Member Info for rossannan

TCGLOVER

How is Spain going to contribute any production anytime soon?

TCGLOVER

I think we all know that that graph has been discredited. To get his rise toward EOY LK has now had to bolt on Steeldrum.

2fatcatz

“Probably be around 2200”

Yesterday we found out that TXP did 1,757 bopd in July. That was a bit of a surprise to me and made me reassess my short term targets. 7 wells are still to contribute in 2018, 2 from being recompleted in their primary targets. So to hit 2,200 bopd would require those 7 wells to be doing an average of just over 63 bopd each at EOY.

That doesn’t sound too bad and indeed it is ignoring further optimisation, one way or another, of earlier wells. Much more significantly though, it is ignoring declines! Factor in declines and it becomes clear that getting over 2000 bopd at EOY will be achievement enough - and TXP will need to get drilling early doors in 2019 before production slips back under 2000 bopd!

steward1

No, pretty much nailing it, I suspect.

The figures speak for themselves:

EOY 2017 - approx. $5.4 million cash
End Q1 - approx. $4.1 million cash
End Q2 - approx. $2.4 million cash
End Q3 - ?

April oil production: average of 574 BOPD
May oil production: average of 532 BOPD
June oil production: average of 553 BOPD
July oil production: average of ? BOPD

What is the Q3 catalyst that is gong to put the figures on a different trajectory?

steward1

What I am interested is when/whether/how LK is going to monetise all these various opportunities. What I am suggesting is that you are looking at the horizon when you should be watching for the ground opening up beneath your feet - I am sorry, but the current trajectory is very clear.

I do not think that the sp will fall to sub-3p though. It might, but go back and read what I wrote - I simply said that I would be a buyer sub-3p. That is not the same thing. As I have said (repeatedly), I think fair value is sub-4p.

HH

I take your point about Bonasse but I was thinking more about the immediate reactivation potential - I thought LK would have picked that low hanging fruit long before now.

Garnhiem.

My point is that the cash burn is pointing towards a bit of a crunch down the line, at which point the market could overreact and throw up an opportunity. It looks to me as if that crunch is coming long before anything on your list, apart perhaps from Bonasse and Icacos, could make any difference. I have been disappointed by the lack of priority that LK has given Bonasse and Icacos. I would have thought that by now, given the way things are going at Goudron, he would have made more of Bonasse at least. My concern is that the real attraction of Steeldrum was simply that it was something he could pay for in shares...

findahappyplace

The LIND facility is not dilutive as such, though there is the potential for dilution should CERP continue to be cash flow negative on a group basis and repayments end up having to be made in shares to conserve cash. The current cash position was not the plan at all - if you go back and check them out, this is crystal clear from old LK RNSs and media pieces. I would argue that the LIND facility, like Steeldrum, is a product of the extent to which Goudron has stalled. That is the thing - CERPs assets are producing but what are being generated in the process are losses, not profits. Investment should begin to pay off and the cash position should begin to stabilise at some point down the line but I would rather wait to see that beginning to happen. In the meantime I would not invest unless an attractive enough discount (sub-3p) became available. I doubt that it will, but I now have cash available in case it does. I suspect that LK is making the best of a bad job and will turn things around over the longer term, but I do think he has been disingenuous about the LIND facility and I don’t like that - it reminds me of his predecessor.

alto1

I am suggesting that this investment is not paying off quickly enough to replenish the cash and that LK will therefore have to crack open the LIND facility for this purpose, even though that is not what it is supposed to be for.

steward1

Do I know either field production or the cash balance as of cob yesterday? Of course not, but in each case the trajectory is clear and nothing in the recent RNS (see my point about recurring expenditure) suggests that Q3 will be significantly different from Q2. Steeldrum will not even feature in Q3 (legal etc. costs aside).

