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Carscoffee: the link describing the Bahamas contract in some detail was on the old, pre-CERP merger version of the website in an FAQ section if I recall. I did quote from it a few times. Perhaps it's worth you emailing the company.

Starchild

Refer to the BPC Investec presentation https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/11/02093518/Investec-Presentation-29.10.20.pdf

Slide 5 states the 2025 goal of 100,000 Bopd from Bahamas.

1. 100,000 x 350 days = 35m boe per year. Possibly using 2 FPSO ships.

2. If there is 1bboe, it would take 29 years to extract.

3. Coincidently or otherwise, BPC’s contract with the gov is for 30 years.

Capital expenditure (assuming no farm-out)

4. If BPC needs 2 FPSO ships, where will it get $1.5b from? (source https://www.investopedia.com/terms/f/fpso-floating-production-storage-and-offloading.asp) A CLN from Trafalgar. (sorry that was a bad joke). It could lease a turnkey solution including personal. Example for simplicity: If the lessor earned $10/b, it would gross them $350m per year.

5. $1.5b? Why buy 2 new Rolls Royces when you can buy 4 used Fiats? A 25,000/day FPSO was for sale in 2017 for only $20m. See https://www.unlimitedoffshore.com/post/2017/05/10/converted-panamax-fpso-for-sale-in-sea . Buy 4. Do a paint job, replace the bald tyres, get a dodgy MOT from someone who wants a nice little earner….. and Bob’s your uncle. Key point: We can lease 2 good pre-owned FPSOs which would pass gov scrutiny.

Revenue/profit potential

6. $50 PoO and $40/b costs including leasing 2 FPSOs and Gov royalties: net BPC profit $10/b. 350 days/yr, equals $350m/£260m per year (@1.35 exchange rate).

7. If ex-CERP business pays all operating expenses, assuming £260m/year net profit, values BPC at £4.4B, or £1.10 per share. Why? Energy companies’ P/E ratio is 17x. However this is a simplistic and conservative valuation and doesn’t take into account NPV10, 2P reserves and future potential, for example Uruguay or Percy-2 nearby.

8. Corporation tax: Zero! This gives us an edge compared to the majors. Instead of paying 20-30% tax, BPC can grow the business or give it to us as dividends.

9. Dividends. If BPC has a 4% yield on £1.10, this is c4p per share. If you have 1m BPC shares, this would provide £40,000 per year income. That’s a nice little earner.

10. If PoO substantially over $50, the profit will be mega, market cap higher, and a better divi.

But what if Percy-1 is a duster?

11. The SP will likely TEMPORARILIY plummet to sub 1p and then recover based on ex-CERP assets. The BoD’s stated goal for end 2021 from Saffron 2 is 2000/bopd and Suriname 500/bopd. Refer to my post recent posts on ex-CERP assets acting as hedging insurance.

Bottom line: No casino in the world would offer chips at 3p, which if the bet is won would give a quick 8-10x return, with the possibility of a 35x or more in future. And if the bet is lost, the likely eventual return of the original stake, subject to some patience.

Conviction strong buy leading to spud.

All IMHO. DYOR. GLA.

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

This post is a simple summary of BPC’s pros and cons and aimed at newbies or lurkers. It explains why I invested since 2014 and will continue to do so.

BPC Positives

1. The BoD has a proven track record of success.

2. Approx. $140m would have been spent by 1Q 2021 on 2D, 3D, analysis, research, and a spud using a $1 billion state-of-the-art Stena drill ship.

3. Share price leading to spud and soon after is very likely to increase. Spud date is c15/12/20.

4. If commercial quantities of oil are found (minimum 150m bboe), SP will substantially increase.

5. If a massive oil field is found 770m - 1.4 billion boe, SP will soar. An RNS recently stated if 700m boe found, assuming $40/b PoO, NPV10 would be over $2.5b.

6. BPC could become a dividend cash-cow.

7. There is approx 1 in 3 chance of finding commercial quantities of oil. According to an article from 2018, this is 4 times better than the industry wild-cat average. http://www.tribune242.com/news/2018/jan/11/oil-explorers-success-prospects-four-times-better/

8. PoO is expected to increase to over $50/b >2021.

9. In Aug 2020 BPC merged with CERP for c£20m. According to management projections and recent presentation below, ex-CERP assets alone have the potential to generate $15m/year NET profit by end of 2021.

