Member Info for rossannan

LTHs should have taken the opportunity for some kind of de-risk that 3p+ presented. It is hard to see why the share price should head north on any sustainable basis until LK does what he needs to do. Then it will be game on.

Scarface72

CERP is the Rosetta Stone of AIM O&G, offering more insight into the workings of the whole sorry circus than any other stock that I know. You do not have to invest in CERP to extract value from it.

So what is your likely source of funding for CERP’s initial foray into the SWP, given that a placing is so very, very unlikely?

bigmj

You have said that another placing anytime soon is very, very unlikely and that suggesting otherwise is scaremongering.

Consider the possibility that one man’s scaremongering is another man just looking at all of this objectively.

If a placing is, as you say, very, very unlikely, you presumably see something else as a likely source of funding for CERP’s initial foray into the SWP.

What is it that you have in mind?

For example, are you expecting a Predator windfall? We know that Predator have the right (but not the obligation) to purchase FRAM for US$4.2m. Last time I looked Predator had until 30 June to decide whether to exercise this option. The CO2 results are all important here so Predator will likely take all the time available to them to make their decision. If LK is relying on this potential (I would say unlikely, but that’s just me) windfall to fund his initial foray into the SWP then that first SWP well may not spud until we are a long way into Q3.

Or are you expecting the necessary funds to be generated organically? If LK is simply relying on having enough cash in the bank then at $2-4M per well he arguably did not have enough in the bank for even one well at the end of the last quarter (even including the delayed payments from Petrotrin). Given the wording in the January RNS suggesting that the height of his ambitions is eliminating cash burn in Q1 (there was $1M+ of cash burn in the last quarter, so I for one will believe that when I see it), he is unlikely to be any further forward in cash terms at the end of Q1. What Great Leap Forward is Q2 going to bring? Goudron waterflood finally kicking in? I’m certainly not holding my breath for that one. It seems to me - does it not seem to you? - that CERP just isn’t on a trajectory that makes organically funding the SWP credible, not in the absence of, say, significant further progress by WTI or the outright abolition of SPT. Perhaps LK is happy to pretty much empty CERP’s bank account and then run the risk of a real cash crunch should the first SWP well disappoint. If that is the case, you should start looking now for a new CEO.

Maybe you think that a partnership is on the cards? Seems unlikely to me, particularly in a punitive fiscal regime such as Trinidad’s with WTI still sub-$60, but if a partnership does happen for CERP at this stage of the game it is hard to see it being on anything other than giveaway terms. Different if it was being negotiated by CERP with a successful drill already under its belt, but once Goudron started disappointing and the bank balance (all that money from Schroders, remember?) started diminishing, it became more and more difficult to see how that would be achieved.

Of course there is always Leo’s Magic Deal Tree. Is that what you are pinning your hopes on? I guess that if you shake it long enough and hard enough, something could fall out of it. Eventually.

So what is your likely source of funding for CERP’s init

Hedgecutter

Fandabidozi!

Hedgecutter

Anything is possible, but my money is on a tip fuelled sugar rush. As I said, if yesterday’s rise is repeated (in other words, if the selling price makes it to 3.5p) I will be going short.

Rugby2015

So why did Daniel ***** say “He [LK] expects the first of these to spud in H2 2019”?

wraith

What percentage of your portfolio does CERP make up? You may not be overweight here, but many other LTHs have made it clear that they are dangerously overweight in CERP, even while effectively encouraging each other to increase their exposure. What I was suggesting was that any LTH who is dangerously overweight (or even all in) here could take this opportunity to de-risk, even if only a little by reversing recent top-ups.

MrMagoo31

That was a while ago, it is H2 now (see e.g. the quote from LK in the Daniel ***** article).

emilyt16

Sour grapes? Not remotely. Repeat this rise tomorrow and I will happily take advantage of the opportunity by opening a short. Tips often lead to a sugar rush but it is rarely sustainable. Derisk opportunity for LTHs in the meantime...

CERP currently giving a masterclass in being a retail darling. Shares like CERP bubbling up certainly signals a shift in retail sentiment. An MCAP over £25M with, I strongly suspect, less than 1000bopd while TXP with well over 2000bopd has an MCAP of under £20M. TXP has debt that certainly weighs on it but in some ways the punitive fiscal regime in T&T arguably favours a company still largely at the idea stage when it comes to retail sentiment. We will see how CERP does in translating the idea into reality. It has not done very well so far.

steward1

Hope you saw my reply before the local rampers had it deleted.

neon

No panic - I put the money in TXP because it bit the placing bullet when CERP didn’t. I was only ever going to wait so long for LK to come clean about funding the SWP before looking elsewhere. Happy with the horse that I have backed.

neon

Don’t set too much store by Predator when it comes to CERP.

What will move CERP up? As 74399 suggests, something needs to happen here.

Talking of Predator, we know that it has the right to purchase FRAM for US$4.2m. Not the obligation. Last time I looked Predator had until 30 June to decide whether to exercise this option. The CO2 results are all important here so Predator will likely take all the time available to them to make their decision. If LK is relying on this potential windfall to fund his initial foray into the SWP then it could be that that first well is not going to spud until well into Q3.

On the other hand, if LK is simply relying on having enough cash in the bank then at $2-4M per well he arguably did not even have enough for one well at the end of last year. Given that he appears to be contemplating simply avoiding cash burn in Q1 ($1M+ of cash burn in Q4 so I’ll believe that when I see it), he is unlikely to be any further forward in cash terms at the end of Q1. It seems to me that CERP simply isn’t on a trajectory that makes organic funding of the SWP credible in the absence of, say, a great leap forward by WTI or the outright abolition of SPT.

Is a partnership on the cards? Seems unlikely - TXP tried hard but eventually had to bite the placing bullet (and is now being rewarded by the market with a nice move up above its placing price). If a partnership does happen for CERP at this stage of the game it is hard to see it being on anything other than giveaway terms. Different if it was being negotiated by CERP with a successful drill already under its belt.

Of course there is always Leo’s Magic Deal Tree. I guess that if you shake it long enough and hard enough, something will eventually fall out of it. Maybe even something worthwhile. Eventually.

LGO-fan

Not a very insightful tweet, IMO. How can either CERP or TXP take advantage of a fire sale of RRL assets without issuance? Of the three it is only TRIN that appears to have an adequate war chest.

neon

How is Goudron WF coming along? Any CEO on a share promotion exercise needs to be taken with a pinch of salt.

“this latest looks a further potential catalyst to see the shares well ahead from current levels”

Absolute zero insight there.

Razorman

Good one.

Razorman

Goebbels? Really?

Seriously folks, is this a panto or a share chat board? Time to make your minds up.

Hedgecutter

Fair point - that may well be the explanation. Maybe the next RNS will be the one for the placing! Sooner the better because answering the funding question will set the share price free. It may briefly dip to the placing price, say 2.2p or (worst case) 2p, but after that it will be game on.