Member Info for Starchild

I’m in my 7th decade and have only lost substantial money (£10k+) on one share. I bought Tesco as a dividend cash cow just before the accounting scandal which was a mistake. Instead of a cash-cow, I ended up with a sickly impotent billy goat.

Buying BPC was NOT a mistake. I substantially topped up several times after the CERP merger with a simple strategy: If Percy-1 was a success, the ROI would be 7 figures. If it was a total failure, the ‘bet’ would be hedged based on ex-CERP assets, so I budgeted to buy several million shares at rock bottom to hedge further. Even more confidently due to vaccine availability and PoO recovery. As a side point, despite not hitting commercial quantities (yet), Percy-1 was NOT a total failure with a farm-in (or other monetization) on the horizon. But that’s another debate.

What continues to attract me to BPC is its uniqueness

1. Low overheads of $4m/yr (pre-capex) / $3m net. BPC is not Tullow with hundreds of millions in overheads and debt.

2. BPC owns 100% of almost all its assets. Worst case scenario, it farms everything out, shrinks the headcount and collects royalties.

3. Trinidad’s SWP potentially holds 230m boe. That’s the size of a small North Sea oil field.

4. NINE Saffrons have been identified. The total cost to spud and develop them all is approx half one offshore spud. The profit per barrel @$60 PoO onshore being double that offshore.

5. Suriname is jam on the bread and butter.

6. A Bahamas farm-in will be a game changer, but not pre-req to my ROI model.

As a side point there are some nervous persons on this BB that short BPC. You may have noticed they bombard negativity in droves when the SP is ticking up, or to add negative sentiment when it is ticking down. What I’ve also noticed is some traders or those probably acting for special interest groups do sometimes sell at a loss. There have been very few buys (1m real ones vs MM tree shakes) at sub 0.45p, yet during low volume trading days, there have been large sells below 0.45p. I have my suspicions who can benefit by keeping the SP artificially low. I have suggested BPC’s nomad investigates this and closing auctions. Yesterday the SP would have closed at 0.51p (10% up), had it not been for the eod auction at 0.47p

Key point: IMHO, based on the current very much undervalued Mcap, there’s plenty of surge potential. Based on my trading strategy, the worst-case scenario subject to patience, is a 50-100% ROI next year. Best case is a seven figure ROI in months. I’ve been a LTH since 2014 and patience for a few more months is not a problem.

Key question: can anyone identify a similar ‘unique’ company that fits BPC’s risk/reward/Mcap profile? One hit wonders such as 88e and BPC pre-CERP merger don’t count.

Always DYOR as my risk/reward analysis and opinions may be wrong. Better still, seek independent professional advice.

GLA

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

Trying to explain my weekend Easter bunny joke to a foreigner can take longer than summarising BPC’s potential below.

I substantially increased my holdings in the weeks after the Percy result and now own >0.5% of the company, excluding extended family and friends. I would have preferred 0.5% of Apple but do not currently have $1B in spare cash. IMO, it is impossible for Apple to become a multi-bagger in months. Yet BPC can, perhaps even in weeks. Why? Its £23m Mcap is IMO seriously undervalued. It has very little room to permanently collapse, with huge scope to spectacularly rise. How? Refer to the recent presentation and below https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/03/25213812/bpc-update-presentation-march-21.pdf

Trinidad

1. SWP has NINE Saffron lookalikes, one being spudded next month.

2. SWP’s 230m boe potential is more than a Bahamas commercial find. The markets currently value this as peanuts.

3. SWP is onshore. It costs c$2m to spud each Saffron with immediate production, not the $45m per offshore well with production in years.

4. At $60 PoO, current T+T production pays all the bills and leaves $3m net excluding capex.

5. It only costs $20/b to extract onshore and BPC are investing in tech to automate and reduce costs.

Suriname

6. Potential 24m boe. Spud costs as above, with an EWS soon. The markets currently value this as zilch.

Uruguay

7. A nice little opportunity which could become a 1.4B boe nice little earner. The markets currently value this as nada.

Bahamas

8. $140m spent building an office block that collapses is lost money other than the value of the land minus the costs to clear the site and build again.

9. BPC spent $140m on Bahamas exploration, c50% related to Percy-1. The data and farm-in potential is a substantial major asset. The markets currently value it as ZERO.

I believe if the BoD were replaced by the Easter bunny with random decisions taken for points 1-9 dependant on its feeding and toilet habits, unless everything that could possibly ever go wrong did, the SP could increase spectacularly. If there were no Saffrons and nothing else in the pipeline anywhere, assuming $1m spent maintaining wells, it would leave $2m net profit/yr. At x17 P/E ratio common to HC company valuations, $34m is more than BPC’s current MCap.

