Member Info for Starchild

Refer to 26/3 RNS https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/ry4n3kr and page 9 presentation https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/03/25213812/bpc-update-presentation-march-21.pdf . Figures approx:

1. At $60 PoO, CEG is earning revenue to cover all opex with $3m/yr free cashflow after $4m/yr G&A, excluding OTCs and Capex. (G&A will be reduced by c$1m ASAP)

2. $1m capex for incremental production. Success = 100 bopd = $1m/yr free cash. (ROI 1 year)

3. $3m capex to spud S2 Trinidad. Success = 200-300 bopd = $2-3m/yr free cash. (ROI 1 year)

4. $2.5m capex to spud Suriname including an EWT ($700k) in a few weeks. Success = 500+ bopd = $2.5m/yr free cash. (ROI 1 year)

5. New Biz dev opportunities 100+ bopd $0.7m/yr free cash. Capex $2.5m - $3m. (ROI 4 years).

6. Saffron 3, 4, 5, 6, 7, 8, 9 full-field development (2-3 yrs) 4,000+ bopd $25m+/yr free cash. Capex <$60m. (ROI 2 years).

7. Infill drilling programs 200 - 400 bopd $3m - $4.5m/yr free cash. Capex <$6m. (ROI 2 years)

Other points

8. 31/12/19 C/F tax losses for T+T is $85m gross/$25m net. This is an asset to increase net ROI above, or if CEG T+T subsidiaries were asset stripped and sold as shells to a profitable T+T oiler for tax offsets.

9. The special PT threshold has been raised from $50 to $75/boe since 1/1/21. This too positively affects ROI compared to CERP by c18% net.

10. Refer to 2019 CERP accounts page 14 (https://find-and-update.company-information.service.gov.uk/company/05901339/filing-history ). Note: since the T+T Gov closed the local refinery, CERP/BPC/CEG received 2% MORE than PoO WTI by selling direct to Heritage who use Brent PoO. Using simple maths as WTI/Brent price difference is fluid, CEG earns +/- mid-price.

Funding assumptions

11. April cash on hand plus the OO/Placing (c$10m) will clear the slate (Stena/LOL) and should have enough left for S2 and a Suriname EWS etc. In the meantime, CEG is generating c$250k / mth free cash.

12. Bizzell funding will become available at 8p subject to conditions. It is good Stephen Bizzell joined the BoD.

13. Financial institutions have appetite for oil wells and mines that give an ROI in 1-3 years. CEG does NOT need tens of millions NOW to do 1- 7. It will have access to RBL ($1m-$2m per 1mboe certified 2P reserves), infrastructure $, pre-sell $, while using Bizzell $ to strengthen the balance-sheet, or for appraisal drilling until 2P reserves merit an RBL.

14. A future Bahamas farm-in (or Uruguay) will be a mega bonus.

CEG is no longer a one trick pony performing at a circus. It owns the Circus with various acts, and we are its shareholders. (Sarcasm awaited). A great ROI is possible, subject to ticket paying audiences wishing to see the show during the CEG 2021/2 grand tour.

Refer to my post yesterday on expected news which will affect the SP.

DYOR. IMHO. GLA.

Starchild
https://www.lse.co.uk/profiles/starchild/

Michael: everything in limbo while platforms updating systems. There are actually 7,892,523,921 shares (7.9B).

My platform has even got the total I spent on BPC/CEG since i became a holder in 2014 wrong. Does anyone else who took part in the OO or placing have similar problems?

Starchild

10:1 consolidation this morning. Providers haven't quite caught up. Google finance showing 980% increase.

if you have auto trades, don't forget to cancel, or you could end up selling when not meaning to!

Starchild

I have listed my best guesses how news may impact CEG SP. ‘H’ (high), ‘M’ (medium), commentary in [ ].

By end June

1. (H VIP) Saffron 2 spud interim results

2. (H VIP) Detailed Percy-1 autopsy [Connected to 13, Gov renewal. If there’s a good case for further drills, SP should increase. The market currently values this as zero, with the $150m spent worth zilch].

