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A universal truth is 1 = 1. This fact is impossible to disprove.

It is a fact elephants have large ears.

The statement ‘an elephant is NOT heavy’ is an opinion based on comparison. It is a fact relative to an oil tanker but untrue compared to a kitten.

The statement ‘my kitten was naughty’ is an opinion based on a value judgement. It is NOT a fact as there is no internationally accepted scale of kitten behaviour ranging from ‘good’ to ‘totally wicked.’

It is a fact day traders join this BB on masse when the SP is substantially moving up or down. It is an opinion whether it is legal or ethical to manipulate others for self-gain, by talking the share up one week, and down the next.

It is a fact on 28/12/20 17:12 Proselenes wrote ’ ….will I buy BPC ? No way. Not now, not again.’ (source https://www.lse.co.uk/profiles/proselenes/ ) So, I ask some rhetorical open questions to the reader of this post. Why does s/he for months on end bombard this BB and ADV when s/he has no shares? Is it out of kindness and concern to fellow human beings so they don’t lose money? How has s/he got the audacity to give lectures on ramping, when clearly ramping PANR and 88E? It is a value judgement to state h/er behaviour is despicable. With various opinions why s/he detests BPC and behaves this way.

It is a fact some posters are delighted BPC LTHs lost substantial money on Monday. It is an opinion this sort of behaviour is uncouth and cruel.

It is a fact BPC hopes to achieve 2500 boe/day production by year end which will generate $15m net profit per year at only $40 WTI PoO. And substantially more if PoO is at $60. It is an opinion whether this can be achieved or not.

It is a fact BPC estimates $20m is needed to develop ex-CERP assets. It is also a fact this investment is not needed in one chunk up-front, and can be self-sustained with organic growth and other funding.

It is a fact I gave opinions on how money can be raised in my post on 11 Feb 06:02am. It is an opinion whether you agree or not.

It is a fact someone bought one share in https://www.lse.co.uk/ShareTrades.asp?shareprice=AFN&share=ADVFN on Thursday. It is also a fact this was me for reasons I will share soon. I did this for Linton and a few other LTHs.

It is also a fact I wish everyone a nice Saturday. Even to those my posts clearly annoy, such as Findme and Carelesssid.

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

Zaggy: I wish you well.

If ex-CERP assets can reach 2500/b per day generating $15m/yr net profit, this cash can be used to develop ex-CERP assets further or to buy-out small T+T independent producers. Alternatively, every 2 years the cash can be used to SELF-FUND (without CLNs or similar) frontier exploration wells Percy-2, Uruguay-1, Percy-3, Uruguay-2, Other-1. So using simple figures these wells can be self-funded every 2 years for +/$30m. Assumption: PoO remains constant at $50.

So what would the BPC Market-cap and share-price be? Some assumptions:

1. Oil industry (Q4 2019) price-to-earnings ratios are around 17x (source https://www.investopedia.com/ask/answers/012015/what-average-pricetoearnings-ratio-oil-gas-drilling-sector.asp) . However in the above scenario BPC would never make a profit or pay a dividend until a mega spud bore fruit. As such its SP would be based on potential future value rather than P/R ratios.

2. If at any point, a farm-in materialised, the SP should soar.

3. Leading up to every spud, knowing a sudden CLN would never materialise, the SP would increase.

4. After the 1st successful spud out of 5, if commercial quantities of oil were discovered, the SP would surge.

5. After each exploration duster (assuming none had been successful to-date), the SP would likely collapse in a knee jerk reaction as now, and then increase back to base value.

6. The SP’s base value would be dictated by 2P reserves and projected potential earnings.

Where we are today is at point 5 even though Percy-1 was NOT a duster. BPC’s market cap today is £25m which I consider undervalued and so do many other commentators who back their opinions with research (eg Pageofcups, Tiburn) as opposed to hardcore ramping.

So, as ex-CERP news materialises over the next few weeks, we should get to point 6. According to analysts, if ex-CERP is successful and all its ducks line up in a row, a potential market cap of £250-300m is possible. If these analysts are only half right, the SP could recover to 2.5p+ and more. To this I add another caveat; Percy-1 data and samples are being analysed over the next few weeks which may affect the SP. Currently this does not appear to be factored into the current market cap which is at pre CERP merger value, despite (a) BPC having no Lind debt or any debt, (b) being at a more advance stage in developing T+T, (c) having spent capital doing so. And (d) having more money in the bank and assets compared to CERP.

