Member Info for rossannan

offerman

I could not disagree more. They drill a well in the SWP in mid-2019. There may not be much in the bank at that point and they may have used up most of the LIND facility but they do it anyway and, despite the apparent 10% CoS, they get lucky. However, one swallow does not a summer make. The market would be pleased for them but it would look ahead to the very substantial CAPEX required to appraise and develop the field before they could book significant reserves, and value the shares accordingly. One standard SWP well is never going to be transformational. It is important to remember that we are not talking about a deep well targeting a potentially world class asset - Cedros is in the SWP but it is not that kind of potentially transformative big drill that LK is talking about.

I’ll have the IPA, please.

offerman

40-50p is the current maximum but that figure can only fall (there is no prospect of share buybacks). Further dilution will be driven by the rate at which CERP is running out of cash, which will likely necessitate more stuff being paid for with shares. This may all be presented as accretive but it will still reduce that 40-50p figure.

The cash balance at the end of Q3 will be critical. Eventually CERP’s cash position should begin to stabilise and maybe even improve but not, I suspect, before CERP is well into the LIND facility. I cannot see how CERP will be able to organically fund the initial foray into the SWP, even though that isn’t going to happen until Q2 2019 at the earliest (by which time the 40-50p figure will likely be well out of date).

In other words, the SWP farm out may well have to happen before rather than after drilling commences, diluting CERP’s interest in the SWP. I suspect that it will either be that or more traditional dilution. One problem with the SWP is the way that it is sometimes talked of as if it is development drilling rather than exploration. The fact that uber rampers VSA could only come up with a CoS of 10% tells you all that you need to know. That initial foray into the SWP is not something that LK can afford to bet the company on - he has to build in a margin of safety and it is not at all clear where that margin of safety is coming from.

Folk can of course point to recent medias in which LK explains how everything is going to work out fine, but these are essentially marketing exercises and folk like me can point to older LK medias that really don’t stand up well against what we know now. Folk can also speculate about rabbits that LK might suddenly pull out of the hat, but I would suggest that he already has more than enough on his plate. He needs to digest each meal before he moves on to the next one - otherwise this all could go very wrong very quickly.

Investors like bigmj who are in from near the lows and strapped in for the long haul will no doubt do very well - LK is maybe not perfect but he is no NR - but be wary of rampers like Edgein on ADVFN who tend to paint very rosy scenarios and downplay just how capital intensive this industry is. I remember Edgein posting back in February about how “many of the other little trinnys will stay as they are” as LK moves CERP forward.

At that point CERP was 5p. Now 3.9p.
At that point TXP was 11.85p. Now 17.75p.
At that point TRIN was 15.75p. Now 17.18p.

Enough said - good luck.

faz7475

It won’t be 80p, that is mathematically impossible. At the moment I’m not sure that, fully diluted, it could even be as much as 50p - the number keeps falling and I expect that to continue. Put it this way - if you have 8 horses but only 4 men, the maximum number of horsemen you can have is 4.

LGO-fan

What are these NR numbers that I am using?

neon

I would invest sub-3p if I had the money to hand at the time and depending on how things had panned out (this is not a share price prediction though - my prediction was sub-4p - I would expect LK to do enough, one way or the other, to keep CERP from slipping back under 3p).

neon

None. But if you sit back and just assume that the management of the O&G company that you are invested in know what they are doing and will do right by you, that is the equivalent of holding your wallet out open in front of you and closing your eyes. NR demonstrated that very clearly.

neon

I am saying that I could write a note that would prove more accurate than VSA’s. Have a look at their earlier notes and compare the figures in them against subsequently published figures.

*without drilling

jeffry

VSA not ramptastic? Have a look at their notes over time and see how their figures stack up against what we now know (they don’t, not even close). VSA’s notes are basically a marketing exercise and yet even they won’t give the SWP a CoS of more than 10%. Yet if anything has become clear over the last few months it is that there is a limit to what LK can do within drilling and that he is not quite the “well whisperer” that he appeared to be. Not much can be achieved without substantial CAPEX, and how is that going to be funded? Not as organically as the Q&As would have you believe, I would argue.

LGO-fan

Not praising, just quoting, my point being that if even the ramptastic VSA are not prepared to quote a CoS of more than 10%...

LGO-fan

My point is that if the ramptastic VSA aren’t prepared to quote a CoS of more than 10%...

“All these reasons make us believe that this is a relatively low risk play in exploration terms, improving the chance of success on what would certainly be a material play in worldwide oil terms.“ On the other had, VSA quoted a 10% SWP CoS. Low risk?

bigdouble

Consider the possibility that you in fact just don’t like what they are posting and ask yourself whether you would query how they were spending their time if they were on your side of the argument...

bigdouble

Maybe, but do you seriously think that there are any on here?

bigdouble

Paid poster conspiracy theories? Really?

Well done LK, you got there in the end.

HH

You are not counting ADVFN posts. CERP is undoubtedly a special case all the same.

Poor show by LK. No obligation to issue an RNS if none of these developments are going to have an effect on CERP but still eminently sensible to do so to reassure the market that this is the case, particularly when CERP’s relationship with Petrotrin is so intimate (IPSC). Current tick down might have been avoided if he had.

Garnhiem.

What is shocking about it? Looks like a good RNS that CERP would have been wise to issue their own version of.

More fool LK.