Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
"Based on these studies, we have selected a preferred appraisal drilling location, which is approximately 4.8km from the Chuditch-1 discovery well. This represents a substantial step-out, illustrating the size of the field and our confidence in the reprocessed seismic datasets. "
conservative drill option adjacent to discovery well not chosen
Bigger scale of field and higher confidence in technical findings would have been shared with interested partners - Baron confidence then begets confidence in partner for investment.
"discussions with potential funding partners provide additional affirmation that the technical case is robust "
Following this affirmation
"The Company is in discussions with various contractors and is actively assessing the availability of suitable rigs, equipment and personnel."
It will be achieved in time - your good at appearing to retreat to appear reasonable - but who do you think your kidding by now Mr Troll?
I look at adult BB with researched and cogent discussion, then compare it to this BB and its chalk and cheese, just insult hurling and distraction off message. so you win (or think you do)
investors looking in may think COPL with its billion barrels isnt real or investable. it is.
HNW dont make substantial investments on the basis of BB opinion/swayed by resident trolls easy to spot such as you FF, but on RNA and research.
I note you dont deny the moniker, Mr F F Troll.
Stas
Perhaps they are positioning for US market launch following JV - close out of LSE in time- PI LSE shares may transfer over once complete - they then re start the comms, but with a N American slant to gain US II
Attn: Mr F F Troll
" What was you on about Repeating my Production hopes / predictions"
Im sure you can work it out. You do not have any shares and are a paid troll , so your hopes are that prod is as low as possible and will push that message as long as you can - im just pointing out your tedious mendacity.
But soon you wont have any ammo. You have been irrelevant for a long time, points made with no substance, at some stage those that pay you will realise the games up and move on.
It would be expedient to release the confirmed trend, August and Sept production in one RNA.
Compelling first RNS by new CEO, using information in his control.
Outline the investment plan for BFU/CC and what this means for cashflow over time.
Interesting timing of confirmation of advanced talks coinciding with the CNOOC interest in TL.
Looks like an entire delineation campaign has been actively discussed with a few interested funders:
"Our ongoing discussions with potential funding partners provide additional affirmation that the technical case is robust and there is alignment on the requirement for drilling an appraisal well on Chuditch, followed by additional exploration activities to delineate the total on block gas resources for this LNG scale project."
Pre planning for drill in late 2023 assumed:
"All of our efforts are currently focused on the Chuditch PSC drilling decision to be made late in 2023 for a Chuditch-1 appraisal well. We are making good progress and are in advanced discussions with a number of potential funding partners."
if they plan to start drilling late in 2023 - say December - then need to agree the terms with partner, legals, signed agreement to allow contracting and mobilisation of a selected rig - even with a fair wind rig mobilisation c 4-6 weeks to secure and get to site with personnel.
Drill logistics key in overall timeframe:
" In anticipation of the proposed drilling of an appraisal well, the Company is in discussions with various contractors and is actively assessing the availability of suitable rigs, equipment and personnel."
Talks are advanced, may expect funding agreement end Oct-mid Nov in this context - the asset is 3rd party assured and has further potential scale.
Big bear
I think AM pushed this to the wire and did complete the drills, probably caused the going concern comms as he didnt expect a slow down of the production in Jan/Feb.
He almost broke the company gaining CUDA, also pushed hardest in North Sea with Oilexco, with at one time the most drilling being done by one company - so he has a history of pushing to the envelope of available funding and risk, in the interest of fast development.
This can work for us now as we are through the worst risk, through BH support - but at a cost. AM knew they were in deep and had to fund him to get their eventual return what else are they going to do at this stage with JV coming?
I think he used up all his cash and leverage to secure the drill contractor, may have done a deal with them/find oil first drill, they get a % or he pays later.
perhaps this? RNA Mar 27th
"Further to the announcement of March 20, 2023, the Company has also issued 26,842,036 common shares (the "Shares") settling $2.2 million of payables to arm's length creditors of the Company."
Then the March $14.8m BH dilution pay for the outstanding drill cost and the GGS, which was only $4.5m and started in April - this expense is within the Q2 financials - two H wells cost around $8m so it was viable.
Otherwise, why wait so long to do the GGS -? This wasnt his priority it seems.
Phase A of discovery delineation in previous presentation August 2022 was for 6 drills
https://www.canoverseas.com/wp-content/uploads/2022/08/COPL_August_2022_Investor_Presentation_Final_080822.pdf
slide 9, red stars marked
Deep well locations A (permitting now)
confidential wells permitted and intended to be drilled in Jan/Feb this year were
BFDU 42-19-3576FH - Frontier 1
BFDU 41-30-3576FH - Frontier 2
They may well have been drilled, the presentation states the plan , 50% of the casing was already bought by Aug 2022 - which means intent and presumed ability to pay for a drilling contractor must have been viable - these wells were exactly as stated targeting Frontier 1 and 2, slide 16
"COPL has been able to secure 50% of the casing required to drill the first two horizontal wells.
