Black Rock Share Discussion Threads

[futhark] 04/9/2008 23:10

Hi all, did I miss the £1 spike today?
I have been changing my anti virus from Nortons, they want £59.99p to renew Nortons 360.
Gone with Mc Afee (came free with O2 broadband) Not bad for unlimited bb for £7.50 a month.

[hybrid07] 04/9/2008 22:31

Have the directors lost a lot personally, does anyone know? Would they be losing at say 20p? If so they might be reluctant to accept a reasonable buy-out

Thanks for your post Captain, I understood that one!

[trickyboyfish] 04/9/2008 22:25

Look on the bright side, if we all get sucked into a black hole then it will only be about 5cm across so we will be no more than 5cm away from each other thus we wont need advfn, we can just shout. It would be nice to meet you all under better circumstances though ;)

[trickyboyfish] 04/9/2008 22:03

I dont know what you are all so concerned about anyway. They turn the Hadron Collider on next week and will probably create a black hole in France which will soon suck us all in. We're all doomed!

Anyway Maxk - you'll be first to go so if you would be so kind as to post a warning on here when you feel the ground sliding away from under your feet, I would be most obliged.

Rgds

TBF

[jimarilo] 04/9/2008 21:53

"150bopd from Acacia -2" ....... the most recent rates from this well were between 10 and 5bopd

"Estimated production 14,000bopd" (GROSS) and at what cost to BLR if indeed those sorts of production figures were possible ?

Previously it was thought that Arce would need 60 wells to tap the reservoir commercially ......again at what cost to BLR

"there are some investors here that have been broken by BLR's poor performance as can be seen by comments, that's understandable."

Kiptin the above statement proves your misunderstanding of all on this BB, broken we are not, realistic is what we are

We have chased the share price down on positive thoughts and research, only to find that the management didn't have as much control or foresight when dealing with Kappa OR our assets are sub-standard

Kappa have produced notable flow rates elsewhere in Colombia, maybe it is our assets, maybe Rubiales and Prospero will be better equipped to dealing with our assets than Kappa

Truth is they need to prove our assets value then we will buy yet again

We invested in a future with BLR not a quick buck if they sell at 4p, 8p or even 15p

[maxk] 04/9/2008 20:44

I dont see how you draw the 2nd conclusion Kiptin.

As for SW's appraisal of the management/prospects, he voted with his feet, and by the looks of it at some cost to his punters, but he bit the bullit just the same.

[captainnelsonforties] 04/9/2008 17:09

Hi Base,

These are my opinions based on the available information. At least a few of us see a future and value to BLR. ;) Its all about timing, we have the proven and probable reserves from Arce at present. That report lays out the development plans for Acacia and Arce. The capital expenditure for these fields has been highlighted. Pacific Rubiales may have engineered that press release to put a point across. Its clear that they want to aggressively develop their assets through the acquisition of Kappa, raising Kappa's gross production from 4,000bopd to 12,000bopd by 09. Clearly that's not all Acacia and Arce, but they'll play a part. Acacia-1 and -2 will be re-drilled and sand prevention installed, Acacia-1 expected to produce 300bopd and Acacia-2 150bopd. Cash calls for these would be in the region of $3.5 - $4m over 08 and part of 09. Prospero would fund $2m on our behalf we would need at least another $2m before working capital to meet these commitments. The rest of 09 could push BLR as Rubiales wants 12 production wells drilled. Production cash flow wouldn't meet requirements. If they get a buyer for Monty they'll be good for one cluster on Arce and a re-drill of Acacia then its square one again. Hopefully an inproved 2P with more proven and probable oil reserves on both fields. Successful horizontals would increase our proven oil from the vertical holes we have. Acacia-1 and Arce cluster-1 (4 wells + injector) could provide BLR at best case approximately 250bopd ($25,000 per day approximately). Each Arce cluster will cost BLR approximately $2.5m. At that point they would need another $5m funds for cash calls for the 2 remaining clusters for 09. The GCA report should see the light of day by then so that may make it easier for us to raise these funds, but here lies the point that Mr Puntin made regarding significant dilution.

