Member Info for tedoby

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In both appraisals I’ve taken the oil price hedging to be 416,772 boo @ $56.58. I’ve assumed operating costs are $29/boo. That's $22/ brrl for lifting and $7 production tax taken frm the Tennyson Report. I’ve also assumed from a WTI oil price of $75 COPL will be paid $72/brrl . There should be no tax to pay other than production tax which I’ve accounted for.

Finally I believe I may have been too conservative on the production figures used. Especially on the Barron Flats Shannon unit. This unit has something in the order of 34 extractor wells albeit some not in use and 8 injector wells with a further 8 licenses pending. Each vertical extractor well should be capable of producing over 200 bopd and the horizontal wells much more. Which is why I think my assumption of 7k bopd by March next year may still be conservative.

Just out of interest and FWIW I have BFS achieving its first plateau of 5k bopd by late December this year which is simply an extrapolation of the increases we saw last summer. I see no reason why that shouldn’t be achieved now the gas supply has been secured and the surface makeovers are well advanced.

On that basis the $11.5m cash currently in hand should improve by a further $5m or thereabouts by March. So we could be looking at a notional cash situation before expenditure of around $16.5m by the time debt payments begin in my view.

On a related note I have it that production needs to be just a little higher than the 2700 bopd BFS achieved last August to cover the loan repayments. Although the amount drawn down is $45m, 9m of that are derivatives and not yet payable. The principal is $36m and is to be paid back over the 36 months.
In addition to the principal we have the interest which is variable subject to Libor. But for now it's running at 12.5% on the amount outstanding.

The metrics I’ve used in the appraisals with the exception of the p/e ratio have been taken from the ARC and Tennyson Reports together with COPL’s Presentation at the beginning of this year. All I’ve done is try to assemble them in such a way that I thought might help us to appreciate them at a given milestone next March.

In my eyes the appraisals portray a picture of rapid growth from where COPL is at the moment whether the acquisition of CUDA’s shares is successful or not. So much so that COPL could pay down its debt within eight months if it chose too. However I very much doubt that will be the route chosen given the potential we have by further investment in Federal Deep.

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Appraisal 1- without CUDA’s WI:-

With production in March being assumed as 7.00k bopd gross and 4.060k net from BFS + 0.60k bopd from BFFD + 0.60k gross bopd 0.40k net fom CC we get 5.06k bopd in total to COPL. Which is 1.847m bopy.

Revenue annualised at that point is therefore 0.417m x $56.58 = $23.590m hedged +1.430m x $72 = $102.960m giving a total of $126.550m. From there the average price per boo is $68.52
.
It follows that operating netback before debt and G&A is 1.847m x $39.52 = $72.993m.

And final netback or earnings is $72.993m less $16.000m for debt and less $10.000m for G&A which gives us $46.993m.

At today's exchange rate we get $46.993m x 0.74 giving us a total earnings figure of £34.775m.

With165.5m shares in issue that gives us an eps of 21p and using a p/e ratio of 12 we then get to an all important SP of 252p* and a MC of £417.06m*.

Appraisal 2- with CUDA’s WI:-

With production in March being assumed as 7k gross 5.95k net bopd from BFS + 0.60k bopd from BFFD + 0.60k bopd from CC we get 7.15k bopd total to COPL. Which is 2.610m bopy.

Revenue annualised at that point is therefore 0.417x $56.58 = $23.590m hedged +2.193 x $72 = $157.896m giving us a total of $181.486m. From there the average price per boo is $69.53
.
It follows that operating netback before debt and G&A is 2.610m x $40.53 = $105.783m.

And final netback or earnings is $105.783m less say $24.00m for debt and less $10.00m for G&A which gives us $71.783m.

At today's exchange rate we get $71.783m x 0.74 giving us a total earnings figure of £53.119m.

With165.5m shares in issue that gives an eps of 321p and using a p/e ratio of 12 we then get to an all important SP of 385p* and a MC of £637m*. I make that a 50%+ increase on these two metrics if the acquisition is successful!

If you’re not excited by the prospect going forward you should be in my view.