3. (H VIP) Final Bahamas costs. [Excluding $4m due to LOL, if the legacy bills total <$10m it will be good. If some debt is paid in shares, it depends at what price. Positive: more cash left. Negative: some dilution]

4. (M) Suriname spud update

5. (M or H) Funding availability vs needs [See 8]

6. (M) What’s next in T+T

7. (M) EA court process update

8. (M) Y/E 2020 accounts including events since 31/12/20 [Connected to 3 and 5. We all expect a bumper loss. Material events since, may or may not meet expectations. T+T 2019 tax losses C/F were $85m c$25m net]

Summer

9. (H) Saffron 2 full results. CPR for RBL?

10. (H) Suriname spud> interim results> full results> CPR for RBL?

11. (H) Court case with the Enviros will last 2-3 days. [+/- 2 weeks for judgement. Key will be the summing up. If the court LAMBASTS the Enviros’ conduct and implies malice, more chance of 12 happening]

12. (M) Possible legal action against the enviros for attempting an injunction which cost CEG and its shareholders millions, while allegedly harassing suppliers (LOL and Lloyds)

13. (H) Confirmation Bahamas licenses have been renewed from 1/7/21 for 3 years [See 2, 14]

14. (H) …..which could open the door to a farm-in 4th qtr, with a major or a consortia of smaller ones to share the risk/reward. Will CEG get some of the c$150m spent and/or free Percy-2/3 drill(s)? [If a free drill, SP should substantially increase. If up-front cash the SP should soar. The Mcap could increase by at least double the value of the cash, as CEG could M&A or self-fund Uruguay].

15. (M) Uruguay update. Can this be leveraged as a ‘first dibs’ to sweeten a Bahamas deal? [If a farm-in, SP should increase immediately and soar leading to news flow re a URU-1 spud].

16. (M) PoO. [High impact if stuck at <$55/b or >$75/b]

17. (M) Related to a recent PRD RNS: how is the CEG/PRD JV for CO2 progressing?

Autumn

18. (H) Bahamas Farm-in? [Connected to 2, 13, 14, and possibly 15. Most small AIM energy companies do not have points 14, 15. On 21/1/21 BPC’s Mcap peaked @ £110m (2.35p x 4.7B). Had there not been the LOL overhang made worse by the enviros, pro analysts believed the SP/Mcap could have been double that. If a farm-in announced, even if CEG only owns 25% of the asset, by how much will the SP/MCap soar? Today the market values this as ZERO.]

Short-term high impact news: ‘VIP’ points 1-3 above.

IMHO. Always DYOR. Constructive feedback without insults or trolling welcome. GLA.

Starchild
https://www.lse.co.uk/profiles/starchild/

Bohemia: I agree there will be overhang most of June despite the spud. Although not an exact science, do you generally agree with my analysis of the overhang parameters re my post 25/5 06:05am? Also, as a matter of interest, where did you get the 14 June date from?

Young-gun2000: result of saffron 2 spud is estimated to be 25-30 days from the date of yesterday's RNS. Refer to https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/xj357ow

Starchild

Icemax: Thanks. If the cut-off point for selling by Gneiss, other fee suppliers and Shore Capital is +/- 0.3p, the 191m overhang must logically be nearly over, as between 20/5 and yesterday >650m shares have been traded. (Source: Yahoo and Aquis)

I see no logical reason anyone who took the OO and placing at 0.35p, would sell for under that. Especially as the spud was announced yesterday.

it's happened several times to BPC. CLNs such as Trafalgar, Lind and the the September 9m placing caused overhangs to the approx level of the deals, then for a few days after, there were few trades relative to the previous weeks (investors weren't sure if the overhang had ended so only putting toes in the water, so SP static), THEN the top ups/new investors came on board and the SP rose substantially...until the next funding announcement. The exception to this was Lombard, as the Percy result on 8/2 was before LOL had finished dumping.

