Member Info for Starchild

Minimil: very good thought process and rationale.

I'm busy most of the weekend but will keep an eye on the various opinions.

Starchild

Following in Linton’s footsteps with the pre-spud sweepstake………please estimate the BPC share price assuming a successful spud. If you have the time and inclination, justify it. Another way of looking at this is in the ‘bottom line’ below. Incidentally for those that plan to hold shares after spud, this exercise will come in very handy. The best 3 justification posts by 2am Monday morning will share in heaps of accolades, tributes and honours.

1. To keep the maths simple, and so we use the same criteria, let’s assume:

(a) 4b shares on issue (actual number is 4,049,360,203)
(b) No more major dilution at the asset or share level
(c) £1 = $1.30 (this will likely change based on Brexit outcome)
(d) $40/b PoO on spud.
(e) £20m value of ex-CERP assets as now
(f) ‘Only’ 700m barrels initial estimate

2. Please read operational update RNS 30/9 https://polaris.brighterir.com/public/bahamas_petroleum_company/news/rns/story/xl6el9x. Key paras below with my commentary in ….[ ]…..

………….’In a successful development scenario of approximately 0.7 billion barrels (i.e., of the P50 resource level at Perseverance #1 only), and assuming a real US$40 oil price, the project remains robustly economic with an NPV10 exceeding US$2.5 billion [….Net present value with 10% discount, ie pure NET profit AFTER ALL operational expenses including farm-out…..]. In such a scenario, even at these relatively modest oil prices, an aggregate revenue stream of over US$5 billion would flow to the Government of The Bahamas in royalty income […..Brill. It’s national debt is c$10b……] and other payments over the life of the project. In the event of a successful development being established at the BNorth Perseverance #1 location, it is expected that the most likely resource volumes identified for the remainder of the 70 - 80km long B Structure would be largely derisked. In such a scenario it could thus be anticipated that one or more additional FPSO [….Floating Production Storage Offloading vessel. See https://en.wikipedia.org/wiki/Floating_production_storage_and_offloading …….] developments would be required to effectively drain the expanded resource base - for example one located at the northern end of the structure, and the other at the southern end. With a similar wells and subsea architecture configuration, a commensurate increase in incremental economic worth […..‘there’s more gold in dem hills’…….] to the project (and revenues to the Government of The Bahamas) could be anticipated………….’

Bottom line: At what price should fund managers/institutional investors/pension funds buy BPC shares if the spud is a success? And if possible assuming you have the time and inclination…… justify your figure to them including where the SP could be in 2022.

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

Ps IreneK and Fatal: I was only joking about the dove cat-snack in my previous post. I do not have a cross-bow or mallet. Only a small hammer.

Irene sweetie, I'm not answering on behalf of Linton who is the official bookmaker for the pre-spud price. Clearly you have something in common as you like a flutter and have magnanimously offered your winnings to the RSPB on other (daft) bets.

Couple of things:

1. When wagering on the BPC SP price pre-spud, as you are a professional de-ramper with CFDs shorting the share, you are not allowed to give a minus figure.

2. Must dash. Cat has been very good the last few days and deserves a snack from my newly built dovecot. It is looking at me with large cow eyes in anticipation (I forgot to tell you my cat is genetically modified and looks a bit strange). Anyway I will let nature takes it's course and will procure a plump dove. Mother nature is sometimes harsh, which I why I will use a cross-bow to wound it and a mallet to end its life as a mini-feast for my cat.

Have a lovely weekend

Starchild
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Ptrotter: Apologies. No offence meant. Seasoned investors such as yourself with decades of experience can sniff out opportunities and act upon them. My recommendation to you is having the tech tools at your disposal so you see when MMs shake the tree, and real-time actual trades. It is IMPOSSIBLE to do this without real-time data and in your case if you got a 1% edge on £50k buys, a level 2 console has paid for itself.

Starchild
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Iking: I think you could be right that Stena is on board. It has until 30/11/20 to state so at the 10% asset or share level.

However.....IF my assumptions are correct on the ex-CERP assets RBL and that we don't need a Bizzell @2.5p (or better) CLN in 2020, we may not need Stena.

