenting the field development plan. Yes, assessed risked recoverable contingent resources are approx. 28M bbls, however that is a function of the data available and the drilling to date. The company are targeting up to 50% recoverable of OIP.
"Stratigraphic oil accumulations in Upper and Lower Cretaceous reservoirs are gas expansion drive without bottom water. As such, primary recovery factors by analogy are limited to 10% maximum until the reservoir reaches bubble point
COPL’s current thoughts are to implement “miscible enriched gas flooding” early, working outwards from its operated
miscible flood gas plants infrastructure. This scheme will over time increase recoveries of the oil in place to 50% or greater"
The Canadian listing is irrelevant at the moment. Very illiquid, low volume.
20% down on 6 trades totalling approx. 11k shares. A grand total of around $2k CAD through the books at time of writing. One of the effects of having an illiquid stock.
It's really not worth getting worked up about.
Hodl, gold. You are looking at it in isolation. What I am talking about is collective and a combination of factors, exacerbating general sentiment which ultimately contributes to an individuals decision making. Any one individual has little affect, but if a rumour or speculation is picked up and treated as gospel by many, it absolutely feeds general sentiment which in itself is infectious and self perpetuating, it is human nature. Sentiment has a huge influence on the share price at this level. I see no evidence to the contrary other than an opinion you hold.
Anyway, it is off topic, so I'll not argue the point further.
Hodl, I have to disagree that opinions on social media platforms don't affect sentiment. If it was the case, the opposite is true and there is no such thing as rampers and pump & dumps. There is clear evidence every day on the markets of this occurring. Sadly, it works both ways.
I believe it's entirely more plausible that investors (not all) base decisions of the collective sentiment of what's written on social media, rather than understanding and digesting what is written in company releases.
It only takes one rumour of a placing and it can spread like wildfire. Remember how much posts there were about TWs articles - don't tell me that didn't sway decisions. It is naive to think social media (e.g. these boards, twitter, etc.) don't have any impact on sentiment, and it is sentiment that drives micro/small cap companies.
Sbrown. The pumping wells use suction to extract production fluids from the reservoir. It doesn't flow, or not very well, under reservoir pressure. Google nodding donkey, and it will explain it better. Essentially, think of plunging a toilet and you get the picture.
The MF programme has increased reservoir pressure and that has enabled the well to flow under pressure alone, which the company has seen. The issue with the pump and rods is that it reduces the cavity, therefore you have a restriction in the cross sectional area of the wellbore. Hence, removing the rods increases the cross sectional area and provides an improved flow path for the well to operate. I am unable to quanitify how much improvement might be expected, but it will certainly help flows on those two wells. Hope that helps.
The selling today, in my opinion, is just the mechanics of trading. The share price was running hot off the buying pressure last week, look at the RSI and you can see it. Get in on anticipation, get out on news when the technicals top out. Interestingly, it has gone straight back to in to oversold territory. Again, in my opinion only, back in the buyers zone now.
I find it amusing how the opinions of some directly correlate to the SP. When it's overbought, sentiment is sky high, when it's oversold sentiment is rock bottom. Fundamentals haven't changed, yet opinion has. Can you not see the pattern of how traders execute entry and exits?! It is rather obvious with this share as it is has a large retail following that tend to be more emotive in decision making.
I'm not a big trader, don't have the time, so just an observation. I'm more than happy with yesterday's presentation and the evolving forward plan. The fundamentals will eventually shine through.
No problem Bob. It was a concern that I had too, hence why I wanted clarity on it. That being said, I will add that to my list of questions for the webinar. It is worth having that cleared up and on the record.
Op - below doesn't correctly reflect the current MF programme.
"Hedged oil for all of 2022 just over 1,000 BPD , at $56 dollars then Hedged 2023 oil of some 400,000 Barrels"
The hedge is a swap agreement. The company are not tied in to selling the notional volumes of oil stated at the hedge price unless they are also purchasing butane for MF. It is a two way hedge. They are now mainly injecting recovered methane, reducing significantly the butane being purchased. I've clarified that point with Art. The average sale price in Q1 was circa $90 and there is no way to achieve that if they were selling the notional volumes referenced at the hedge price. I hope they discuss this in the investor webinar as I think there is a lot of misconception between investors on with how this is structured.
Butane will be required for some wells and certainly new injector wells, but most of the existing injectors have sufficient butane stored downhole that they can get away with injecting pure methane.