– There is a current global shortage of oil field tubulars (casing) due to the Ukrainian conflict.
– Casing prices have increased >50% with all grades in short supply
– Production tubing prices have increased by >30%
• COPL’s Southwestern Unit has identified a drilling rig to conduct the operation.
Contracting the rig will occur once there is certainty around casing supply
• The Company has a well plan for drilling and completion operations
• The first horizontal well will target the Frontier 2 sand at a location in the Barron Flats Federal (Deep) Unit
• The second horizontal well will target the Frontier 1 sand at a location in the Barron Flats Federal (Deep) Unit
Looking forward to when the wells confidential status is removed following JV.
If they are in production - it sure allowed a better negotiating position with the JVP, may explain the long discussion period as would not be surprised if AM hasnt delayed matters by holding out for a better deal - perhaps him at point in COPL America with the discovery fully under his control, delineating it with JVP funds, materials and resources.
Many small cap oilers do not ever make it to production - all just potential.
Even of they do strike oil, the route to market will take many millions which they do not have - have to build all the topside infrastructure, road access, links to refinery to turn whatever oil produced from their first well into revenue, even if it was strike , they could maintain drilling prog to gain substantial reserves booked over time.
Then to do this in USA with their established fields - and then hopefully not in Alaska and its challenges, roads need building, route to refinery etc- or overseas in dubious jurisdictions.
Then the chances of said oil strike being substantial, flowing at high API is remote.
So add all the blockers to transition from exploration to production and profit and the % that truly make it to mid cap is negligible.
These are the facts:
COPL have all topside in place, with expanded GGS capacity
Roads built and route to market
P2 booked from BFU and CC fields
A financial backer in Anavio (albeit with associated cost in dilution, but no free lunch)
Using proven MF tech and at an increased rate, safely manage pressures
With a projection towards 7000 bpd that is now back on track
with 100% of the Cole Creek field owned, 85% of BFU and Fed Deep.
With reasonable SL debt of $37m end June given their standing start,
RBL becoming viable with proff of concept and so restructuring to better terms possible
Bonds that may be paid by shares or offset and paid off when production increases
Revised board and new directors joining.
That 7000 bpd at a conservative netback given no hedge, WTI rise and low tax = c $8m a month net profit once gained
COPL estimated 18 months to get to 7000bpd in 2021, perhaps c 12 months from now they know their field and have the infrastructure in place, H wells viable for Shannon formation as evidenced by an operator north of them.
From standing start of identifying the asset, securing it along with an inherited insolvent partner CUDA Working interest, gaining BH funding and developing the field, dealing with multiple problems back to back, some of their own making for sure - but driving through towards a sustainable operation right now - with $8.5m short term liquidity coming from hedge removal /Anavio finance and $5m banked as of end June.
Comprehensive gain coming per Q is c $24m, which restructures and pays off debt rapidly.
Then there is the JV.
All of which secures mid cap status for COPL, against all odds.
Pilot
you can have debt/liabilities and still be in profit in terms of cash flow, its how you offset/pay back later/ring fence impacts at the critical early formative stage
This is captured in the financials page 3
the only number you need concern yourself with is the table on page 3
Comprehensive (loss) income (2,123)
$2m loss in Quarter, which with hedge removed/O&A reduction of $1m for Q4 means they are approaching cash flow profit , equally $8.5m on account so in real terms they cover the liability in any case.
1- Debt is fully serviced - despite the market retaining doubts - now at $37m - soon RBL possible and the SL will be retired for much better offset terms.
2 - Smaller BH has completed selling according to calculations posted by LLP and others - Anavio is holding for the greater prize and looking to re plan bonds for lower dilution
3 - Prod is rising - just not reported yet, will continue to do so as the MF tech is proven. Winter well head equipment was installed so prod can be better sustained in cold weather.
4 - LOI signed, commercial term discussions since April - JV may reasonably be expected in Jan or before - fact remains a large oil company would not bother signing an LOI if the stated intent to complete was not apparent - it secures the position whilst legals are completed.
Address items 1-4 - then monthly operations comms default to rising production and JV delineation progress.
Sentiment is powerful in the context of lowering risk and increasing upside as time passes.
Pilot
You dont understand what cashflow is then in this context, or dont want to?
its not about warrants/issuing shares which you maintain
Its net incoming/outgoing cash
Which with latest measures means they are approaching profit
It seems the BH is content with the amount of shares they own and not looking to further dilute, perhaps restructure the bonds as long as JV deal occurs - it appears they are aware of the negotiations progression (as it seems are the SL)
"Anavio and the Company have agreed to discuss a possible reduction of the quantum of payment of any "Make Whole Amount" under the terms and conditions of each of its 2027 Bonds and 2028 Bonds (each as defined below), provided a satisfactory Joint Venture is entered into by the Company, hence reducing potential dilution."
