RE: MORNING BOYS AND GIRLS25 Jul 2022 08:46
Reposting fantastic summary by TIBURN as a reminder to all the shorters you got lucky on Friday but now your luck has just run out!!!
‘Key points from interview, AM explains the RNA in detail and what this means for COPL.
- Bond rather than equity
- can be paid in cash not stock - designed to allow refinance of the current $45m debt and replace with an RBL at low interest rates with a revolver
- They have a number of RBL companies interested in offering them a facility
- Secure CUDA - increase borrowing base, makes it more attractive for banks to offer the RBL
- Security on the bond is at the public company level and not asset level, meaning they can have this bond debt to pay back later once production rises aswell as RBL at the asset level
- UK LTH fund manager vote of confidence - they are below the TR1 level so not declared shareholders
- This fund manager approached them with this offer end May - better deal for bridging loan from April - better deal for all shareholders of which they are one
- Got it done in a time of financial market chaos
- Critically the II believes in the story, managment and COPL people , believes that oil price will continue to rise - its an investment decision by a partner not finance of the last resort as previously.
- CUDA ownership now BFU at 85%
- CC 100%
- FD at 85%
- Tap facility allows funds for drilling
- No equity for 90 days
- The bond allows refinance of debt - the current debt is asset based and needs to be replaced
- The NPV value of the reserves allows RBL - believes they will get a very good borrowing base at a reduced interest rate - 7-8%
- Bond is 24-36 month term and can be paid in cash from production
- Net asset increase 47%
- Active work flow prog - near term news for RS coming
- Not a simple document but will be issued in full and explained by RNA
- They have come up with a big number aswell, need to review and talk with COPL staff, thorough documents RS name on it
news flow in order:
1 - RS report in 2 weeks or so
2 - Bond allows fix of the topside - high pressure work continues at relatively low cost - upgrade to gas gathering system in phases
- BLM hearing in Sept - gas flare decison is royalty based not environmental, as its COPL gas they can flare to allow pressures to reduce.
3 - Three horiziontal wells planned Q4
- Frontier 1 and 2
- CC drill
- shortage of steel casing globally, more than doubled in price in USA
- They have half of what they need already but will gain it as supplies free up
- Drilling rig lined up, well design in hand, once casing gained they can start.
- Retail did not understand the bond facility in general - its a good deal and allows the company to do what they need to do
- markets globally not easy, interest rates high, recession risk - they gained finance in these difficult times - were told it was remarakable they have secured it as not many others can currently
"reaffirms the assets the Company has and the
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