Starchild

Tiburn: I agree RBL is a way to tap into substantial funding without causing further dilution to shares or new dilution to assets. If 10mboe 2p net reserves can be certified by end 2021, up to $20m ($2m per 1mboe) can potentially be borrowed. Refer to 1/10/21 RNS https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/rdz1k8w

‘… Reserve-based lending facilities: The Company has indicated publicly that it is seeking to undertake a portfolio wide Competent Persons' Review (CPR), with a goal of 1 mmbbl of certified 2P reserves (net) by the end of 2020, and 10 mmbbl of certified 2P reserves (net) by the end of 2021. Certified 2P reserves are a readily monetisable asset, and the Company has commenced discussion with several providers of financing facilities that advance funding against the assessed value of 2P reserves ("reserve-based lending facilities", or "RBLs". Based on the level of targeted 2P reserves and typical RBL lending arrangements (including those currently under evaluation), access to in the order of $20m of capital is considered by the Company to be a realistic goal….’

Icemax: where did you get the 0.28p discounted price from? I’m not doubting you, just don’t recall seeing it anywhere.

Danawinner: Thanks. I will contact you offline over the weekend. The shareholder activism I have in mind, does not relate to CEG.

All: new shares in the CEG OO/Placing should appear in accounts just before 8am this morning. The 10:1 consolidation tomorrow. If you have 1m shares, they will be reduced to 100,000 shares at 10 times the value.

DYOR. GLA

Starchild
https://www.lse.co.uk/profiles/starchild/

@Slift noted. Perhaps AM will 'play' if contacted by your lead activists.... a 2nd CPR if agreed, may be a game changer and postpone court hearing by a few months. What harm will a 2nd CPR do? And while it's being done, get the current BoD 'unfrocked' from duties. (ie, sack them)

Starchild

I am not a HUR shareholder or bondholder, but have been following the story.

The point I find baffling is the assertion by the BoD about looming insolvency. Under UK national laws (E+W, Sc + NI), insolvency is when a company cannot pay its bills or debts when due. Why a debt due in July 2022 triggers such a move NOW also baffles. What if PoO hits $100/b? Is it worth getting a CPR 2nd opinion on reserves? If I had a dire problem possibly resulting in personally bankruptcy in 12 months, I’d NOT declare chapter 7 now!

I’m sure legal advice is being sought and commend you folks for your shareholder activism and principled stance. Without appearing sexist, you have gande cojones and I’m sure ordinary PIs across these BBs support you.

GLA

Starchild
https://www.lse.co.uk/profiles/starchild/

I reset my brain yesterday and listened to both presentations with an open mind pretending I knew nothing about either company. I came to the conclusion both presentations were good and would have resulted in me undertaking DYOR.

I would have likely had a flutter on the 1st, Trident Royalties, subject to the SP not jumping this morning. I would also likely have had a flutter on the 2nd, CEG, after clarification on what was going on with their apparently ‘delayed’ spud. Based on the negativity on the CEG LSE/ADVFN BBs I would likely have waited until an RNS confirmed the spud.

This morning it has been confirmed.

Starchild
https://www.lse.co.uk/profiles/starchild/

ps: I have absolutely no idea why the spud was not RNSd Monday and the ‘secrecy’ around it yesterday during the presentation. The only thing I can think of, is as of yesterday morning (Trinidad time) when Eytan presented (UK PM), CEG had some obscure approval missing from the authorities or lost in the system due to Covid. By eod yesterday it had been received. To use an example, had I been CEO of a skyscraper developer which began building a 60 floor office block last weekend, I would have been reticent to publicly announce to investors we had started, if one of the many formal approval documents allowing the build had either been lost or awaited.

All figures are approx and use pre-consolidation SP. My RNS commentary in [ ]

The OO/Placing sought to sell 1,966,889,572 new shares. The results in the 20/5 RNS https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/x8q56ox

Total sold/placed:
1. £2.63m raised (38.15% OO subscribed 750,289,637 x 0.35p)

2. £4.26m raised (II/HNWI placing subscribed 1,216,599,935 x 0.35p)

The placing INCLUDED:
3. ……. ‘Gneiss Energy, …has itself subscribed as principal for 235,714,285 Placing Shares as part of the Placing. As part compensation for services provided…c99.6 million unlisted warrants will be issued…...’ [235m shares bought for real cash. To sell these at <0.35p will be daft]

The OO/placing did NOT include:
4. ….’Additionally, …. application has been made to AIM for the admission of 937,700,234 Ordinary Shares, pursuant to the agreed early conversion of £2.5 million currently outstanding Convertible Notes (including accrued interest) at a price of 0.35p….

