George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Hallowed: I am not here to do research for anti-CEG commentators, who will spin whatever I write with even more negativity. DYOR. However on this occasion, re the 4000boed peak production and 1000-1500boed, refer to 14/7 RNS, ‘development of Saffron’ para. Source https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/x2gozlw . You will note the 1000-1500 is dependant on an initial 5 saffrons minimum
All: note sentence………………”Focus now turns to integrating what we have learned from this well, to updating our resource estimate accordingly, and to defining the best way forward for the project as a whole - building production and cashflow remains our overarching strategic imperative. We will keep shareholders appraised of material developments."
It implies an updated CPR is soon to be released.
Refer to my previous post.
GLA
Starchild
https://www.lse.co.uk/profiles/starchild
Today’s Saffron 2 RNS https://www.londonstockexchange.com/news-article/CEG/appraisal-update-saffron-2-production-test/15110546
Highlights
A commercial production rate (81 bopd) has thus far been established at Saffron-2, from approximately 66 feet of Middle Cruse reservoir units; produced oil is already being sold and generating immediate revenues for the Company
· To maximise near-term production income additional clean-up, testing, and optimisation of producing zones is currently underway; the Upper Cruse reservoir units also remain to be perforated and produced
· The Lower Cruse reservoir units exhibited good pressure and produced high-quality oil (480 API), but testing of these zones was halted due to the impact of mobile shales on the well bore; these lower zones have been isolated from the currently producing horizons, capable of being re-entered for future remedial actions in support of production
· Well data and projection of aggregated well performance is being used to reassess overall Saffron field resources and economics, with work underway to determine the optimal forward plan for development of the Saffron project as a whole
Observations:
The total oil sands in lower-middle-upper is 300-370 feet and the Middle Cruse formation only has 66ft of various Middle Cruse sands. It is producing 81boed. This is in round figures $1.75m/year gross revenue @ $60 Poo. Approx. half is free cashflow.
The lower cruise needs TLC engineering skills, either eventually at Saffron 2 or a Saffron 3 to get production from the lower cruise.
Had it been proven the lower cruise had no oil, and unlikely anywhere else in the SWP, it would not have been good. However oil is being generated and earning money out of only 20% of total sands. Best analogy I can think of is Percy-1 having discovered 150m boe which was the minimum for commercial investment, without knowing whether any oil was at the Jurassic level.
I’ll be interested to see Malcy’s and Proactive’s take on this later today.
GLA
Starchild
https://www.lse.co.uk/profiles/starchild
ps: there was never a prediction of 4000boed by year end. It was a multi-saffron peak production figure. I believe the aim is 1500 boed by year end.
What is CEG’s fair market value considering CERP merged for £24m in a fire sale when PoO had collapsed? To help answer this, it is good to watch 2 recent presentations:
Eytan’s Proactive 29 April one. 31 mins. https://www.youtube.com/watch?v=oEl4lw107OA and his QA session 6 May, when the SP was c3.15p. 38 mins https://www.youtube.com/watch?v=97B0ZuskdrI
An interesting comment in the 2nd presentation was the timeline for knowing and resolving Percy-1 final debt bills,… ‘I hope by June/July’ …. after Saffron 2 result. The date has slipped, but I assume we will know soon after the S2 result.
Other points
On 25/3/20 BPC’s SP collapsed when it issued a force majeure notice to the Gov to delay the planned Percy-1 spud. The SP went from a 51.7p high on 25/2/20 to a 9p (adjusted) low on 21/4/20.
On 26 /5/20, the Stena drill contract was announced (source https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/rdzqj8w ). It caused the SP to increase to a high of 33.44p (adjusted) within a week. A more than 360% increase in 5 weeks. (SP source: https://finance.yahoo.com/quote/CEG.L/history?p=CEG.L )
I am not suggesting a decent S2 result will make the SP increase 360% to 6p. However, AIM is known for traders that pile into a share when the going is good and piling out when it is not (and for profit taking). IMO, the current ultralow price is not because CEG is worth a measly 13m MCap (when CERP was merged for almost double that in a fire sale), but because lack of news and low volumes has helped a tiny group manipulate the SP down for derivate/CFD profits.
