Member Info for Tiburn

Trolls a minor inconvenience if even noticed, like lint.

Ignore or flick away without thought.

Prod is rising - reached 2700 and growth profile well established with plastic GGS pipes previously , now steel and double previous NGL injectant rate.

These are the facts, MF is an established technique across PRB - anyone that downplays COPL prod expectations has an agenda, there is no technical basis for this position.

COPL are going slow and steady, with a keen eye on sustainable and safe operation as drivers, not PI sentiment and SP fluctuations.

Any PI estimate of when prod reaches 5000 bpd as modelled by independent reservoir engineers is just that, an estimate without full understanding, so subject to change as events unfold - as none of us know the full story and very few understand the technical constraints in any case. Its not a linear relationship, subject to ridicule if not achieved - instead understand the technical constraints overcome over time in RNS.

RNS Nov 1st 2022

"COPL has provided its internal evaluation to International Reservoir Technologies ("IRT"), its specialist reservoir engineering firm. In late September IRT tested the internal evaluation which resulted a field wide re-simulation of the miscible flood in early October"

"The reservoir volume of the Shannon appears to be underestimated as approximately 30% more volume of enriched gas has been injected into the reservoir to achieve the production response observed this year than assumed in the original simulations. As such, the eastern injection patterns are full to design with movement of the miscible bank being observed."

Critically the constraints have been addressed:

Aug 16th 2022 RNS:

"Despite the positive reservoir response to the Miscible Flood, the Company's ability to optimize the field production rates and take advantage of the oil production response to the enriched gas injection is currently restricted. This is due to operating pressure limitations on wellsite treating, separation, and vapor recovery units at several wells in addition to ongoing limitations on gas gathering system operating pressures"

The understanding of how the miscible front is working has increased since then:

"The Company is now in a better position to predict future increased well responses due to the progression of the miscible front in the reservoir. As such, the BFU Shannon reservoir continues to respond better to the miscible flood than expectations at the time of the Atomic acquisition which were based on early simulations of enriched gas injection and simulations completed by the Company earlier this year."

The 5000 bpd is viable - once past 2000bpd ( which could be right now) its just adding stability to COPL position and their ability to grow rapidly - the key milestone will have been reached, financial stability and ability to develop the field.

Or you can go with Lint's biased view.

Looking at mining and oil opps in general, safe jurisdiction is becoming much more of a key driver for investment, lower risk given supply chain issues and geo politics, industry USA reshoring and de globalisation ongoing.

Combined with great ESG credentials as per Stas post, in the context of the largest onshore find in decades then its a win win for the JVP.

Here are some more objective facts.

JURISDICTION

• Onshore USA is the lowest cost & risk sector globally

• Safe political jurisdiction, pro oil and exploration State, Governor & Senator support

• Low tax and royalty regime

• Substantial M&A activity in the Powder River - hot basin.

• Drilling permits authorised November 2023

DISCOVERY

• Discovery ratified by independent Ryder Scott to 1 Billion barrels OIP, subsequent JVP Due diligence and further evaluation

• Stacked reservoir plays - multiple targets, additional OIP following delineation

• Suitable for immediate tertiary MF recovery up to 50% of OIP

• No wildcat drilling - established PRB reservoirs

• Low cost drilling onshore, rapid production and Capex payback

• Route to market - Infrastructure/ refinery established in mature oil region

• Carbon capture play with impermeable anticline 9 miles long at Cole Creek

RESERVES CONTEXT

https://oilprice.com/Latest-Energy-News/World-News/BP-Rosneft-Were-Only-Firms-With-Over-1-Billion-Barrel-Oil-Finds-In-2021.html

Jan 2022

"BP and Rosneft were the only companies to have delivered over 1 billion barrels of oil equivalent in discoveries last year "

"Overall, the volume of discovered resources globally was disappointing, dropping from 19 billion barrels of oil equivalent (boe) in 2020 to just 6.6 billion boe in 2021,"