5. …..’ inclusive of Fee Shares payable to advisers (being 191,114,234 Ordinary Shares).

Assumptions
I’m not a ‘day-trader’ so I don’t care about overhangs, but here are my assumptions:

6. 80% of OO shares from LTHs will NOT be sold for short-term gain and will be used to lower Percy-1 result losses. 20% will likely be sold but at >0.35p otherwise it will be dumb. Estimated overhang (20% of 750m) 150m shares.

7. 50% of Placing shares will be sold @ +/- > 0.4p+. None will be sold for < 0.35p otherwise it will be dumb. Estimated overhang (50% of 1.2B) 600m shares.

8. IMO NO Bizzell shares will be sold as they believe the SP will potentially increase to the 0.8p funding bar and their CEO Stephen Bizzell joined the CEG BoD with that aim.

9. Most fee shares to suppliers such as GNEISS/Shore Capital have or will be forward sold ASAP even at a 10% loss. Max overhang: 190m. Why? Because any sub-0.35p losses will be hedged by the 235m shares (plus warrants) taken in the placing. Put another way, c£600k in fees, sold @ 10% loss is hedged by the subscribed c£800k.

10. From 20/5 – 24/5, >350m shares were traded over 3 days.

Conclusions with the caveat this is conjecture as I am not a clairvoyant:

Large chunks of the Gneiss/ShoreCap overhang have been forward sold/bought in a controlled manner using ShoreCap (!). This explains why the SP hardy moved Fri/Mon despite large individual trades.

Gneiss subscribing >£800k (£200+k more than fees received) is IMO a positive sign.

350m traded, means the sub-0.35p 190m shares overhang is probably imminently over, and the SP should go to > 0.35p soon.

This leaves 750m shares for the next overhang (points 6+7). If S2 is a success, that overhang should clear by end of June. Earlier, if there’s appetite, creating trading volume until the S2 result or if there’s other positive news. What news? Read my Sunday 4:45am post.

IMHO. DYOR. GLA.

Starchild
https://www.lse.co.uk/profile

Saffron 2 probably spudded last night UK time. We hoped for an RNS this morning, but it may be delayed till tomorrow due to the event probably happening on a Sunday and only a few hours ago. It will also coincide nicely for tomorrow’s Eytan CEO designate presentation. (UK-Investor-Mag conference Tuesday 1600. https://ukinvestormagazine.lpages.co/may-uk-investor-magazine-virtual-conference/ )

On a slightly trivial note, I can confirm I am definitely a ‘He.’ A grandad not a grandma. Furthermore, as the issue was raised, I used the term ‘we’ recently by mistake. It should have been ‘we LTHs.’ I felt using ‘I’ would have implied I am a self-appointed guru and the only source of CEG research and BB answers, which I am not. A 2nd mistake was assuming Antha was a ‘she’ and spelling his name wrong. Sorry Antha.

My 1 post a day (plus 1 or 2 follow up/clarifications if I have time) should not be read as RNSs with every word scrutinized. I usually copy everything into a Word doc to ensure <3000 chars limits and to replace obvious typos, some including wrong terminology and grammar slip through.

I used ‘He’ with a capital above. It should not be construed as aspirations to divinity. It was to illustrate the point I was making and as such, I see no reason to have to clarify this in a future post.

I will continue to use words such as ‘may’, ‘could’, ‘possibly’, ‘probably’ when giving opinion on researched facts. I am surprised this has resulted in recent criticism.

