Member Info for uncertain

Flybyboy, the reason you bought is one of the reasons many people sold. Nevertheless Drilly McBoatface could still come good!

They were making losses in the spring and had cash flow problems. My view is that the cashflow is being remedied in the second half of the year. They do have an ongoing problem in meeting their drilling obligations under licence or they would not be trying to defer them. They are not expanding the MJF field as fast as they would like to but output should now be rising.

These are the negative aspects. The positive ones are that Yelemes should be on export licence now and producing again; output should be in the 2k to 2.5k bopd per day range; the export % should be going up as well; Brent is shooting up (touched $49 briefly this morning); something is going on with flaring but we don't really know what.

On a month by month basis CASP is now profitable. What we don't currently know is what they are spending that profit on.

and they need a good oil price to produce the cash flow to invest more in the deeps, although further MJF development should come first IMO. $48 and climbing this morning

Not sure about the papal infallibility though!

Welcome aboard Underdog - a suitable name for this share.

And whoosh! As the US markets open, Brent climbs to $47.62. On reflection we could see $50 by the end of the month!

I am thinking that $50 by Xmas is not unreasonable now. We are just passing the high point in August before the second wave of Covid brought Brent down again and we will soon have a price which is higher than at any time since February. Still a long haul for CASP as we turn around the cashflow crisis of the Spring, but there are reasons to be optimistic.

presumably if a deep flows they'll be happy to pay the "tax". Its not really tax, more repayment of pre casp expenditure on the field as I understand it.

Meanwhile another vaccine success has been announced this morning (Oxford Astrazeneca) and Brent is heading rapidly north towards $46

Brent finished the week over $45. We seem to be back to August prices. Each time we get a new vaccine confirmed as effective I am expecting more strength in Brent.

Those flare rumours suddenly resurfacing after a a couple of weeks!

The reference price is Brent although I believe we get a little less than Brent. In the past CASP have indicated that Brent at $35 is about breakeven olthough they can survive on $30 for a while. I think those figures are based on domestic/ export splits and domestic prices which are out of date, so a little caution is needed there. We need a margin above $35 to get on top of cashflow issues from earlier in the year and in order to get the drilling programme going again, particularly MJF

Another rise in Brent.
Better cashflow, MJF expansion sooner.
Larger oilflow, more money for expansion and maybe deeps
2021
will be much more fun

I think we are in for a quiet time until after Xmas. If Brent stabilises or rises and January brings moderately good news about MJF output, I think we may see a bit of optimism in the new year.

to the vaccine news. CASP less so, but a small move in the right direction. We need to have both increased price and increased quantity! RNS soon please!

Biden is looking the likely winner now (on the basis that the remaining votes are postal votes, which have a Democrat bias) and he has a limited anti-fracking policy. On the other hand he is more likely to lockdown for a period, and he will puush for long term reduction on the dependence on petrol and diesel. I would guess the net effect on the oil price would be pretty neutral for the next year. A vaccine would be the best shot in the arm for Brent.

For today at least, the market disagrees with you - back at $41. Europe may be locking down, but oil is sold elsewhere.

nicely today towards $40 after testing $35. I wonder what impact if any the outcome of the US election will have on Brent.

Wabu, the problem is that the payment of $250K pcm has coincided with other cashflow issues. Obviously the period from March to June when oil prices went through the floor created a difficulty. When we got the export licence for MJF we also went from being paid in advance by local traders to being paid in arrears for our export sales. Local traders also wanted to paid back during the covid period which we are largely doing in oil rather than cash. There are also problems with drilling obligations under licence agreements which increase our outgoings, although we are attempting to negotiate our way out of this. Finally 300 bopd of output from the Yelemes field is suspended while we apply for an export licence (expected soon), and we have just acquired a $60K pcm liability with the boat.

This all sounds a bit negative but in actual fact the situation is righting itself in the second half of the year with output likely to rise over 2000 bopd by December and maybe moving up towards 2500 bopd. With current oil prices and export percentages we are likely to manage a revenue in the $6-7m range for the second half of the year and with the cashflow position resolving itself should be able to afford more MJF drills next year.

And then of course there are always the deeps and the possibility of leasing out the boat, but no-one is counting on that at the moment!

If output remained at 1620 bopd for July and August and an export percentage of 50% was achieved together with an average export price of $40, with a drop to 1340 bopd in September, then assuming the local price was $5 then I get revenue for Q3 of $3.164m.

If they really achieve 2200 bopd in Q4, as suggested is possible then this could rise to about $4m with the same assumptions about export price and export percentage.

Turns out I didn't need Clive's fag packet after all

They can try to negotiate a delay on 802 as they have with other drilling obligations under the licence. How they fund the drill is the question but they have given us no financial information to assess their position - not even enough information for us to guess what that position is.

If you are reading this Clive, just give us Q3 output, average export price received and export percentage and then we can work out the rest for ourselves.

It really isn't hard. You should be able to work it out on the back of fag packet before lunch

This is an operational update, not a Q3 report. The Q&A supplement some information we need but quite a lot is missing. Poor communications as per usual.

What we don't know:
what output was in July and August;
we don't know if the currently allowed 50-50% export is being met;
we can reasonably assume around $40 is being generated , but no actual price achieved is reported.

What we have learned:
There was a dip in output in September to 1340 bopd but this is temporary
Output is expected to move up to the 2000-2500 bopd over the next few months
Acid treatment on the deeps is a Chinese replacement because of problems getting the acid through the Russian Border
Debt to traders is being paid of at least in part with oil, but the Kazakh price remains very low

But really Clive this is unacceptably low levels of communication. We used to get monthly reports on output, price received and percentage exported. We understand that we won't get that because you have gone over to quarterly reporting, but you haven't, have you? You have gone over to rendom reporting.

Where is the quarterly report? Give us the information we need to make sensible decisions about our investments.