This post is for newbies planning medium/long-term and LTHs that are currently sitting on a substantial Percy-1 based loss. NOT for traders who think short-term and have different agendas. Many post here talking the SP down to fit their trading strategy. The shorters bombard this BB and ADVF’s with negative chanting revolving around words such as dilution, overhang, funding, and BoD competency. Thinking medium term, I disagree (refer to my recent posts) and frankly don’t care.

At £23m BPC can be a multi-bagger. At $2T Apple cannot.

IMHO strong buy, but DYOR. GLA.

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

Bohemia: I ran out of room to post the source RNS link which I normally do. https://www.londonstockexchange.com/news-article/BPC/corporate-and-strategic-update/14866023

I'm not understanding what your KEY point is. Do you believe my opinions posted this morning are improbable, possible or probable?

If you don't mind me asking, do you have any BPC shares?

GL

Starchild

Part A: Volantis (‘LOL’)

I correctly predicted LOL would be owed zero from the original £7.5m advance. On 6/3/21 06:21 I then argued the max LOL exposure is £564k assuming the unlikely scenario none of the 188m shares subject to the ‘put’ in Jan were sold. If I am wrong, BPC can deal with the matter on 16/4 with little or no overhang as follows:

1. By BPC paying LOL in CASH by ‘borrowing’ from the disputed Stena final bill as it will have a payment schedule probably spread over many months. And/or…

2. By BPC exercising its option to the £3.5m Australian deal. (Refer to part B)

But…BPC has leverage over LOL to pay zilch. Why? Potentially serious LOL reputational damage for alleged sharp practice.
(a) They lent money and allegedly tried to keep it a secret. ‘Official’ policy was not to fund oil exploration.

(b) when discovered, LOL publicly stated this was a ‘mistake’ (probably being found out was the mistake). Which resulted in a loud signal to the market they would dispose of their BPC investment…which created a catalyst for the SP to fester at c2p….which meant they had trouble disposing by 8/2/21.

Key assumption: BPC has leverage over LOL to do a deal and if not will pay in cash NOT shares at eg, 0.5p

Part B: The Australian loan

BPC borrowed £5m to date (Dec 20/Feb 21) out of £15m available. If another £3.5m is borrowed by the 16/4 cut-off date, £7.5m will be left available, IF required. The maturity date is 31/12/23 with BPC having the right to ‘buy back’ the shares security. As such it is BPC that decides IF and when to issue shares until 31/12/23. The result is NO OVERHANG until then. In Feb the funding bar was set at 0.8p. Why? Because the Australians (a) believe BPC will honour the 6 x 6 monthly interest payments due 30/6/21 - 31/12/23; and most importantly (b) is very confident the SP will be worth more than 0.8p in future.

Remember, when the original deal was first structured in 2019, the investor had the option to appoint its own BoD person in the event Simon and Eytan resigned. This is because the investor historically made a very good ROI with previous deals in orgs SP and EU worked for.

Key points: if an experienced group of investors in specialised lending to small oil orgs believe the SP has scope to substantially increase…it’s good enough for me. Furthermore, IMO should BPC seek £3.5m by 16/4, I see no reason why the funding bar should be substantially reduced from 0.8p based on BPC’s mega potential. The fact the SP is temporarily festering at sub-0.5p is a technicality during low volume trading (possibly with some manipulation by special interest groups) while news is awaited, in case there is a large imminent overhang.

A + B bottom line: IMO there will be little or no overhang after the 16/4 key funding date and the SP will increase leading to spud.

IMO strong buy. Sell, hold, buy: DYOR.

GLA

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

During the Easter break, it is well worth spending 30 mins watching two very informative Leo Koot interviews which I believe most ex-CERP LTHs have seen. However, I doubt most BPC LTHs or newbies have. I watched them for the first time yesterday. Bookmark them.

27/4/20 17 mins https://www.youtube.com/watch?v=Nmn8Nk0MA9I (Leo explained the Saffron discovery. Watch short video clip @6 mins with oil gushing out of the well. Also discussed was the Saffron 2 deal and the 3rd party offer to have it drilled for free.)

17/4/19 11 mins https://www.youtube.com/watch?v=PEbW8DRIbaw (Leo detailed the upcoming drill programmes and the potential in Trinidad’s south west peninsula.)