“Frontier exploration drilling fell to the lowest level ever recorded by Westwood (since 2008) with only 15 frontier wells completing and only one making a potentially modest-sized commercial discovery,”

“The 2022 exploration programme is dominated by commitment wells on licences acquired prior to 2020. Things may change in 2023 and beyond, as current portfolios are drilled out and if acreage is not renewed in response to energy transition pressures"

CONCLUSIONS

The longer time taken to JV is due to the scale of the discovery - largest find in decades onshore USA at a time when Majors reserves are very low and WTI price high - requiring complex technical evaluation and commercial terms negotiation.

Objectively - a Major will secure the discovery through partnership with COPL.

The main negative position touted assumes the JV may not happen, as many other promises did not come to fruition as justification, despite multiple events as per Letter of Intent.

COPL didn't force this document on the JVP, it was initiated by them to protect their interests pre formal signing - indicating the intent to JV - hence the name.

The second theme pushed is that even if JV did happen, the most value that may be expected is a paltry 5p-9p range - numbers plucked form the air with zero workings - All designed to sow seeds of doubt, to discourage the unresearched or new investors as to the upside - based on past promises not kept and poor comms.

So valuing a +1 Billion OIP resource at $70m top end mcap equivalent - or just 7 cents a barrel when benchmarked sales deals completed are in the range of $3-5 barrel once delineated - and this is the low end, without all the positives of the Wyoming location.

So if im a new investor, what to believe - as the COPL past is there to see, it doesnt strike confidence on the surface, the SP decimation being foremost, primarily die to poor comms and vested interests who are paying the detractors, as to discount so many positives continually is as much sign as you may need to understand their MO.

These are the objective facts.

Standard practise on any new product issued, especially for a front of house website, is to complete checks, It took me 30 mins to review.

Its just so slack to still have targets from 2021 - update to new status.

Missed this one aswell COPL, on the investors page no less

https://www.canoverseas.com/investors/

"The neighbouring Cole Creek Unit provides additional oil production growth through workovers"

ok - so what was the full workover result (now complete?)

what about the additional Cole Creek 8000 acres find here, detailed in RNS?

9 mile anticline for carbon capture?

"The Nigerian operations also provide significant potential upside"

Obviously no one proof read this page then....

If you want to draw investors in at this pivotal time this is basic stuff, they may be oil men and not PR specialists, but this is hardly difficult - just refer to the their own RNS and bring out the salient points.

However, at least signs of some activity and preparation for next stage coming

prod rise should take the brakes off, JV massively so and many will be looking at this website, so its being updated is for that - they now value investors taking positions, otherwise they wouldnt have bothered.

This also implies they plan on becoming a larger company and retaining shareholders, perhaps promote Insti investment in time, linked to US launch perhaps - mid cap qualities - overall message is we are getting closer to JV.

Fair enough Tuckman

Your right, to be accurate the BPC drill had a 1 in 3 COS- they didnt get to TD, but the target formations from the seismic were not hit on the way down, so no point perhaps - as you know about the BPC drill I assume you were also invested and so were as wrong as all of us in that stock?!

O&G penny share stock are always cash strapped - not sure what your argument is?

The $17m is a block of cash however and shows confidence by the lenders - with no hedge, high WTI, reduced O&A costs, lower cash on account requirement , GGS paid for in April, 1m NGL injectant paid for in Oct - no big draws on funds we know of coming so can focus on getting to b/e.

Albeit its been a horrible financial journey and a lot of upside has been mortgaged to get COPL to this point. Each to their own, but IMHO a corner has been turned here, I agree, lets see what Dec/Jan prod brings.

Tuckman - some u win, some u lose, the BPC geology was compelling, but it was a 50-50 wildcat drill - such is O&G . But there have been some great ones aswell.

This isnt about anyone's viewpoint or ability to pick winning stock, its about COPL objective situation and reaching an understanding based on research and learning - PI will always be at difficult points on the confidence curve based on that understanding.

