Black Rock Share Discussion Threads

[hybrid07] 03/9/2008 22:47

Can someone tell me if I have got this right - I find the Captain and Ivan's posts a little technical:

Pacific has bought Kappa, and Pacific have stated that they want to acquire the stakes of certain small companies in the Kappa fields. Pacific has the funds and it's a kind of tidying up operation.

BLR is priced to go bust, and directors are not being paid, so I assume it has run out of cash. Therefore it wants to sell some or all of its interests.

There is a Sedar report that gives a rough valuation of the Columbian assets, which is above our current market cap. (Can someone tell me, what valuation does that report suggest?)

So we have a willing buyer and a willing seller. Seems likely that they can make a deal, although they may need to haggle over the price.

If all this is true, then there's not much risk at this share price

I guess the risk could be that BLR will get cash from Pacific, and blow it all in the North Sea

So I guess we have to hope for a bid for the company (eg Pacific could by BLR and sell on the N Sea assets)

Have I got that roughly right?

[oilretire] 03/9/2008 22:40

More on what Rubiales are up to elsewhere in Columbia

[futhark] 03/9/2008 21:12

Captain :- £9m bid would put us at 30p per share, not a bad return on a 3p ish average holding. ;)

...........................................................................

How about us poor sods who paid around 90p?

[jimarilo] 03/9/2008 20:29

LOL@Maxk

According to the VSA report we should be pumping over 1000bopd during 2008 ;-)

[captainnelsonforties] 03/9/2008 15:55

That Petrotech report makes for interesting reading. Acacia is counted as pretty small time with a total of 6 wells for full development. Arce is deemed a different story though.

NPV put on Arce is $74m at 50% of the field which is to be developed at a sole risk basis to partners. That would put BLR's NPV at $37m for the 2P and a massive $271m on a 3P basis (before tax).

Clusters of 4 horizontal developmental wells will be drilled. From reading up on Arce only vertical wells have been drilled to date. One drilling and one completion rig will be on site from the end of 08 with 12 wells to be drilled during 09. Costs for a cluster and tie in of $9.2m ($2.3m for our share). Each cluster is estimated to produce on average 1,000bopd and Arce blend to sell around $120/bbl. With production in the region of 350 days and a life per cluster of 48 months that's decent cash flow. A total of 138 wells planned for the development of Arce and as many as 22 per year with four rigs on site.

22 wells in one year would put the CAPEX on Arce of at least $56m per year, putting out CAPEX at $14.5m. Hmm I think Pacific Rubiales plans for the Arce oil field development are a little beyond us at present. ;) I wonder if Mr Pantin has us in mind and would he like to increase his NPV on Arce by another 25.5%?

Captain Nelson Forties

[captainnelsonforties] 03/9/2008 15:19

Excellent find guys,

well done tricky!

I thought that a few more of the longs here would have been eager to bring their averages down today. It all fits with the report on the Rubiales site. Arce is scheduled to be developed late 08. Drilling clusters of wells with injectors, BLR won't have the funds to keep that pace. The BLR schedule suggests a year end decision for the future of the company. It is quite possible that management are working towards getting the best value for the investors here. Putting all the recent seismic from Acaica with the well data and that from Arce and we could potentially have a NAV above £7m (our NAV was £5m pre-Acacia discovery). An £8-10m bid would just about rap things up nicely here. ;) Rubiales paid $18m/£9m per 1mmbbls of Kappa reserves, We'll have more than 1mmbbls 2P for Arce and Acacia. £9m bid would put us at 30p per share, not a bad return on a 3p ish average holding. ;)

It could all go for us on a favorable report from GCA, Rubiales will be aware that these assets are being appraised by the experienced GCA personnel at the expense of BLR and am sure would be interested in their findings. Get out a good report and dangle it in front of a big fish like Pacific Rubiales and see if we get any bites.

Captain Nelson Forties

[thrgef] 03/9/2008 15:16

Good posts guys, momentum is building

[maxk] 03/9/2008 15:11

Speaking of loons, some mug just paid over the odds for 125k.

Or perhaps they know something?

[maxk] 03/9/2008 07:56

"Loon" being the operative word.....cos it will be in good company.

[futhark] 03/9/2008 07:52

Morning all,

[jimarilo] 03/9/2008 07:45

I agree Ivan Loon Energy fits

[adnatrob] 03/9/2008 03:57

Ni Hao everyone. I still hold some of these and it is starting to look a little interesting again. In China a lot these days and dont have time to post, however, I try to keep up with your posts. Good luck to all.

