The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Exxon are scaling back investment in shale projects in the US, as are a lot of large companies in that space. Shale are relatively short term projects, production declines occur rapidly and require significant investment as companies need to keep drilling / fracking to open up the reservoir. That is completely different to the reservoirs say in the North Sea or offshore Nigeria. Ofcourse, that side wasn't explained by Bag. Wonder why.
Suhail, honestly there has been several posts stating it is Brent. I really don't know what anyone else can say. WTI is the North American crude benchmark, Brent is generally the benchmark for the rest of the world, including Africa.
Oil continuing the bull run at a good pace this morning. May get back above $55 in the next day or so. Also, good to see European Markets picking up where the US left off yesterday.
General good feeling returning to the markets so far this week. COPL will follow suit in my opinion.
A fair question Berta, but I wouldn't of thought so. It is after all a temporary cut, the brunt of which will be undertaken by the Saudi's. I don't expect we will be pumping oil out until summer at earliest. That said, ShoreCan are only after this first well of between 6-10k bpd to comply with the licence extension. A relative drop in the ocean. Also, Nigeria are screaming out for more investment in the oil industry, so I wouldn't thought they would block new developments because of this.
My concern the past week was that our proposed investors wouldn't close the finance due to a crashing oil price, that appears to be changing. A buoyant oil price can only be a good thing for the company.
Russia is on board for production cuts, paving the way for bull run in oil. Headline report below:
OPEC+ is expected to cut the oil output cut by more than one million barrels per day (bpd), Vice President of Russian oil producer Lukoil, Leonid Fedun, said on Monday.
"Coronavirus outbreak hit the oil demand, but it is short term," Fedun argued, per Reuters, and added that he expects Russia to cut its oil output by around 200,000-300,000 bpd"
Great to see oil having a major bounce today. At the end of the day, that's what makes this project viable.
Reports coming out today OPEC+ considering a hug temporary cut in production of >1M bpd in the wake of the Covid-19 outbreak. The OPEC+ meeting not until end of the week so we will have to wait for confirmation but I think positivity in the oil price will generally be reflected on oil stocks. My eyes firmly set on that meeting. A good result, I think finance news will be hot on the heels.
In truth, I don't know RK. Just speculating and trying to piece the puzzle together. That PB has been with NNPC for so long, it makes me wonder that it must be something else i.e. Essar. But i guess we'll never really know until Arthur provides an update.
I disagree Spooky. My suspicions are that ShoreCan will be dealing with Essar to get them out of the licence before Approvals and the rest of the milestones will subsequently fall in to place. They are in direct breach of the terms of the Shareholders Agreement - posting of the performance bond. There's no hiding from that. ShoreCan getting their ducks lined up - project finance set up in principle ($80M+), performance bond with NNPC, SPA all but agreed - puts ShoreCan in a very robust position to negotiate and ultimately force Essar Mautritius to settle. I suspect there are discussions ongoing to come to agreed terms for their 20% interest in Essar Nigeria. The SP action is irrespective of this. It is simply Shareholders selling or manipulating the price to make money. The recent placing also provides sufficient funds to put them in good stead for negotiations, and should they need to, prolong negotiations beyond September (which should a placing not have happened or some other form of funds found, was impossible).
It was always the plan to buy out Essar as they couldn't keep their side of the bargain, hence the notice of default last year. They won't get a free carry in to the development. So there really is only one option left for them, other than a prolonged legal battle that they have no hope of winning (see the terms of the Shareholder Agreement).
I'll put it out there - I believe Essar will be bought out very soon (2 / 3 weeks) and things will fall in to place after that.
Sub, you can't claim to be misunderstood at all. You have called out multiple posters and have been nothing but abusive to myself, Guitar, Jay, Jiving, even Berta. Those that have been here for years and have as much if not more to lose than you. Posters that have a wealth of knowledge on this company and you've ostracised them all. So no, I think I've called it correctly so I'm not going to take you on.
RK, my take is the same as it has always been. I believe this will come good and the problems have been the process of Nigeria and the Essar issue. Those two points have resulted in the long delays, however things are coming to a head. Many other companies take ages to get the correct permissions to drill in Nigeria - SRSP, SAVP, LEK. It's a known that the process is slow going. But then, the rewards are huge so I think it will pay off.
How do you solve a problem like Essar - a difficult Partner that knows of the value of the licence but can't pay their way. We don't have the cash available to buy them outright but they haven't stuck to their side of the bargain - posting of the performance bond. Essar Mauritius don't have the money and don't have the credit to post it.
So, I suspect there will have been negotiations to buy them out somehow before Approvals. That was the plan last year, as we all know, and I don't think it has gone away.
Hi Groover.
Yes, COPL are clear of all debt associated with Essar. RK, thanks for your input also - good points. You will see a write up in the MD&A of quarterly / Annual results regarding the percentage splits. It's a good place to read up on the history. The split still stands as is. However, I suspect Essar Mauritius will be bought out at some point. They won't be getting a free carry in to the development and can't afford to pay their way. It's the obvious solution. Personally, I think that will happen pretty soon but I'll not share my thoughts on it any further as there are some on here that will turn it against me and have done in the past.
The placing for example has been blown well out of proportion but that was always going to happen. A placing is never ideal, but if you think rationally, it's not the end of the world. At £60M MCap, the recent placing equates to an SP of 1.7p instead of 2p i.e. 17x where we are instead of 20x. And overheads have been reduced so we can operate to the end of the year and are better positioned to negotiate. I'll get hounded for putting a positive spin on a placing but there you go.
Anyway, credit to you for doing research. That should always be encouraged instead of letting others do it for you and moan when it doesn't go your way.
I'm still positive this will come good but others are obviously firmly camped on the other side.
I should also point out that Essar Nigerias sole asset is OPL226. It was established as a vehicle to drive that licence to production. Any Essar related business, with the obvious exception of Essar Nigeria, has nothing to do with COPL - bankruptcy, sale of assets, earnings etc.
Groover, you are referring to the Parent company Essar who are under a lot of strain at the moment. However, the subsidiary that we're in bed with is Essar Mauritius. COPL own a 40% interest in Essar Nigeria, Shoreline also 40%, and the final 20% is Essar Mauritius.
Who's misleading Bonum. You fail to acknowledge the fact that overheads have been reduced. Its in black and white. Instead, you swing the conversation to you being right so you can pat yourself on the back. Remember, you titled the conversation 'Greedy Mullhollands Pay Cut??'. That has been disputed because there has actually been an overhead cut. God forbid someone disputes what you say. But rather than concede that you might be wrong like any rational person might do, you post condescending and passive aggressive drivel and accuse genuine holders of having no common sense for daring to suggest something that contradicts what you've posted. Talk about having a superiority complex. You go on to post imaginative accusations that we're all somehow in awe of Arthur where I see no evidence of such. I shouldn't get baited in to an argument but never mind. Que yet another self-appreciated post to all the astute holders out there...
I'm not going to be drawn in to an argument with you Bonum. Really isn't worth it, and I have better things to do. I can't really see a post at that your referring to where anyone is glorifying Arthur. Just stating facts. Everyone was shouting for the company to reduce overheads, and it has happened. That can't be acknowledged? Maybe that doesn't suit your view but it's there in the releases. You say posts are being manipulated to suit a certain view. That works both ways, just depends on your view. I would say the exact same about you. Anyway, your condescending posts really grate on me so last post from me.