Cadogan Energy Solutions Share Discussion Threads

[targatarga] 30/7/2019 10:14

At least we're back to having to pay the full offer price. Roll on to the next piece of good news!

[diesel] 29/7/2019 15:55

I am surprised the share price is where it is, will try to buy more tomorrow, this is now a solid little company executing its business soundly, growing profits, with an interesting diversification interest, and only valued at about its cash levels....

[targatarga] 29/7/2019 15:30

This should help sentiment!

[akmal101] 25/7/2019 12:21

Buys are not showing up?

[brumbrum79] 23/7/2019 23:10

Thanks for Opinions, recommendations and additionaly informations.

For Spangle:
a) the Monasterytska license average daily production is about 460 bpd -> imho, 460 bpd based on daily production 500 bpd and downtime 7,5% (2-3 days/month for every producing well) so I decided to apply 460 bpd as average daily Oil production;
b) for 2020 Forecast, I don't have any informations and data about Oil rates decline production of the existing and producing Oil wells so I decided to apply a reduction of 5% y/y, please refer to the assumptions. As You know well it's not so simple to find some kind of informations/data...
c) I agree with You about my Assumptions on the 2020, based on informations about Cadogan Petroleum's E&P Pipeline/Projects (Blazh-21 -> sidetrack of Blazh-2; workover and test of other 2 existing wells, 1 Oil and 1 NG; ecc..) I could have increased the production by 125/150 bpd (minimum) in the 2H of the 2020 but I preferred to remain conservative.

For Diesel:
Loan to Proger -> interest rate 5,5% yearly but payable at maturity (which is 24 months). For the 1H2019 Proger Loan interest should be 250.097 Euro or 280.000 Usd, based on Loan execution date 26 february 2019 (124 days);
My main focus was on the E&P segment and whether it was definitely/firmly profitable.

For 1HY2019 about E&P segment my expectation is a revision/up-date of the Reserves (1P-2P-3P) & Resources (Contingent) associated to the Monastyretska license based on:
* Monastyretska reservoir study results (Cadogan RNS 27/09/2018);
* successful of the Blazh-10 well and its High productivity (higher than other 3 producing wells);

Imho, Cadogan is widely undervalued.

ByeBye

[diesel] 23/7/2019 10:26

BB.. Thanks for the input, there is also the interest from the loan to Proger, strange though that deal was I think it could prove to be the catalyst that this company needs. They have tried to expand into new territories but have been thwarted this may well give them the access they need to grow the business.
Ps bought more today, think the drop off over done...

[911man] 23/7/2019 08:22

Clarity of why the CEO left would be helpful. I always thought the Proger deal was odd so would be nice to see that my fears are unfounded.

Regarding the share price. I have been in this one (in varying amounts - some pretty big back in the earlier days)but though I would reduce to a nominal holding just to keep aware. Sometime, something will happen to get a more robust share price movement. But this last movement showed that people get really bored, really easily.

[spangle93] 23/7/2019 00:53

Brumbrum - thanks for sharing your detailed projections. I think they are as good as anyone can do at this stage. I think 2019 is much firmer, because we know that there will be no more new meaningful contributions to production in this period.

If you want to refine it, you could add 5-10% downtime (e.g. see the comments about wax build up and rod replacement) which is common. Also, I don't know whether anything changes fiscally if they get the 20-year licence: maybe not here, but it does in Kazakhstan. And then at some stage later in the year, the new CEO will have his (can't see it being a her) ideas on taking the company forward.

There is also the trading and oil services companies, but they are pretty minor in comparison.

Yes, the E&P business is profitable and I believe that new developments can be funded out of cash reserves, without the need to raise money.

For 2020 it's of course much more challenging to predict. I think you'd need some kind of decline curve on production (though to balance that, you've not included any new production from planned wells).

The big question is what would it take to shift the depressing share price

[brumbrum79] 22/7/2019 12:31

2020 Forecast - E&P (Oil Production)
* Oil Production 2020 -5% y/y -> 435 Bbls/day (ex 460 Bbls/day 2019)

2020
Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec
Oil Production Bbls Daily
435 435 435 435 435 435 435 435 435 435 435 435
Oil Production Bbls Monthly
13485 12180 13485 13050 13485 13050 13485 13485 13050 13485 13050 13485

Oil Production Yearly Bbls 158775

Brent Crude Oil Monthly Average Price $
60,00 60,00 60,00 60,00 60,00 60,00 60,00 60,00 60,00 60,00 60,00 60,00
Discount on Brent $
20 20 20 20 20 20 20 20 20 20 20 20
UA Crude Oil Price $
40 40 40 40 40 40 40 40 40 40 40 40

