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Bahamas Petroleum Company (BPC)

Street66
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Bahamas Petroleum Company (BPC)

#143873

Postby Street66 » June 5th, 2018, 10:21 am

A friend of mine tells me he's made a killing recently on BPC's rise from 1p to 3p, almost overnight, on rumours of discussions with a major.

I've admittedly done very little research, but understand there's some excitement surrounding BPC's various licenses within the Bahamas - with BPC supporters trying to divine:
a. the governments willingness to grant drilling rights
b. the existence of viable reserves in the zones
c. "talks" of a buy-out or JV with a major

all of which will propel this minnow from the current 3p back to the heady days of 2011 when it was trading at 250p :o !

Members of the BPC Shareholders facebook group have even started picking out their favourite colours for their Aston/Bugatti (depending on how much stock they have) for when it "inevitably" strikes gold :roll: .

Apart from the fact that reading the posts and reactions to non-news is a truly revealing glimpse into confirmation bias, I am curious to know if anyone here has come across BPC and/or knows anything substantive about it?

Yours curiously,
Street66

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Re: Bahamas Petroleum Company (BPC)

#143939

Postby spasmodicus » June 5th, 2018, 3:56 pm

back to the heady days of 2011 when it was trading at 250p

whoooa there! according to Hargreaves Lansdowne it maxed at 25p (but maybe they did a 10:1 consolidation?)

I took a look at their website
https://www.bpcplc.com

You can download Ryder Scott's 2011 CPR and there is also some stuff on the 3D survey that they later shot. Back in the heady days of $100/barrel you could put in an order for the Bugatti Veyron on the strength of this, but nowadays you won't get many takers.

To add more pessimism, there are also environmental movements against such development in the Bahamas, see
http://www.tribune242.com/news/2018/apr ... ideration/

I would wait for the SP to go back down below 1p before buying some and waiting for the next "pump and dump"?

$ceptically,
S

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Re: Bahamas Petroleum Company (BPC)

#144041

Postby Street66 » June 6th, 2018, 6:39 am

Thanks Spasmodicus!

To add more pessimism, there are also environmental movements against such development in the Bahamas, see
http://www.tribune242.com/news/2018/apr ... ideration/


Yes - an example of the confirmation bias I mentioned is that this news apparently means that approval will definitely be given because otherwise why would the environmentalists be working so hard against it :roll:

Suspect you're 100% right to be sceptical...and apologies for adding the extra zero!

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Re: Bahamas Petroleum Company (BPC)

#144055

Postby Proselenes » June 6th, 2018, 8:49 am

I do hold a lot of BPC and was buying around 1p........pure speculative punt. I am one of those willing to just buy a lump and wait.

And even through its up to around 3p now, its still a pure speculative punt. If the deal comes in with a Major oil company, then anything is possible, 20p or 30p or 40p a share.........

But.........if it does not then its back down to around 1p a share (and for a time below that as people sell out).

So its very high risk and with that potential very high rewards.

Invest/Gamble at your own discretion.

I remain in.

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Re: Bahamas Petroleum Company (BPC)

#144897

Postby Proselenes » June 11th, 2018, 7:08 am

Shore Capital 8th June note on BPC on the download link below :

https://we.tl/UYpZJGIaG0

.

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Re: Bahamas Petroleum Company (BPC)

#144932

Postby spasmodicus » June 11th, 2018, 11:47 am

Shore Capital 8th June note on BPC on the download link below :

https://we.tl/UYpZJGIaG0


I would say that it's a fair assessment, as the actual chance of drilling success is rated at 10%, in line with OGJ's "under 20%", see
https://www.ogj.com/articles/print/volume-92/issue-52/in-this-issue/exploration/explicating-a-gut-feel-benchmarking-the-chance-for-exploration-success.html

But from an investment point of view you have to include things like "probablilty of getting a farm-in" and "probability of drilling going ahead" which affect the share price en route. If BPC gets its farm-in, this will cause a price hike, after which I would expect things to cool off again until drilling is given the go ahead. If or when drilling is successful then there is more uncertainty while the toss is argued over whether it is a commercial discovery and how to finance and do the development. Lots of fun to be had there.

If one is going to buy, it probably doesn't make much difference whether one goes in at 1p or 3p. Even if the current farm-in proposal falls through, hold on to the shares and there is always another day, provided BPC has enough cash to survive. Its only real costs are in the maintenance of its licences. Presumably its director/shareholders are prepared to sit this one out - I haven't checked on who owns what, in their share registry. Owning such stock is like a lottery where you get more than one draw, but unlike Premium Bonds, your stake may or may not survive through to the next lucky dip. You especially have to watch out for small exploration companies which raise money on the AIM or whatever and then spend it all on a fancy Mayfair office, six figure director salaries, first class flights and hotels, without ever finding a drop of oil.

I haven't yet done the due diligence on this, but am considering BPC as one of a portfolio of about 10 small oilies, in which most will probably go down the tubes, but one might multi-bag.