Its my opinion that Mr Puntin wasn't making reference to any one company, but to all companies that share Kappa's turf. If you cannot make the payments and slow development plans sell to us. The last thing that Pacific Rubiales would want is delays caused by BLR going down the shoot and the red tape and months of delays caused by liquidation. Its much smoother as they recognise the value of Arce and Acaica to put in a realistic offer. Call in the media and make the suggestion publicly, hence we get a press report hinting at just that. Mr Puntin even makes a direct remark regarding the Las Qunichas licence.

Hybrid,

There is risk here in that BLR may not raise funds from the working capital requirements and a bid/merger may not emerge. That is the risk. Given Mr S Walkers appraisal of the management I believe that they will do their best to give something back to shareholders and something that will bring value here. I am of the firm opinion that with the quality of our assets demonstrated by the recent report and the interest of major players such as Pacific Rubiales in this partnership we'll get a deal done. That recent press article has made me even more sure of the direction this is going, I see it only as a matter of time now. I do hold more now than before. That was the CEO's put up or sell up comment to Kappas partners (BLR included). Check the report on Rubiales site. Lifting, transportation costs, infrastructure and blending of the Arce oil is only a fraction of the wellhead value of the oil and the Net Present Value of the assets. The field is set for a peak production of 14,000bopd estimated production (very commercial on that scale). I estimate that when the GCA report comes to fruition we'll have an asset value of £6-7m, management will push the exploration value of our licences to the potential bidder giving us a bid slighly above the value of our fields. Somewhere in the region of £7-10m would be fantastic. A £3m bid would get my vote and a 200% profit, but I would like to see some of the rest of you get something of value back or as much as possible. I'll support the "as much as possible" bid completely. ;) there are some investors here that have been broken by BLR's poor performance as can be seen by comments, that's understandable. There is value to these assets though even if not all can agree or see that. Fair value on BLR should be £6m (20p), but fear has driven us down.

Enamel,

A bid for Monty/Stinson could see a reasonable return and breathing space for at least a few months of the Pacific Rubiales plans for Arce and Acacia and bring more value to BLR through successful development. Where BLR get the cash to keep pace with the JV is where I cannot figure. Production cash flow won't match initial expenditure and given the recent article I see this heading in one dircetion, into the pockets of our banker. All in my opinion of course. If they can get a cash partner we could have a different story. I cannot see a company giving us that good a terms at present and they are going to want a very decent slice of the action. A merger with a co with $8-10m in cash and little assets could buy us some time. As long as the management do their best for shareholders in returning value to some here then I cannot argue with that, regardless of how it pans out in the end.

Captain Nelson Forties.

[jimarilo] 04/9/2008 16:00

Thanks Tricky .......ah

Seems my dealing account must have an anti BLR policy, works fine everywhere else ;-)

[trickyboyfish] 04/9/2008 15:55

Jim

Buy 100k @ 3.11
Sell 250k @ 2.85

[jimarilo] 04/9/2008 14:56

Anyone got the current online buy and sell limits ?

Edit I thought my pc was messing around as I could only get 5K online @ 3.25p

Now that 10k sell has gone through can get 10K @ 3.16p

Including costs £330.00 for 10K ......not that long ago 10K would set you back £5 or £6K changed days ;-(

[enamel] 04/9/2008 14:22

The BLR directors will not want to sell the company except at a premium to assets. I therefore believe that the most likely outcome will be for BLR to sell some assets to raise enough cash to enable further drilling to prove and enhance the value of the reserves.

[hybrid07] 04/9/2008 10:11

So what is the risk here? That for some reason PEG decides that they won't bother to make an offer for our assets? Or that we may blow the cash somehow? Or for some reason the costs of extraction may be greater than the value of our oil?