But COPL have found their +1 Billion barrel OIP - biggest find in decades USA onshore have they not?

The COPL plan is in action, we know of no impediments to prod rising, JV happening.

No one is buying until 100% proven events occur - doesnt make them right or cause fears over the assets veracity by inference, it just makes them cautious.

I dont see the need for further finance at all, the $17m liquidity should suffice to get to b/e 2000 bpd.

There is no predicting the worst snow storms in decades Tuckman.

The winter issues were about access to the well heads, poor road quality and well heads not been winterised - these aspects appear to have been addressed to my satisfaction and probably for most.

As to their effectiveness, Im assuming they have done all that they can, what else would you have them do to prepare for Winter?

You may be an expert on oil field slowdowns during Winter, but most have to go by the company RNS and trust that lessons were learned and the measures taken will mitigate most problems.

This sector isnt straightforward at all, there are always risks, its up to each PI to determine if the company is taking a reasonable approach - or not .

I think they have mitigated this winter ops risk substantially looking at the evidence presented, you do not, but I cant see why you would take the position objectively - there are enough issues not addressed without downplaying the efficacy of SWP field works to known issues.

Indeed Tuckman

But COPL are prepared for Winter.

RNS Nov 15th

"Field work was undertaken to repair and dome access roads, with numerous required inspections and repair programs to all low-pressure heater-treater-separator units to prepare the upgraded gas gathering system for the resumption of enriched natural gas liquid ("NGL") injection."

RNS July 6th

"Delivery of the first three of eight high-working pressure wellsite/production separation facilities required for the upgrade is anticipated by week's end, with the balance of the units being delivered over the following two weeks. Six of these units were fabricated in Alberta to specifications for winter operations common in Alberta, Canada which should mitigate the issues experienced at the BFSU during the winter of 2023."

Roads repaired , well head equipment installed for winter operations so they dont get blindsided again - equally $17m of liquidity released for period to end Q1 so even if they did have issues despite the measures taken, they have a substantial cash buffer.

I trust this allays most concerns on Winter production slowdown.

Its possible the two Confidential wells were paid for and drilled by the JVP for flow tests

and completed for prod at the time - as their production is not required to be declared to WOGCC nor then subject to reporting in COPL accounts as declared revenue (as then transparent to any research done by competition , negating the wells confidentiality).

However revenue could well have flowed to COPL since that time to an agreed % split.

Cash on account remained high in period, $4m end June even after the $4.5m GGS works started in April.

So with this assumed revenue buffer COPL have the ability to develop the BFU in a methodical, safe and steady fashion as evidenced to date - its not being advanced as fast as possible or corners cut, this approach will surely pay off in the future with steady prod growth as the NGL injectant rate is increased.

Combine the hedge offset for Q4/ SL interest deferred /lower cash on account reqs/ further BH funding and O&A costs cuts with Directors taking shares as salary, all leads to enabling a strong COPL foundation towards the end goal of securing the JV - as these are temporary/one off finance measures and not continuous it implies the JV timeframe for completion is fully expected by COPL financiers in Q1 2024.

The solid BFU performance profile and liquid company finance foundation has allowed AM to focus on the JV negotiations - regardless of how his new role came to be its the most logical move for COPL and plays to his strengths -as he couldn't appear to delegate he simply did not have time to do everything - now he does not need to.

Cowan will only start comms once prod is rising and all on track imo - given the delay for MF induced rise in oil prod, I expect this Mid December or early Jan.

In the meantime, the debt is serviced or offset to March 2025 by which time production should be approaching or at the 5000 bpd plateau just from BFU, plus JV and delineated field works ongoing with rising production/RBL from reserves gained.

In real terms, given the size of asset the overall debt is miniscule and will be serviced or replaced by RBL in time - conducting field operations with borrowed funds is the sector model.

