Member Info for rossannan

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.

Credit to my colleague Irene for getting to the heart of the matter. All the evidence suggests that CERP is not cash flow positive at a company level - the opposite in fact - meaning an eroding cash balance and a looming SWP funding crunch.

trickydickie

They are good points that bear repeating whenever an exaggeration or misapprehension pops up on here (which is quite often). If you don’t believe me, just wait for the next update.

neon

It is a serious question. I assume that it wasn’t you that had my reply to your post deleted, but someone did. Potential investors looking in here might want to have a think about why this BB is so intolerant of skeptical posts (either having them deleted or responding with personal comments) and have a think about whether, in its current form, it actually offers them any worthwhile insights into the investment case for CERP. If I’m right about production and cash burn, the market will see the placing coming and this will be sub-3p before you know it. On the other hand, LK could take full advantage of the LIND facility before it expires and possibly avoid (or at least minimise) that placing. That would be a smart move, IMO, and, for me at least, might make CERP investable again.

Another post bites the dust. If you think that CERP is such a fragile proposition that a skeptical post on a BB could shatter it, why invest in it in the first place?

neon

Do you never look back at earlier LK “medias” and wonder what went wrong? In the past he has been way off both in relation to production and (not unrelated) cash burn. What is to say that he will be spot on this time and that the Steeldrum assets won’t surprise him on the downside, just like Goudron did?

LTID

879bopd peak is unlikely to translate into 1000bopd sustainable anytime soon.

Here is a link for Admin - perhaps the reason they keep deleting this post is the possibility that I am making these quotes up? Now they can follow the link to see that I am not and that CERP’s share promoter in chief really does seem to check his objectivity at the door:

https://mobile.twitter.com/amonkmonkey?lang=en

Andrew Monk tweets on ARS (28/11/18):

“Caught up with Tony Manini ?@AsiaMet_Res_ARS? at Mines&Money-not happy with share price but also discussed many ways to finance rather than equity...”

[“Al @al_cardiff1 Replying to @AmonkMonkey and @AsiaMet_Res_ARS
must be skating very close to needing cash , if you read last interim report”]

“More than one way to skin a cat !!.............As an example they could probably get cash today at project level - so dont get caught out in a bear trap - was a Sell at 14p but now too cheap and a Buy”

Hours later the placing is announced. Watch out when Andrew Monk starts explaining how CERP is going to be able to fund the SWP without a placing...

Vmax

What profits? Surely the only thing that is going up with WTI at $51 is cash burn.

philipy

You can talk about what’s in the posts or you can avoid the issue and talk about the poster. Let’s see if I’m right about EOY production and cash and the inevitability of a pre-SWP fundraise via LIND, a placing or a partner. Proving the majority wrong (again) probably won’t make any difference to how skeptical posts are received though - folk have far too much invested in CERP, in every sense, and need to be a bit more objective. The initial LK story was good but it has changed and I don’t see a turning point until LK comes clean about cash burn and funding.

Brycen

My posts are not as negative as they may first appear. I am not suggesting that CERP is another RRL and is going to zero (although I am confident that CERP will go sub-3p in the near future). It is more that the majority view on here seems pretty unrealistic to me. This is fed in part by some fairly unrealistic comments from CERP itself. There is a failure to acknowledge just how capital intensive CERP’s business is and the extent of the current cash burn. The market gets it though, as you can see from the chart. I am sure that CERP will reach a turning point sooner or later - sub-3p I suspect - when it finally faces up to the reality of funding its initial foray into the SWP.

“The Company has no other plans to drawdown on the Lind Facility which was put in place as a "financial insurance policy" in mid July 2018 and the facility will actually expire in early January 2019”

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.

Bigpecs

Whether these are bargain prices remains to be seen - this very much depends on what WTI does next and what LK does about funding.

neon

I don’t know why they stopped answering - I asked them a whole range of questions about what they are doing in the here and now (rather than about the legacy they inherited from the previous management, of which I am well aware). I guess they didn’t like what answering some of those questions might have revealed. I would though argue that a small disappointment now is better than a big disappointment later.

PMO and Total can fund new drilling campaigns because they have the cash in the first place. Mark my words, something will have to give to fund CERP’s initial foray into the SWP - it will either be the LIND facility, a placing or a partner.

This is not microscopic analysis, it is looking at the essentials of the business - cash flow and funding - to see where the immediate challenges lie. I have no agenda - I am neither long nor short CERP - and am happy to give LK credit for his achievements thus far. He significantly misjudged Goudron though, you must admit.

LK may do good stuff in the future but if the current shareholders are going to get the benefit of that, cash flow and funding in the here and now need to be taken care of. LK needs to demonstrate to the current shareholders that he will do everything he can not to dilute them any further. Taking full advantage of the LIND facility would be a good start - if he does that I will be the first to congratulate him, however he chooses to explain it away. He must know that something has to give and he should take his chance while he can

neon

“If SWP hits big oil"

Not going to happen anytime soon because the initial targets are shallower. They are not 800lb gorillas. Do folk not realise this? Those shallower targets are all that CERP can afford at the moment, on the face of it at least. In reality I strongly suspect that they won’t even be able to afford those shallower targets without the LIND facility, a futher raise or a partner (who would be looking out for itself in whatever it negotiated, particularly at current WTI).

Until LK comes clean about funding this is a barge pole stock for me.

LGO-fan

This is the problem, ignoring the evidence that the cash pile is still diminishing significantly over time and failing to consider what that may ultimately mean for shareholder value.

LGO-fan

Really?