Richelieu:…. ‘Why do you think derampers tend to spend day in day out on various BB? To make money’…. On Sunday you made some valid points. Negative posters on here are generally grouped into emotion and motive:
Demographics
• LGO holders, the daddy of CERP, who lost money due to a mega dilution since 2015
• CERP holders who lost money due to the BPC merger in 2020
• BPC holders who lost money due to Percy-1 in Feb 2021
• New holders since Feb 8, including those who participated in the OO/Placing
Today, all the above are sitting on paper losses. Some continue to hold or sold out and occasionally air their frustrations aimed at the BoD via this BB which is their right. However, I suspect some bombard negativity for financial gain because they are shorting CEG via CFDs. On the flip side, in 2020 there were some amateur cheerleading pump/dump/pump/dump traders. They bombarded positivity, then negativity until flipping again. The most blatant were allegedly banned. Those who collude with others to do so on BBs risk prosecution.
DYOR. GLA
Starchild
https://www.lse.co.uk/profiles/starchild
Thebhoys: you are totally off the mark again. I invested in 10m shares in the Placing NOT the OO. Options in an OO have percentage limits based on someone’s holdings. Placings do not. I participated in both.
Antha: You are trying your very best to publicly analyse my wealth or lack thereof. So, in total transparency I’ll publicly provide you my logon credentials to all my banks and trading platforms worldwide, as they are the same:
Please note, all are case sensitive
• PW = DontBeNosy
• Name of first pet = Godzilla
• Mother's maiden name = Boadicea
• First school = GrimsbyBorstal (from aged 5-18 for chopping the hand off another kid for stealing my Jaffa Cakes)
• Place of birth = Uranus
• Memorable word for password reset = Gerbil
Age/DOB = ItDepends. (….on how old you want me to be. The younger, the more it will cost subject to minimum hourly rates and the age of consent)
‘Bottom’ line: I suggest you look up shareholding disclosure parameters during M&A. It is NOT 3%. I have NOT invested £1.2m in CEG. I am NOT sitting on an £880k paper loss. I do NOT hold 20m shares (yet). Had this been the case at an average of <6p, every opinion I recently posted would still stand and although risky, I would be quite comfortable doing so at <6p based on how I see CEG’s medium to long-term future.
Have a nice day. I have more productive things to do for the rest of my day.
Starchild
Anonymity: some feedback to your points.
Had the SP not been manipulated by shorters during very low trading volumes, it would likely have remained at around the 3.5p OO/Placing price. I considered the 3.5p price discounted and so did other subscribers. We were not under a collective hypnotic trance. Placings can fail if not seen to be at a discount. Some commentators (even the anti-BPC Oil Man Jim) believed the SP could increase leading to the S2 result subject to funding certainty.
I therefore considered <3.5p artificially low and a possible bargain, so I bought >2m shares since the placing at between 1.625p-2.72p. I did so in 11 trades spread over several weeks to hedge in case the SP went lower for the above artificial reasons which it did. It annoys me that stock market rules allow a tiny group of traders to buy £20-40k worth of shares, sell them at a 5-10% loss, earn profit by shorting them, buy, and repeat. But I saw their game as an opportunity. Had the SP stayed at around 3.5p pending the S2 result, I doubt I would have purchased those 2m+ shares.
Just to be clear I did not top up to ‘lower my average’, although now being at less than 6p, is an indirect consequence. I now see CEG as 4 separate investments for me and possibly some other LTHs:
1. Pre-Percy 1 result
2. Between the result and placing
3. The placing/OO itself
4. The 2m+ shares I bought since.
As I see it, if all the CEG ducks line up in a row OR a Bahamas farm-in happens, I could earn a 7 figure ROI. If only some ducks survive, I could still get a decent 6 figure ROI. If all the ducks get shot, I’ll lose money and keep the shares in the bottom draw until I can de-risk in various stages over 2-3 years to minimise losses. I’m willing to take the risk but strongly urge others to DYOR.