I do my very best to provide researched opinion in good faith for readers of my posts to DYOR. I spend around 1 hour a day researching or commenting as a hobby. It started out of boredom during lockdown and is currently probably influenced by Stockholm Syndrome based on the nasty responses and insults I get for rarely publicly airing my frustrations at the current state of play or attacking the BoD. I see NO point doing so as there are enough disgruntled current LTH shareholders, angry ex-shareholders and shorters machine gun posting negativity.

I do speak to and email senior CEG senior execs confidentially, sometimes providing unsolicited opinion, however any feedback from the company whether verbal or written has never been market sensitive. Despite this being the case, nearly everything communicated remains confidential and not for the public domain or this BB. I would expect the same if the shoe were on the other foot.

Finally, this BB is about CEG not me.

GLA

Starchild
https://www.lse.co.uk/profiles/starchild/

Some commentators have been trying to compare CEG’s MCap to its peers. This is very difficult.

CEG has stated, Auctus analysts believe, and most commentators agree, the current MCap is purely based on CEG’s current tiny 450-500boe/day. There is no premium for potential. I have copied yesterday’s post and flagged with an ‘H’ (high) and ‘M’ (medium), my best guesses for SP impact, with commentary in [ ].

By end of June

1. (H) Saffron 2 spud interim results

2. (H) Detailed Bahamas Percy-1 autopsy [Connected to 13, Gov renewal. If the autopsy implies a good case for further drills, SP should increase. The market currently values this as zero, with the $150m spent worth zilch].

3. (M) Update on Suriname

4. (H) Final Percy-1 costs. [If the bills total <$10m it will be good. If some debt is paid in shares, it depends at what price. Positive: more cash left. Negative: some dilution]

5. (M or H) Update on general funding availability vs needs [See 8]

6. (M) Update on next steps in T+T

7. (M) Update on the EA court process

8. (M) Y/E 2020 accounts including events since 31/12/20 [Connected to 4 and 5. We all expect a bumper loss. Material events since, may or may not meet expectations]

Summer 2021 (IMO)

9. (H) Saffron 2 full results

10. (H) Suriname spud and interim results 4 weeks later.

11. (H) Court case with the Enviros will last 2-3 days. [+/- 2 weeks for judgement. Key will be the summing up of the ruling re point 12]

12. (M) ….Followed by possible legal action against the enviros for attempting an injunction which cost CEG and its shareholders millions, while allegedly harassing suppliers (LOL and Lloyds)

13. (H) Confirmation Bahamas licenses have been renewed from 1/7/21 for 3 years [See 2]

14. (H) …..which could open the door to a farm-in 4th qtr, with a major or a consortia of smaller ones to share the risk/reward. Will CEG get some of the c$150m spent and/or free Percy-2/3 drill(s)? [If a free drill, SP should substantially increase. If up-front cash the SP should soar. The Mcap could increase by at least double the value of the actual cash, as CEG could M&A or self-fund Uruguay].

15. (M) Uruguay. Can this be leveraged as a ‘first dibs’ to sweeten a Bahamas deal? [If a farm-in, SP should increase immediately and soar leading to spud].

16. (M) PoO. [high impact if stuck at <$55/b or >$75/b]

Back to valuation comparisons. Most small AIM companies do not have the equivalent of points 14+15. On 21/1/21 BPC’s Mcap peaked @ £110m (2.35p x 4.7B). Source https://finance.yahoo.com/quote/BPC.L/history?p=BPC.L . Had there not been the LOL overhang, made worse by the enviros, pro analysts believed the SP/Mcap could have been double that.

Key question: if a farm-in announced, even if CEG only owns 25% of the assets, by how much will the SP/MCap increase? Today the market values this as ZERO.

IMHO. DYOR. GLA.

Starchild
https://www.lse.co.uk/profiles/starchild/

Expected newsflow

The week ahead

• This Monday 24/5 7am RNS confirmation Saffron 2 was spudded Sunday night UK time.

• Thursday 27/5 New BoD: Eytan becomes CEO, Robert Riley (ex-CEO BP Trinidad) and Stephen Bizzell join the BoD

• Thu/Fri 27-28/5: shares bought in the OO and placing appear in CREST (online) accounts. The 1 in 10 share consolidation will take place.