All IMHO. DYOR. GLA.

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

Ps…To the additional LTHs who stated in the last 24 hours they have called it quits. I wish you well.

1. Current ex-CERP profitability

Refer to page 20 of Actus report https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/12/08133633/Auctus-BPC_IOC_08.12.2020.01.pdf
‘…..In Trinidad, the assets are governed by corporate tax (55%), Special Petroleum Tax and royalties (12.5%)…… IMPORTANTLY, outstanding tax losses are ~US$25 mm for Goudron, ~US$15 mm for
Inniss-Trinity and ~US$45 mm at Bonnase/Saffron’……. [Trinidad does have high corporation tax, but this will NOT apply to BPC for some time!!!!]

Based on WTI PoO of $58. $20 to extract, equals $38 gross profit minus 12.5% royalties. No corporation tax (refer above), SPT does not apply under $75.

So, $38 x 475/b day x 360 days = $6.5m / yr minus 12.5% royalties $800k = $5.7m minus $4m annual BPC operating expenses including payroll without cap-ex. C$1.7m profit/year

2. Future ex-CERP profitability (subject to staged cap-ex)

Refer to https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/x4zelor …….. ‘Trinidad includes five producing fields with a total of around 250 historical wells, of which about half are presently considered capable of ongoing production.’ ….. ‘[In Aug 2020] about 80 wells were on production, and the well workover frequency rate had fallen…..’

Simplistic assumption: if the 80 wells can be increased by the remaining 40 viable ones, with the minimum of Cap-ex, this could create an additional 250b/day. Based on the formula in my section 1 above, this could represent an additional $3m/yr in pure profit after royalties paid. Total of 1 and 2 = approx. $4.7m/year free cash to be spent on CAP-EX in other ex-CERP assets.

3. Other financial factors which will have a bearing on available funds to develop ex-CERP

(a) If the final bill from Stena is less than $5m, this will exceed my expectations. What if Stena agreed to delay payment to year-end (it won’t affect their annual 2021 financials), in return for some fair uplift and security? Just an idea not a prediction.

(b) LO: BPC has a valid legal argument or at least a plausible one, to leverage any LO payment due after April. LO publicly ‘regretted’ being an investor, which signalled to the market they would share dump. This kept the SP down. Why should BPC owe then any indemnity? LO can huff and puff as much as they want, but would they want more bad publicity by going to court? Especially as the original RNS had to be clarified, because LO didn't want anyone to know!

Bottom line: the above are just some ideas for BPC to have the cashflow to develop ex-CERP. It excludes RBLs, CLNs, and monetizing Bahamas stuff. Why the heck are some posters on this BB talking about bankruptcy for goodness sake?

All IMHO. DYOR. GLA.

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

Ps…Laallee: good luck! Keep your pecker up mate.

1. 'Watertight' Bahamas contract

Refer to yesterday’s news article http://www.tribune242.com/news/2021/feb/09/oil-opponents-demand-permanent-drilling-ban/ . [When the AG was….]……’asked whether the outcome gives the Government another opportunity to exit an arrangement himself, the Prime Minister and other Cabinet ministers all said it desperately tried to get out of, Mr Bethel replied: “I would rather not speculate on the Government’s position until so advised.” ……………’

Some anti-BPC commentators are now casting a new angle on the validity and continuity of the BPC/Gov agreement. Google ‘bpc watertight bahamas’ and you will note various articles where the PM, AG and other ministers have publicly stated the contract is WATERTIGHT. This implies there is NO clause that states………………’in the event of a duster, inconclusive result, or a non-commercial find, we the Gov have the right NOT to renew the license for that exploration block. In fact we can take all the other licenses away as a punishment to BPC because not enough algae and zooplankton died millions of years ago at the drill spot. .. …’

2. Ex-CERP potential

Tiburn’s informative posts yesterday referred to the 3/11/20 RNS https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/x4zelor . It is well worth reading again, especially ‘upcoming key milestones’, found near the end of this key RNS. Cross reference this with slide 22 on https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/10/20121621/BPC-UK-Investor-Magazine-VC-Presentation-20-October-2020.pdf . Key point: 2500/boe day can result in $15m/year free cash after paying expenses and royalties etc. This was based on $40/b WTI. It is currently $58/b

3. What would you have done differently if you were in-charge?

I have asked this question several times. The only general feedback being, ‘a farm-in’. But how, if the only offers, if any, were on punitive terms? For example, ‘we’ll do the drill for 75% equity of all BPC’s Bahamian acreage’ . Had this type of a deal been done and Exxon-Percy-1 had found 700m boe, many on this BB would have been outraged with the BoD for selling out its shareholders out of laziness to get funding!

