Black Rock Share Discussion Threads

[hybrid07] 05/9/2008 19:16

It has been suggested that BLR would get "diluted" rather than "go into default". I take that to mean that BLR's stake would get scaled back in proportion to BLRs contribution to the project as a percentage of the whole cost i.e. money we have already spent would be taken into account.

Edit: if the numbers in the report assume a $135 price of oil, that sounds serious to me. The bit that's left over after costs will be reduced by a much higher percentage.

[oilhunter2] 05/9/2008 17:41

Capt'n. re. GCA CPR.
since Kappa is now PR. will BLR have access to the CPA?. problem is BLR has no money to fund its portion of the CPR so why should PR give BLR access to it.
Also if PR wanted to increase its holdings in the Acre/Acacia Este asset, I would not give BLR access. just get rid of BLR. Either outright offer/purchase of the BLR permit equity or swamp with a high work programme budget which BLR could not pay and go into default. the operator with its high equity has total power over budget/work programme. it can get up to all sort of things...not that PR would of course...

[audereestfacere] 05/9/2008 17:00

Shall we prepare ourselves for a bidding war over BLR between Prospero and Rubiales? Rumours that Roman Abramovich considered buying BLR with his loose change have proved unfounded. Ken Livingstone, despite his love of South America, would have to use his own money to buy BLR, so that's a non-starter.

[ivanburgess] 05/9/2008 16:49

Hi all.

Forgive me for saying so, but I thought the sand problem had already occurred and been rectified a long time ago.

At the end of August last year, production was suspended at Acacia 1, due to sanding up of the well during testing. In addition to swabbing and testing of the lowermost zone, which flowed very little, but verified the oil table, the workover rig gravel packed the upper zone from which we were getting the big numbers, and production resumed in October. So the fact that PEG plan to redrill and recomplete them again next year means that either they didn't do that right, or we were being fed misleading info from Kappa?

[captainnelsonforties] 05/9/2008 16:43

Oilhunter,

BLR commissioned the CPR on the 3rd of December 2007, not Kappa. Kappa failed to provide GCA with the latest information, that problem has been removed as Kappa are now controlled by Pacific Rubiales and progress on the report is expected to continue.

Captain Nelson Forties

[oilhunter2] 05/9/2008 16:21

I thought that BLR didnt pay for the GCA rpt. in the end, which is why I cant find it anywhere..Kappa did.

[captainnelsonforties] 05/9/2008 15:21

Hi all,

No offence was taken by me. This bb is open to all opinions +ve or -ve to keep an active debate on the future and potential investment of BLR. I will tend to put out the facts to what I see as inaccurate or overly negative views.

The Petrotech report can be found at:



The GCA report latest from the corporate update RNS:

Competent Persons Report

'Black Rock announced on 3 December 2007 that it had commissioned Gaffney, Cline and Associates to produce a Competent Person's Report on its Colombian and Southern North Sea assets with an effective date of 31 December 2007. This was to incorporate reserves and resource estimates (as appropriate) for the current portfolio of discoveries and prospects. The sale of the Colombian field operator, Kappa, to Pacific Rubiales has delayed this evaluation as Black Rock is reliant on Kappa providing the most up-to-date information on our Colombian assets. On completion of the sale of Kappa, the Board of Black Rock anticipates that progress on the CPR will resume again.'

hhh,

They will base their potential production index for the horizontal wells based from the data of the four wells drilled into this reservoir. The data is presented in the petrotech report, from reservoir pressure, API, oil saturation, etc etc its all taken into account. They also use the Chicala field right beside Arce as a model for development. They know that this field isn't highly compartmentalised as it would be noted in the seismic and mentioned in the geology. Horizontals can be perforated on either side of an infield fracture to continue production from the same well. The wells to date on Arce are all vertical. These Canadian heavy oil specialists are well experienced and have the technology to drill horizontal wells as well as a number of land rigs capable of drilling these shallow wells. The 48 month production cycle per well cluster is covered in the Petrotech reports.

True the movable drillbits and the MWDs will be used to drill through the pay section. Yes these wells will cost more than the previous horizontal wells. Horizontals cost approximately $1m usd, each horizontal production well will cost approximately $1.8m, putting a 4 well cluster + injector at $10m usd, BLR's share at $2.5m approximately per cluster.