By end of June (IMO)

• Saffron 2 spud interim results

• Detailed Bahamas Percy-1 autopsy

• Update on Suriname spud

• Final Percy-1 costs as negotiated with Stena and other suppliers. If the final bills total <$10m it will exceed my expectations.

• Update on general funding availability vs needs

• Update on next steps in Trinidad exploration and production

• Update on the EA court process

• Y/E 2020 audited accounts including material events since 31/12/20 as at publication date

Summer 2021 (IMO)

• Saffron 2 full results

• Suriname spud and interim results 4 weeks later (Covid permitting)

• Court case with the Enviros will last 2-3 days. Followed by……

• ……Possible commencement of legal action against the enviros for attempting an injunction which cost CEG and its shareholders millions, while allegedly harassing suppliers (LOL and Lloyds)

• Confirmation Bahamas licenses have been renewed from 1/7/21 for 3 years……

• …..which could open the door to a farm-in announcement 4th quarter, with a major player or a consortia of smaller ones to share the risk/reward. Will CEG get a percentage of the c$150m spent and/or free Percy-2 and 3 drill(s) in 2022/3?

• Uruguay updates. Can this be leveraged as a ‘first dibs’ to sweeten a Bahamas farm in deal?

CEG’s Mcap is currently based on the tiny 450-500boe/day production. The corporate reset will clear the slate, so the company and its real shareholders can move forward. If you believe the above news will be generally positive, hold or buy. If not, SELL and move on.

Those LTHs that don’t sell, I suggest a mental/emotional reset by all LTHs including myself who are languishing in substantial losses. IMHO, set new expectations. If the SP meanders upwards over the next few months based on some of the news flow above being positive take it a step at a time rather than banging heads on keyboards until breaking even, or doubting the integrity of fellow LTHs and insulting them daily. As I see it, if the SP initially reaches the 0.8p funding bar and then reaches the Auctus 1.2p reNav in a few months (pre-consolidation prices) that would be great.

Anthea: you only recently joined the bandwagon of attacks against my integrity. I believe you are an honourable person and I’m willing to take a risk. PM me and I will prove I have >40m shares and based on my background and businesses I own in several countries, do not need pocket money as a paid ramper. The matter will then be put to bed on this BB once and for all.

DYOR. GLA. Have a nice weekend.

Starchild
https://www.l

Findme $7m disputed re debris down the hole. see https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/xeq3lnx

'..... a considerable amount of non-productive time (and hence additional cost of approx. $7 million) was added to the overall drilling program as a result of mechanical debris in the hole lost from the Managed Pressure Drilling (MPD) system requiring side-tracking.....'

Now off to do my proper jobs in my normal life!!

GL

Starchild

Icemax: I agree with you too. Mine are very high level estimates based on the 2 links. I expect financials will be produced in June for Y/e 31/12/20 to include up-to date financials since then and the date of the RNS

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Findme: I totally agree with you. So does the BoD, hence a large chunk of the $14m (up to $7m according to a Feb RNS) is disputed.

Starchild

icemax: go to the Auctus link I posted. It actually showed $23m estimated balance, but i deducted $3m Bizzell and moved it to 'available financing' as it's not in the bank yet

Starchild

If you are wondering why there are no posts for Columbus Energy here (renamed CEG from BPC on 21/5/21) , it's because you are on the wrong forum. Go here instead https://www.lse.co.uk/ShareChat.asp?ShareTicker=CEG&share=Challenger-En or type 'CEG' in the search box above.

This BB here is an artificial one to show CEG trades on the pan European Aquis stock exchange, rather than a discussion portal.

GL

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Inspirednotion: nope. It's like a wedding certificate. If you or your spouse change your name.... you're still married and don't need to get married again.

All that's happened is BPC has changed its name to challenger energy group. BTW next week shares will be converted 10 to 1. If you have 1m shares, you will automatically only own 100,000 shares but at 10x the value.

Starchild