Captain, I'm afraid I still don't understand your answer. Are you saying our Columbian assets are worth $62m - $15m? What is your estimate?

[base97] 04/9/2008 10:08

Captain Nelson,
Interesting projections/thoughts which all add up to a Corporate picture of BLR that, if even 50% obtainable, would be very acceptable to a majority of us.
I have studied the numbers which you are using from the reports and they are there for all to see! Your suppositions I am not totally certain about as I do not have the Technical insight required to put certain numbers to work.
However, I appreciate your willingness to share your thoughts and fully agree that in the final summary, Rubiales are the Bankers. Good luck.

[futhark] 04/9/2008 10:01

Hi Dr J, with all the money I have just poured into here you would have thought the share price would have gone up! {:~#

[dr jekyll] 04/9/2008 09:46

He's been down his sofa again!

[futhark] 04/9/2008 08:35

I have decided to take the captains advice.

Time Price Volume Value Buy/Sell Type (key)
08:01 3.11p 545 £17 Buy O

[futhark] 04/9/2008 08:08

Jim, that was out of the bungalow window!

[jimarilo] 04/9/2008 08:04

I thought we already did that Fut ;-)

[futhark] 04/9/2008 07:24

Morning all. So what will happen today? I won't get my money back thats for sure.
Thanks Captain for your thoughts ......mmm should I jump out of the window now or see what develops???

[oilretire] 04/9/2008 03:07

Captain, thanks for that, I missed that series of posts. It's a good post from Darron. For others that missed it, you'll find it here:

djpreston - 22 Jul'08 - 16:07 - 1563 of 1970

[captainnelsonforties] 04/9/2008 01:02

Maxk,

Darren wrote on this thread that if he knew about Rubiales he would have held on! Check the thread if you don't believe me. Throws your theory kinda out the window. Well I take it you've never been in business then. Assets going for ridiculously low prices make good investments. Check out the value put on our assets then look at out market cap and you'll finally see what you've been missing. Takeovers, reversals and mergers are much more frequent with smaller companies than larger companies. They don't require huge cash flows. A good example was the recent merger between Elixir and Gawler, both valued at around £10m and neither were producing at the time.

Captain Nelson Forties

[maxk] 04/9/2008 00:25

Good for you Kiptin !


Why bigger companies aint buying is frankly stupid, the 'crock serves up everything a preditor wants, huge cash flows, even huger potential, and all for song.

Thats why SW sold out, at a huge loss!



You need to to see a head doctor, you really do!

[captainnelsonforties] 04/9/2008 00:09

Well Maxk,

I suggest you read the Petrotech technical report as the numbers are all straight out of there. That is the quoted Net Present Value of Arce taken straight from the report. Oh don't worry I know exactly where the share price is and have a fair idea where its heading too.

Not all institutions are selling, standard life were buying. Do you even know how these guys work? Some institutions base their buying on selling on criteria such as market cap. Some have to sell if the market cap drops below their fund limits. Some funds don't touch companies that have market values below £3m, once the threshold is reached they have to sell to meet their fund's policy. There are various different factors. My point exactly BLR has been heavily oversold, that's the reason I'm here. BLR selling their assets has nothing to do with which institutions chose to hold or fold. You strike me as a shareholder who has lost a lot on BLR, that is unfortunate and your bitterness may now have clouded your judgement. Maybe others buying now aren't mug punters but rather very savvy investors, not afraid of a bit of risk, and can see the bloody obvious. Arce alone is worth many times our current market value. Something that will be emphasized by the GCA report if the Petrotech report isn't clear enough and if you spend the time to read it you will see that its the case.