4. LTHs

I fully understand and respect that several LTHs have decided to call it a day. I wish them all the very best. I enjoyed sharing opinions with nearly all of them. Even the occasional skirmish with weaponised handbags. Personally speaking I remain optimistic, as news is expected over the next 50 days re ex-CERP assets on MANY fronts and Percy-1 tech analysis. I’m willing to risk millions of shares at only 0.63p as the risk is now spread on various fronts: good news vs bad is no longer a binary win or lose anymore.

Linton, please PM me.

All IMHO. DYOR. GLA.

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

Yesterday’s RNS was deeply disappointing to BPC, its shareholders, and most of the silent majority Bahamian people who have suffered a hurricane and pandemic. And me. So I topped up by several million to lower the average loss as I believe it is hedged for reasons that follow. BTW, 719,251,071 shares changed hands yesterday in 4376 trades, plus Aquis exchange. So in round figures 800m. Even the most pro-BPC commentators foresaw a knee jerk reaction to 0.5p on a duster. However, Percy-1 was NOT a duster.

A few personal observations, assumptions and opinions:

1. Oil plus data minus dust = $,$$$,$$$
There IS oil but with current technology and PoO at that location not commercially viable today. The data and samples are worth money to an oil major. BPC has spent $130m getting intel from a frontier region. What if we were first in Guyana with the same result? It is possible over the next few months, majors will seek exclusivity to look at the data and pay for the privilege, possibly leading to Farm-in discussions. This is implied in the RNS but not spelt out [My emphasis in caps] …..

‘…….. The Company considers the results…… notably the CONFIRMATION of migrated OIL…… will significantly REDUCE technical risk for any future/further exploration in this new FRONTIER province. In particular, BPC considers that the results….may provide a STRONG technical basis for renewed FARM-IN DISCUSSIONS, with a view to FUTURE DRILLING at other target locations within BPC's licence areas…... ‘

I believe we will know more by April, because as I read it, ‘there’s more gold in dem hills’.

2. Ex-CERP
I only became a CERP shareholder after the proposed merger announcement. Here lies the potential for both BPC and ex-CERP LTHs, who have not called it quits yet. Today BPC has $12.5m cash before having to pay Stena an undisclosed final payment, legal fees for the JR and LO’s reconciliation payment if any. Based on the way LO has behaved, I hope BPC doesn’t pay a dime and invites LO to sue.

Based on WTI PoO being $58, I assume BPC is making a small monthly surplus. Why? BPC has stated op-ex excluding cap-ex is c$4m/year (before Leo left), and $20/b extraction costs for c500/b per day. Do the maths but don’t forget T+T Gov royalties.

BPC has stated it needs $20m cap-ex to fund T+T and Suriname. Some has probably been spent already and reflected in the remaining $12.5m cash BPC has now. This means funding is needed but not in one go. Even if funding was done in stages for 1.5b shares in future, resulting in Cap-ex to generate 2500b/day by year end at say $55 WTI, the SP should IMHO recover to 2p+ in 2022.

I believe for LTHs it is not the end of the story, but the beginning of a new chapter. For newbies who joined us yesterday sensing a bargain in the short to medium term, welcome to the family.

All IMHO. DYOR. GLA.

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

I have merged my Sunday posts so you can make your own informed risk management decision whether to buy, hold or sell BPC shares.

Firstly read two analysts’ reports, and watch a 9 minute interview.