To add one more justification to the nine yesterday, why I subscribed to the OO/Placing and bought more since………
10. Precedent. Since BPC’s inception every placing or OO has exceeded the offer price at some point or was indemnified (Lombard). There is one exception. On 4/2/11 BPC’s SP peaked to 23.21p, worth £2.32 today (MCap £229m!) when PoO was $110/b. In March/April 2011 a placing was done in 2 chunks to raise £45m. This was at 18.75p, worth £1.875p today and is the only time in BPC/CEG’s history an OO/Placing has never reached the issue price afterwards; ever. PoO collapse soon after didn’t help.
If there’s no RNS next week and the SP gets artificially manipulated even lower, I plan to buy more. IMHO, the S2 result will minimally be ‘OK’ rather than a total disaster as S2 is S1’s twin and one of the justifications of the CERP merger was BPC’s engineering skills.
GLA.
Starchild
https://www.lse.co.uk/profiles/starchild
NEWS FLASH: The Bahamas Government did something they said they would never do: called an early General Election. It will be on 16 Sept. IMO if the opposition comes into power, it will be to CEG’s advantage.
I bought another 450,000 shares yesterday and approaching disclosure territory under rule 8.3 if M&A is on the cards.
I did so because I believe…..
1. They were cheap.
2. A Saffron 2 RNS will very likely be issued soon.
3. It is unlikely the news is bad otherwise it would have been disclosed already, NOT 2 weeks later to hide it.
4. CEG is earning approx. $10m gross revenue @ $60 PoO and is not broke.
5. The disputed Stena debt is manageable and CEG must have a plan otherwise Arena would have fallen about laughing at the idea during initial due dili, rather than signing a term sheet @ 4.2p.
6. Alternative funding is a possibility, even farm-ins for SWP instead of the ‘have your cake and eat it’ Arena deal.
7. A Bahamas farm-out would add a giant dollop of jam on the bread and butter.
8. IF the S2 news is bad (unlikely), and it is believed there is very little hope of monetizing the Bahamas asset, we may have a friendly or hostile merger on the cards.
9. If M&A applies re point 8, it must be at a premium to seduce those that paid 3.5p in the OO/Placing including me, otherwise it is unlikely the 75% vote will pass. If a marriage was forced upon me, the prettiest, most intelligent, and wealthiest girl in town is TXP. (Note for Touchstone’s lawyers: that was meant to be a compliment). TXP could issue new shares for our CEG ones (similar to BPC/CERP) and based on its offshore presence could leverage a solution to the Stena problem it would inherit.
LGO-fan: your comment….’any increase in SP following a positive/ok result from S2 is likely going to be offset by the dilution cause by a likely equity raise to fund S3 and onward’… I don’t mind some dilution at the asset or share level to pay Stena (to conserve cash) and fund growth (to create cash).
IceMax: Although I do not agree with many points you raised about Auctus on Friday, you provided an in-depth cerebral fair opinion. However your Thursday post was somewhat typical of the one or two liner anti-CEG comments churned out by shorters and angry ex-holders, hence my sarcastic reaction. Sincere apologies if my tongue in cheek Braveheart clip in Auctus’ defence, caused offense.
I totally agree this BB should not be used for personal attacks. I am on the receiving end of many because I generally post upbeat researched commentary and do not aggressively publicly criticise the BoD. I consider it bad form to do so against persons who cannot defend themselves. The same applies against commentators who are no longer permitted to post on here, some of whom I had major disagreements with. All said and done, I am not suggesting BoDs of public companies should not be publicly criticised, however if I had a major issue, I’d sell my shares and move on, or if I had a substantial holding communicate with the company privately. And in exceptional circumstances, organise a shareholders’ mutiny.
DYOR. GLA.
Starchild
https://www.lse.co.uk/profi
Icemax: your comment yesterday…. ….’But the Auctus note was one of the worst I've seen. Not only was it massively out of date even when published, the address of the company's financial viability at the time was simply shocking in it's lack of detail. Complete toilet paper….’
