Member Info for Rugby2015

I am sure RP and the BoD are very keen to do the same. None of the projects are going backwards IMO and hopefully it will be similar to waiting for that elusive bus to arrive and we see 2 or 3 positive updates in a very short space of time and why not? Revenue from 6 wells in ED are due towards the end of October, Nitrogen is in abundance and West Denver has the short term focus of the business for now in time and resources. All simmering away nicely in one big pot waiting to reach boiling point. We won’t have to wait forever - it just feels like it - LoL!

I listened to LK’s interview again when he was talking about the Bolt deal and his plans for Icacos and Bonasse. He seems to think he can make quick gains in production in both fields cheaply and efficiently. He said they reactivated 3 fields in Bonasse last June producing 3 bopd each but did very little work on them. IMO I can’t see why he won’t get all 10 wells producing 10 bopd each quite quickly and maybe 2 or 3 of those Wells will produce much more so I look forward to Bonasse contributing 100-150 to group production before the year is out .

But I’m choosing to be patient. Yes the current SP is clearly disappointing for all concerned there can be no argument with that but as other posters have explained the Nitrogen project is a cheap and easy way for hugely increase in revenue for the company, no wonder RP couldn’t contain his excitement in recent interviews. Actual revenue from the other 6 wells is I believe about 8 weeks away. The 7.5% deal with TrueOil didn’t appear to go down well with many investors but it did totally derisk the company. We only owned 47.5% (from memory) of ED where WD we own 100% of the leases and RP has emphasised this. If for example we struck a similar deal at WD as we did for ED then that 7.5% (of 47.5%) would become around 16%. Add to that we are in a much stronger position to negotiate, we have proven success and we have already derisked the company so would 25% be the minimum we would hope to get? Could we get more? I’m not saying we are going down that route and once Nitrogen revenue streams are known the picture might look different. The last 12 months have been tough but ED revenue (6 more wells) and Nitrogen probably only weeks away and WD happening in 2019 it’s very easy to see a positive rerate in the SP anytime soon - and that’s why I choose to be patient. All IMO and good luck to all whether you decide to leave or stay.

Mr Garnhiem for spelling your name wrong in my previous post. Good to see WTI back above $70 a barrel tonight, I’m not greedy so would be happy if we could average that throughout September.

Garnheim - I must give credit where credit is due. You certainly have more patience than me and continue to competently defend the company against Ross and his constant cash burn talk etc etc. I have not posted for a while and I suspect others haven’t too due to him and his associates dominating the board with his endless negativity. I’m in the camp that believes he should be ignored and then he would end up talking to himself and only then would he realise how boring he is. Each poster to his own though and you have done a brilliant job of not letting him getting under your skin and have responded quoting either your research or previous RNS’s where the facts can’t be disputed. He is not one for healthy debate and while the occasional poster praises his point of view, I am afraid that I have been here too long, along with many others no doubt, to give him any credibility whatsoever. No doubt he’ll challenge this post but I won’t respond. The fact that LK makes adjustments to his 3-5 year plan as he goes along is exactly what shareholders like me want him to do and that is to react to changing circumstances as they appear. I don’t care if Goudron only produces 600 bopd by the year end if the reason is there is more bang for the buck to be had elsewhere. You have highlighted the work that is planned at Bonasse and Icacos and other low hanging fruit was identifier early on with the Steeldrum acquisition. I still feel very optimistic that LK’s end of year target of excess of 900 bopd will be smashed. Let’s wait and see for that but good effort Mr Garnheim!

Your entitled to your opinion but if by the end of 2019 you think 1000 bopd is the production number and a 7p is the share price then I think that is cuckoo. We will just after agree to disagree and leave it at that. In fact, by the end of 2018 I expect both those numbers to be exceeded and that’s why I’m invested here.

HopefulDave, well said, my feet are firmly fixed in your camp. The company has come from nowhere in 3 years and took the deal from True to totally derisk the company. Very exciting prospects ahead that are going to generate revenue and when those figures are known the market will react in a positive manner because they recognise actual revenue figures as opposed to potential numbers. The resources are focussed on West Denver at the moment and this project alone IMO will be company changing. HNR are making great progress and could be a very large company in 3-5 years time

Your conclusion- ‘So a more realistic estimate might be 1000 (average through 2019) * 62 (WTI) * 365 = $22 = £17 million , which is what i indicated. 54 million is cuckoo land’ You are entitled to your opinion of course and it might be shared by others who don’t believe in LK’s transformational growth or who choose to be cautious so as not ti have the feeling of being let down further down the line. I think 1000 bopd average for 2019 is bonkers! IMO he will not miss his ‘in excess of 1000 bopd’ target by end of year 2018 and if that’s the case you are saying not only will production not increase in the following 12 months but will fall - your having a laugh aren’t you? WTI of $62 is not worth arguing about, you might be right, the price of oil is so unpredictable but in the last 12 months the monthly average has risen 10 out of the last 12 months so is clearly on an upward trend and although June showed a fall I’m confident average of July will be over $70 for the first time in years. 12 months ago it was around $45 so next years average could be anything. I am playing devils advocate here but if I had to wager whose estimate of 2019 revenue is closer, yours at £17 million or VSA at £54 million I would have to side with VSA. Not because I want it (I do of course) but I believe the transformational growth over the next 18 months will be off the scale and all us shareholders who believe the story have to donis patiently and excitedly watch it unfold. 4.4p currently is a shocking SP but we still all have an opportunity to buy more at this bargain price! GLA - look forward to being richer in the next 18 months!

Point 3 - you said ‘The 54 million revenue estimate is pounds not dollars. ( so even your optimistic effort doesnt get there)’. In your initial question you stated 54 million and did not stipulate pounds so how was I to know this. Let’s stick with dollars, I agree 54 £ million is more unlikely, not impossible 😊, but more unlikely!