The BH gain profit by
- sale of delineated asset and dividend payments
- selling their accumulated shares over time at much higher SP, mcap reflecting the sale payments to COPL over time
PI do aswell.
Pilot - we are talking cash flow,
the net incoming revenue and net costs are the numbers to look at - page 3 table
they had $5m on account end June aswell - so even if warrants included they are breakeven in Q3 and into profit Q4 as prod is rising, we should find out in 2 weeks the trend
its semantics in any case as they are fully funded:
"$8.5 million of liquidity ensures the Company is fully financed in to the first quarter of 2024 with the intention of reaching possible third party strategic Joint Venture (as defined below) agreement"
Yes Pilot - the hedge removal measure does make them profitable
https://www.canoverseas.com/wp-content/uploads/2023/08/COPL-Q2-2023-FS-_Aug14-FINAL.pdf
page 3 summary table Q2 financials
Total revenue from oil sales in Q2 = $6,344,000
Total expenses in Q2 = $8,163,000
Comprehensive (loss) = -$2,123,000
So with hedge removed, COPL expect $5m revenue in period Sep to Jan as per RBS, or $1m a month given WTI rise
= $3m per Q offsets the $2.1m loss for Q, plus O&A reductions.
Making them profitable due to this measure.
Equally, it appears no payment of the capital in Q2 back to SL
page 5
Cash Flow From (Used In) Financing Activities:
Repayment of senior credit facility -
it appears only interest paid :
Interest paid on senior credit facility = $1,659,000
Morning Unnd
I was going on the financials for Q2
https://www.canoverseas.com/wp-content/uploads/2023/08/COPL-Q2-2023-FS-_Aug14-FINAL.pdf
table at bottom of page 5
Cash Flow From (Used In) Investing Activities
Property and equipment expenditures = $3,972,000
Which I took to be the GGS payments upfront, as they started work in April
with GGS costing $4.5m - so about right for cash flow as they finished work in early July on time and on budget, so no need to tap the BH for GGS now, as the kit is online and paid for.
I cant see the steel supplier waiting on payment this long given COPL financial journey, so if you accept that then the hedge restructure $5m saved, $3.5m BH and cash on account comes to around $10m in Q4 - nice round number - with JV expected in Jan - may be a JVP requirement to pay for a share of initial drills.
Seems the SL and BH are content to support COPL until JV lands, adds some stability as prod rises , WTI increases and hedge removed - all at the perfect time for COPL.
"Restructure 100% of the WTI hedges from Sep23 to Jan24, freeing up c. $5.0 million of near-term cash flow"
They expect $5m cash saved Sep23 to Jan24 - $1m per month pays for the SL capital repayment in full per month - this measure alone makes them profitable already.
End June COPL had $5m on account - no major capex July - to date mentioned in RNS - GGS was paid for previously, O&A is reducing, WTI price increases.
add
"$3.5 million equity injection at 4p per share from Anavio
cash flow /on account Sep- Jan perhaps c $10m scale (JVP requirement?)
More than enough for known outgoings / BFU field development in period/contingency
Equally :
"allow the reallocation of significant COPL expenses to the COPL America Inc. operating entity."
which is only related to the Frontier and JV - there is no revenue coming into this subsidiary yet.
Significant expenses being ? new drills imo.
Once the BFU field stabilises with the increased butane injection rate, we should get a new modelled production growth graph update, with revised production plateau.
It was up to 7000 bpd and taking 18 months to get there previously as modelled in 2021 - on website investors page:
"COPL is a fast growing US-focused oil producer. It holds operated stakes in two adjacent oil fields in Wyoming, including Barron Flats where production is set to triple to a peak of ~7 kbopd (3.2 kbopd net to COPL) within 18 months. “(Tennyson Securities forecast, 19 August 2021)”
But that was with MF rate around rate half of that planned now the GGS steel pipework has replaced the plastic, allowing higher pressures to be handled and so greater production.
Very interesting post by Eazy on Shannon H well by adjacent operator - step change in production possible.
Combination of factors in play now:
GGS phased completion over time
Increased rate of gas flood possible
Drilling possible with revenue gained
Horizontal well potential, maximises extraction
De waxing of pipes
Winter well head kit installed to maintain operations
Cole Creek well recompletion programme
All adds to production curve and total expected in 2021.
Once the revenue starts coming, its cumulative, reinvestment in the field adds more wells, higher production enabled, more revenue and on it goes.
There is also the Dakota formation, not mentioned in the JV, that COPL America may develop using the BFU profits - leaving the Frontier for the JVP to focus on.