Point noted, however perhaps you can kindly elaborate on your professional/academic analysis expertise compared to Auctus before giving us such dramatic unsolicited advice as an expert ‘counsellor’. Without causing offense (and tongue in cheek), I believe this 1 minute Braveheart scene may come to Auctus mind if they read your informed post. https://www.youtube.com/watch?v=4S7QARslq74
All: my TXP ‘comparison’ post yesterday was to justify that the 2 Auctus reports IMO had merit in terms of future potential CEG SP projections of £100m MCap with S2-S4 on stream (April 2021 report) and £220m-£320m (Dec 2020 report). Any implication I was trying to justify that CEG should be at those TXP levels now, is totally FALSE.
The current SP having lost more than half its value since the ‘discounted’ 3.5p OO/placing due to manipulation when trading volumes have been very low, is IMO ARTIFICIAL. Watching a SP decline so quickly for no news-based reason is extremely frustrating to holders and a joy to shorters. However, there is one and only one benefit: If you believe the S2 result will be satisfactory or better, the SP will increase, so BUY at bargain rates. If you do not, then hold or sell.
My assumption, which should NOT be taken as unsolicited advice, is the S2 result is OK and delays are being caused because of funding negotiations for S3+, and possibly a mini-CPR is awaited.
Yesterday I purchased another 200,000 shares at 1.625p but am not suggesting anyone tops up based on my assumptions. Had the SP not been manipulated by shorters, I wouldn’t have bought shares between 1.625p-2.725p since the OO/Placing both of which I substantially participated in. If I’m wrong, I’ll lose more money. If I’m correct anyone buying now will do well.
I will ignore the recent deeply offensive posts against me for now.
GLA
Starchild ‘the desperate fool’
https://www.lse.co.uk/profiles/starchild
Icemax: your comment yesterday…. ….’But the Auctus note was one of the worst I've seen. Not only was it massively out of date even when published, the address of the company's financial viability at the time was simply shocking in it's lack of detail. Complete toilet paper….’
Point noted, however perhaps you can kindly elaborate on your professional/academic analysis expertise compared to Auctus before giving us such dramatic unsolicited advice as an expert ‘counsellor’. Without causing offense (and tongue in cheek), I believe this 1 minute Braveheart scene may come to Auctus minds if they read your informed post. https://www.youtube.com/watch?v=4S7QARslq74
All: my TXP ‘comparison’ post yesterday was to justify that the 2 Auctus reports IMO had merit in terms of future potential CEG SP projections of £100m MCap with S2-S4 on stream (April 2021 report) and £220m-£320m (Dec 2020 report). Any implication I was trying to justify that CEG should be at those TXP levels now, is totally FALSE.
The current SP having lost more than half its value since the ‘discounted’ 3.5p OO/placing due to manipulation when trading volumes have been very low, is IMO ARTIFICIAL. Watching a SP decline so quickly for no news-based reason is extremely frustrating to holders and a joy to shorters. However, there is one and only one benefit: If you believe the S2 result will be satisfactory or better, the SP will increase, so BUY at bargain rates. If you do not, then hold or sell.
My assumption, which should NOT be taken as unsolicited advice, is the S2 result is OK and delays are being caused because of funding negotiations for S3+, and possibly a mini-CPR is awaited.
Yesterday I purchased another 200,000 shares at 1.625p but am not suggesting anyone tops up based on my assumptions. Had the SP not been manipulated by shorters, I wouldn’t have bought shares between 1.625p-2.725p since the OO/Placing both of which I substantially participated in. If I’m wrong, I’ll lose more money. If I’m correct anyone buying now will do well.
I will ignore the recent deeply offensive posts against me for now.
GLA
Starchild ‘the desperate fool’
https://www.lse.co.uk/profiles/starchild
Refer to TXP 13/8/21 RNS https://www.touchstoneexploration.com/wp-content/uploads/2021/08/August-13-2021-Q2-2021-Financial-Results-and-Operational-Update-TSX-FINAL.pdf
TXP basic summary, NOT a deep dive: In the last 6 mths it averaged c1400boe/d while appraising some large oil/gas discoveries. TXP has $11m cash, access to $20m funding and drew a percentage towards its current cash. 65m boe 2P reserves 31/12/20. MCap is $285m CAD and was >$550m 6 mths ago. This is c£160m / c£315m.