[ivanburgess] 03/9/2008 02:50

Just a couple of thoughts which may provide some logic to what I suggested earlier.

Loon Energy has 49% of Krappa's interest in the Abanico block, and if as I believe possible, Ecopetrol backed in for 50%, (it was the old Association contract) then that would leave Loon with just under 25%. (The figures now match a little better). The deal did not include the Abanico field, although Loon drilled a well, discovering a gas field directly above the Abanico field. I believe this has been further developed over time, and other prospects Loon drilled include discoveries at the Delta 1 field. So Loon has possibly the 25% share spoken of in the report, but doesn't have the benefit of the Abanico field's oil, and has a big requirement for cash to explore and develop the rest of the block. Loon are well committed financially, with much cash needed to service their many exploration and developments in a lot of areas in the world, and its just possible that this is the target of PEG to increase their stake in the Abanico block.

There appears to be a close connection, as Loon is a Canadian company too, and guess who they farmed out some of their acreage to? Would you believe Prospero? Bloody Canadians everywhere. Even Krappa's owner I believe was Canadian too. Seems like they all talk and deal with each other, so I wouldn't be surprised.

But of course, it could equally be BLR who is the target, for Pantin did say that Las Quinches offers the best exploration opportunities.

We will have to wait and see.

[maxk] 02/9/2008 23:05

From Trickies post.....the writing is on the wall..


"Pantin: We are targeting two main oilfields and think the companies will be more than willing to sell. They are small companies and if they don't sell to us, they will be diluted. They don't have the financial strength to go forward with the expansion program we have in mind."

[ivanburgess] 02/9/2008 23:02

Feelbo & Tricky. Thanks for that, guys. Well worth reading. Appreciated.

However, don't take it as a given that they are referring specifically to us. When we read the critical bit, ..... """Kappa is an operator and has on average a 25% working interest in the fields it operates. [State oil company] Ecopetrol has a 50% stake in most of the blocks and the other 25% is held by other oil companies. We might acquire some of that interest.""" ..... well, it does nearly fit, but ......


As regards our blocks in Las Quinches and Alhucema, shares in the relevant fields are:

Acacia: Krappa 50% BLR 25% Prospero 25% (as near as damnit). Ecopetrol has not yet made any decision on whether to back in for 50%. If it does, then of course Krappa becomes 25%, etc. But at the moment "others" account for 50%, not 25%.

Arce: Krappa 50% BLR 25% Prospero 25% (as near as damnit). Ecopetrol has declined to back in at present, but keeps its options open. Again, "others" are 50%.


My guess is that there is also another option, and that could be they are talking about Krappa's other fields, which are producers, and by which means, they could more easily ramp up production to the levels they are targetting. They may not be talking about us at all.

But I hope people are looking at us, for indeed, anyone who looks, sees an asset-rich company which is severely undervalued, and is ripe for a revaluation. That may be one of the reasons why the share price has risen of late, a bit of buying on our low price, hoping for a nice GCA report, and probably a few speculating on us being snapped up by someone (PEG or another).

Yes, it would be nice to get a bid, but of course, many will still be losing a pile. I would ultimately like to see us make it on our own, and even if we sold Monty/Stinson using the cash to pay our way until Colombian production brought money in on a larger scale, it might be the best hope of the long termers recouping some decent dosh. But there are many potential outcomes, and so the likelihood of my number one hope becoming reality, gets diluted like our holdings. We can but dream.

[futhark] 02/9/2008 22:26

Tricky, (Evening) doe's this mean you are coming back in?

[trickyboyfish] 02/9/2008 21:22

But Im looking forward to the Christmas Party :(

[feelbo] 02/9/2008 21:17

Trickyboy,

Good to see you managed to link it.

Looks like they would like to buy BLR out.

[maxk] 02/9/2008 21:03

Cant find sod all.....but surely this would have to be disclosed...no?

[trickyboyfish] 02/9/2008 20:58

Cheers Mate ;) will do.

[feelbo] 02/9/2008 20:57

Trickyboy,

Unable to link,however run Google news search on Kappa,

[trickyboyfish] 02/9/2008 20:53

feelbo - have you got a link to that - thanks

Evening all ;)