The past

In 2Q 2020 CERP had its perfect storm through no fault of Leo nor the BoD. Covid-19, PoO collapse, the Lind debt, and the monthly overhang it was causing, compounded by Schroders simultaneously share dumping. CERP needed $3m/year to cover monthly opex but couldn’t, let alone capex to invest in its future. The BoD very likely attempted a funding solution and possibly knocked on GNEISS door to broker one. During those dark days it is quite likely any funding solution would have been so punitive, it would have made the Dec 2020 LOL / BPC deal, at the height of BPC’s own perfect storm………… appear philanthropic to the point of being charitable.

Today

BPC is on the cusp of fulfilling Leo’s vision, with two fully funded company making spuds only weeks away. Compared to then, there are 3 additional positives BPC has which CERP did not: (i) on 1/1/21 the punitive T+T special tax threshold was increased from $50/b PoO to $75/b. (ii) PoO is $60+/b, with analysts predicting the possibility of $100+/b and (iii) BPC and GNEISS actively pursuing monetization of the $140m Bahamas asset.

The future

Between Tuesday and by 3Q 2021 substantial news flow is expected re the above. A key date is +/- 16 April.

Summary

I continue to believe there is very little scope currently for a permanent SP collapse, with plenty of scope for the SP to soar on various fronts. Positive news will create a different kind of perfect storm and trigger investors piling in, with shorters exiting their positions as a herd, to compound the increase.

Dire warning

Never, ever, ever pour a bucket of boiling water into a Rabbit warren at Easter time as this will almost certainly result in a very hot cross bun.

IMHO. DYOR. GLA.

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

Read http://www.tribune242.com/news/2021/apr/01/activists-get-200k-bpc-hearing-theres-catch/ as it wins the most ridiculous excuse I have ever heard for not making a time critical court ordered payment. Here’s why:

• Smith QC’s clients left it too late. Smith’s firm wrote to BPC’s solicitors on 29/3 seeking a delay. They responded the NEXT DAY, yet Smith blamed them for waiting… ‘until the 59th minute of the 11th hour for time to run out.” Eh?

• The envios have a habit of waiting until the 59th minute as evidenced by the original attempted injunction while the IceMax was sailing. They had 10 years or at least since EIA in Feb 2020 but didn’t. Why? To allegedly inflict as much financial damage to BPC as possible. They succeed. BPC had to secure funding from a hedge fund at 2p per share.

• UK solicitors follow very strict AML / KYC rules before accepting money. I’ve never heard of a lawyer acting for the other side suggesting opening a joint account with an opposing law firm, to hold their own client’s money.

• I doubt the judge will be impressed. She set aside 2 days of Supreme court time.

• I doubt BPC’s solicitors/QC, and the AG’s office are impressed either. They too set aside 2 days.

Key point: The AG should ask for the case to be thrown out. And BPC should seek a full costs-to-date award.

Greed

The Definition of greed is an ‘intense and selfish desire for something, especially wealth, power, or food’. The Tribune is against oil and anti-BPC by their biased reporting. To a lesser degree EWNEWS who published a letter implying BPC shareholders are greedy. I absolutely object being labelled greedy (selfish) because I choose to invest in shares of any company for my family. https://ewnews.com/letter-to-the-pm-protect-our-ocean-heritage.

PR

I rarely publicly criticise the BoD. Today will be an exception as there’s no access for unsolicited opinions. Smith is good at playing the media and so are the enviros. The BoD should complain to the publishers and lean-on or REPLACE its PR agency who should be putting across BPC’s point of view using various platforms. I would even suggest using the tricks political parties do: the use of surrogates to convey negative messages against the opposing camp. The key ones being the enviros allegedly have hidden agendas from foreign interests that fund them and are a danger to the Bahamian people and its economy. A good PR agency could leverage their constant negative messages of no oil, no Disney, no cruise liners, against the enviros but at arms’ length from BPC. Read below.

https://ewnews.com/local-environmental-groups-to-conduct-thorough-review-of-disneys-lighthouse-point-eia

https://ewnews.com/literally-the-worst-idea-environmentalist-slams-plans-for-cruises-to-homeport-in-the-bahamas

http://www.tribune242.com/news/2021/mar/30/activists-demand-90-day-extension-disney-review/

End of whinge

IMHO. DYOR. GLA.

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

ActionManx: You’ve only ever posted twice. Post more often as your opinions are cerebral and well argued.

Jono44: You post regularly (mostly negativity or ask questions to allegedly try and spin BPC negativity). Respectfully, why do post here despite admitting having NO BPC shares?

Private_Investor: Your April fool suggestion for companies to issue a spectacular RNS and then retract it…..was very funny! MMs would love this idea based on the percentages they would make from the trading volumes, despite the BoDs involved likely being locked up.