Again IF the CLN-may-NOT-be-needed-in-full assumption is correct, we win both ways....
1. If Stena does a JV, we will have more cash than required for Percy-1 (and other projects)

2. If Stena does NOT want a JV, and RBL can be leveraged based on Trinidad S2....it's less dilution at the asset or share level. We will own everything 100%. Considering royalties are maximum 25% for Bahamas Gov, and zero corporation tax.............this will create more SP up-side on a successful Percy-1 spud. With lots of room for farm-out pie-sharing in 2021 with a major oil company.

Summary: today, I don't mind either. I welcome other opinions.

Starchild
https://www.lse.co.uk/profiles/starchild/
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Ptrotter: Suggest you get 2nd level console from LSE (here) only £24/month minimum 1 month. Refer to my post 28 Sep 2020 09:45 for justification. If you spent £50k last few days buying shares, it's a no brainer. Trust me...it will pay for itself.

You will be able to tell with reasonable accuracy when a buy/sell is what the colour suggests.

Good luck

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

Chesh: The downside of being first, is you'll be first for the actual production side of conception! Not that it isn't an honour when it's InterestK :)
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InterestK: I believe you services to conceive love-children will have to be shared with the list below. It was their discussions / posts today that led me to the conclusion IMHO, S2 is the missing funding link subject to a CPR. ......

Chesh
Tiburn
Jcgswims
Spritefan
Armatrading

and, somewhat ironically....
IreneK!!!!

Starchild
https://www.lse.co.uk/profiles/starchild/
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Chesh: your recent posts have been very helpful. In fact, the missing FUNDING link!!!!!!
I found this a few minutes ago https://www.proactiveinvestors.co.uk/companies/news/918136/columbus-energy-resources-confirms-oil-discoveries-from-saffron-well-onshore-trinidad-918136.html

As you state, S2 has an API of 40 degree which is very good.

Estimates are.....11.5m boe! ...... Assuming we are not sharing S2 with a partner, this can be the final funding needed without a CLN! We only need 5m 2P reserves to borrow $10m via reserve based lending (refer to my post this morning and recent RNSs). Even if a JV is in place and we need to give a percentage, say 50-50 (which I don't know), could this be the final funding answer?

Starchild

Chesh: You are right! I failed to scroll down after seeing the no data for CERP message. Thanks.

Thoughts from Chesh an other ex-CERP LTHs:
1. What are the estimates for barrels of oil in S2?
2. MUST BPC partner with the 3rd party to do the well at 3rd part expense, or can we do it ourselves?

Starchild

Chesh: Many thanks re S2 approval for 3 qtr 2020. Maybe this is one of the imminent ex-cerp news releases. LSE RNS deleted. Original RNS here https://www.londonstockexchange.com/news-article/CERP/saffron-2-drilling-application-to-ministry/14555545?lang=en

Starchild

Yesterday’s RNS stated we are now fully funded for spud. We await news on the remaining +/- $10m for everything else, some of which will not be required until 2021. So where will this come from?

1. A Stena JV at the asset or share level for UP TO 10% = $10m. It has until 30/11/20 to make the decision.

2. Today we have 1m boe 2P reserves. We can theoretically use RBL for $2m, however if between now and when payments are due in 2021, ‘imminent ex-CERP news’ is forthcoming and a CPR shows 5m 2P by first quarter 2021, RBL for $10m can be done. According to a recent RNS, the BoD believes during 2021 10m 2P reserves and $20m RBL is possible.

3. If Stena does not want to do a JV, it may agree to delayed payment subject to proof of future ex-CERP enhancements and RBL availability. Others key suppliers may also do so. Let’s not forget Halliburton sometimes JVs in lieu of fees. See http://www.pantheonresources.com/investors/financial-reports/652-interim-report-unaudited-for-the-sixth-months-ended-31-12-19/file. Note on page 14 they had a 25% working interest in an Alaskan asset.

4. A CLN for a ‘small’ amount now IF needed for cashflow. Remember if Percy-1 a success, and IF a CLN is needed vs RBL it will be at a great rate based on the then extremely high SP. Yet, if a duster and ex-CERP assets are developed ‘while we speak’, RBL will fund cashflow for 2021 and beyond. Based on this, I find the term CERP ‘dog’ offensive and an insult to ex-CERP LTHs as it implies they were stupid investors. Perhaps its potentially award winning puppies will be more loved.

Bottom line: The BoD has repeatedly stated it will do everything possible to limit dilution and will draw on funds only when required. IMHO I believe the above permutations hold the answer. I also believe we will formally get the answers ‘soon’ and this will be reflected in the SP leading to spud, hence IMHO 'Strong buy'.

