Bayfield Share Discussion Threads

[mojomonkey] 01/10/2012 13:39

This looks like its heading back to 15p again, crazy market.

[ultrapunch] 01/10/2012 10:34

stef77. Sorry buddy, but you are completely WRONG!! That US$46.2m includes CAPEX spend on Trintes as well as Galeota.

The AIM admissions document last year stated total CAPEX of US$157m.

That was US$87m CAPEX for Galeota (7 wells) PLUS US$70m CAPEX for Trintes.

The Trintes figure has sinced been increased by US$10-15m because of the clapped out state of one of the platforms that was earmarked to drill new wells on Trintes. Consequently one of the other platforms has had to be re-furbished at a cost of US$10-15m.

EDIT. Since BEH only raised US$81m at last years IPO they will have to raise a lot of dosh to continue with their current rate of CAPEX.

[ntbb] 01/10/2012 10:19

sorry wrong thread

[ntbb] 01/10/2012 10:13

just bought some here



Executive Chairman, Finian O'Sullivan, commented:
"Stabilised gross production in excess of 2,000 bopd and substantially better pricing for our oil provides improved cash flow and a solid foundation from which to fund growth potential and follow through on previously announced strategic initiatives.

[cockney sparrow] 01/10/2012 07:22

I would buy in again at 17p , 18p & 19p if they go that low again.

[triples] 01/10/2012 00:26

I'm still positive about Bayfield. Good revenue/bbl, delayed deadlines that could be delayed again if necessary at a guess, production climbing and possible corporate action in the background.

Still a hold and maybe a buy at these levels for newcomers.

[stef77] 30/9/2012 22:40

hi ultrapunch, agreed, they still have to find the money for the 5 exploration wells , although they got till march 2015. we established in previous posts that it costs aprox 12 mil dollars per well based on management's projections (87mil divided by 7 wells) plus 10-15 mil for refurbishing one of the platforms.
I don't dispute that, on contrary, the bad news is that they'll have to almost double that amount based on the results they just published. they spent 46.2 millions on only 2 exploration wells, almost double the amount they anticipated. so based on that 5 wells at 23 mil/well plus 10-15 mil for the platform ,well... close your eyes!, yes, aprox $ 125 millions.
Upon reflection, now I think they got this cost projections so wrong that combined with slow progress on production( and subsequently cashflow) they had no choice but to stop drilling as soon as possible and get out of the Gorilla Rig commitments and the rest we know it. From what I can see, it seems they're wriggling the rig contract pretty well by "sub-letting" to third parties and so on, and yes, they will loose some money but I don't think a significant amount. anyway , a lot less than if they had to carry on drilling at that cost.
These are the bad news, the good news is that the Trinidad and Tobago Government are like family to the bod. first they agreed to extend the timetable for the 7 expl wells to 2015, then gave them in effect money out of their pocket by paying an extra 27 dollars per barrel.
And for that reason, when you've got family like that, it's worth "staying home".
No, it's disappointing to be honest, but what now? does the management deserve a second chance? absolutely! for all the reasons we mentioned here before. HOWEVER, in my opinion, they'll have to deliver on production targets this year, like someone mentioned here, it's not about luck anymore, they know by now the ground, and they shouldn't promise 1950bbls/day if they can't deliver.and if they don't deliver, I shall think about "leaving home"
I believe they will though, and will come good in the end. just need patience...

retsius, absolutely, the management is the reason I'm in here.

[ultrapunch] 30/9/2012 18:44

From friday's results RNS.

"The Rowan Gorilla III rig is not scheduled to be available before November 2012 and following its release by Niko it is expected that the rig will be assigned by Bayfield and Niko to a third party operator in Trinidad for a period of at least six months. As a consequence, Bayfield will have no further liability under the rig contract except in relation to any future wells to be drilled at its option."

Yes, stef77, but it still has to find US$62.5m to fund those 5 remaining exploration wells if it wants to continue to explore the Galeota field. If it doesn't it could lose the Galeota licence, though it did manage to re-negotiate the terms of the Galeota licence so it has until March 2015 to drill the 5 wells. I'm pretty certain that BEH will want to start drilling the first of those remaining 5 wells in early 2013.

Also BEH and Niko managed to hire the Gorilla 111 between on a long term contract and save US$8m in the process according to the AIM admission document. I'm assuming it must have cost BEH to get out of that contract?! Perhaps BEH have made a payment to the rig owners which they will get back if they do use those 4 slots by a certain date?

There could be future liabilities for BEH tied up with the 4 remaining slots for the Gorilla 111 rig that are not accounted for in the US$34m current liabilities up to the end of 30/6/12. I wonder what the current liabilities will be in the next set of results (to the 31/12/12)?

Perhaps that's why the Trinidadian authorities changed BEH's oil revenue terms from WTI-17.5% to BRENT-9.5%? To give them a chance of making a profit and give them a chance of staying afloat. It can't be in the best interests of the Trinidad and Tobago Government for BEH to go bust!! Especially as I've an idea that the state owned Petrotrin are getting free carry on their 35% interest for all of the US$70m CAPEX (plus US$10-15m extra) being spent on the Trintes field plus the US$87m being spent on the Galeota exploration.

[retsius] 30/9/2012 18:25

steff

Very good summary of results.You analysed the statement so well.Remember this is a very new fledging co.and especially on Aim where prices can fluctuate wildly as we have seen in the past weeks.Directors` holdings are massive and that gives some comfort as they are hugely involved.

[petersmith6] 30/9/2012 11:47

Well the possibility of raising more money has put quite a few off.how much dilution needs to be taken into account and I still see sub 20p on the cards

[mojomonkey] 29/9/2012 17:55

Ultra, in all your research on BEH have you come across much about the brand new slant drilling rig they own? I have only seen it mentioned a couple of times in RNS with not much detail.