AIMHO as always and fingers crossed guys,

The RNS this morning implies that production from just one well is 600-900 bopd. That's just amazing. The revenue from it covers about 75% of COPL's costs on its own and makes the company nicely profitable in one step change!

The Barron Flats Shannon unit has something in the order of 34 extraction wells and 8 injection wells with a further 8 licenses. Each vertical extraction well is capable of producing over 200-300 bopd and clearly the horizontal ones far more.

We all should be very pleased with the news this morning guys. I'm aligned with Tiburn in thinking we could be producing 5k bopd by the year end.

GLA

Guys there's been some great posts on here today. Especially yours Tiburn. They're simply brilliant.

There are so many pieces in this jigsaw that are not in place yet. CUDA, development and finance to mention a few. But I think there is enough for us to see the picture forming if we look carefully.

On the one hand I'd love to post more on the numbers and how I think things might develop if we play our cards right.

But on the other hand I also think now isn't quite the time. Perhaps the right time for me to post is when we get the CPR report on BFFD or when the CUDA issue has been resolved.

I'm very bullish about COPL's future. I'm also generally happy with the way things are going and appear to be being handled.

I'm not a trader and I'm not particularly good at it when I try. But I do believe we're in an enviable position and I'll continue to buy the dips whenever I can.I've built up a reasonable holding and I haven't sold any so far.

Fingers crossed guys.

AIMHO as always.

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It should be little or no surprise to hear that a Receiver has now been appointed to deal with CUDA.

Looking at CUDA’s earnings to debt ratio I would imagine the writing’s been on the wall for quite some time. Trading whilst knowingly insolvent may bring negligence of its Directors into play.

CUDA’s debts have been accruing by the looks of things and despite the improving prices of oil along with the miscible flood impacting much better. It doesn’t look like CUDA was ever going to gain control of its increasingly heavy liabilities.

From what I’m seeing I also doubt the courts will be persuaded to allow a “CUDA mk 2” to rise from the ashes here. I simply can’t see a rescue package being acceptable to the courts.

For me it follows that we are going to see the Receiver attempt to sell CUDA’s assets in a formal process that will take its formal course that’s established to protect all creditors interests. Not just those of Tallinn and Bridging CUDA’s senior lenders.

On the Wyoming assets there will be COPL as a bidder and perhaps only COPL. In which case the Receiver is sure to want convincing any offer standing on its own is best value before recommending it's acceptance.

Any sale will be as near to market value that the Receiver can get then and there’s no one in a better position to demonstrate true value than AM.

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As we all know the Atomic purchase was different. It didn’t just include the WI’s of the units. It included much more. It included Atomic's affiliate companies along with the infrastructure, equipment and such like all of which AM will be able to argue has a value. So any extrapolation from the sum COPL paidfor Atomic should be adjusted and discounted accordingly.

If that wasn’t enough I’m of little doubt AM will also be reminding the Receiver of the estoppel claim against Tallinn and Bridging that stalls them from accessing any monetary value in the common assets together with the financial claim against CUDA for it’s material breaches of Contract.

Let's also not forget it's Southwestern, COPL's affiliate who's in control of shareholders purse strings which is no bad thing.

The Receiver will have to take account of damages and costs arising from the claims and offset them against any offers under consideration whether it be COPL’s or others.

All things considered, I'm feeling very positive that in Q1 next year we will see COPL owning 85% of the Shannon unit and 85% of the Federal Deep unit beyond the exploration drill together with 100% ownership of Cole Creek.

Under the circumstances I somehow doubt the Receiver will be receiving any other meaningful interest in the sale of the CUDA’s Wyoming assets. I firmly believe he will want the quickest and preferred route to conclude a sale and that will be COPL.

Although we should do well without CUDA’s WI’s in any event they would be very nice to have at the right price.

Fingers crossed it works out well for us guys.

AIMHO as always.

COPL doesn't need more finance just yet and certainly not to acquire CUDA's WI. So talk of an imminent placing coming is pillar talk in my view.

CUDA hasn't even been declared bankrupt yet. When or if it is then a receiver will be appointed and a due process followed.If it happens we're looking at a two to three months period to dispose of the assets which COPL can be part of if it chooses to.