CEG summary: average 450boe/d. If S2-S5 produce 200+boed each, it will be the same as TXP today, excluding Suriname. CEG is negotiating access to $17.5m in funding although I DO NOT LIKE THE DEAL and prefer JVs. On 31/5/21 CEG had $10.7m cash and has a disputed $7m-$14m Bahamas debt which when resolved could be paid in shares, leaving cash for growth. CEG too has potentially large discoveries of >200mboe in the SWP, which S2 will help towards de-risking. And a potential Bahamas farm-in. 1.3m boe 2P reserves. Its MCap was £14m last night.
Rebuttals to yesterday’s negative posts
1. I am not a pro-analyst and rely on experts such as Auctus to provide opinions as part of my DYOR and research. Auctus are connected to Investec, CEG’s joint broker which is no secret. Auctus openly states in disclaimers that it receives payment for services. This does not mean they are paid to mislead, lie, exaggerate, or twist facts borderlining on corruption. Auctus make a case and do not pick numbers out of hat. If they did so, they would lose credibility and possibly their right to provide opinions to clients. The reputational damage would spill onto Investec, an international bank, broker, and wealth advisor.
2. As for the Auctus reports being out of date, this is simply NOT true. The underlying facts are the same, the difference being shares on issue. In fact Auctus were conservative in their PoO outlook. I therefore converted to MCAP rather than using an out-of-date SP based on the then shares. It is simple maths. Based on TXP, if ALL ex-CERP assets line up, why can’t CEG be £220-£320m in 2023 as stated?
3. I was criticised for……’what's the point of giving Galvy an honest overview (which he asked for) without also saying the negatives, i.e all the debts (many millions) CEG owes to various parties’…… I totally resent the inference to dishonesty. I’ve made it clear in several posts, including today about legacy debts. It is NOT a secret. I cannot fit every variable in the 3000-char limit per post.
As part of DYOR, read the following ‘alternative viewpoints’ by ex-holders, some of whom may be shorting CEG. However, you will find very little research other than negativity and attacks.
https://www.lse.co.uk/profiles/antha/
https://www.lse.co.uk/profiles/zagegypt/
https://www.lse.co.uk/profiles/jono44/
https://www.lse.co.uk/profiles/johnbriggs/
Compare their ‘analyses’ to Auctus reports and make your own minds up.
GLA
Starchild
Galvy: your 2 questions were to the point and very good… ‘what does this old dog have going for it today that LGO or BPC couldn't make a success of in the past? I would really like to see this company succeed and I'd love to recoup the significant losses I made with CEG's grandparent. Can it do that?…’
All current holders and potential new ones initially waiting for the S2 result have similar questions including me.
I’ve been a BPC holder since 2014, a CERP one since July 2020 and now have several million CEG shares. This is not a boast, as I’m currently sitting on large paper losses as are others.
OO/Placings are bad and very dilutive if it is to pay debt, for survival or to pay the cleaning lady. They are good and less dilutive if capital is being raised for investment, expansion, or acquisition. This is like any IPO and generally well received. 10 yrs ago when PoO was $100/b+, BPC raised £46m from IIs @ 18.75p (£1.875p today) source https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/xpmmejx
A key 26/3/21 RNS explains CEGs potential. Instead of a high risk/high reward Bahamas mega drill, it’s lots of little risks/little rewards which if added together can be substantial cashflow. Refer to https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/ry4n3kr Summary below based on $60 PoO:
a) CEG is earning c$3m/yr free cashflow to pay the bills inc $4m/yr G&A.
b) $1m capex for incremental production. Success = 100 bopd = $1m/yr free cash. (ROI 1 year)
c) $3m capex to spud S2 Trinidad. Success = 200-300 bopd = $2-3m/yr free cash. (ROI 1 year)
d) $2.5m capex to spud Suriname including an EWT ($700k). Success = 500+ bopd = $2.5m/yr free cash. (ROI 1 year)
e) Saffron 3, 4, 5, 6, 7, 8, 9 full-field dev (2-3 yrs) 4,000+ bopd $25m+/yr free cash. Capex <$60m. (ROI 2 years).
f) Infill drilling programs 200 - 400 bopd $3m - $4.5m/yr free cash. Capex <$6m. (ROI 2 years)
g) New Biz dev opportunities 100+ bopd $0.7m/yr free cash. Capex $2.5m - $3m. (ROI 4 years).