10. At the current SP assuming point 9 comes into fruition, even if NET profit is only $10m, IMHO shareholders are fully hedged 2022+. Refer to my post on 30/10 04:31 for a deep dive of how it is potentially fully hedged.

BPC Major Risks

1. No oil is found at Percy-1.

2. Not enough oil is found.

3. The wrong type of oil is found, eg, API too heavy akin to bitumen.

4. Ex-CERP asset revenue projections fail to materialise. Ever.

5. A close encounter of the fifth kind by an alien civilization.

6. If any of points 1 – 3 apply, and point 4 permanently applies, it will be a disaster for the company.

Key points: My family and I have several million shares. I became a shareholder in 2014 knowing full well the risks involved. In August 2020 BPC merged with CERP. I firmly believe the current SP is seriously undervalued as it will very likely increase leading to spud, will soar on Percy-1 success, yet be FULLY HEDGED in 2022+ if Percy-1 result is inconclusive due to ex-CERP assets. I have no reason to doubt the BoD’s financial projections and this will be clarified further following a competent person’s report/audit of probable ex-CERP reserves in a few days.

Read https://www.bpcplc.com/2020/10/29/bpc-presentation-to-investec/ and watch the 30mins Malcy interview https://www.youtube.com/watch?v=K8lIplrzbF4&feature=youtu.be

Above IMHO. Always DYOR or seek professional advice. GLA

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

In a post early yesterday morning, I stated………… ‘As opposed to the last week of November, I believe an RNS could be issued late THIS week virtually confirming ‘the ship is on its way.’ At the same time, the RNS may update us on whether Stena wishes to JV at the asset or share level, even though Stena has until 30/11 to do so……’ I then provided opinion why this may be the case, even though Stena has until 30/11 to make the JV decision.

However in hindsight, there is an alternative PERFECT scenario if Stena does not want the risk of a JV and simply just wants to get paid in cash, the traditional way of doing business. What if Stena agrees to a delayed payment for ‘a few month’s’ secured on ex-CERP assets? A de-facto RBL by the back door with no dilution for us? Here are the scenarios on the assumption we have $23m in the bank and Stena already has a copy of the CPR under a strict NDA:

1. The Percy-1 spud costs are estimated at $21-25m and $5m contingency. If costs are only $21m without the $5m, Stena to delay $5m payments to help BPC develop ex-CERP, secured in a type of RBL, even if Percy-1 is a duster. We will have $7m for development. Stena’s debt will be secure.

2. The spud is at the top range of +/- $30m and Percy-1 is a duster. But would it be so high if a duster? Stena agrees to $10m flexible payments. We will have $3m for ex-CERP development. Stena’s debt will be secure.

3. Percy-1 is commercial. Half the world will want to lend us money and the world’s oil major’s offering farm-outs. Eytan and Simon’s phones will be ringing off the hook. Stena’s debt will be secure.

So why would Stena even consider ‘playing-around’ with the above permutations as $10m to Stena is probably the cost of doing an annual service on its $1b IceMax ship? Because:

(a) It’s not a lot of money.

(b) The ‘debt’ will be secured.

(c) Stena already agreed to think about doing so, otherwise the 26/5/20 RNS wouldn’t have stated the JV options.

But most importantly……………….

(d) Stena could earn substantial revenue over the next few years if Percy-1 is commercial. Even if BPC ultimately does a farm-out, Stena could be contractually protected….eg…’Exxon we agree to the farm-out and as part of the agreed deal, you must spend at least $100m with our mutual buddies Stena, who helped us when we were a ‘tiny’ £225m market cap company back in December 2020!!!

Bottom line: This is possibly why the CPR is being done ASAP and timed when Stena needs to make the JV decision. My opinion is based on logical assumptions because all dates (CPR, CLN, Stena) seem to converge in the middle of November, and the business psychology at play.

All IMHO, as I may have misread the tea-leaves. If Stena does a JV or we get a farm-in by a major, the above opinion is somewhat irrelevant.

DYOR. Please refer to my previous posts on the matter. CONVICTION strong buy leading to spud. Have a great Sunday.