The receiver will have a due process to follow and has to be fair to all creditors not just Tallinn and Bridging who are the senior ones. There are other avenues the receiver may be asked to pursue as he attempts to recover the debt.

In the disposal process best offers will need to be sought from interested parties and reconciled all of which takes time. Disposing of the assets may only be part of the receiver's duties.

So if it happens I think we'd be lucky to see an acquisition situation the Wyoming interests inside three months in my estimation.

COPL has more than adequate finance facilities and future options until then. If we return to August production rates and progress from there as planned we’re going to be looking at producing 5k bopd just from Shannons first plateau. By the time the principal of the loan begins the cash balance should be more like $20m not the current $11m if the price of WTI oil and the other metrics stay in line..

Even without CUDA's WI 5k bopd will be giving COPL a net annual profit of $20m just from Shannon and ramp up should continue from that particular field from there..

When and if a finance call is needed COPL has many options other than releasing further equity. it will have its cash balance at least in part together with the accordion facility not to mention the possible sale of the upper gas network said to be worth about $10m if it chooses to. I’ve no doubt the opportunity to refinance the existing debt will be one of the main considerations too.

AM is on record as saying COPL doesn't need to come to the market again and from my calculations I can understand why. AM is saying quite the opposite in fact. Whilst he's not promising a dividend he's stated that's his intention. How does that position sit against a further equity release? You don’t have to be near savvy to see it doesn’t fit.

Talk of an imminent placing is coming from those who either don't understand COPl’s mission statement or simply want to be mischievous for their own selfish reasons.

AIMHO.

Tiburn thanks for sharing your analysis. It's a great post as yours always are!

Personally I think BFFD has the potential to be much more lucrative than the other units on the site put together. We'll see.

Thanks again.

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It seems the market may have been disappointed by the comment made in today's RNS telling us the current level of production is about 2.0k bopd (gross).

Disruption in gas supply has been the cause in part. But that’s now been resolved.

But perhaps more significantly it’s also been impacted by restrictions in surface equipment and facilities. We’re told additional surface equipment has been procured and installed to resolve the issue with commissioning occurring this coming week.

The RNS goes on to say once commissioned, production should increase back to the levels achieved at the end of August. It goes on to say levels should continue to increase from that point with stable forecast gas injection volumes.

It sounds to me as though the rapid increase we saw in August couldn’t have continued until the surface equipment was upgraded in any event. That being the case, I'm anticipating a return to the August level very quickly now the equipment is being installed and following commissioning next week.

From there, given the gas supply has been resolved I see no reason why we shouldn’t be reaching the first plateau stated in COPL'S Presentation of 5k bopd by March 2022 (when payment of the principal of the loan agreement is scheduled to begin).

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At an average production rate of say 3.90k bopd gross and 2.28k bopd net for the fourteen week period between now and March 2022 we should produce around $4.9m further positive cashflow on a linear calculation. If that's near right it should be a considerable contribution towards development costs and a nice addition to our current balance of $11.5m.

FWIW I have the Shannon Unit and Cope Creek combined making at least $18m annual profit or earnings at 5k bopd gross at today's WTI oil prices. Even taking into account full loan payments together with hedging and staying at our current WI share.

At the second plateau of 7k bopd by my calculation the annual profit moves to $25m based on the same metrics.

Production at BFFD falls into a separate category all together. Not only do we have 100% interest until 4x the drill cost has been received in revenue but also Opex should be considerably less given it's a conventional extraction.

As if that wasn't enough (at depths below 5280ft) royalties will be far less on BFD as they're paid to the Government as opposed to the landowners. 12.5% from memory in lieu of 20% on BFS and 22% on or thereabouts on CC.

Needless to say but if the acquisition of CUDA works out for us at a good price the benefit will be huge over time considering the fields and facilities are in their infancy.

AIMHO

Superb post as always Tiburn. Thank you for posting.

As you rightly say the risk/reward ratio here is increasingly compelling as the churn continues to erode COPL's Market Cap most days.

I can't add much at all to what you've said except perhaps to say one of the most sensitive metrics going forward will be the increases in COPL's WI through further acquisition. Any adjustment on that front should be better than linear.