Point 2 - You said ‘2000 bbls - d ( remember that would be an average figure in 2019 and so highly unlikely to be achieved, given that for example CERP have managed to increase production by less than 200 bbls in one year under Leo’ You say LK has increased production by less than 200 bopd in 1 year. Admittedly production has not been as high as I thought it would but he has done a little better than ‘less than 200 bopd in a year’ and his recent update for the end of 2018 is that 1000 bopd will be exceeded. Personally, my expectation is much higher but If end of year is ‘just 1000 bopd’ and they drill in SW as planed in H1 of 2019 then I believethe average for 2019 of 2000 bopd is not unreasonable, personally my expectation is much more!

Irene - whilst the board is bereft of news and I have some spare time I will respond to your last message point by point First of all you say there are a number of errors in my calculations - I don’t fully agree with this. You asked the question of how VSA arrived at their 54 million revenue calculation, I wasn’t agreeing with them I was just offering 1 possible calculation. Point 1- you said ‘Using $75, that is higher than current brent price, CERP sells at WTI pricrs’. I know this. We are talking about the average price that CERP receives in revenue in 2019. It is hard to predict monthly WTI averages let alone the average for 2019 but currently the trend is upward. Some well respected analysts suggest $100 a barrel is on its way so it could be much higher as well as lower. It’s just an opinion to suggest where the VSA revenue calculation cones from. Yes, we all know CERP doesn’t receive the full WTI price so to receive $75 we may need WTI of $80 or even a bit more.

I agree - LK emphasised the strong government relations which surprised me a little as I thought CERPS had a relation with government too, clearly not as good as Steeldrum. We know there is a rig on Bonasse, he’s also mentioned some low hanging fruit and with South Erin and Icacos there are plenty of options to increase production in the next Q

LK has mentioned that in Trinidad there are 18 small oil companies, I think he described it as a scatter gun approach. Clearly, consolidation and economy of scale would benefit both merging companies especially with the tax and royalty system as it is. 1 company producing 800 bopd would make more profit than 2 smaller companies combined both producing 400 bopd each. Add a very exierienced BOD, workforce and the Columbus method of increasing production at low cost and it seems a win win for both parties. That’s what Steeldrum and their Norwegian investors thought. IPSC contracts up for grabs? The transformational period has started, but it’s only just beginning!

Thanks for the link Garnhiem, it’s a good reminder of how quickly and cheaply LK thinks he can move production at Bonasse to a material level. In answer to your question I think both. At this moment in time he needs one to achieve the other. It really could come at anytime. The whole board are in Trinidad for 3 more weeks and whilst the integration is the focus and a very busy time for them it wouldn’t surprise me if during this time they were investigating other options too. Thoughts anyone?

Sellonnews there is a rig on Bonasse now, production can be increased at Bonasse and Icacos without waiting for the deal to go through. As for Goudron, future work might depend on assessing if it still gives the best bang for his buck but the water injection pilot programmes will continue IMO as that is where the big uplift will eventually come from.

Jcgswims many thanks for providing that link of another confident and sssured interview from LK. I would recommend to all shareholders, especially those getting nervous about the stagnant SP and lisingva bit of confidence in LK to deliver to check this interview out. He’s a proven winner, he is very proud of the quality of his small management team and their ability to deliver on the strategy. I am Confident the end of year target of 1000 bopd will be easily exceeded and as he has mentioned before there are 18 operators in Trinidad and there is great value to be had by economy of scale which he says is essential. The interview is a great watch and he stated his ambition of completing on a $100 million deal. IMO the transformational growth has begun and I have no doubt the SP will follow in due course.

Malcadele - your welcome and I agree with what your saying - 1 day Rodders! LoL!

Malcadele - not last week you weten’t! I am sure we all share your frustration but there is no point in blaming the company as it’s hard to see what more they could do. Last week the board was full of positivity and praise for RP. Some commented that the Q&A was a waste of time, too regimented, a bit vague, no new news - RP can’t win can he, damned if he dies and damned if he dirsn’t. Of course there wasn’t anything SP sensitive inntge Q&A or else it would be in an RNS but it did follow a very detailed end of year results and by answering shareholders questions he did keep shareholders informed. The SP does not reflect the potential here and the genuine excitement felt amongst the board and many shareholders too about the ongoing projects we have. Everything has advanced nicely in the last 6 months but a little more patience is required. It is not ‘blind faith’ - we know several projects are about to generate revenue, at the end of October we know 6 more wells in East Denver will be producing cash and IMO at least some of the nitrogen will be sold. CO2 and Helium are ongoing and currently the focus is on West Denver. Until there is an announcement I would like to think RP is increasing the acreage quietly behind the scenes. The company will always be ahead of the shareholders in terms of planning and a lot of behind the scenes action has to be conducted quietly to gain or keep a competitive advantage or involvectaljs tgat are commercial sensitive. I do feel your frustration but it isn’t as if we haven’t got anything to look forward to in the short, medium and long term and the current low SP does offer a further opportunity to acquire more if you are not fully loaded already. It could be worse, you could have recently bought more at 24p like I did, it’s slightly annoying but in 3 months I’d like to think the odd penny or two is small fry in the bigger scheme of things and I am happy I managed to accumulate a few more. I’m happy I’m holding!

Garnheim yes your right reference thecrigs, access at market rates whenever required and the experienced workforce IMO relates to the current employees of Steeldrum.

Capitalidea thanks for your response and I am sure you are right. Makes sense to have a fixed price for conversion for a year otherwise it’s a bit of an administrative nightmare.