Speculatively,
S

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Re: Bahamas Petroleum Company (BPC)

#145737

Postby Proselenes » June 15th, 2018, 8:10 am

http://www.tribune242.com/news/2018/jun/14/oil-explorer-targeting-window-of-opportunity

By NEIL HARTNELL
Tribune Business Editor
Moderator Message:
deleted email address


An oil explorer is aiming to seize "the current window of opportunity" to drill its first Bahamas well after five years of regulatory and oil price-related delays "abated".

Simon Potter, Bahamas Petroleum Comp......................................................

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Re: Bahamas Petroleum Company (BPC)

#150364

Postby Proselenes » July 6th, 2018, 3:32 am

Been some chunky buys on BPC of late and the price has resumed an upward trend again.

Hopefully some news is around 1 to 2 weeks away, could either be news from the proposed deal with a major or news on environmental approvals. All in all very speculative still, however with only a 53M market cap and potentially a major deal, there is a lot of potential upside as well as of course downside on no deal.

The back costs spent by BPC over the years and the value of the data they have now has to be worth, in my view, at least 250M and if a major comes in with a deal worth that for a 50% share you can certainly see where the valuation upside comes from being just a 53M market cap now.

However should no deal happen then there is always the chance of going back to a sub 10M market cap.

Speculative it is.

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Re: Bahamas Petroleum Company (BPC)

#151252

Postby HowardRoark » July 9th, 2018, 6:49 pm

Indeed, these are finally exciting times . . .

I was in during the summer of 2010 and out in the early winter of 2011 for a quick multi-bag . . . then came back (erm, several times!) over the succeeding years as the price kept dropping. So all that profit plus a lot more has gone in. I'm now at today's price, finally after 7 years' of patience, looking at a trebling of my averaged-down purchase price.

Am I selling? Not until at least news comes out about the current negotiations.

Back in early 2011 with a price of c. 24p per share the market cap was c. £200m (around the time a fund raising was announced at c. 18p per share (ouch!)). Obviously the number of shares issued due to fundraisings etc. over the years would now mean that a market cap of c. £200m today gives a price of c. 12.5p . . . about double today's "true" closing price of 6p (the 5p close price appears to be a crossing trade issue as the bid is 5.9p with ask of 6.1p).

This is clearly high risk but, having followed the entire story since 2010 I'm hopeful of a good outcome . . . eventually. While BPC has entered into an exclusivity arrangement with a "major" (the first 3 months of which, in return for a US$250,000 monthly fee, expires early August, extendable thereafter for periods of up to 3 single months) the price will tank if that comes to nothing . . . but before that exclusivity arrangement was announced in early May it was known that BPC was in advanced talks with a number of possible joint venturers. A change in government last year and recovery in oil price and general drilling sentiment changed the picture.

Can the Bahamian government afford to say no to this opportunity? No, I don't believe they can. Their economy is in a pretty poor state and allowing for the possibility of major discoveries now would ensure a secure future Bahamas via a sovereign wealth fund, with world-class environmental protection legislation now in place.

It's worth noting that back in 2009 or 2010 the now-elected party (following a change in government last year) was in power that had been developing the BPC relationship very nicely together with Norway's Statoil (now Equinor). The intervening years saw the opposition in power which effectively saw very little developing with BPC (possibly because BPC weren't considered the "right fit" for that party!).

It seems to me there's now the impetus to get a deal done, certainly at least from the government and BPC . . . and why would a "major" sign up for exclusivity? It really didn't need to and the amount of technical data available to any interested party passing through the data room can't be too far different from any information that might be gained from entering exclusivity. Note too that agreement was entered into just a few days after BPC submitted it's Environmental Authorisation to the government . . . bear in mind also that the government have previously said they would want to approve any BPC partner before allowing drilling . . .

So, an announcement to come shortly of both Authorisation approval at about the same time as announcing a deal with the "major"? Seems quite possible. And if the talks fall through, would one or more of the other parties-in-waiting come forth with a proposal? Also possible.

The question is: at which point to sell?! I can see a doubling-plus from here on farm-in news . . . to 12p-15p range? With an upward trajectory building towards drill spud . . . 20p? If no deal just yet I can see this plummeting back to 1p-1.5p.

I'd be interested in others' thoughts as I don't really know! There could easily be a lot of speculative froth added to this on any positive news. Either way, no sales from me until announcements!

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Re: Bahamas Petroleum Company (BPC)

#151494

Postby Proselenes » July 10th, 2018, 3:12 pm

I did a top slice earlier. Left it so that my remaining large holding can be sold for 0.5p a share and it will mean my initial investment is covered. So bad news will now have no negative effect whilst good will have a tremendous positive effect.

The RNS today does state that they are still working on the technical evaluation, and that has to be concluded before the commercial can be done. So based on that RNS I would assume that there could be at least a months extension now, to allow time for the technical to be concluded and then a commercial agreement concluded.

Hopefully it will be concluded earlier and with a positive outcome.

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Re: Bahamas Petroleum Company (BPC)

#153953

Postby Proselenes » July 21st, 2018, 1:49 pm

Good consolidation around the 5p level.

