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6th Sept. (New CEO)
" It is my simple aim to drive maximum value from them, whilst also ensuring that if the interest being shown by certain third parties in joint venturing with us matches our own views on value, we will seek to further scale through partnership."
Five weeks later.....
15th Nov.
"The negotiations regarding a possible joint venture announced by the Company in July 2023 are ongoing and the parties are working to agree all outstanding matters."
Sounds to me like they have agreed the scope of the JV and the price. Just finalising a few details.
Yes, no doubt we have had the production low point.
Wells will be slowly coming on line and the NGL taking effect. UP from here.
From COPL : "The company expects to see initial results from the higher density NGL's before the end of November 2023."
I can't see any reason why we cant get back to at least previous production highs, and more.
It's been done. The oil is there. It hasn't ran out. The field is at the beginning of it's life. And we can now pump in
at least the same amount of NGL that bore fruit last time.
But now with the new management running a tight ship those previous highs make us profitable.(helped by oil price of course)
It is shocking how much we have been able so save on expenses. But very welcome that we can.
If todays RNS had said Nov. is running at 1400bopd we would have had a visible sign that the plan is working.
Just going to take a short time longer.
Bit disappointing the field is yet to respond in a meaningful way to date. But it will. It did previously. Be interesting to hear what they saying if we get the Q&A in terms of their confidence/optimism.
I read the JV wording as positive. (An agreement is on the table save for a few outstanding matters is how I took it ?)
We know Q3 results will be poor.
It's all about how production is going. Only words we have had from COPL was.
"Currently, the Company is determining the best level of efficiency and is restarting NGL gas injection in September. The Company is focused on delivering production results in Q4 2023 and, further guidance will be provided as appropriate, and as approved by the Board of Directors."
"The company plans to spend over $500,000 on NGL injectant in each of October and November to increase the density of NGL's in the gas injection"
SP is down due to historical:
Previous mismanagement of the business
Core production down (leading to loss making and going concern issues)
Interest rates high
Onerous means to raise cash(bonds)
Price of oil last year.
Well that is all pretty much behind us now. Only way is UP. !
We are at the start of:
New management
Production plan in place and on going to increase production (to fully fund the business for 2024)
Interest rates have peaked and should drop from now
We should have no need for more cash if the production plan works
Oil price is set to be buoyant throughout next year.
AND not forgetting the cherry on top. A JV with a major early next year...Maybe !!
Just need to see this all starting to play out and the wider market getting wind of it for the sp to respond.
I am hoping they tell us October production has risen to 1400bopd and they are expecting that to increase.
If so 2000 bopd should be achievable by end of Dec. or Jan.
I think we'll get some positive news this week.
I am expecting a tick up in the sp from Monday in anticipation of progress on production, or at least
a road map of where we are headed.
Increased production with a positive outlook looking forward will do wonders for the sp.
Rodney, I am more cautious about new CEO's to be honest. They often have no skin in the game and are often brought in
after previous management failures to turn things around, but that usually involves refinancing at the expense of long term private investors.
Time will tell. However I am cautiously optimistic that things will come good for COPL
Time will tell. But having said that I do think the sp is so low it should be up from here.. Fingers crossed.
Kind of depends on the sp at the time Finwittrader.
If it surges on a JV deal the bondholders might prefer to convert and sell at a higher sp than 2.6p
Lets' say JV is announced with a large lump sum. Sp surges to 10p.(for example). COPL inform the bondholders they want to buy bonds back. Bondholders think, hold on we should rather convert and sell at a much higher price than 2.6p
They can sell all the way down to 2.6p(and a bit lower) for a huge profit.
COPL ideally should then hold fire and wait until that plays out, price drops to circa 2.6p(or lower) and THEN starting buying shares on the open market. Thus, effectively buying back all the diluting shares.
Who knows how this will all play out. Probably why the current sp is on it's knees!
6 Sept:
"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."
I read this as Anavio being agreeable for COPL to redeem the bonds. (if we get the JV.)
If COPL do negotiate a decent lump sum from the JV and/or an RBL they clearly become in a much stronger position.
Sure, buy back all the bonds if possible. Or negotiate some arrangement with Anavio
HOWEVER, Alternatively COPL could simply start buying shares at whatever price bondholders are selling at if they convert.
From the BP article
" By pursuing joint ventures, BP can achieve growth ambitions while avoiding spending billions on acquisitions. However, agreeing on the value of the combined assets and how to divide the venture's ownership are among the hurdles BP would have to clear with potential partners, the sources said. "
Negotiations obviously take time especially when agreeing the value of assets.
Our new CEO:
"I am committed to delivering on the potential of our increasingly well invested assets. It is my simple aim to drive maximum value from them, whilst also ensuring that if the interest being shown by certain third parties in joint venturing with us matches our own views on value, we will seek to further scale through partnership."
I am very confident that we can at least get back to previous highs with the increased gas injection.
We don't know how long it will take or what figure we might achieve. I think 62,400 was a monthly high with the low pressure pipework. I am optimistic we can get somewhere near 3000bopd eventually.
With the new regime of cost control that makes us a highly profitable stable production company.
(That is the bread and butter, with the jam being the JV and horizontal drilling in the Cole Creek to come?)