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

As opposed to the last week of November, I believe an RNS could be issued late THIS week virtually confirming ‘the ship is on its way.’ At the same time, the RNS may update us on whether Stena wishes to JV at the asset or share level, even though Stena has until 30/11 to do so. Why and what will be the impact?

1. Why? Refer to 25/9 RNS. If arrival to spud location date is 15/12, notice must be given at least 30 days prior, ie, 15/11! https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/xpl8n1w …………….

.....‘Stena has today provided a commencement notice to BPC, specifying as follows:

(i) Drilling rig: Stena IceMAX

(ii) Expected date on location: toward the beginning of the drilling window specified in the rig contract, which commences on 15 December 2020.

The specific mobilisation location and exact arrival date of the rig will be confirmed by Stena no later than 30 days prior to the arrival date. Anticipated well spud date will be some 3-4 days after the rig arrives on location in the field. This means that if the rig arrival is on or shortly after the 15 December 2020 (as per Stena's current indication), Perseverance #1 would be expected to spud prior to Christmas 2020….’

Cross reference with 30/9 operational update RNS https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/xl6el9x

2. It is unlikely Stena will formally give the required notice above and in the same letter state….’Hi BPC, we’re still thinking about the JV and anyway, contractually we have 2 weeks to procrastinate a bit more.’

Conclusion: Although some very cautious investors (such as institutional investors) may wish to wait until the above RNS is issued (and even pay a premium), IMHO, I believe the above news (or expected news) will have a very VERY positive impact to the SP next week as it will prove we are on the home straight. As for funding if Stena JV doesn’t materialise, mainly for ex-CERP development or for Percy-1 contingency IF required, I believe this will be somewhat irrelevant for the reasons described in my recent posts.

DYOR. Have a great Saturday.

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

It is interesting to note dates to form pieces of a funding puzzle, and then come up with conclusions.

1. Stena. Prior to 1/12/20…… ‘subscribe for up to $10m of new equity in BPC on the same terms as would apply in any BPC capital raising, OR …[10% JV Farm-in southern licenses]’. Source https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/rdzqj8w

Stena opinion: if they choose the shares JV the likely worst case scenario for $10m even if at 2.5p SP to match Bizzell, this would be @ $1.30 = £7.7m = c300m shares. Only 7.5% dilution. It is unlikely Stena would ask for this option with the intent to share-dump, otherwise they could have just asked for cash.

2. Bizzell. CLN option has been extended to before 15/12. However IF BPC subscribes £1.5m for 70-80m shares this will be extended to 15/1 with no penalty payable in the event BPC subscribes to at least 50% of the CLN. Source 20/10/20 RNS https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/w0l08nw

Bizzell opinion: Before 15/11 as an insurance policy, BPC may go for the small £1.5m option as a ‘pay to play’. If it does not, it could imply something is cooking. Stena JV? Other JV? Farm-in with a major? Or reserve based lending. If it does, worst case is similar dilution to Stena, c300m shares (half the CLN), including the 70-80m above by 15/1/21. Why half? We don’t need more than $10m.

3. Gneiss Energy. May 2021. They were extended by 9 months on 13/8/20. Source https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/r7334vx

Gneiss opinion: Gneiss were extended for 9 months and not 3 for a reason: to help BPC broker RBL or similar. But to do this we need a CPR! Hence…..

4. CPR. ‘middle of Nov’, perhaps next week! In the meantime….

CPR Opinion: it has been timed for middle of Nov for a reason. I believe it will be version 1, with a version 2 after ex-CERP asset developments during 1Q 2021………………

5. Ex-CERP developments from today until 1Q 2021. Refer to recent RNS

Conclusions: The SP hasn’t surged as expected yet. Why? Some are waiting for the CPR and Stena IceMax is on its way last week of Nov. However, some may be waiting to see if the CLN £1.5m deposit will be triggered. IMHO it is irrelevant as we may NOT need any further funding based on all the above. Spud could be less expensive than budgeted for, none of the $5m contingency is used, and because a portion of costs are not due until Feb/March 2021. In fact, by the time of the CLN 15/1 deadline, 30 days after spud, we will have some intel if Percy-1 is commercial and if it is, Gneiss will have a queue of lenders and Majors wanting to ‘play’ at much better rates than Bizzell…IF IF needed.