Summary
1. If all the CEG ducks line up in a row = £220m-320m MCap potential: (Source Auctus pages 1, 17 and 18 https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/12/08133633/Auctus-BPC_IOC_08.12.2020.01.pdf )
2. If just 3 Saffrons succeed, Auctus stated a potential £100 MCap (Source 27/4/21 https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/04/28113530/Auctus-BPC-27.04.2021.pdf )
3. The above excludes a future Bahamas farm-in, possibly leveraging Uruguay. LGO/CERP did not have those assets.
I prefer SOME expansion with JVs at the asset level. 75-25 until capex paid, then 25-75% splits in CEG’s favour. Mini farm outs rather than RBLs, OOs or placings. This would likely increase the SP (confidence re no placings), and with a higher SP, CEG can leverage a Stena deal involving shares which would help it retain several million $$$.
DYOR and GL!
Starchild
https://www.lse.co.uk
Wotitsworth: I believe the results are known, unless the testing had temporary delays due to clean-ups, rig malfunctions etc.
Without appearing to defend anyone, assuming the results are satisfactory or better: further delays could be because a mini-CPR is being done and/or CEG is finalising a funding deal and/or it is analysing production over an extended period on the insistence of the funding provider.
The alternative is S2 TOTALLY failed the tests, but I doubt CEG would sit on this news. There's no point and anyway S2 is S1's twin so some oil can be extracted from 300 - 370 feet of oil bearing sands, rather than zero.
Yesterday's RNS had to be issued because it was in the public domain about the court case on friday. I do not believe it was a timed deflection to hide very bad imminent S2 news. Again, there would be no point.
GL
Starchild
As expected, ex-shareholders and admitted CEG shorters who regularly post negativity were all out in numbers. Their aim was to justify why a decent RNS was not. The same folks will probably do the same if S2 is a success, with Vicky Pollard type comments such as …’yes but no but in a few weeks the oil flow will diminish to one boed’…and…’yes but no but a placing is coming at 0.01p for a gazillion shares to pay Stena.’
‘Hostile bid’
One flawed argument was why a major would pay millions in a farm-out, when they could buy CEG for $20m in a hostile bid. Rebuttals:
1. Oil majors do not bully their way into buying tiny oil companies in hostile takeovers to avoid paying for farm-outs. It would be a PR disaster. If anyone knows an example, please share!
2. The hostile bid would have to be much more than the MCap and higher than 3.5p anyway. In May, 3B shares were issued @3.5p and I doubt those holders would vote yes for less.
3. CEG would defend its position with the key argument, ‘we told you Bahamas has monetization value as proven by the major’s hostile bid. Vote no and we’ll find another major yet retain control for holders.’
I am not saying at the current SP a hostile bid is out of the question and recently posted about this. However it will not be from a major to get Bahamas acreage on the cheap. If I am wrong, enjoy the SP surge while the matter is being publicly argued!
The only major financial gorilla in the room is the legacy Stena debt. $7m of the $14m is disputed. On 31/5/21 we knew CEG had $10.7m cash, probably including $4m due to LOL in June. If the matter goes to court (which will take ages) and the court orders CEG pays $14m, then there may be a problem if S2 failed and S3-S5 never spudded. This would possibly lead to a CERP type amicable merger with a regional player. At the other end of the spectrum is a Stena settlement involving shares, which means CEG will retain millions in cash for growth.
‘Hostile’ QC
Refer to http://www.tribune242.com/news/2021/aug/16/activists-new-court-filing-over-oil-drilling/?news (thanks LLL). Note Smith QC is legal director of save the bays. Furthermore I find it strange he openly admitted one of the reasons to injunct was for publicity. IMO, CEG has grounds to sue on its behalf and separately for its shareholders’. Due to the attempted injunction being timed when it was, CEG had to borrow at punitive rates vs 2.5p and holders who planned to de-risk some of their shares at a profit during the spud could not.
My take?
1. Yes but no but if S2 is OK, and no but yes but if it aint. And yes but no but I caught my boyfriend snogging that cow Stena behind the school wheelie bin. And I got that Smithy bloke to write him some evils and take an injunction in the Clapham high court thingy for the global publicity.
