Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
History has shown he has raised when the company needs to raise to fund operations, as do any other junior company. Why is Arthur raising in the market so different?
I've explained my take on the last two placings and why they were at the price they were at. The last two placings were at the best possible price given the circumstances, the second one in particular he had very little options. There is a reason behind everything so why can't we post "surely he won't do a placing at this level". Sure he would do it if he needs to sure to keep the business afloat, but does he absolutely need to raise 1 billion shares?
Cash balance suggests no imminent placing, rumours of approvals news and an asset that is worth 10s of millions of dollars as it stands.
All you and others seem to be achieving here is talking the price down through unsubstantiated claims of a doomsday style placing, ironically making that scenario more and more likely. Maybe that's the aim... I've noticed we've now slipped in to oversold territory on the daily for the first time since October. Time to hop back on?
Fair enough Jiving, thanks for clarifying your point.
Personally I just can't see the doomsday placing at the price we're at. Not because I refuse to consider it, but because it doesn't make any business sense, particularly since the company are valued way below estimated asset valuation.
Jiving / Ploppy,
I don't agree it's the same pattern. True, they came 2 weeks after the interviews, but in my opinion it is more likely coincidental. The last two placings in particular were undertaken in different circumstances.
August 2018: COPL received a letter from EM alleging a breach in contract that may have escalated to legal proceedings. It was a 60 day notice for resolution of the allegations and had to be disclosed to market. We needed money around the time of the 60 day notice. The BEST price Arthur would of gotten for a raise was as soon as possible. It was a disgusting price, but imagine he did nothing until October with all operations on hold and the allegations unresolved.
September 2017: Releases an interview and the SP shoots up. He got a reasonable raise away at a decent price opportunistically. The ethics of it can be debated. However, he could of waited until the price came back down and got one for double the amount at 0.5. The long-term holders would still be here but with more dilution.
Sorry, but I just don't buy in to the story that Arthur raises for the sake of it at terrible prices. You've convinced yourself that it is the case but without actually thinking of the alternatives. The company need to raise to keep the lights on, there is no way around it until we get to production. The above points me to believe he won't raise at this price, but he will wait for a better opportunity. Let's face it, he knows better than anyone else here what's in store. If it was nothing, he would of raised already.
I think the recent RNS sums up exactly what more we know from a year ago: Secured back-end financing for the project, we've developed and submitted the field development programme to the regulators, we know details of the program and the timelines for drilling, first-phase of the PSC has been extended for 24 months. All of that we didn't know a year ago.
What you posted isn't truth. It's pocked full of half-truths and speculation, with a suggestion of a conspiracy that Arthur is fabricating official news releases.
I don't think anyone finds it their job to be hostile on this board, but what I think you will find is certain posts being challenged if it's inconsistent or they don't at least consider the other side of the argument. Which yours doesn't.
Isn't it at least possible Arthur is telling the truth about the elections? That he has told the truth about the delays, not worth considering as at least possible? You assume that because we haven't heard anything that no progress is being made. Your post reads like a certain poster that got banned for trolling and a tendency to jump to conclusions.
Jiving, I agree with you to an extent. We are all on the same boat here. All annoyed, all want this to come off etc. Sentiment is low. However, this either fails or succeeds and given progress to date with the licence my money is on this succeeding from where we are just now. A lot of people are blaming Arthur on how long this has taken but he's not actually in control of timescale. He's maybe mislead us or whatever but Kola and Tunde is/was the man sorting out the approvals. Anyway. Hope we get there and I think we will. Certainly deserve it
Good to have you back on the board NoEasy. I had thought you went MIA there for a while. You're right though, the huge elephant in the room is the raise which must come before the drill in the summer. Not what we wanted but I see it as a short-term negative impact and may have to adjust targets down to compensate slightly but still staggering potential here. I think and hope things become more clear after the elections.
I haven't been talking about the markets valuation of the company, Bell. That is quite obvious from the share price. I was talking about the underlying value of the asset, which isn't so obvious. There is a difference, although I don't think you recognise it. My point being, COPL have spent ~$10M to plan the development, it has 100s millions of recoverable barrels, technical aspects and design completed, approvals well underway etc. It is a hugely undervalued company for what the *underlying* value of the asset is. It has to be. Sure there is risk of delays, or a raise, or whatever else it's being bashed for, but that doesn't affect the value of the asset. That is the whole point of investing, to find undervalued stock or nothing would ever move. There is a concerted effort to bash and funnily enough you've popped up again since the summer as sentiment seems low. Im sure you'll disappear when it turns again. Glad you pointed this out "An additional $20 million to $33 million of funding from ShoreCan". Please do some research about what that actually entails. As I said, what do you think the Service Provider and finance is for? I gave up reading the BP stuff. Not relevant. As for trying to dig up skeletons from over 10 years ago. Wow. Haha. Nice try. COPL successfully planned and executed a drill with a major oil company.. it was a duster, it happens, it was an exploration drill. However, the team have experience in successfully planning and implementing a drill and the share price 5 bagged in the lead up to it. I guess you wanted to skirt round that bit.