Unusual situation BPC is in

I suspect the reasons the SP is festering despite recent decent RNSs such as an imminent Trinidad spud are:

1. (To a lesser disagree) the court case. Markets do not like uncertainty even though a possible future JR would deal with historical BGov legal technicalities and whether the BGov’s EA should have been handled differently. When this matter is resolved, it will remove a potential niggling doubt from a farm-in partner. The case was 29/30 March. Judge Hanna Adderly had two small family hearings yesterday and is not currently listed for any cases between today and 7 May. (Source https://www.bahamasjudiciary.com/courts/hearing-list/ ) She has the right to a holiday. Unlike a commercial or criminal trial where a judgement summary can run to many pages, I believe a JR application ruling will be short, eg… ‘The JR is hereby [granted/not-granted] because of 1,2,3.’ … As such, I doubt we will have to wait weeks for the ruling.

2. (To a greater degree) on or around 16/4 whether additional shares will be issued to LOL or the Australian investor. On 6/3/21 06:21 I argued the maximum LOL exposure is £564k with BPC having leverage they shouldn’t have to pay a penny. If I am wrong and LOL are due substantially more, BPC HAS THE CASH to pay them, by ‘borrowing’ from the disputed Stena final bill. A key word in the 26/3 RNS….. ‘to finalise a schedule for those payments over the coming MONTHS’…. (source https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/xeq3lnx ). Why is ‘months’ important? Because by the time any scheduled payment is due to Stena, a lot will have happened affecting the SP and BPC’s ability to leverage cash.

I am not overly concerned for either points 1 or 2. Because the current over-sold share-price has IMO, plenty of scope to surge and could be helped by UK investors buying on or soon after 6/4 for their pension pots.

IMHO. DYOR. GLA.

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

v o x m a r k e t s / vox markets !!!

Note the reasons Simon Potter gave in both interviews below why the SP is undervalued with lots of potential upside.

Watch https://www.youtube.com/watch?v=NmJ2-gkVHaE&t=15s

Listen to the ‘**********’ podcast (thanks Solarfire) https://www.**********.co.uk/articles/bahamas-petroleum-company-hummingbird-resources-and-glen-goodman-on-crypto-5f89635/

Risk/rewards as of today

1. [Relegation] IF the 8/2/21 RNS was too up-beat and ‘oversold’, no farm-out EVER, Trinidad is a duster, Suriname is a duster, PoO WTI <$40/b, only 450 boe/d production: the SP will take a long-time to recover and risks a potential massive dilution at asset or share level to fund SW Peninsula/Percy-2/Uru-1.

2. [Cup winners] IF no farm-out now, yet Trinidad is a success (FA Cup) OR Suriname is a success (League Cup), BPC will have cash (via RBL/infra-lending/pre-pay) to invest in SWP and possibly a Uru-1 spud in 2 years. Mcap/SP will increase.

3. [Premier League champions and triple winners] IF no farm-out now, yet Trinidad AND Suriname both come up trumps, BPC will have cash to invest in SWP and Uru-1/Percy-2. Mcap could reach the £250-300m proposed by analysts. 5B shares is a potential 5-6p SP. (Source: pages 18/19 https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/12/08133633/Auctus-BPC_IOC_08.12.2020.01.pdf )

4. [Champions League quadruple winners] IF a farm-out happens, and Trinidad/ Suriname BOTH succeed, BPC will have immediate cash to invest in M&A. How much cash? I hope there’s a bidding war and we get £100m in back-costs but this may be very optimistic. Whether $50m - $100m, the up-front payment is TINY for a major that likes the data. It is a small amount relative to the cost of several exploration/appraisal/production wells; with no BPC royalties payable until ALL its costs are recouped. If the farm-out cash is substantial, the Trinidad onshore market is very fragmented with lots of small operators, and BPC could M&A. It would also have the cash for a multi-well Trinidad SWP development and to spud Uru-1 within 12 months. Mcap could reach substantially more than the £250-300m point 3, due to cash from the farm-out and its leverage potential. This implies a SP of MORE than 5-6p.

Note: SP/Mcap above is based on analysts’ opinions. I’ve done extensive modelling (SP not on a catwalk) and will share my findings on the morning an RNS informs us of a farm-in.

If you believe 1 likely to happen… DE-RISK at the first opportunity while the SP increases leading to the Trinidad spud and other news-flow. Even the anti-BPC ‘oil man’ Jim believes the spud is an opportunity. KEY POINT: Even IF BPC asks for a 3rd chunk of money from the Australian investors, they have NOT asked for shares for their Dec and Feb advances. Unless they do so in future, there’s NO overhang from them.