If your AM then an early funds payment for a % of working interest should be a JV term condition goal, $50m would by a huge catalyst , is small change to the Major

Blackstoat analysis of full potential stands - there is no correlation with current SP as none of the upside is factored in yet let alone current P2 - but it will be in time, for a much larger OIP scale.

Nelson

"I have had a view that these wells are significant for some time."

On confidential wells on WOGCC

49-009-49002

APD description:

"Southwestern Production Corp proposes to drill a pilot hole to 9,079' TVD in the Frontier formation, then kick off horizontally to 8,961' TVD/11,053' MD to test the Frontier 2 D Sand formation."

The 11,053 ' MD or measured depth is the length of the horizontal kick off wellbore

This equates to a 2 mile long lateral from which they can produce, the other confidential well had similar distance testing Frontier 1.

Example of time and cost to drill H wells form the Permian:

https://www.pheasantenergy.com/the-numbers-the-permian-excels/

"now it’s taking 15 .... days to drill a horizontal well down 10,000 ft"

"The average time it takes to drill a well dropped from 35 days to 14 in the last two years. The cost has plummeted from $4.5 million to $2.6 million. The average drill cost per foot was lowered from $245 to $143. "

Assuming COPL could have gained these economies, they could have drilled the two H wells themselves using BH funds as outlined previously - multiple funds gained for the GGS yet it only cost $4.5m

Or more likely, the JVP funded the majority of the drills, assisted on materials from their stocks bought in bulk, used their drill company etc which would have reduced costs.

Assuming the two drills were a success, (as the JV talks continued) then they have delineated 4mile lateral distance of the leasehold area in total. This should give a substantial reserves value gained which have value in the JV deal discussions.

Win-win for both - as part of the terms , COPL could sell these reserves to the JVP at fair market price for oil in ground minus the cost of the drills. These deal funds may be enough to pay off their debt, would be small change for the JVP but assist in gaining cheap reserves with much upside to develop in time, secure their position as partner and maintained by the LOI until the deal is signed.

So what mcap growth if COPL do secure these funds in the deal and SL debts paid off, BH interest payments in cash?

COPL new management team and $17m liquidity package to finance the plan ongoing

just needs the first domino to fall soon - production rising.

Hi PAss

Great posting and research as always

You have posted all the indicators/positives on a deal being done in TL, would it be ok to collate them and summarise in a few bullets from your notes, would be a great help.

Re Treks point :

"US govt is fast tracking permitting to encourage onshore production as part of its deglobalisation strategy. Trillions of USD set asset for infrastructure spend"

Phoenix right place, right time, re shoring of industry, with high copper requirements, preferably sourced within US:

https://zeihan.com/trade-and-reshoring-in-the-usa/

Https://www.nextbigfuture.com/2022/11/zeihan-predicts-ev-revolution-fails-and-high-global-inflation-for-five-years.html#:~:text=Zeihan%20is%20predicting%20that%20copper%20supply%20shortages%20will,meters%20with%20a%20target%20of%20about%20100%20meters.

"By 2030, analysts at Rystad Energy project that copper demand will outstrip supply by more than 6 million tonnes."

+2 Billion barrel resource, third party ratified by RS and then the JVP to their obvious satisfaction, as LOI has been signed and JV talks continue, finalising outstanding matters so the main thrust of the agreement and commercials must be agreed.

in tandem

SP has been decimated to junk failure status and cannot gain any traction despite going concern status totally mitigated by funding deals, cost cuts etc.

COPL should release an unequivocal RNS statement that going concern is not an issue now until at least the end Q1 2024 - as SL has offset loan interest for this period, hedge is offset to 2025, BH funds have been gained, operating cost savings made etc - rather than leaving this fact as just implied through these actions.

In the meantime - production rises towards 2000 bpd breakeven according to the plan.

JV talks continue which represent a material step change in COPL fortunes, enabling a path to mid cap status on delineation and eventual sale.