Analysts tend to look on the value side I find. But on the cost the need to import gas next year should be reducing on an exponential decline until it normalises in around Q3. From then on imports should be just the minimum necessary to top up the gas ****tail as it continues to be recycled. It's a situation that mitigates third party risk like the one we've just witnessed as well as increasing the return.

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj53abS64D0AhXbEcAKHeJsDIMQFnoECBEQAw&url=https%3A%2F%2Fmathworld.wolfram.com%2FExponentiallyDecreasingFunction.html&usg=AOvVaw3CRxpWcsgn-JM7ck-tDf7G&cshid=1636102360571163

Taking what AM implied in his latest IG podcast I have the cost saving as adding around 107p or more to COPL's SP at the current 57.5% WI and forecast 5,000 bopd production rates by Q3 next year. It will make the missible flooding process hugely profitable then given the net saving goes straight to netback and/or earnings and feeds into whichever valuation method is used.

Fingers crossed we have more news before the 15th to change the SP’s direction and compliment the standard report.

As always AIMHO.

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First of all I’d like to start this post by saying CUDA looks to me to be a very distressed seller wanting to avoid bankruptcy at almost any cost. Even if it means it’s creditors taking sizable haircuts I think it’s seen to be the lesser of two evils. Let's assume that’s a given.

Conversely COPL is not a forced buyer although it would be very nice to have CUDA’s share; it's an “icing on the cake” situation for and not a “needs must”. From the recents Analysts reports we see them both saying the Wyoming oil fields appraise very positively regardless of CUDA’s Working Interest. So the acquisition only becomes attractive if the price is right. This position would have given AM a very strong hand in making any offers and in any subsequent negotiations with CUDA in my opinion.Let’s assume that’s also a given.

It’s impossible to be sure of the timing but I believe that sometime in or around Q2 CUDA and it’s major creditors decided that the best course of action under the circumstances would be to dispose of CUDA’s assets and to avoid its bankruptcy. I’m in little doubt they would have considered all options very carefully.

From what we're told I further believe CUDA through a due process would have sought bids for all its assets from any interested parties including COPL sometime around July. I say that working back from the beginning of September date when Letters of Intent were required to be issued to any prospective purchaser/s allowing sufficient time for the due consideration process.

It’s clear that COPL would have been the preferred bidder for the Wyoming assets given it’s position as the major shareholder and having control of the infrastructure and so on.I think it's quite possible that COPL’s offer would have been the only genuine one capable of being accepted by for that reason.

CUDA would have needed August to reconcile offers in order to have been in a position to issue it’s Letter/s of Intent to the successful suitors by or before the beginning of September allowing sufficient time for the formal contracts to be drafted by COPL’s lawyers and entered into by tomorrow's deadline.

If my assumptions are correct it follows and if COPL’s offer and final negotiations were successful them AM would have known about it on receipt of CUDA’s Letter of Intent about four weeks ago.

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I also imagine the respective parties would have entered into Non Disclosure Agreements which is usual in these cases. So although AM was officially gagged let's look at some of the indicators and see if it all fits.

AM said he would issue regular updates and he hasn’t. Perhaps this is because he was advised he shouldn’t given the NDA in place.

If you listen to the IG interview in the middle of September you’ll hear AM confirm that COPL are currently working on the acquisition of further WI. How could he have said that if he wasn’t a recipient of CUDA’s Letter of Intent? I believe he couldn’t.

In the same interview you’ll notcice AM didn’t name the owner of the additional WI. In my view he couldn’t even though it was obvious because of the NDA.

Linked to COPL’s interest in acquiring CUDA’s share of the Wyoming fields, we have Southwestern (COPL’s Affiliate) running two claims against CUDA in the state’s courts. It’s quite possible that COPL instigated it’s claims through Southwestern at around the same time as submitting it’s offer to buy CUDA’s Working Interest. I believe the timing of the two claims would have been by design to apply maximum pressure on CUDA to sell to COPL. I very much doubt they’re coincidental as the timing by AM looks perfect. The two claims I’m referring to are are ;-

On July 8, 2021 Southwestern filed a Statutory Lien in Wyoming against Cuda's interest in Barron Flats Unit in the amount of US$1,929,746.48. This amount represents the cumulative operating arrears of Cuda for the month ending May 31, 2021.