I would expect news this coming week or next.......so the excitement is going to build again I am sure. Deal or no deal..........thats the question. A deal should see at least 10p a share value, could be a lot more. No deal and well.....down it will go.

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Re: Bahamas Petroleum Company (BPC)

#157472

Postby Proselenes » August 6th, 2018, 10:55 am

Interesting RNS

https://www.investegate.co.uk/bahamas-p ... 00068519W/

One must assume therefore the Major wants to be able to change the CEO with minimal costs...and so reducing the salary of the present CEO and limiting pension liabilities is required by the Major. In effect telling the present CEO you are going to get rich off of the shares, so we will cut your salary and stop pension contributions.

Very positive imo.........end game of a deal must be getting close now.

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Re: Bahamas Petroleum Company (BPC)

#157577

Postby HowardRoark » August 6th, 2018, 9:39 pm

My thoughts exactly, Proselenes . . .

In whose interest would it be to change the CEO's Ts & Cs of employment? And would this have happened in the absence of a serious farm-in partner?

Would a farm-in partner be happy to fund $tens of millions of drill and back-dated seismic costs to see $several millions in value/cash going to the CEO? When said CEO will stand to benefit very well from being on board with the tens of millions of shares plus 39,000,000 options exercisable at 2.22p he already has?

Note too no other director has been affected concerning their deferred director fees: they will stand to benefit from newly issued Ords once "a farm-out or other arrangement sufficient to finance the first exploration well is completed."

Considering all the other items on the meeting agendas for the last 3 months-plus with the non-disclosed party I'd have thought this is almost granular . . . so almost there?

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Re: Bahamas Petroleum Company (BPC)

#159002

Postby Proselenes » August 12th, 2018, 3:50 pm

"Shell hails bounceback towards deepwater drilling. Head of exploration says break-even prices are now $30 a barrel"

www.ft.com/content/c5f464ac-9e0b-11e8-85da-eeb7a9ce36e4


.

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Re: Bahamas Petroleum Company (BPC)

#159128

Postby Proselenes » August 13th, 2018, 5:51 am

To try to estimate the deal that BPC may (or may not) get I have gone through the following scenario :

I am the CEO with 70 million shares.


Whats best for me ?

Priority 1 : Keep my share entitlement intact.

Priority 2 : Maximize the potential share price going forward.


So I should get a very good deal for BPC which will leave it strong enough to require no further cash calls until drilling is finished whilst at the same time getting as many drills done as possible.

I should ensure that BPC is left with enough cash at end of drilling to be in a strong position to either sell the discoveries at a good price, or raise money to commercialize them at a good price. No firesale, no panic fund raising.

I should get as many of the top targets drilled as possible so as to maximize the potential ahead of selling the finds or raising money for commercial development.


A/ Major offers BPC retain 30% of the licenses and gets 1 free carry drill (to testing) and 100 million cash for back costs.

Not really doing my 70 million shares the best over the long term. If 1st well fails then money is tight for a further drill.


B/ Major offers BPC retain 30% of the licenses and gets 2 free carry drills (to testing) and 60 million cash for back costs.

Better, now got 2 chances to really multi bag my shares. Downside only 2 chances and what happens if other area's are better and bigger.


C/ Major offers BPC retain 30% of the licenses and gets 3 free carry drills (to testing) and 30 million cash for back costs.

Probably be happy with that. BPC has enough cash to see it through to the end of the three drills and be strong enough not to be pushed around when the time comes to sell the finds or plan for commercialization. For me this gives the maximum potential uplift to my shareholding. Every 1p on the share price earns me 700K GBP, and so with 3 drills and BPC ending the 3 drills still with loads of cash and able to sell or plan to develop, my shares will do very well.


So taking that into account my expectation of a deal, if it happens, will be all the 3's.

BPC retain 30% of the licenses and Major takes over 70% and becomes operator.

BPC get 30 million in back costs in cash.

BPC get 3 free carried wells drilled (free to BPC until final completion and any testing).

That above will give the biggest share price appreciation and so rewards for all shareholders who hold through to drilling. Once drilling is near given the massive potential and already proven oil system there (from drills decades ago) one would expect the BPC share price to be around 70p (just like the Falkland oilers market caps as drilling started were near to a billion) - however Bahamas is bigger and better in terms of size of potential and lower in terms of risk of finding oil as thats proven already in the area.

I have top sliced once already (enough so that I can sell all the remaining BPC I have at 0.5p and come out with zero profit or loss) and have now decided no further top slicing in the event of a deal - just add on dips (after deal) and hold through to drilling next year (or late this year even depending on the Majors accessibility to rigs and EA approval).

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Re: Bahamas Petroleum Company (BPC)

#159831

Postby Proselenes » August 15th, 2018, 12:55 pm

https://www.malcysblog.com/2018/08/oil- ... d-finally/

.......................The name of the super-major who is in detailed and confidential discussions is...............................


.

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Re: Bahamas Petroleum Company (BPC)

#161726

Postby Proselenes » August 24th, 2018, 10:53 am

No deal.

Glad I top sliced earlier. Even managed to offload the remainder for 2p this morning, which was well ahead of my 0.5p target for no loss.

.


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