Hodl, it may not all be going to an escrow account. For example, they may well be billing or back-charging the Receivers/CUDA for costs incurred in Q1 without directly profiting from sales. However, the sales revenue will be going somewhere and if not to COPL/SWP directly, it will be held in escrow pending the finalisation of the acquisition. With little overheads, net revenue will be far greater than the $300k deduction in the receivable.
At the end of the day, it will be going in to the same pot (in other words to SWPs books). Whether that is in Q1, Q2 or Q3, is a minor detail in my opinion.
Hodl, I disagree with your interpretation on receiving CUDAs WI, unless I have misinterpreted your meaning.
"They are taking money back for billings.
Money recovered. The Q4& Q1 suggest they have clawed back $ 300k,upto March 1."
I understand it to be they are recovering the entire proceeds of CUDAs oil sales and have been doing so since last year to settle the receivable that they hold, not just CUDA's costs. It is held within an escrow account and can be booked as revenue following completion of the CUDA acquisition, although in effect it already is.
I suspect that proceeds within the escrow account will be, partially or wholly, used to offset the cost of the acquisition.
Candle, see below from page 9 of the MD&A.
"Oil production for the three month Reporting Period averaged 1,114 bbls/d net to the Company at an average
realized price before royalties of $91.14/bbl as compared to 706 bbls/d at $56.33/bbl in the Comparable Prior Period."
I think the figure you have arrived at is after royalties have been deducted.
Understood Candle. Thanks. In that case, the point I made below should hopefully clear it up.
The company aren't restricted to selling the notional volumes of oil at the hedge price, it is a swap agreement only and they are not obliged to fulfill it. It is a two-way mechanism.
What hedge figures are everyone referring to?
The company have stated that they are now injecting pure methane for most of the wells, albeit some wells will require butane. So the 'hedge' on the majority of oil sales is irrelevant from what I gather. The company sold their oil at an average price of approx. $90/bbl which is evidence of that. The hedge of $56/bbl comes in to effect when they purchase butane, and that has hedged price itself. It is a swap agreement and shouldn't be used in isolation for oil sales only.
In what regard is hodl "obviously correct"?
There's nothing obvious about that statement. Is there any evidence to suggest he is correct other than an opinion that you agree with?
On the other hand, I have provided a reference that shows he could well be wrong.
Not long to wait either way but opinion and fact are two entirely different things.
Hodl, see below regarding your objection to the term net billing ref 10th January 2022, which also contradicts your argument that it is only to cover CUDAs costs.
"Southwestern continues to take Cuda's operating net revenue through set off or "net billing" to reduce the arrears over time. As such, Cuda's working interest share of the oil production and expenses in the Barron Flats Shannon Unit accrues to the account of Southwestern as the field operator, and creditor, until the arrears are satisfied."
Agreed Tiburn. That is my assessment too. Cuda WI effective as of January, as per the RNS mid-Jan regarding settling of the arrears.
Add in significantly reduced OPEX due to 100% methane injection (instead of butane-methane mix) for much of Q1, lack of drilling activity and CUDAs WI & Dakota being sold at market spot price.
I'm cautiously optimistic about the numbers in the Q1, but we shall see tomorrow.
Hodl, I'm not going to argue semantics with you and to be honest, I'm not too interested in tit-for-tat.
I will concede your points on the forward plan of modifications for the field, thank you for providing a reference.
However, what you have referred to is longer term modifications and optimisations, which is rather far reaching, particularly since the issues that kicked off this thread are near-term production constraints associated with the gas gathering lines and treaters. The known issues that have resulted in the wells being choked back and why the company are producing circa 2,000bpd rather than 3 - 4,000 bpd.
Gas sales will happen for the MF fluid/gas once oil production has been exhausted in the BFU. Gas returned topsides will be processed, extracted from the production fluids and reinjected. For me, that is so far in to the future it is a moot point, as with many of the issues you presented.
Below is the list of anticipated key modifications.
Key capital items addressing the noted restrictions being proposed for 2022 and beyond:
• a gas plant start-up, which will capture liquids from the gas stream to offset purchases;
• a third compressor installation, which will increase gas injection compression capacity to 12 Mmcf/d and
would include liquids compression;
• a phase 1 gathering system upgrade which will address much of the low-pressure gas gathering line restrictions
in the center of the field, with future phases to branch out to outlying wells; and
• a phase 1 surface facility upgrade regarding the CPF which will address well battery limitations and begin the
construction of a CPF with oil gathering lines mirroring the gas gathering lines upgraded in Phase 1.