A payment may have been made against the principal of this claim. However further payments will have been falling due from May 31 along with fees and interest. It’s doubtful they have been met otherwise we wouldn't be seeing the following additional claim.

On July 26, 2021 Southwestern filed a second claim against CUDA, Bridging, and Tallinn as defendants for a judicial foreclosure order against the defendants including an award of damages for breach of contract, a quantum meruit or unjust enrichment judgment and damages for a breach of promissory estoppel.

This claim further extended to a declaratory judgment as to the lien priority against Bridging and Tallinn to affirm Southwestern's first lien priority on CUDA's security against the Barron Flats Unit. CUDA received a copy of this claim on July 27, 2021 and subsequently accepted service of it on August 12, 2021.

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If successful, this claim puts Southwestern in first position in a creditors queue in front of Bridging, and Tallinn who as funders were the previous preferential creditors. Effectively it prevents them from claiming against CUDA’s assets in Wyoming until the Southwestern claim has been settled and the court cases have been concluded.

Southwestern’s claim is for costs on a quantum meruit basis. So it's effectively a cost plus situation. Moreover Southwestern are claiming for damages given the claim looks to be for a material breach of the contract between COPL & CUDA. This claim is yet to be determined but could be both lengthy and significant which is not what CUDA will want,

The two claims will be putting enormous pressure on CUDA, Bridging and Tallinn as both the quantum and timing of the verdict is unknown. Costs along with interest will be accruing daily therefore the defendants will want it settled as quickly as possible.

If the claims for costs, loss and expense, interest and damages are successful they could be many times the original principal.

At the end of the day CUDA’s sale isn’t about what it owes its Creditors. It’s more about what it has as the best offer on the table that's capable of being accepted. CUDA and its Creditors will have realised that at the time. Moreover so will AM.

A final thought. If like me you believe AM knew his acquisition offer was being finalised at the time he held his IG interview in mid September then you will also believe that financing the deal will not require any further release of equity. Because that's what AM took care to say explicitly.

Fingers crossed we hear positive news on the acquisition next week and we see the SP lifted from its current doldrums. We’ve been locked in them far too long now.

As always AIMHO.

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Although I haven't changed my position but I’ve updated my previous post to this which hopefully explains it better:-

From AM’s recent interview we should all be of little doubt he would like to acquire CUDA if at all possible at the right price. I believe it's been said that CUDA wants $40m for its Working Interest in Wyoming and that AM doesn't want to pay more than $20m. How true that is I don't know. But I imagine it may well be right.

If I was in CUDA'S position I'd be thinking that Atomic was paid roughly $50m for its 57.5% WI but WTI oil prices have doubled since then. So $40m for 27% WI to CUDA may seem fair.

Conversely I've no doubt AM will be looking at COPL's notional Market Cap and working out that the market is valuing Atomic’s purchase at around the acquisition cost. So $20m for CUDA's WI will seem reasonable to him given there can be no better way to value the asset than from what the market is saying.

Time and regulations aren’t on CUDA's side unfortunately for them. It’s said the sale of its assets must be concluded by this Friday having had Letters of Intent in place a few weeks back. Time will of essence given its debts are sure be increasing considerably by the day,

Throw in the fact that it must be difficult if not impossible for CUDA to sell it’s asset to anyone else given COPL owns and controls the infrastructure. Not to mention there’s a foreclosure case running which further compromises CUDA’s position.

We’ll have to see how it pans out obviously. I doubt we'll have to wait too much longer now before we hear.

I for one really hope we manage to buy it and at a reasonable price. The cost to value ratio may well be better than the Atomic acquisition which was exceptional if the price is right. Let's look at next year's economics for COPL in two ways. One without the COPL acquisition and one with. future scenarios. They may not turn out to be right but whatever happens and whichever way you look at it the end result may well be much the same.Viz:-

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Alternative A - with COPL’s current 57.5% WI interest remaining the same:-

Let's assume that WTI oil price remains constant and payment is $80/boo. Let's also say that production is 6,000 bopd which is midway between the two plateaus given in COPL's Presentation last February.