If you believe 2 - 4 may happen: BUY

IMHO. DYOR. GLA

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

Watch the 16min interview https://www.youtube.com/watch?v=NmJ2-gkVHaE&t=15s

Highlights and opinion

1. Percy-1: The drill confirmed trap/seal/reservoir quality. Potential in Jurassic.

2. Percy-1 costs: In the past it took 200 days and $100-120m to drill a well. BPC did so safely for less than half. Budget exceeded due to (a) covid-19 (planes/helicopter, hotels, keeping staff on ship) and (b) a piece of steel fell down the hole! [Why BPC disputes $7m]

3. ‘Percy-2’: the 80KM zone is huge with other structures potentially holding commercial HCs. Jurassic very exciting. It took more than one attempt to find HCs in North Sea and Alaska [and Guyana / Falklands]. BPC is now merging $140m worth of intel, data and seismic to offer farm-in.

4. T+T S2 : CERP found oil 1 year ago. Spud in May will cost $3m and can immediately produce 200-300b/day ($2m net cash/yr.) If successful 1000-1500b/day leading to a full field dev 4000b/day.

5. T+T current production: 80 wells. Workovers optimized, well automation with Weatherford, CO2 project.

6. Suriname EWT: Gov approval given, supplier contracts signed. Spud July subject to covid-19 as staff will travel from T+T.

7. Uru-1: 1.4 B Boe potential.

8. Funding: $25-40m needed but NOT upfront. Sources: $13m in bank, $14m facility, current production [generating $3m NET per year], forward selling /pre-pay, equity JV or FARM-IN.

9. LOL deal: BPC hit a perfect storm when Icemax was on its way, with the environmentalists’ attempted injunction during XMAS. Various facilities were unavailable or withdrawn. [IMO the timing of the interview and court hearing is no coincidence. It implies a future, separate claim for damages by BPC and maybe shareholders (trapped or unable to top-slice) . No wonder Mr Smith QC has been quiet for weeks. The envios and their backers have money]

10. ‘Why buy BPC?’ The current SP is based on current Trinidad production. Lots of up-side to the SP (and lots of pending news) on S2 soon to spud, SWP huge, Suriname, Uruguay, + possible FARM-OUT. Lots of upside.

Key observations: Simon was frank, to the point, honest and open. And excited. IMO It is rare for a CEO to spell out why a SP is undervalued as it’s usually left to analysts to do so. This shows confidence.

IF IF IF BPC needs a convertible loan, the current facilitator (advances were made in Dec and Feb) has NOT asked for shares to be issued. As such there will be NO overhang unless it does so. BPC owns 100% of most assets. I’d rather have share dilution than a mega asset one. This will be mute if after the court case there’s a Farm-in.

Based on the interview, I continue to believe BPC is a strong buy. SP can surge, with little room for collapse.

IMHO. DYOR. GLA.

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

Jono44: respectfully, you admit to having NO BPC shares, nor give reasons why you regularly post here, so why the questions?

Watch Simon Potter's (CEO) video presentation of a few mins ago. Key points 14+ mins about funding.

I added to my shareholding based on this. Read between the lines !!!!!

Watch https://www.proactiveinvestors.co.uk/companies/news/945180/bahamas-petroleum-reaffirms-commitment-to-high-impact-offshore-exploration-in-the-caribbean-945180.html

IMO. DYOR

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

Carlf1990: negative opinions using freedom of speech are not taken down even if reported. For example, 'I think the SP will be 0.00001p next week' is an opinion. Manipulative ones for trading purposes are taken down (or those that breach its Ts and Cs) by LSE. False, or libelous ones by the companies affected. This BB is now being monitored by LSE, and others.

LSE has a new COO, and he appears to be doing a great job getting things done. The LSE BBs should be a forum to express opinions in good faith. Not a place to insult people, create discord or manipulate others for selfish gain. (including unethical or false ramping, for example to falsely state a a delayed buy for 1 million quid is happening)

Starchild

From personal observations there are IMO 4 main groups that comment on the LSE BPC BB and ADVF’s:

1. PIs. Some top up to lower their average.

2. PIs that keep a core BPC holding, top up and then sell to make a small profit on the side.

3. (a) Day traders full or part-time, that buy/sell and use derivatives/CFDs. (b) A group that MANIPULATE for personal gain by switching from buy to sell depending on their current ‘play’. For example, to falsely state the MM live sell is at 0.42p when the actual price is 0.49p. Some get banned and risk being reported to the authorities.

4. BPC haters who bombard negativity for one of five reasons:

(a) The annoying, ‘I told you so’s.’