Leew

If you accept that the confidential wells were drilled in Jan, their confidential status could have been a key constraint - the going concern bombshell to decimate the SP happens at the exact same time the drill results understood is poor timing to say the least - AM may not have been able to outline the drill results to the SL and so stall the cash flow calls?

Options could be:

1 - drill flow test success - not placed in to prod - JVP paid for drills /prod revenue immaterial

2 - flow test success - placed into prod but all revenue flows to JVP as they paid for them

3 - Flow test failure/indeterminate - no production

4 - flow test success - COPL paid for drills using BH funds - placed into prod later, but not declared revenue in accounts

However either way, as JV discussions continued, these drills did their job to prove Frontier flows.

Equally, perhaps they were not placed into prod immediately following drilling in Jan/Feb as winter conditions/ roads access dire during winter for tankers, they are only now fully addressing this road maintenance.

Feb 1 RNS

"On 28 January 2023 the BFSU gas plant and field operations were shut-in for safety purposes due to severe winter weather and BFSU production and gas injection has been offline since that date. BFSU production facilities are presently being re-started from 30 January 2023 as weather and access roads are cleared. Limited quantities of oil have been trucked from Cole Creek Unit during this time."

Stas

"I'm not sure why there can be any questioning of the confidential wells, we all know the confidential wells have been drilled."

Our posts crossed - im not questioning this and fully believe they were drilled once I had found their record on WOGCC! Im just responding to some that are questioning this.

Using same link , access Southwester, then production by well

header states :

"Operator Production for Selected Year, Excluding Confidential Wells"

So declared production is not given for confidential wells

COPL evaluate ONLY their declared production in their accounts

The drills are managed by SWP and they asked for confidential well status from WOGCC , its nothing to do with the NDA but key to the ongoing JV discussions -this was pre LOI so prudent to keep these H wells confidential for multiple reasons.

Operators cant maintain confidential well status in perpetuity, its gets reviewed periodically.

Once JV signed all will be understood, but we know now COPL applied for and gained permits to drill two Frontier wells in the FD - they planned to drill in Jan 2023 meaning funds must have been in place or were funded by JVP? two wells are listed as confidential so they must have been drilled rather than remain as permits, were not P&A as then their confidential status would be rescinded - and critically as outlined their production is also confidential on WOGCC.

We also know that AM expected JV in early new year 2023 - following these drill results?

The fact remains the JVP remained at the table for further evaluation and signed an LOI.

April 20th RNS

"Frontier oil Joint Venture discussions are continuing, now focused on commercial terms."

All well data understood by then, further field evaluation completed, interestingly specifically Frontier formation in discussion - not FD or CC leases and no mention of Dakota.

"Substantial additional technical evaluation has been undertaken during this period, which has led to a better understanding, and increased confidence, of this resource."

Jansey

"If you read the latest MD&A there is a 0.6m receivable from a “partner in their Wyoming assets”

Average price of a Horizontal well is c $4m

CNOOC share of FD is 15%, if they chose to take part in one well, 15% of $4m =$0.6m

On confidential wells on WOGCC

49-009-49002

APD description:

"Southwestern Production Corp proposes to drill a pilot hole to 9,079' TVD in the Frontier formation, then kick off horizontally to 8,961' TVD/11,053' MD to test the Frontier 2 D Sand formation."

The number of drilled wells listed in WOGCC in well status:

http://pipeline.wyo.gov/OperatorsFrame.cfm?Oops=1

search for

SOUTHWESTERN PRODUCTION CORPORATION

then well status, brings up a table

which lists 2 confidential wells.

confidential wells = drilled - its not confidential permit to drill recorded in this table - its called wells status.

Confidential well status must mean all aspects relating to it, key being the declared production - in WOGCC or in a Company accounts - as if ascertained they had success and high production in a certain formation, the need for well confidentiality is somewhat challenged, so why would they bother?

Otherwise, they would not be put into production which would be a completely illogical move given COPL cash flow needs.