I did note that the directors are doing their best to reduce costs and have done so successfully enabling the co to trade to the end of the year. During which time the GCA report will hopefully see the light of day. Also the CEO of Pacific Rubiales is looking to buy our partners that haven't the financial strength to meet their program in Colombia. Lets see will Pacific Rubiales say ohh no BLR's asset value is too far above our purchasing power. LOL They have just put a report on their site that has a Net Present Value of 50% of Arce at just over $300 post tax. 25.5% of Arce is therefore in excess of $150m post tax on future value and you think these guys might think twice about £5m, £7m, £10m. Pacific Rubiales could buy Loon Energy, Prospero Hydrocarbons and Black Rock Oil and Gas many times over without blinking an eye. If Pacific want the rest of Arce they will name their price. That articles reads in such a way that any company that stands in the way of Rubiales work program, it will be in their interests to sell to them. I cannot see BLR raising $14m a year to fund the capital expenditure on Arce.

Jimarilo, if the steam equipment worked they may well have been producing in that region. One cluster at peak production is scheduled to produce approximately 1,000bopd over 48 months falling to 96% of the previous months production continusously during the cycle. It certainly isn't stopping the current development proposal for Arce. Its in black and white with expected production per horizontal cluster and year by year estimates are given and the peak production.

Fut,

Well I guess those who bought at 90p may need to average down somewhat. For BLR to achieve a market value nearly £30m it would take a miracle. If the GCA report confirms we have assets of £6-7m a bid is likely in that range or maybe a sweetner will be in there to clinch it for us say £9-£10m. We'll likely have 2P proven and probable reserves in the region of 1.2-1.4MMbbls so a £30m bid is highly unlikely. I'm sure those that bought so high had a strategy and may well have revised that at this stage. Either that or it may be taken out of their control if a bid for the company should emerge.

Hybrid,

Enough cash in the kitty until year end with Monty open for offers at the moment, so its not cut and dried as yet. The Net Present Value range placed on Arce after tax with various risked elements applied ranges from $331m to $121m for the life of the field. That's for Pacific Rubiale's estimated value to the field when developed. They have 50% interest in this field, so BLR have slightly over half of that interest at 25.5% of this block. So the NPV applied to BLR over the life of the field is $169m to $62m. The field life is estimated to be 11 years peaking at approximately 14,000bopd (gross) at full field production levels. Check out the Pacific Rubiales site and dl that file. Its quite large so it may take a while if you don't have broadband. Its a must read for anyone that holds BLR or is interested in an investment. Its puts things very much into perspective after the comments of the CEO of Rubiales suggesting that anyone who cannot meet the work program of theirs should sell to them. The Capital expenditure (CAPEX) for Arce is huge with up to 4 rigs planned on site to complete development and up to 22 wells per year. Its all there in black and white. Add to that the $15m CAPEX to develop Acacia drilling, seismic and infrastructure and BLR are going to require deep pockets.

I have my money where my mouth is on this one. Rightly or wrongly I see BLR being taken over at a price that remains to be determined by a number of factors. This is my opinion and clearly not everyone shares it. As a holder of BLR on a public BB I'm entitled to state it.

Captain Nelson Forties

[jimarilo] 03/9/2008 23:27

As Ivan pointed out, there was no company name mentioned, only interest % and the sums didn't add up for BLR to be the unnamed company

It all points to Loon Energy who also have shared assets with Kappa to the LooneyTune of 50%

If BLR sell out for cash we will probably be worth what Prospero bought in (49%) x2, which would be just over £5m for the Colombian assets 15p ish

Prospero will want to push for some more you would like to think

Plus there is the N/sea assets

That might be the best deal for short term traders but not the long suffering holders

A merger would be the best way for the long term holders if we got sucked into another company with plenty of cash, in a similar way with First Africa Oil and Bowleven

However FAO's assets were/are substantial

The other way is for us to raise funds from an insto/placing, but we need to raise maybe £3m or £4m to match Prospero's £2m and to have day to day cash flow

The thing is cash is very hard to raise in current times and going on history our assets are not the easiest to develop, even if we had £2m to match Prospero's we would need to perform much much better with the drill bit to stay alive (that's if we even get the chance) £2-£4m doesn't buy much time in the oil business not even in Colombia

None of us know how this will pan out, but certainly no way is it a "farm bet" ;-)