6,000 bopd is 2.10m bopy as near as makes no difference. That’s 2.10m bopy x 57.5% = 1.21m bopy to COPL. Finally let's say pre - debt & tax Netback is $50/boo giving us $30/boo costs.

Repayment of the debt principal begins in March 2022 and will run for 10 months whilst the interest is already being paid at 12.5% and that will run for the full 12 months unless there’s a change to Libor.

So as we stand we have annual revenue as 0.39mboo hedged at $56.58/boo and 0.82m boo at $80/boo. Giving us a total revenue of $87.67m

On the cost side we have operation costs of 1.21m bopy at $30/boo giving us $36.30m and debt costs of 10 x $1.25m(P) + 12 x $470k(I) giving us $18.24m. Making the cost before tax of $54.54m and a profit before tax of $33.13m. There should be no tax to pay given the offset of losses transferred onto COPL’s balance sheet and other allowables.

So it follows that the $33.13m may be used as “earnings” in an earning metric method of valuing Barron Flats Shannon.

Barron Flats Deep,Cole Creek and Nigeria assets have not been considered. They’ve been excluded.

With BFS running in an optimised and steady state by Christmas 2022 I believe it’s appropriate to use a p/e ratio of 25 and in so doing we get a contribution to COPL’s spot market cap from BFS & CC to $828.25m at that point. During ramp-p the method is less appropriate as the earnings are distorted. As I say BFD, CC and Nigeria have not been considered so we are looking at just the current working assets.

It follows that with around 165m shares in issue we get to $5.02 notional share price contribution from just Barron Flats Shannon which is £3.71at today's exchange rate as I say by December 2022. That’s pretty much twelve bags from here.

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Alternative B- with COPL’s WI interest increased to 85% having acquired CUDA :-

For the purposes of this alternative I’ve assumed that the acquisition of CUDA is accommodated using the $20m “accordidian facility” under the current loan agreement. I've kept the other metrics under that agreement such as the term and repayment structure the same for now. However if the Barron Flats Deep test proves to be as attractive as I believe it is it could be an opportune time to restructure the debt by extending the period as well as the amount.

Again for now let's assume that WTI oil price remains constant and payment is $80/boo. To keep like for like let's also say that production is 6,000 bopd gross which is midway between the two plateaus given in COPL's Presentation last February.

6,000 bopd is 2.10m bopy gross as near as makes no difference. That’s 2.10m bopy x 85% = 1.79m bopy net to COPL. (compared to 1.21m bopy without CUDA’s WI)

Again let's say pre - debt & tax Netback is $50/boo giving us $30/boo costs and that repayment of the debt principal begins in March 2022 as before. Interest and repayment of the principal both increase in proportion to the amount borrowed.

So now we have annual revenue as 0.39m boo hedged at $56.58/boo and 1.40m boo at $80/boo. Giving us a total revenue of $134.07m. (compared to $87.67m without CUDA’s WI)

On the cost side we have operation costs of 1.79m bopy at $30/boo giving us $53.70m and debt costs of 10 x $1.80m(P)+ 12 x $638k(I) giving us $25.66m. Making the cost before tax of $79.36m and a profit before tax of $54.71 m. (compared to $33.13m without CUDA’s WI))

As before there should be no tax to pay given the offset of losses on the balance sheet and other allowables so it follows that the $54.71m may be used as “earnings” in an earning metric method of valuing Barron Flats Shannon. Barron Flats Deep,Cole Creek and Nigeria assets have not been considered. They’ve been excluded.

Again with BF running in an optimised and steady state by Christmas 2022 I believe it’s appropriate to use a p/e ratio of 25 and in so doing we get a contribution to COPL’s market cap from BF & CC at that time of $1367.75m. (compared to $828.25m without CUDA’s WI))
I repeat BFD, CC and Nigeria have not been considered here.