I have not implied that the sp will fall to 3p. Go back and read what I wrote - I said that I would be a buyer sub-3p. That is not the same thing. As I have said, I think fair value is sub-4p.

steward1

LK is being disingenuous because he must know that the LIND facility is more than the insurance policy it has been presented as for this simple reason: the trajectory of CERP’s cash balance is clear and where else is the money going to come from?

I have already said that I haven’t had any position in CERP since before the start of the year. Why would I short it? I am hardly calling it down to zero. I have already said that I think fair value is sub-4p. As that is now so close, what would be the point of taking on all the risks associated with a short for a turn of less than 10%?

You would need to ask jcgswims why he has banned me from his ADVFN thread.

Garnhiem.

I would need to dig out earlier volumes of my bound collection of NR RNSs - off the top of my head I seem to remember that they were trying to renegotiate the terms of something that had been signed and had just not been completed, so I can see where you are coming from.

Garnhiem.

Not formally, as far as I am aware, but effectively:

Update on Trinity-Inniss
RNS Number : 2151K
LGO Energy PLC

24 December 2015

LGO ENERGY PLC
("LGO" or the "Company")

Update on Trinity-Inniss, Trinidad

Further to its announcement in the Company's Annual Report and Accounts on 2 June 2015 LGO wishes to clarify that whilst formal negotiations with the owners of FRAM Exploration (Trinidad) Limited, which holds the Trinity-Inniss Incremental Production Services Contract in Trinidad, have never been formally terminated the Company is not currently in active discussions to acquire these rights.

findahappyplace

It’s about what it may be used for and how that may or (I would argue) may not stand up against the explanation we were given for why it was put in place.

steward1

So what is the reasonable, in fact obvious, extrapolation from the following figures, bearing in mind the recurring nature of the items of expenditure outlined in the recent RNS?

EOY 2017 - approx. $5.4 million cash
End Q1 - approx. $4.1 million cash
End Q2 - approx. $2.4 million cash
End Q3 - ?

April oil production: average of 574 BOPD
May oil production: average of 532 BOPD
June oil production: average of 553 BOPD
July oil production: average of ? BOPD

And do you seriously think that Steeldrum was always part of the plan?

HH

Yes, Catshill would be significant prize for any of the TRIN oilers. Steeldrum seems an unduly complex and contingent proposition by comparison.

steward1

So what in the last six weeks could have possibly have unplateaued Goudron production and why hasn’t the market been told about this material development?

EOY 2017 - approx. $5.4 million cash
End Q1 - approx. $4.1 million cash
End Q2 - approx. $2.4 million cash
End Q3 - ?

April oil production: average of 574 BOPD
May oil production: average of 532 BOPD
June oil production: average of 553 BOPD
July oil production: average of ? BOPD

steward1

They lost money hand over fist in Q2. Looking at the recurring items of expenditure listed in the recent RNS and the way that production has plateaued at Goudron, I am supremely confident that they are currently losing money hand over fist.

HH

I am flabbergasted by the complacency about the way LK has deviated (to put it mildly) from the road map. If I had posited the current scenario on here a few months ago it would have been dismissed as a de-ramp.

Garnhiem.

“or monthly repayments may alternatively be made in equity at the Company's election at the prevailing price at the time of payment”

steward1

EOY 2017 - approx. $5.4 million cash
End Q1 - approx. $4.1 million cash
End Q2 - approx. $2.4 million cash
End Q3 - ?

If that doesn’t say “losing money hand over fist” to you, what does?

LGO-fan

The first phase has not been successfully completed. CERP is losing money hand over fist. That was not the plan. Various items of current expenditure will no doubt pay off down the line but they won’t pay off anything like quickly enough to avoid the coming cash crunch. LK seemed to be making progress without drilling but that progress has now stalled. LK’s EOY production forecast, which includes Steeldrum, will, I am pretty sure, be missed but it tells us in any event not to expect much, if anything, from WF (do the maths). That is why the LIND facility will very quickly prove irresistible. 10 weeks ago I would have said (in fact did say) that this was good value at 5-5.5p but it has since become clear just how much the story has changed. Can’t you see how much it has changed?