Not true that these wells have produced FA, all of the wells for BLR on Acacia and Arce have produced oil to surface. These wells weren't completed correctly by the previous operator and the common problem in heavy oilfields of sanding of the perforations occurred. This could have been avoided by taking the necessary steps of putting sand control into the wells before putting them on production. Kappa failed to do that, as a result Pacific Rubiales plans to re-drill and correctly complete Acacia-1 and A-2 in 2009.

Well Pacific Rubiales paid $168m for Kappa and their CEO has described the Las Quinchas as very exciting in terms of potential reserve upside. So obviously their CEO seems value to this licence in particular. We have 25.5% of the Las Quichas licence and the proven and probable oil reserves that go with it (Arce and Acacia). Pacific Rubiales have picked up their share of Las Quichas already and have made it clear that the other partners of Kappa can sell out or face dilution makes it clear that they'll take more if they can get it. The petrotech puts a very high NPV on Arce alone, and good value to Acacia. It will be interesting to see what emerges from the GCA CPR. No doubt management will use it to tout the value of our assets to attract attention of potential bidders. If Pacific Rubiales sees potential to our licences, their commissioned report sees high value to our licences, then its only reasonable that others might too.

Read that report and see for yourselves.

Captain Nelson Forties

[hhhold2] 05/9/2008 13:30

all sounds good bout the horizontal wells but what have they in terms of flow rates to base thier figures agains't ?

how do you know this area isn't heavily compartmentized with the flu formations which again could affect how long they will flow anything for (ie they drain a small compartment)? (take alook at SEY, Maritainia)

horizontal wells cost alot more to drill because they need to be guided though the payzone area & make sure they reach the correct compartments !

thx for your interesting posts captain!& as you have stated BLR wouldn't have the funds for this & even if they did its still high risk , so far drilling has produced us FA, the way i see it horizontals wells are used to increase the length of production string in the payzone on low producers in the north sea & it more often than not works well but BLR have had zip so far from terms of production so i will be surprised if they can get anyone paying £5m for their Columbian assets, this new report may throw some good spin on it though as some hope for investors !

[hybrid07] 05/9/2008 12:43

News and comments about closing Kappa t/o:

_______________________

Pacific Rubiales Closes Kappa Energy Acquisition

Thursday, September 04, 2008

Pacific Rubiales Energy Corp. has closed the acquisition of Kappa Energy Holdings Ltd. for a cash payment of approximately US$168 million, subject to minor post-closing adjustments and regulatory approval in Colombia. Proceeds were financed through the previously announced issuance of a convertible unsecured subordinated debenture offering of C$240 million with an 8% coupon and a conversion price of C$13.00. GMP Securities L.P. acted as the exclusive financial advisor in connection with this transaction.
.
.
.

Kappa has a strong existing reserve base with, as of May 31, 2008, approximately 10.3 million barrels oil equivalent (MMBOE) of proven and probable reserves and 24.2 MMBOE of proven, probable and possible reserves. In addition, 166 MMBOE of prospective resources have been identified in the best estimate case. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. All the reserve numbers quoted
above are net before royalties.
.
.
.
Ronald Pantin, the company's Chief Executive Officer, stated "We are thrilled with the potential upside of the Kappa acquisition and have exciting plans to maximize the value of this investment."

[oilhunter2] 05/9/2008 12:35

ok where can I get these reports?, GCA and Petrotech. I shall download, print, put my slippers on, and read over the weekend. thanks.

[granny7] 05/9/2008 10:41

Capt V Jim reminds me of Vav V Jim only Jim was the bull for that one!!

Keep em coming Capt.

[dr jekyll] 05/9/2008 09:16

Good post Ivan and morning all. However, I have to say I am impressed with the captains research and logic and it he has given me more hope than I had before. I have basically given up on this one so a little hope won't do me any harm.

[futhark] 05/9/2008 08:41

Ivan, don't forget some of us were down 50% before the 50-1 debacle.
I should have followed my own advice & got out when they announced it.

Oops sorry. Morning all.

[maxk] 05/9/2008 07:27

G'day cobbers.

Strewth Ivan, you must have a had a few tinnies under your belt to come up with that post.

Makes perfect 'crock type sense tho.


Have a cold one....

[jimarilo] 05/9/2008 06:59

Totally agree Ivan, great post !

[adnatrob] 05/9/2008 03:20

Captain, why would the directors want to sell? You probably own more shares than they do! Apart from a few hundred thousand they gave themselves as a bonus (for what I might add) I dont think they hold many more.