So with around 165m shares in issue we get to $8.55 notional share price contribution this time from just Barron Flats Shannon which is £6.33 at today's exchange by December 2022. (compared to £3.71 without CUDA’s WI)). That’s over twenty bags from here.

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Alternative B shows how attractive the acquisition of CUDA could prove to be. For a notional $20m cost COPL would in theory gain over $500m in value in about a year's time when Barron Flats Shannon is hopefully operating in an optimised and steady state.

If it happens then CPOL’s Net Asset Valuation of the Wyoming assets increases to over of half a billion US dollars (80% P2 Reserves of $308 million (10% NPV)) as a straightforward adjustment to the valuation given in COPL’s Presentation which is truly astonishing given COPL’s current market cap & share price!

As I’ve said I’m not saying this stock isn’t without risk. Of course it is. But what I am saying is that it's rare stocks like COPL with such enormous potential and a very attractive risk/reward ratio that makes the investment a risk worth taking.

Let’s hope the market stay’s strong and AM get’s there for us! I understand AM now holds 3% of the stock so perhaps his position conveys the potential here better than I have.

The opportunity beyond the debt years looks even more amazing as things stand guys!!

AIMHO.

Following AM’s recent interview we should all be of little doubt he would like to acquire CUDA at the right price if at all possible. I believe it's been said that CUDA wants $40m for its Working Interest in Wyoming and that AM doesn't want to pay more than $20m. How true that is I don't know. But I imagine it could well be.

If I was in CUDA'S position I'd be thinking given Atomic was paid roughly $50m for its 58% WI but WTI oil prices have doubled since then so $40m for 27% seems fair.

Conversely I've no doubt AM will be looking at COPL's notional Market Cap and working out that the market is valuing Atomic’s purchase at around it's acquisition cost. So from that perspective $20m for CUDA's WI seems reasonable given there can be no better way to value than from the market.

Time isn't on CUDA's side unfortunately for them. It's debts must be increasing by the day, added to the fact that it must be difficult to sell Wyoming to anyone else given COPL owns the infrastructure and it has a foreclosure case running.

We’ll have to see how it pans out obviously. But I doubt we'll have to wait too much longer now before we hear.I for one hope we manage to buy it and at a reasonable price. The cost to value ratio may well be better than the Atomic acquisition which was exceptional if the price is right.

For example, let's look at three future scenarios that I like to think are possible. They may not turn out to be right but whatever happens and whichever way you look at it the differentials may well be much the same.Viz:-

Example 1 - COPL’s current 57.5% WI interest:-

Let's assume that WTI oil price remains constant at $80/boo. Let's also say that production is 6,000 bopd which is midway between the two plateaus given in COPL's Presentation in February.

6,000 bopd is 2.10m bopy as near as makes no difference. That’s 2.10m bopy x 57.5% = 1.21m bopy to COPL.

Finally let's say pre - debt & tax Netback is $50/boo giving us $30/boo costs and that repayment of the debt principal begins in March 2022 and runs for 36 months.

So as we stand without CUDA's WI we have Revenue as 0.39mboo hedged at $56.58/boo and 0.82m boo at $80/boo. Giving us a total revenue of $87.67m

On the cost side we have operation costs of 1.21m bopy at $30/boo giving us $36.30m and debt costs of 10 x $1.25m(P)+ 12 x $470k(I) giving us $18.24m. Making the cost before tax of $54.54m and a profit before tax of $33.13m.

There should be no tax to pay given the offset of losses on the balance sheet and other allowables so it follows that the $33.13m may be used as “earnings” in an earning metric method of valuing Barrin Flats Shannon. Barron Flats Deep,Cole Creek and Nigeria assets have not been considered. They’ve been excluded.

With BF running in an optimised and steady state by Christmas 2022 I believe it’s appropriate to use a p/e ratio of 25 and in so doing we get a contribution to COPL’s market cap from BF & CC at that time of $828.25m. During ramp-p the method is less appropriate as the earnings are distorted. As I say BFD, CC and Nigeria have not been considered.

So with around 165m shares in issue we get to $5.02 notional share price contribution from just Barron Flats Shannon which is £3.71 by December 2022. That’s twelve bags from here.