DYOR. Have a great day.

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

JV with a major 6.1p
JV with Stena asset level 5.2p
JV with Stena share level 4.4p
CLN Bizzell: 4.1p
None of above: 4.9p

IMHO for a bit of fun rather than a prediction. Disclaimer: I'm in for the spud all-in so i don't care on spud price.

Starchild
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Robbla: great find! I missed it too. Did it appear overnight?

I recommend everyone reads Roberta Quant's document as it is not just about the environment. It covers some tech aspects of the Percy-1 drill.

See https://d1ssu070pg2v9i.cloudfront.net/pex/bahamas/2020/10/14102918/100759-BPC-QA-Doc_FINAL.pdf

Starchild

Zag: I didn't realise going to the loo gave you strength! :) BTW, forgot to mention Stena or RBL

wessex: 10/10! Totally agree with you

Zag: This is one where no-news is good news. I can't see how the BoD can issue an RNS stating 'we don't need the CLN' until it is 100% sure we don't. Logically, either an alternative is on the cards for the remaining +/- $10m (perhaps via RBL) or with the co-operation of Bizzell, deadline has been extended. However, if an RNS was issued stating this, people would jump up and down thinking the CLN is on the cards, when in fact it may not be needed. IMHO

Starchild

Morbox: I personally have no issue with today's RNS. It is mainly deferred salaries. Reading between the lines, we are FULLY funded for Percy-1 otherwise this wouldn't have been done. I therefore believe remaining finance, mainly via RBL is on the cards once a CPR has been done. IMHO.

Starchild

Zag: I don't think we will need the Bizzell CLN, for reasons described in my previous posts re reserve based lending however it is in the background just in case.

Starchild

Between now and year-end, news-flow will likely affect the SP: c25% from CERP news and c75% BPC’s. IMHO below marked ‘M’ could have a MEDIUM impact to share price, ‘S’ could have SOME impact, and ‘H’ may have a HUGE impact.

Expected news
1. ‘S’ Legacy licensing issues resolved with Bahamas Government.
2. ‘S’ Admin. Bahamas Gov has signed off the few Environmental Approval issues outstanding.
3. ‘S’ Merger admin: Heritage and Staatsolie Suriname consent to the merger without exercising certain rights or objecting.
4. ‘H’ Competent person’s report: An audit of BPC's probable reserves.
5. ‘H’ Final funding update for +/- $10m. Stena JV at the asset or share level? Reserve based lending if CPR above shows 5m boe? Today it is 1m boe, but see ex-CERP section below.
6. ‘H Expert opinions from Proactive, Shore Capital, Investec Bank and others on SP / Market-cap leading to spud, and SP if oil found.
7. ‘H‘ The Stena IceMax ‘is on its way……crew safe.’
8. ‘M’ ‘The Stena IceMax spudded yesterday at hh:mm local time….crew still safe.’
9. ‘HHH’ Initial interim spud update (pre XMAS eve)

Possible or hoped for news
12. ‘H’ Major Oil company (or 3rd party supplier such as Haliburton) JV/farm-in. Must pay-to-play with a substantial contribution to actual c$140m (and virtual c$500m) spent until 1Q 2021.
13. ‘S’ IreneK will seek a new life as a nun in the Amazon jungle and will stop posting daily negativity on this BB.

Ex-CERP related news which may affect the first 0.5p of the BPC SP (Some points, courtesy of LGO-fan/in4cdros and others).
20. ‘S’ Possible deal done with Predator (PRD) for up to $2-4m. (lapsed, but may materialise in future)
21. ’M’ New Contract for Goudron with far better terms, allowing for more profitable BOPDs.
22. ‘H’ Test results from S1 (MC), and turning this into a producer.
23. ‘H’ Start drilling S2 ASAP.
24. ‘S’ Successful CO2-project.
25. ‘S’ CERP 2019 accounts. Market already expects these to be down-beat, but H2 2020 update in same RNS, likely up-beat.
26. ‘S’ Spanish gov to refund $1m for something ex-CERP related which I can’t remember

I excluded general news such as Covid-19, PoO, USD-GBP exchange rate. Let me know any proposed edits to the next version. IMHO CONVICTION strong buy leading to Percy-1 spud. This is not a SP prediction for tomorrow or next week. All IMHO. Always DYOR and/or get professional advice. GLA.

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