I would be interested to know its capabilities and what it costs to operate as owner/operators. Anything really, some company somewhere had to build the thing, do they build similar or are these type of rigs one-offs? I have a figure in my head of about 12million GBP to buy it originally but I might of dreamed that!

On the SP, I too think this current share price will seem cheap even by the end of the year. I suppose I could of sold more at around 30p than I actually did but in the end I looked at why I am here.

A long term investment, not a trading purchase and thought yes, I can sell about 20,000 at 30p and make a few bob but I have never ever managed to get my timing right when trying to buy back lower. I am just being honest with myself, I am too inexperienced to do that kind of thing well.

No I ended up saying to myself, I dont think I will get the chance to buy these again at a range between 15p to 19p and held tight. My portfolio this weekend may be showing a daily loss of about 3,500 GBP but that will disappear on Monday! Then its just a matter of sitting tight and waiting for the BoD to work their magic. GLA

[socktrade1] 29/9/2012 14:00

check out tpet guys good to double in the next few months www.tangierspetroleum.com clock on media then webcast on the left and watch the videos, huge upside in morocco with a 75 % stake and a 90% stake in australia. farm out deal imminent with the likes of repsol and GENL already in morocco.. you get the picture, always do your own research GLA

[spacecake] 29/9/2012 09:41

The company management have set in motion a plan to achieve the target production by the end of the year. If they fail, thats poor management, luck and hope do not come into it. I would like to see some news on the pump work overs, it looks like flow from side track B3 has declined since July.

How long for production and oil sales to recover the cost of investment ?

[triples] 28/9/2012 23:40

Management hope to exit 2012 at 3000bopd gross / 1950bopd net. Let's hope they can without spending a fortune getting there.

[ultrapunch] 28/9/2012 23:33

Hi triples. Actually I expected the production figures for H1 to be poor. After all there was a link to the Trinidad government oilfield production figures posted last week that showed the average monthly bopd figures for BEH for every month from Jan to July inclusive!!

What disappointed me was the lack of any increase from the figure mentioned in the July 13 RNS (and the July figure quoted in that link) and the latest bopd figure mentioned in todays RNS. It looks like existing production is declining despite installing new pumps etc on the existing producing wells to replace the knackered old ones. They are instead going to have to spend more money on sidetracks to increase production.

[triples] 28/9/2012 23:09

Upon reflection, the results read quite well although the production level for H1/12 was disappointing when compared to the expectation.

Anyway, I agree with ultrapunch that the closing price today will seem low in a few months' time.

Not quite as compelling as at 15p, but still good value as management are getting on with it in a practical way.

[tappingl] 28/9/2012 22:56

Hi Ultrapunch
Thank you for the information. I really enjoy your posts and your rhetorical writing style as it's so informative. Thanks for sharing your tips on shares with positive flag indicators too - also fascinating. Have a good weekend. L

[ultrapunch] 28/9/2012 22:48

Hi euclid and tapping1. Actually they don't have to find the money by the year end, but I think they will probably want to sort out their finances by the year end. Don't forget they wanted to raise money via an institutional placing in the summer, but had to pull it because of lack of interest, for whatever reason.

They still have 4 slots to fill under the Gorilla 111 rig deal, but the slot that had to be filled before the end of 2012 has been assigned to a third party at what cost to BEH we don't know.

Hi stef77, I don't believe that US$34m figure you mention includes the outstanding commitment for the 4 wells to be drilled with Gorilla 111. The US$34m is for current liabilities. That will include all the CAPEX being expended on the Trintes field. The 4 outstanding wells to be drilled with Gorilla 111 are not current liabilities in my book. Anyway that US$34m is covered by current assets of US$41m (inventories + trade and other receivables + cash).

The company is obviously still open to offers because the 8.5 forms keep being issued. Whether they have already received any offers and turned them down because they didn't match the Directors valuation we will never know.

I think by the end of the year todays closing price will seem very cheap because by then I expect some kind of corporate action to cover that US$50m (£30m) future commitment. Whether that is a complete takeover of BEH, sale of assets, farm in, or a placing we will have to wait and see. O'Sullivan and Pannikov have every incentive to do the best possible for shareholders because they own 35% of the shares between them!!!!

I reckon from the 1st of August they will definitely be profitable after subtracting the cost of sales, but before CAPEX and admin expenses with the change from WTI - 17.5% to BRENT - 9.5%. Whether BEH can achieve it's target of 1950bopd Net by the end of 2012 is questionable bearing in mind their previous failed production forecasts.

[tappingl] 28/9/2012 22:07

30m by year end - a lot of money to raise in this climate, unless they got bought out/taken over. Is that still a possibility? As someone pointed out previously, they are more attractive now that they have negotiated a better price for their oil and don't having any more drilling commitments until next year. A 430k buy seems to be an awful lot of money to risk prior to results and not money you would spend unless you knew what you were doing (?) unless the company was going to be bought out for a higher price than you had paid. Thoughts?

[euclid5] 28/9/2012 21:50

Hi Ultrapunch,

when you say above they have to find £30m by YE - can this only be via a placing / or RI? - because that's a hell of alot of money to raise in these market conditions

thanks

[ultrapunch] 28/9/2012 19:58

Mojomonkey. Both of those trades you mentioned were reported late. The 430k trade was done yesterday and looks like a buy at 29.68p (OUCH!!!!)

The 150k trade was most probably a buy from earlier in the day.

Mojomonkey, unless there is an auction no trades go through the market after the 4.30pm close. There was no auction.

[mojomonkey] 28/9/2012 19:56

Thanks triples,