Member Info for rossannan

faz7475

I did but it was deleted. Will try again - TRIN and HUR both look like good value, HUR being the riskier one. SQZ and SDX also offer good long term value, neither are hugely risky. For more of a rollercoaster geared to the oil price there are PMO and RKH.

jeffry

Which is a shame because this market has thrown up some cracking bargains (though CERP is not yet one of them).

jeffry

Sorry, looks like you have posed a question that Admin aren’t allowing to be answered.

jeffry

TRIN (producing - lower risk) and HUR (about to produce - higher risk) are my favourites. SQZ and SDX are also offer great value at the moment. For real gearing to the oil price and rollercoaster potential there are always PMO and/or RKH.

It’s easy to overestimate what waterflood can do for you.

offerman

Here is a more direct link:

http://www.energy.gov.tt/meei-consolidated-monthly-bulletins-january-august-2018-2/

September was 995bopd, down 35bopd. October may be available next week. All but about 200bopd is CERP, I believe, but HH has the best handle on it all.

Limopete

It’s the cash burn / funding dynamic that is the problem as far as I see it. Cash burn is fine, but only if you have enough cash and you don’t have significant additional CAPEX to fund in the near future. There will certainly be a turning point within LK’s 5 year time frame though. It became fairly clear that one of the problems with NR and his team was their tendency to operate LGO remotely from London, letting things slip on the operational front. LK and his team seem to take pride in operational excellence on the ground and doing things right first time. That is bound to pay off, eventually.

faz7475

I think we covered all the bases at the weekend!

Limopete

Just trying to offer what I would say is a more realistic point of view for anyone looking in to consider (alongside everything else). I just don’t think the turning point is here yet, even if WTI has tonight perked up a little on the back of the trade war calming down. LK deserves a fair amount of credit but I think you are giving him too much and there is a bit more of the the bad and the ugly to come before it gets good...

Bamps21

No, what I said was that if that has been the effect of our posts we have arguably done the investors in question a favour.

Saying that, if any potential new investors or existing holders are looking in, I would certainly argue that it’s not too late to hold off from buying (for new investors) or sell (for existing holders) pending a better entry point or more information, but it’s up to each individual to do their own research, consider their own circumstances and look at both sides of the argument - although on here the other side of the argument seems mainly to be personal comments!

mossma

Look at the chart. Who has been right about CERP - the invested posting on here or the uninvested skeptics? The answer could not be clearer. One way or the other LK will eventually address the cash burn issue and CERP will reach a turning point, but it is clear that many on here aren't really interested in figures, they just want speculation that new investors might buy into (for example about deals and/or SWP gushers). They have their work cut out there though - the number of shares already issued and to be issued pretty much precludes the kind of returns that have been bandied about on here - it's just maths. No doubt there is still a decent return to be made by patient investors, but for many even that kind of unambitious talk amounts to deramping. All that the skeptics on here try to do is inject a little realism. Looking again at the chart, if our observations have ever caused a potential new investor to change their mind or an existing investor to sell up, we have arguably done them a favour.

Horseyhead

What exactly did you ask them though?

I am looking forward, trying to gauge future cash burn, and therefore interested in whether they are still operationally cash flow positive at the current $50 WTI (i.e. at whatever average price per barrel the current $50 WTI translates into under their various arrangements). I am not interested in whether they turn out to be operationally cash flow positive at the average (i.e. likely higher) oil price that they obtain over Q4 (though they may not be).

The figures in CERP’s published accounts illustrate how significant lower WTI over a sustained period can be for CERP - compare 1H 2018 with 1H 2017, for example:

Averaged realised sales price from Goudron operations in 1H 2018: US$61.17 per barrel, netback per barrel of US$13.13

Averaged realised sales price from Goudron operations in 1H 2017: US$46.28 per barrel, netback per barrel of US$5.69

As I said on here a few days ago:

“If WTI hangs around these levels for much longer, LK will be making a huge mistake if he does not take full advantage of the LIND facility before it expires. Even with the smoothing that the IPSC offers and SPT being taken temporarily out of the equation, the cash flow here cannot be very pretty right now. Pre-SWP funding looks unavoidable. LK can either take on modest debt now or dilute shareholders yet again later. He may of course end up having to do both, but if he has any concern at all for shareholder value he needs to take LIND’s money. He can then explain it away however he likes, saying that it is to accelerate something or other (rather than simply plug an obvious funding gap), but he needs to face up to reality.”