(b) Supporters of special interest groups for ideological reasons (eg, environmentalists), or those who are paid (eg, another company leveraging a ‘play’ on BPC assets). These SIGs want to lower the SP or destroy BPC.

(c) Some that lost substantial money (or ex-employees), who are angry and seek revenge. If they can influence sentiment to destroy BPC or at least lower the SP to less than they sold for, they will believe their failure could have been worse, so will perversely feel better.

(d) Permanent shorters/de-rampers who occasionally buy but rarely admit it, in case they get banned and risk prosecution for being in 3b.

(e) Trolls that enjoy causing discord and hurting others for fun or spite. Some are now banned.

Real shareholders in groups 1 and 2 DO post negativity and have the right to air frustrations if the SP tanks. But they rarely machine gun post. IMO respectful cerebral debate including some negativity should be welcome.

Question: If it were certain the SP would recover to your average PLUS 15% in 12 months, would you be pleased or still be upset? Ie, more than you would earn in a 10-year bank deposit.

This question may appear daft however it is not, as my KEY assumption is groups 1 and 2 would answer positively but those in group 3 would not, as they don’t want to tie their trading capital for 12 months. They are the ones who complain the most when there’s a placing because they can’t ‘play’ for a few weeks unless they pre-empted an overhang. BoDs owe NO loyalty to traders WHATSOEVER.

IMO it is group 3 and 4 that post most negativity, (and group 3b depending on their trading positions) as it makes NO rational sense for groups 1 and 2 to do so 24x7 against a company they’re invested in.

ALWAYS DYOR and look back at posting histories to ascertain which group someone likely belongs to and whether to trust their opinions. Always REPORT manipulators to LSE and false or libellous posts to both LSE and the company.

I add https://www.lse.co.uk/profiles/starchild/ at the end of my posts, for my fact based research, sources and good-faith opinions can be accessed by newbies to ‘DYOR’, sell, hold or buy: it’s up to them!

GLA

Starchild

Please refer to my previous posts and compare to the Auctus report which was published Thursday on the London Stock Exchange.

(Source 'Equity research', bottom of page https://www.londonstockexchange.com/stock/BPC/bahamas-petroleum-company-plc/company-page. You will need to register, free, with Auctus to get a copy which is subject to copyright. There are 2 reports, download the 25/3 one)

Highlights

• SP is worth 1p today, excluding farm in. (I have given more details justifying this, in my recent posts)

• SP could be 1.5p - 1.9p subject to success with Trinidad in May and Suriname in July.

• Auctus did a deep dive of the balance sheet noting Percy-1 was $10m over budget. In their opinion, BPC will have $6 - $7m surplus cash after paying for Percy-1 to fund the spuds and other stuff. (For ‘other stuff’ Capex, refer to my RNS based post 26/3)

• Subject to success, ignoring the possibility of a farm-in, BPC could borrow $ millions via RBL/infrastructure loans. Touchstone borrowed $20m for Trinidad expansion at a fixed 7.85% in May 2020. (Arguably, BPC are in a better position now due to PoO being higher and the current Covid-19 situation compared to May)

News awaited

• Refer to my recent posts on expected news including possibly the Percy-1 autopsy

• Court case is today and Tuesday

Other

‘Sacking’ the BPC BoD: I do NOT support this whatsoever unless those that seek the sackings can fully justify it by answering the thought experiment posted on 27/3 (Saturday). What would you do if you were the BoD/CEO today? And what would you have done differently? To state, ‘I would have done a farm-in in 2018’, is fine, but what if the offers were punitive or there were no offers?

Key point: Excluding a farm-in or monetizing Bahamas acreage after the Percy-1 result, at $60 PoO BPC could be making a NET profit (excluding capex) of $40m/ year from 2022/23 onwards. For a breakdown including capex needed (with ROI timelines) refer to my post 26/3, which is based on the last RNS.

I firmly believe having posted evidence and opinion in good faith, the SP can surge; it is seriously undervalued and remains a strong buy. However, it’s totally up to you whether to buy, hold or sell.

IMHO. DYOR. GLA.

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

I believe there is a good chance we will get the results of the Percy-1 autopsy after the court case Monday/Tuesday. Why?

1. BPC has to file its contractual right to extend its exploration window for 3 years by Wednesday 31/3. Although unlikely to be a contractual pre-req, if I was the Minister/PM I’d say, ‘great, but what were your findings from the last drill, BPC?’

2. The previous RNS implied the assimilated data (pre and post drill) will be ready in ‘days’, for the next GNEISS farm-out push, or to provide intel to companies already interested in a JV.