[ivanburgess] 05/9/2008 01:53

Ok, I'd like to say something here.

Cap'n. Whilst I respect your views, and I think what you have had to say since you joined us recently has been a valuable contribution, and I have enjoyed reading your posts. However, I think you fail to grasp that Jimarillo, Maxk, Audere, Fut, plus many many others on this board including myself have been in BLR for a few years now. We have heard it all before, from Steinpreiss, from Ivan Burgess, from numerous broker reports, including WH Ireland, VSA Resources, et al. We all bought into BLR a long time ago, thinking exactly the same thoughts that you yourself are promoting now. What incredibly good value, so undervalued, so much potential, and we bought more and more. Over the period of time we also saw the value of the share fall to a fiftieth of what we initially paid, (ie. from about 2p before the 50-1 consolidation to about 2p after consolidation), and of course, most of us have averaged down, especially when it looked so promising, and it looked like we had bottomed, only to see it fall yet further.

The very fact that we are all still here tells you that most of us are still hopefull that things will improve. We have had some really rotten luck, and things have gone wrong/happened which haven't all been the fault of the company. We accept that exploration is like that, but we are still invested in the company despite the ups and downs that we have encountered. Bearing this in mind, it is understandable if any investor feels a tad cynical. In fact, we/they have a right to shout and swear, or voice their cynicism, for they have earned that right with their hard earned money. I give great credit and respect to anyone such as yourself who comes in, takes the gamble, puts their money where their mouth is, but you must also respect those who did just that, long before you came upon the scene.

We will all listen to your arguments, and we will also listen to the arguments put forward by those who have lost a pile too. We enjoy this board, and encourage all to join in, and we try to make everyone feel welcome, but please don't take offence if anyone disagrees with you, or turn a friendly discussion into a war between those for and those against. No matter what anyone's view or opinion, we all respect each other for having put their money on the table, and as an investor, everyone has a right to voice their opinion, whether we agree with it or not.

Please continue to give your views, bring forth your optimism, for heaven knows, optimism has been in short supply recently, but don't take to task those who have heard the same story before and may be a tad cynical after all this time.

Good luck to you with your investment, as we also wish every other shareholder the same good luck too.

Ivan

[captainnelsonforties] 05/9/2008 00:08

Maxk,

I guess you must have missed S Walkers last post on this thread.

Jimarilo,

As an apparent shareholder in BLR your lack of interest is astounding. The information is all in the Petrotech reports. It states how much these wells are going to cost its all in there and I have been posting it.

The reality is very clear:

1. BLR are short of cash

2. BLR have assets worth at least £5m and a market cap of £900k

3. Arce development laid out by the report suggests 14,000bopd peak production and a total of 138 wells to drill, don't use outdated information, the petrotech has been commissioned by Pacific Rubiales.

4. BLR do not have the financial strength to commit to a work program on the scale of Pacific Rubiales a $bn Canadian company.

5. The CEO of Pacific Rubiales has suggested that any company that hasn't the financial strength to meet drilling obligations should sell to them.

6. In the purchase of Kappa Rubiales paid $18m/£9m per 1MMbbls of 2P

7. BLR have around 1MMBls of 2P from Arce and Acacia, given the acquisition price of Kappa around 27p per share.

8. One way BLR can seek value from their licences is to sell up and release value to investors. They cannot match the plans Rubiales has for Arce alone, let alone Acacia.

9. At peak development 22 horizontal development wells per year will cost $14m for BLR's share of CAPEX. Can they raise it or should they sell, the answer is obvious.

10. Don't be too quick to dismiss the points of others, when suggested these may be developed in the same way as other Canadian shallow heavy oil fields using horizontal wells you dismissed that out of hand. Low and behold, clusters of 4 horizontals with injector wells.

11. Acacia resulted in sanded perforations as no packers were installed. New wells will have packers for sand control and make a re-drilled Acacia-1 capable of up to 300bopd, and Acacia 2 up to 150bopd. These will probably also be horizontal completions that can increase the production index of a well as its drilled across the productive reservoir.

12. You did read the report didn't you? Its a good place to start. Well gemeroilio once you get your head around the report you'll be up to speed with the rest of us. Maybe then you and mack may even buy a few.

Captain Nelson Forties

[futhark] 04/9/2008 23:55

Google has started keeping a history of the sites I have 'googled' and I can't get rid of them, anybody know how before the misses borrows the computer? :~(