If WTI does not recover quickly (or does not recover sufficiently) from current lows, the market will see CERP as increasingly vulnerable with SWP CAPEX looming - if LK wants the SWP to proceed according to his timetable, he needs to take the LIND lifeline. Otherwise it’s placing ahoy (because I doubt that he will be able to attract an SWP partner at current WTI).

Can you not see the merits of LK taking full advantage of the LIND facility before it expires?

Bamps21

Does he though? I am skeptical that any other quick wins will make a significant, or at least sustainable, contribution by EOY. I am sure that if it is at all possible LK will engineer it that production touches 1000bopd at some point this month but my point is about the funding of the business - I am looking at sustainable averages and have very little interest in artificial peaks. I am not just looking average production either but the average price obtained for CERP’s oil. Just watch my Question to the Team (“With WTI now just over $50, is Columbus still ‘operationally cashflow positive’?”) remain unanswered, but try running the numbers yourself and you will see what I’m getting at.

SKY-RIDER

You have inspired me to submit this Question to the Team:

With WTI now just over $50, is Columbus still “operationally cashflow positive”?

Bamps21

My point is that artificial lift is only going to be deployed once natural flowing pressure decreases, so I would query whether Snowcap is going to be the key to LK achieving his EOY target, even though that target is now merely to touch 1000bopd at some point this year.

Bamps21

Anyone getting excited about Snowcap should check that what they are reading is not a misrepresentation of what was said in the RNS.

VSA said:

“CERP anticipate that unaided production would resume at around 100bopd at Snowcap following natural pressure decreases after initial testing between 2011-15.”

But the RNS said:

“It is expected that the well will resume to flow and produce at a fluid-rate of around 100 BFPD with the extent of the water-cut from the well being unknown at present given that it is over three years since the well last flowed.”

Spot the difference. Naughty VSA.

RAMMAN

You prove my point that the challenge is to get the BB making useful guesstimates about figures rather than personal comments about posters.

Let’s try talking about figures.

In the 10th October RNS CERP confirmed an end Q3 2018 cash balance of US$1.97 million, but we don’t know (and LK is not telling) what that end Q3 cash balance would have been with Steeldrum’s cash in the bank stripped out.

So we don’t know what the cash burn was over the course of Q3 but we do know what it was over the course of Q2 ($1.7 million) and we do know the starting point for Q4 (near enough) using the information available - the $1.97m that we know about plus the further $3.22m gross raised via the placing then deducting the $1.25 million used to pay off the Steeldrum loan and allowing for the expenses of the placing, giving us a Q4 starting point of around $3.75m. So what will the EOY cash balance be? $3.25m or more would be encouraging but I am fairly confident that it will in fact be less than $3m, pointing to an end Q1 balance possibly less than $2m. $2m doesn’t take you far in the SWP...

You may believe that Goudron WF and/or Bonasse/Icacos/Steeldrum operations are going to produce a better cash position than I’m talking about. Over time, perhaps, but while LK is good at talking about “quick wins” he has struggled to deliver many so far.

The next important clue will be the October IPSC production figures, due within a fortnight - let’s see if they show any evidence of quick wins and/or waterflood finally making a contribution.

Bamps21

Have a look at what Snowcap might reasonably contribute in bopd terms - don’t confuse barrels of fluid with barrels of oil.

LGO-fan

Just poking gentle fun at some of the weird conspiracy theories on here about skeptical posters.

ShinFalls

Where is that coming from with WTI currently at $50 and the Q3 figures confirming continuing cash burn (though masking the extent of it)? Where is the sixpence that CERP is going to turn on to generate anything close to that, even if it can bring the cash burn under some kind of control in the near future? Almost everyone on this BB continually underestimates what a capital intensive proposition CERP is. We can see that the market gets this. I wonder if LK does and is going to do something about it (LIND) or if he actually believes his own aspirational rhetoric about funding? If the latter is the case, caveat emptor.