3. Simon Potter (CEO) has stated in the media…’The Bahamian people will know by April if they are an oil rich nation.’ April starts on Thursday.

A few commentators here have recently opined it is not worth pursuing an extension, implying having the licenses is a liability and BPC should concentrate on Trinidad and Suriname. I find this baffling and totally disagree. The BoD should NOT press the delete button and shred everything. It cost $140m in real money (c$500m in virtual money) to acquire this data and do the Percy-1 drill. It’s got great potential for monetization otherwise it wouldn’t have been stated in RNSs nor would GNEISS waste time trying to find a JV partner.

In the meantime the extension has been politicised due to the election next year. The PM is being coy. Read yesterday's http://www.tribune242.com/news/2021/mar/26/pm-reaffirms-stance-against-oil-drilling/ Watch https://ewnews.com/pm-minnis-hoping-to-review-bpcs-application-to-drill-again I find the PM’s comment that oil will only benefit a few wealthy persons strange. He seems to have forgotten a well-managed sovereign wealth fund (eg Norway’s) can be a game-changer to the whole nation, subject to a future commercial discovery…… Which is why BPC have asked for an extension as is their contractual right. The agreement is watertight according to several Ministers.

BPC haters, shorters, or those who want a lower entry price will now gleefully state BPC is doomed because it will not get an extension, or BPC is doomed because no JV will materialise, or BPC is doomed because they can’t raise the money in 3 years for a Percy-2.

Next week will be interesting.

Enjoy Sunday. GLA.

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

Bamps21: the $3m figure was in the last RNS and very close to my calculations. ‘Incremental operational cashflow per annum’ is net profit BEFORE Capex. Here’s how: $60 PoO - $20/b extraction costs = $40 x 500 x 360 = $7.2m gross, less $4m Opex/taxes = $3.2m. The reason CERP never made a profit was they had to use income for Capex etc and the special petroleum tax was from $50 PoO, rather the current since 1/1/21 $75.

Shouldvesold

Technology has developed in the last decades since one of George Bush Snr’s companies attempted to drill in the Bahamas. [In 2010, …‘BPC’s] PR group in Houston had contact with George Bush Snr and he was quite impressed and happy to see that it was being followed up on because he had strong beliefs that there was potential for good oil to be found there.’ ….. ‘Essentially you can picture this as an upside down bathtub up to 70 km long and that vertical closure is essentially the depth of the bathtub up to 1.5 km or more, and that is huge’. ..(Source https://www.businessinsider.com/paul-crevello-and-the-oil-rich-possibilities-for-bahamas-petroleum-company-2011-6 )

If oilmen like George Bush Snr and Howard Hugues could see Bahamas’ potential using old technology and the knowledge of similar finds in the region, it’s good enough for me. Especially with all the 2D and 3D done to-date, Percy-1 autopsy intel, CPR by experts and BPC/GNEISS are actively seeking a farmin partner. I doubt targets will search the web, find a few documents from the 1990s, conclude there’s no oil and question the BPC BoD’s intellect for even bothering to spend 10 years and $140m drilling there.

Bamps21

Your tech insight into Trinidad is appreciated, however please don’t imply I’m a naïve investor who has NOT thought things through or looks at BPC with rose tinted glasses. What I do NOT normally do is to air my grievances (if any) about BPC publicly. I will say it to the BoD direct rather than give ammo to trolls and BPC haters to feed off. As such there’s no point.

I predicted a 0.5p SP knee jerk reaction if Percy-1 was unsuccessful. And clearly if Trinidad and Suriname are both failures, no Bahamas farm-in ever happens, it will be very bad. Personally I’m willing to take the risk with 10s of millions of shares.

I’m not a clairvoyant however, to give credit where due, I admit to weekly access to a gifted confidant. Za Za is a famous Romany gypsy specialising in astrology, clairvoyance, fortune-telling and tealeaf reading. She lives in a quaint horse drawn pink caravan. Since the Percy-1 result I visit her weekly and she lets me call her ‘Za’ for short without causing offence for overfamiliarity.

Unfortunately there was a sticky note on her horse’s bottom stating, ‘Starchild, sorry must postpone till Friday due to unforeseen circumstances’. Anyway, yesterday evening she told me the BPC SP will hit at least 3p by August and Man Utd will win the quadruple next year subject to Ole selling Drogba and buying half the Man City squad. She predicted a CLN for £1B (at a 35% coupon rate) will make this Man Utd farm-in happen.

This post should not be seen as a ridiculous cheap ramp to get people to buy BPC shares, even though according to Za Za, the current SP is ridiculously cheap. However DYOR before betting on the Man Utd prediction.