2. I found yesterday’s RNS positive and look forward to the S2 testing results.
Yes but DYOR
Starchild
https://www.lse.co.uk/profiles/starchild
the market's response? Someone shorting CEG sold £1751 on open, and during very low trading lowered the bid/buy to 1.60.
why did they do this?.....
.....so that anti-CEG persons, paid posters (if applicable) or other shorters can artificially influence sentiment in an attempt to bring down the SP so they can make money on CFDs. KARMA.
This has been going on for several weeks during extremely low volume trading and NOT a mega sell-off based on bad news! Refer to my recent posts
Starchild
Correction and apology
Based on today’s RNS, if we get another RNS in a few weeks stating a major is in the data room, it will have a major impact. However I wish to issue a correction and apology to recent posts on the matter, in case this happens out of the blue:
I have stated over the last few months that BPC’s MCap peaked at £154m in Aug 2018 when a major paid for exclusivity in the data room. The actual figure should have been £100m+ on 9/8/2018 when the SP hit a 6.2743p high, as there were 1,570,079,096 shares on issue. Converted to the adjusted 789,252,392 shares on issue today, a £100m MCap equals 12.67p but this excludes the uplift to MCap based on ex-CERP assets. Arguably we can add a minimum 2p (£15m) to this figure today. And should another major have exclusivity to the data room, take the MCap of the morning of such an announcement as a base figure to add to the potential £100m/12.67p SP. (Sources: share count https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/xlm223r and historical SP https://finance.yahoo.com/quote/CEG.L/history?p=CEG.L > download 5 year spreadsheet)
I based my original calculations on less shares on issue. I apologise for this mistake.
GLA.
Starchild
https://www.lse.co.uk/profiles/starchild
PS: Johnbriggs: I believe you are an angry ex-shareholder. Why do you post here?
Today’s RNS key points, observations with commentary/clarity in [ ]
1. ‘ the [enviros] applicants have now withdrawn from the [Bahamas] action entirely. Consent Orders to this effect have been agreed between the applicants, the Company and The Government, and were endorsed by the Court on 13 August 2021, such that the matter has now ended’ [I hope CERP sues them for damages mainly costs. What about the destruction of the SP which caused BPC having to take out the punitive Lombard deal?] …. Keep an eye out in the Bahamas press.
2. Opinion: The timing of the RNS was because the case was concluded on Friday, and IMO NOT because CEG is trying to deflect from S2. CEG needed to update the market before the press did.
3. ‘The Company expects to be able to post this [Percy-1 autopsy] report to its website during September 2021, once appropriate prior notices to, and engagement with, the Government of The Bahamas has occurred’
4. ‘Petrophysical analysis of the well logs have confirmed high quality reservoirs down to the base of the well with no significant deterioration in porosity with depth, indicating the potential for high deliverability reservoirs in the underlying Jurassic formations’. [good]
5. ‘In aggregate, the analysis of the data from Perseverance-1 drilling is broadly indicative of increased potential for oil in the underlying Jurassic interval (which was not penetrated by Perseverance-1). In particular, the relatively cool well temperatures place the postulated Jurassic source rock (producing in nearby Cuba and the US Gulf of Mexico) in the oil window, thus oil generative.’ [good]
6. ‘Ultimately, the technical findings from P1 support a forward program to include further biostratigraphic analysis, fluid inclusion analysis, and selective re-processing of 3D seismic to further educate sequence stratigraphy and seismo-facies of the deeper Jurassic horizons. This work will underpin an assessment of the merits of a further exploration well in the future, both to continue to assess Aptian horizon potential, whilst at the same time targeting the deeper Jurassic intervals’. [good]
7. FARM-OUT..’a number of parties having expressed interest and engaging with the Company. A technical data room has been established, with due diligence underway. Further updates will be provided as and when appropriate.’ [Excellent. DD shows serious intent]
8. LIC STATUS: [IMO, CEG has implied why it disputes the fees. What is very good is the Lic has NOT been terminated, otherwise no point in farmout data room. I like the inference about the election which I read as ‘we hope a new Gov will be in place in May’!]
