Member Info for rossannan

Garnhiem.

Is it a “just in case” facility or isn’t it?

PinWiz I have said all that I am going to say about why I post on here. Let’s get back to business. How much cash will CERP have left at the end of Q3? I say $1 million (excluding any cash obtained by using the LIND facility). What say you?

findahappyplace You might like to believe that the skeptics on here think that CERP is great and are just trying to talk the share price down. I can only speak for myself, but what I think about CERP is exactly what I have posted and I am certainly not kidding myself that anything I write on a BB has any traction on the share price. It didn’t when I was invested, before the road map was torn up, and it doesn’t now. It does though keep the discussion going, which is, after all, the point of the BB.

findahappyplace Yes, because these are recurring items.

Garnhiem.

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

If that doesn’t say “cash burn” to you, what does?

findahappyplace

I only have about two dozen shares on my watchlist and rarely delete one or add a new one. I prefer to wait for an opportunity to come around again in a share that I am familiar with (I first invested here in 2010) than parachute into something new. Also, in terms of insights into O&G on AIM, CERP pretty much has it all, the good, the bad and the ugly - getting a handle on CERP has helped me with several other investments.

neon

So far this year I have not had any positions in CERP, long or short.

findahappyplace

No, not invested at the moment, sold at just over 6.6p towards the end of last year. Wouldn’t touch it with a bargepole after the latest RNS. I do not understand where you are getting the idea of LK “increasing our profitability”. CERP is not profitable and doesn’t look as if it will be anytime soon. I would suggest that at the moment fair value is sub-4p and that it would only be worth a punt if it got under 3p.

Garnhiem.

02/07/18 RNS:

“In taking this action, the Executive Directors and Executive Management members wish to continue to align themselves with the Company's shareholders and also reduce the Company's cash burn, thereby enabling these funds to be invested in other value-adding business opportunities.”

HH

Yes it is because it has been represented as a “just in case” facility related to the Steeldrum deal but we both know that the current cash burn will force him to crack it open sooner rather than later.

I was doing a bit of research on what LK has been outlining for the SWP over time and how it has changed. This threw up an illustration of what scallywags VSA are:

Here is LK’s RNS of 19/03/18

“It is anticipated that between 2-3 wells, targeting the shallower prospects, may be drilled on the licences initially at costs of around US$2-4 million per well, including wells targeting multiple stacked prospects, with the first well potentially being drilled, subject to satisfactory technical analysis, in the first half of 2019.”

Translated by VSA as follows:

“This is expected to be followed by 2-3 appraisal wells drilled in H1 2019, subject to results”.

Spot the difference. To be fair to LK, his story has not changed as much as reading VSA notes would have you believe...

HH

Exactly. All recurring.

HH

That reference to $1.11 million of expenditure in LK’s RNS was a little misleading. How many of those items will recur in Q3? All of them, of course. So will the cash balance even be over $1 million by the end of Q3? Will LK even wait until Q4 before cracking open the LIND facility?

It was particularly misleading of LK to refer to “Spain legacy costs” in that RNS. There was of course significant pain in Spain during H1 but according to LK’s own RNS that hit was actually taken in Q1. The drain in Spain during Q2 would just have been the reduced, non-material, monthly amount.

findahappyplace

“Cash balance of US$2.4 million at the end of Q2 2018”

petersalkeld

Its a classic AIM problem - the combination of flat production and cash burn begs the question of how the business is going to be funded going forward and what the next thing that is going to be paid for in shares might be. That would put pressure on any share price. The market also picks up on more subtle things - LK used to talk about the first SWP well being drilled in H1 2019. At one point he may even have been talking about the first SWP well being drilled in early 2019 (if I remember rightly), but in any event he made it clear in one of the recent videos that that first SWP well would not now be drilled before mid 2019. It is a subtle point but confirmation that that particular prize is still nearly a year away is a bit of a dampener.

alto1

On the other hand, what is the cash position telling us:

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

?

riseagain

Check out the cash burn.

steward1 Potential CERP money still tied up in TXP but I would be tempted to have a punt if it got under 3p in the short term because LK is not NR and that is worth something.

Scarface72 Following LGO/CERP has been very educational - it’s all there, the good, the bad and the ugly - and it has helped tremendously with other investments.

TCGLOVER

I certainly did to begin with - the fact that he was not Neil Ritson was a huge positive - but the story has gradually changed so I have become increasingly skeptical, even though LK is still clearly more operationally and financially competent than Neil Ritson and has a better attitude to shareholder value. I am sure LK will grow the company over the long term - it is even possible that he might even reach his 500M MCAP (£ or $?) target, but how many shares will be in issue down the line? It has all faltered a bit of late. Funding, funding, funding - it was going to be a healthy, shareholder friendly, mix. Not looking that way now.