(a) Investec 8/10 https://www.yumpu.com/en/document/read/64836057/bahamas-petroleum-company-investec-buy

(b) Actus 8/12 https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/12/08133633/Auctus-BPC_IOC_08.12.2020.01.pdf

(c) Proactive Feb 2020.Watch analyst Dr Zac Phillips’ 9 minute interview https://www.youtube.com/watch?v=rQT-xRi6JbI&feature=youtu.be (Although it’s a year old, many points are still applicable today)

Now use the flow diagram of rhetorical questions below to make your decision whether to take the red or blue pill:

1. Will BPC find the minimum 150m-200m barrels of commercial quantities of oil from the Percy-1 well? If no, go to 3.

2. Will there be a massive find of 770m – 1.44b? If yes, ‘STRONG BUY’, take the blue pill and go to 8.

3. Will ex-CERP assets regardless of the Percy-1 result create a potential £250-£300m BPC MC from these assets alone? [Refer to analysts’ reports above]

4. Regardless of Percy-1 result do you have confidence BPC will meet its ex-CERP target of a minimum 2500/boe a day, and $15m free cash-flow per year starting late 2021? If yes, go to 6.

5. Let’s say Percy-1 is inconclusive and BPC has to raise £15m/$18m (out of $20m needed) to develop ex-CERP assets via a last resort horrible CLN at 1p for 1.5b new shares, resulting in c6.2b total shares. Do you accept the analysts’ reports above, even at half their market cap estimates, (ie, £125m-£150m) is probable in 2021/2022? If no, go to 7.

6. If Percy-1 is announced as being non-commercial, the SP will plummet until ex-CERP positive news materialises. This could take weeks or months. Will you attempt to sell and buy back at a cheaper price? Whether yes or no, go to 8 and take neither pill for now.

7. If you don’t have any BPC shares, you’re lucky. Don’t buy any. If you have shares…substantially de-risk or SELL them all prior to the Percy-1 result which could be anytime from now until a few weeks’ time. Take the red pill.

8. DYOR and good luck. End.

Key points: I recently O/Dd on blue pills, increasing my BPC shareholding by a few million because I am of the opinion at the current low SP, SUBJECT TO PATIENCE, WE ARE FULLY HEDGED. No casino in the world would give me such massive odds on a win, yet potentially return my stake in FULL on a loss subject to patience for 1-2 years. (And offer a free side bet on the Uruguay spud). But that’s my opinion and I could be wrong. Furthermore, this post will be totally irrelevant if Percy-1 is a success.

GLA.

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

Ps: If you are upset at the way LO has treated BPC, make a public statement by ADDING an extra 333 shares to any BPC buy or sell trade until end of the week. (<£7)

Short-term decision flow diagram (updated 14:44 7/2/21)

Please refer to my original post this morning. In hindsight based on some posts since, I should have added a ‘worst case scenario’ in the decision flow of rhetorical questions to ascertain risk management and whether we are fully HEDGED with ex-CERP assets. So let’s assume…………..

(a) Percy-1 is announced as being non-commercial or a duster. In fact, there wasn't a drop of oil shown, only dinosaur wee-wee and a dead lobster.

(b) The final Stena IceMax invoice (including service charge and tip) is more than expected, resulting in remaining cash reserves of $2m after payment.

(c) Ex-CERP continues to produce at c500/b day as now, WTI only $50, so operating expenses/salaries of $4m/year (minus Leo) only has a small surplus. (BTW original CERP PLC did not).

(d) Not having the full +/- $20m to develop ex-CERP assets as there’s only $2m in the bank.

(e) Not being able to borrow for infrastructure or via reserve based lending (ie, conventional loans). In fact when asking for loans, the bankers fall about laughing to add insult to injury.

(f) Having to use a CLN at a horrible rate of 1p/share for 1.3b shares, ie, £13m/$18m. (BTW, our Harry would be close to having an aneurism and reach the number 1 position in pumpedordumped purely on the 60 posts a day he would write for 3 months in outrage)

Result of the hypothetical nasty scenario above based on analysts market cap opinions I linked to this morning? 6b shares in circulation still creates a potential £250-300m market cap company, but divided by 6b shares which equals 4p-5p SP subject to patience. Let’s be even more pessimistic and assume the professional analysts wrote their opinions under the influence of whacky backy. Let’s say they were wrong or exaggerated by 100%.............

Result: £125-£150m MC or 2-2.5p SP, subject to patience.

Bottom line: I increased my shareholding in BPC by a few million in recent weeks because I feel SUBJECT TO PATIENCE, WE ARE FULLY HEDGED. No casino in the world would give these odds on a win, yet potentially getting our stake back in full on a loss subject to patience of 1-2 years.

IMHO. DYOR. I invite comment. 'See' you good folks tomorrow. Have a nice evening.

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

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