RK, I don't see why that would possibly be the intention. The cash burn is high, but it goes back to what you pay for. The team at COPL are world experts in their field, and have developed a very robust development plan. One that lesser paid professionals may not have accompished. We as Shareholders don't like the expenses but the team, as far as their concerned, have done their job. Imagine asking or telling them they're getting a paycut for doing exactly their job description. I know that's not what you suggested but it's been suggested. Don't get me wrong, if it happened, great. But I just can't see that being taken up. Arthur, however you may feel about him, sunk $100k in at 0.335p. If nothing else, he's not going to needlessly dilute his own holding. He will have the best intentions for business, that I have no doubt. The concern is matters out with his control. I think after the elections the picture will be a lot clearer.
Of course it doesn't mean a constant gusher, hence why I said associated commercial risk. However, it does get us off to a good start. Handed around like a hot potato? How do you mean? Essar were awarded OPL226 as part of a deal whereby Essar commited to build a large refining and chemical complex in Nigeria in 2005, which they then reneged on. The government had big issues with Essar and threatened to take OPL226 away in 2015. Up step COPL, who approached Shoreline to indigenous the asset, and form ShoreCan. It's the issues Essar have caused that has resulted in OPL226 remaining undeveloped for 15 years. That has all gone now due to the relationships built and commitments of ShoreCan. Where are you pulling corruption allegations from? As for the value of COPL... are you suggesting because no company has initiated a hostile takeover of the company that it validates the current MCap?
Bell, It's not only the data that suggests oil but historic drilling on the block has encountered hydrocarbons in all cases. The reservoir is confirmed oil so it's not exploration. There will be associated technical and commercial risk but there's very limited exploration risk.
I don't agree that an asset is only worth what the current MCap is. If that were the case then there would be no under-valued or over-valued companies. Particularly in the junior markets or junior companies, sentiment plays a huge role in pricing a stock. Swings of 100% are not uncommon. The actual true value of an asset should not consider sentiment as it should be calculated based on established metrics e.g. recoverable oil, price of oil etc. I find it hard to believe that should COPL decide to sell their 40% stake in OPL226 that it would be only worth circa. $4M, taking in to account they've spent some 24 months x $440k = $10.6M operationally to get to where they are today.
Fair points as usual, Brady. I agree it shouldn't be dismissed, however it's been talked up like the worst case scenario is absolutely certain to happen. I don't think that's the case but the rumours just stoke negative sentiment and inevitably this downs the share price. I keep going back to if he wanted to raise and he didn't have any further news planned, he would of done it alongside the recent update. The very obvious news is of approvals which has been suggested already. Balance is OK for now, providing him some flexibility. Elections are a distraction but nothing more. I don't think it's fair to pin the fate of COPL on an election outcome that has been stated as all but irrelevant or the licence by management. New and existing investors can wait until after any placing, but if it's after news of approvals which imo is the more likely event, then they'll be paying a lot more than where it is just now
As of 30th September 2018: $3.4M Cash burn per month: $0.44 Months to date: 4 Cash balance to date: $1.6M I think the last placing is different as there was the potential for legal dispute with EN. It forced a placing at a terrible price as it halted operations. Resolution date was in October so with cash running out, no potential for news, SP was going to dwindle. He was bent over a barrel. It had to be in August.
Bell, COPL have cash until middle of May and therefore stated they need to raise in April. I don't know how you've arrived at start of March at the latest? Who knows when news will arrive but it's been indicated that project has been approved but they've been asked to keep quiet until after the elections. That is in 10 or so days so news potential certainly there. I think you're under estimating the value of the asset by a considerable margin. EM paid $37 million as a signature bonus for the licence. The seismic data has since been re-interpreted and the oil recoverable estimates have increased significantly. To suggest it and all the work undertaken to get to this point is worth a mere ~$4M, even at this stage, is doing it a huge dis-service IMO.
I'd be interested to read why everyone thinks there is an imminent placing on the way at this price as per Oilberta's comment.
A few of my thoughts:
Approx. $1.5M cash balance currently
Prospectus states April for additional raise
A placing didn't occur in tandem with, or immediately after, the update when SP was higher, so why would it occur at 20 - 25% discount?
Approvals rumoured to be given but holding off for official RNS until after elections.
I'd be interested to read why everyone thinks there is an imminent placing on the way at this price as per Oilberta's comment.
A few of my thoughts:
Approx. $1.5M cash balance currently
Prospectus states April for additional raise
A placing didn't occur in tandem with, or immediately after, the update when SP was higher, so why would it occur at 20 - 25% discount?
Approvals rumoured to be given but holding off for official RNS until after elections.
Berta, wise up. All you ever seem to post is disruptive and negative comments. Doesn't have to be always positive but that is clearly scaremongering. You don't know we are going to be hit by an imminent raise. Have you worked out the cash position? I have and it puts day zero (cash at 0) to the middle of May. An oil and gas junior raising for operational costs is very common. I think some are forgetting the big picture - the project is literally worth billions of dollars and it kicks off in few months time. NNPC have already approved the project according to emails. They are keeping quiet for the elections, we'll likely hear something after. The agreed project is what was released in the update. 4 x 6-10k producing wells over 18 months! Arthur may well be planning a raise. But I'd rather be hit with a planned raise than an unplanned one.
I really hope he is planning one. A raise is inevitable, the company needs operational cash. That's nothing new. The obvious hope is he can plan one to coincide with positive news and at a higher SP to mitigate dilution. He has a couple months to do that still and by my reckoning a number of potentially high impact news releases to come before then.