I too wish BPC had gone deeper, but the original budget in April was to drill for 30-45 days (with EA approval given to do so). Had commercial quantities been found at higher depths, they may have.
Tiburn and LTHs: your views please!
I like the RNS
GLA
Starchild
https://www.lse.co.uk/profiles/starchild
Since the Percy-1 result on 8/2/21, the highest the SP has been is 7.2p and the lowest 1.7p. The lowest anyone has ever bought was @1.725p on Friday. This was less than half the OO/Placing price. Had the 3.5p price not been set at fair levels and at a perceived discount, it would not have succeeded.
Those that took part did not do so out of philanthropy to help CEG pay its Bahamas debts (some disputed) nor was it an act of collective insanity. 60%+ were experienced IIs/HNWIs investors and not novices seduced by a corporate sales pitch.
I also took the view 3.5p was discounted and a fair price, so I participated in both the OO and Placing. No external event since, gave rise for the SP to lose half its value, eg a PoO collapse or the invasion of Trinidad. Neither did CEG issue any very negative RNSs. As such, after the placing from late June until Friday, I bought more shares in 12 trades the lowest being @1.7655p on Friday. The total was MORE than those I bought in the OO/Placing.
I did so for the following reasons and certainly NOT proposing anyone follows my lead or takes the same risks:
1. I absolutely believe the SP has been manipulated down and explained the mechanism and rationale in recent posts.
2. This leads me to the conclusion the SP / MCap is artificially low, and the market will correct to true value subject to news. If the news exceeds expectations the SP will likely soar. (Refer to my 12/8 04:20 post what happened to CERP’s SP after the S1 RNS in Apr 2020)
3. A SP manipulated down for artificial reasons brings upside opportunity.
4. If the news is not good, IMO CEG could be subject to a hostile bid at a premium, or the BoD may consider a merger in the event Bahamas monetization is a lost cause and the capex to develop ex-CERP assets out of reach or too punitive. Unless CEG’s finances are worse than expected, any M&A would have to be at a premium to pass a 75% vote.
5. Current c$10m gross revenue and ex-CERP assets have value even if S2 is a failure, specifically the SWP’s potential 200mboe+ which could entice a suitor. CERP merged in a fire sale during a pandemic when PoO had collapsed. I would argue those assets are worth substantially more than the 2020 merger price of £24m, purely on PoO predictions and SWP potential.
6. Ending positively, this is what could happen if all the CEG ducks line up in a row: (Source 8/12/20 pages 1, 17 and 18, when there were 4B shares. https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/12/08133633/Auctus-BPC_IOC_08.12.2020.01.pdf ) And this could happen if just 3 Saffrons succeed (Source https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2021/04/28113530/Auctus-BPC-27.04.2021.pdf )
The above is my view of CEG world today, warts and all. Again I emphasise DYOR as I could have read this wrong and do not profess to being a psychic.
Eytan: news please!
Antha: evidence/links please.
GLA
Starchild
https://www.lse.co.uk/profiles/starchild
anonymity: I agree with most of your commentary. Your to do list of awaited news is similar to my list from this morning.
The company may be constrained on some points for example; the amounts disputed with Stena or the Gov, if they are being negotiated behind closed doors. I find it strange when provisions are made in accounts for settlements, eg with the US or UK authorities, which kind of exposes how much the company believes it will have to pay, and lessens its negotiating position.
Since Eytan became CEO, news was regularly forthcoming until 28/7. We are all surprised no update has materialised for S2 nearly 3 weeks later.
Off to do family stuff. GL
Starchild
Ganners62: I note your observation that my recent opinions in this morning's 2 posts is ‘rubbish’. Perhaps you can explain what you would have done differently if you were the CEG BoD.
FTR, although I have not agreed with every decision the BoD has made (sometimes raising my concerns with BoD/senior management direct in private calls and emails), IMO there is nothing they have done or not done whatsoever, for me to lead or take part in a Hurricane Energy style shareholders’ mutiny. Before any such hypothetical and extremely unlikely event, the BoD would very likely hand over the baton to another leadership team anyway.
GL
Starchild