With family today. GLA.

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

A thought experiment follows, but first the background based on yesterday’s presentation. https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/03/25213812/bpc-update-presentation-march-21.pdf
All figures are approximate based the RNS and $60/b PoO, with some assumptions:

1. BPC is making enough revenue to cover all opex and is making $3m a year net profit.

2. It has the $1m capex for incremental production programs. Success = 100 bopd = $1m/year NET profit. (ROI 1 year)

3. It has the $2-3m capex to spud S2 Trinidad 17 May. Success = 200-300 bopd = $2-3m/year NET profit. (ROI 1 year)

4. It probably has the $2-3m capex to spud Suriname and do an EWT in July. Success = 500+ bopd = $2.5m/year NET profit. (ROI 1 year)

5. It hotly disputes $7m in billing for Percy-1, which could in theory be partly used for point 4 if point 3 fails.

BPC does NOT have the capex, (unless there is a Farm-in involving a refund of some Bahamas Percy-1 back-costs) for ….

6. The Saffron full-field development (2-3 years) 4,000+ bopd $25m+/year net profit per year. Capex needed <$60m. (ROI 2 years). IMO it will not need most of this funding if S2 is a duster. It can use RBL in a success case based on a CPR.

7. The infill drilling programs 200 - 400 bopd $3m - $4.5m/year net profit. Capex needed <$6m. (ROI 2 years)

8. New Biz development opportunities 100+ bopd $0.7m/year net profit. Capex needed $2.5m - $3m. (ROI 4 years). Can be partly financed with RBL now.

Now imagine on Monday you will be formally appointed as the only person on the BPC BoD, its CEO, be given 8.1% of the company and wish to keep its currently very grumpy shareholders sweet. In fact, you will read the LSE and ADVF boards religiously 3 times a day for sentiment. (Immediately blocking trolls and those that are here just to manipulate others based on their current trading position.)

Whatever you did from Monday, it is an almost mathematical certainty groups on the BB will winge, moan and complain….even insult and libel you…. in the following scenarios:

1. If you took out RBLs, you will be accused of being stupid to mortgage BPC’s future income. ‘Look what happened to LGO.’

2. If you took out a CLN, you will be accused of theft by daring to dilute ‘our shares.’ And ‘how dare he create yet another overhang I can’t trade against for 6 weeks.’

3. If you entered into a 50-50 JV with a 3rd party providing all capex in return for half all future Trinidad and Suriname income, you will be accused of laziness.

4. If you didn’t provide regular news, people would complain. If you did, they’d complain it’s not good enough, too wishy washy or just plain BS.

What would you do? You’re the BoD.

Constructive opinions welcome but sarcasm (eg, ‘I’d resign on Tuesday’) or personal insults from trolls is not. A white horse awaits.

Have a nice Saturday. GLA

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

ps..who or what is 'DEV'?

Production now and in the future based on today’s RNS

1. Current production 450 - 500 bopd US$3m net profit per year today @$60 PoO. Capex zero

2. Incremental production programs 100 bopd PLUS US$0.9m net profit per year. Capex US$1m (ROI c1 year)

3. Infill drilling programs 200 - 400 bopd PLUS US$3m - US$4.5m net profit per year. Capex up to US$6m (ROI c2 years)

4. Saffron-2 200 - 300 bopd PLUS US$2m - US$3m net profit per year. Capex US$3m (ROI 1 year)

5. Saffron full-field development (2-3 years) PLUS PLUS PLUS 4,000+ bopd US$25m+ net profit per year. Capex up to US$60m. (ROI c2 years)

6. Suriname project 500+ bopd PLUS US$2.5m net profit per year. Capex up to US$3m (ROI 1 year)

7. New Business development opportunities 100+ bopd PLUS US$0.7m net profit per year Capex S$2.5m - US$3m. (ROI c4 years)

Most can be self-funded or via RBL or infrastructure lending. Eg, 1-3 can create CAPEX down the line for everything including the biggy point 5

IMHO. DYOR. GLA.

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

But we have $4m cash to drill Trinidad and Suriname spuds which are scheduled in weeks. Either can fund the millions needed to build the wells...with or without a Bahamas farm-in

Starchild

see RNS https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/ry4n3kr

and corporate presentation https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/03/25213812/bpc-update-presentation-march-21.pdf

I will do a deep dive at the weekend, however it shows capital costs are between 1-3 years ROI. This can be achieved via RBL/Infrastructure lending (and net income) once new oil has been found in Trinidad and Suriname. NOT a massive CLN for a gazzilion! It also gives more insight into Percy-1.

Starchild