Bottom line: IMHO STRONG BUY. DYOR

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

Agree Petro$. Substantial news IS expected very soon:

1. Middle of November: a Competent Person’s Report, auditing BPC’s reserves and probable reserves. This will be done by the highly respected international organisation ERC Equipoise. See www.erce.energy/global-experience/. This may have a bearing on funding for developing ex-CERP assets, and possibly tick another box for institutional investors to join our party.

2. Soon after 15/11: whether the Bizzell CLN will be required in full or in part. My expectation is BPC will subscribe to the £1.5m for 70-80m shares as an insurance policy in case no other funding materialises and we need it for ex-CERP assets in Q1 2021. If BPC does not ask for the £1.5m, it implies something is cooking. Stena JV? Other JV? Farm-in with a major? Or reserve based lending, re point 1. Refer to 20/10/20 RNS https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/w0l08nw

3. Last week of November: confirmation Stena’s IceMax is on its way to Bahamas, which will take +/- 20 days @ 8 knots. (Source: https://www.lse.co.uk/profiles/coman/ post 21/10 17:49) It is worth reading all of Coman’s excellent posts as he shows clear evidence of being an industry professional. The ship setting sail will remove all niggling doubts over further Covid-19 delays. Put simply, the spud will happen. If anyone wants to surpass my anorak wearing nerdiness, they can even track the ship in real-time here https://www.myshiptracking.com/vessels/stena-icemax-mmsi-235092459-imo-9517575

4. During November, various updates on Ex-CERP asset developments.

5. [Possibly] By next week, HM the Queen fed up with all the fuss and ill-feeling caused by the American election, may take over the ex-colony implementing direct rule, temporarily appointing the Canadian PM as caretaker President. All America’s oil and gas reserves to be placed under the control of BPC. And IreneK locked-up in the Tower of London by royal command as anything spoken negatively against BPC will be considered Treasonous.

Bottom line: exciting times ahead.

IMHO. DYOR. Have a great day.

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

To add my nerdy opinions and some detail to Petro$'s very good post, please listen to Nathan Rayner's podcast. He is BPC’s Operations Director with many years executive management experience leading technical and operations teams internationally. Refer to https://www.bpcplc.com/about/senior-management/

His 8 minute VOX markets interview provided some additional information to the RNS issued yesterday, and well worth listening to. Source https://www.bpcplc.com/2020/11/03/vox-markets-podcast-3-november-2020/

Highlights [approx. time offset in mm:ss]

[1:50] Trinidad Saffron 1: Lot’s of 3D and data analysis done since CERP merger. Stopped productivity decline and aims to MORE THAN 500 BOD by year end including CO2 JV project with PRD. Phase 3 approval agreed. Increased workovers by 20%. 3rd rig hired for a minimum of 3 months.

[4:20] Trinidad Saffron 2: 10 million barrels potential which equates to 2000/day for 10 years. Well designed. Spud Q1 2021. Production H2 2021. Eventually 20 production wells.

[5:30] Suriname: Collated data and undertook various studies. Plans submitted to authorities. Q1 2021 both for spud/drill AND appraisal well.

Opinion: ex-CERP asset potential is huge in its own right. Refer to my RESEARCHED post on 30/10/20 04:31….. ‘BPC 4p-5p per share end 2021 if Percy-1 is a duster? ‘Dangerous’ ‘crackpot’ idea, or possible?.’ It supports analysts view in March 2020 that CERP was potentially worth (21p SP) £200m+ market cap. It also gives a rationale breakdown how, with the current 4B shares, IF 2500/Boe per day are produced by end 2021, which is the BoD’s stated goal…………how this can be achieved even if the Percy-1 result is inconclusive.

Bottom line: At the current SP of 2.5p, despite the potential temporary knee jerk reaction to sub-1p IF IF IF Percy-1 is a duster, I believe with a bit of patience we are FULLY hedged. Yesterday’s RNS and Nathan’s podcast reinforced my opinion. I think when the markets including institutional investors realise this after doing their own due dili, SP could increase substantially.

CONVICTION strong buy leading to 15/12/20 Percy-1 spud.

IMHO. DYOR. Have a great day.

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

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