E&P Gross Revenues Usd$
17.400 17.400 17.400 17.400 17.400 17.400 17.400 17.400 17.400 17.400 17.400 17.400 Yearly
E&P Gross Revenues Monthly Usd$
539.400 487.200 539.400 522.000 539.400 522.000 539.400 539.400 522.000 539.400 522.000 539.400
E&P Gross Revenues Yearly Usd$ 6.351.000

Production Taxes/Fees %
38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25%
Production Taxes/Fees Total Monthly Usd$
206.321 186.354 206.321 199.665 206.321 199.665 206.321 206.321 199.665 206.321 199.665 206.321
Production Taxes/Fees Total Yearly Usd$ 2.429.258

Production Taxes/Fees Total Bbl/Usd$
15,30 15,30 15,30 15,30 15,30 15,30 15,30 15,30 15,30 15,30 15,30 15,30 15,30

Net Revenues Monthly/Usd$
333.080 300.846 333.080 322.335 333.080 322.335 333.080 333.080 322.335 333.080 322.335 333.080
Net Revenues Yearly/Usd$ 3.921.743

Net Revenues Bbl/Usd$
24,70 24,70 24,70 24,70 24,70 24,70 24,70 24,70 24,70 24,70 24,70 24,70 24,7

OPEX Net Bbl/Usd$
15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75
OPEX Net Monthly Usd$
212.389 191.835 212.389 205.538 212.389 205.538 212.389 212.389 205.538 212.389 205.538 212.389
OPEX Net Yearly Usd$ 2.500.706

Gross Profit A/”Ebitda̶1; Usd$
120.691 109.011 120.691 116.798 120.691 116.798 120.691 120.691 116.798 120.691 116.798 120.691
Gross Profit A/"Ebitda" Yearly Usd$ 1.421.036

Gross Profit A/"Ebitda" Bbl/Usd$
8,95 8,95 8,95 8,95 8,95 8,95 8,95 8,95 8,95 8,95 8,95 8,95 8,95
Gross Profit A/”Ebitda̶1; Margin
22,38% 22,38% 22,38% 22,38% 22,38% 22,38% 22,38% 22,38% 22,38% 22,38% 22,38% 22,38%
Gross Profit A/”Ebitda̶1; Margin Yearly 22,38%

D&A Monthly Usd$
58.333 58.333 58.333 58.333 58.333 58.333 58.333 58.333 58.333 58.333 58.333 58.337
D&A Yearly Usd$ 700.000

D&A Bbl/Usd$
4,33 4,79 4,33 4,47 4,33 4,47 4,33 4,33 4,47 4,33 4,47 4,33 4,41

Tot. Production Cost (OPEX Net + D&A) Bbl/Usd$ excluded Prod. Taxes/Fees 20,08 20,54 20,08 20,22 20,08 20,22 20,08 20,08 20,22 20,08 20,22 20,08 20,16

Gross Profit B/”Ebit” Monthly Usd$
62.358 50.678 62.358 58.465 62.358 58.465 62.358 62.358 58.465 62.358 58.465 62.354
Gross Profit B/”Ebit” Yearly Usd$ 721.036

Gross Profit B/”Ebit” Bbl/Usd$
4,62 4,16 4,62 4,48 4,62 4,48 4,62 4,62 4,48 4,62 4,48 4,62 4,54
Gross Profit B/”Ebit” Margin
11,56% 10,40% 11,56% 11,20% 11,56% 11,20% 11,56% 11,56% 11,20% 11,56% 11,20% 11,56%
Gross Profit B/”Ebit” Margin Yearly 11,35%

2020 E&P Forecast - Assumptions:
* Oil Production 2020 -5% y/y -> 435 Bbls/day (ex 460 Bbls/day 2019);
* Brent Crude Oil Average Price 60$/Bbl - Discount price 20$/Bbl;
* Production Taxes/Royalties/Rent Fees flat (38,25% as 2019);
* D&A 2020 (Monastyretska license/wells ->500/525$K; Other PP&E ->200/175$K);
* 2020 E&P Forecast in the do-nothing scenario (existing 4 Producing Oil wells: BM-3; Blazh-1; Blazh-3; Blazh-10) -> No New Investments (spud/drill new well/wells) in the E&P Segment (Monastyretska License; Bytlianska License)...
But we know very well the E&P Projects/Pipeline is good enough (Blazh-21 well [Oil] -> Sidetrack of the existing Blazh-2 well in Monastyretska; Workovers of 2 existing Wells [1 Oil; 1 Natural Gas] + Spud/Drill 2 New Wells [1 Oil - Vovche-4 well; 1 Natural Gas - Borynia-4 well] in the Bytlianska license);

Based on Forecast the E&P Business Unit is profitable or seems to be profitable

Considerations/Opinions/Views about 2019 E&P Business Unit Estimation & 2020 E&P Business Unit Forecast??

ByeBye

[brumbrum79] 21/7/2019 23:26

An Estimation...

Cadogan E&P 2019 (OIL Production - E&P Business Unit)

2019
Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec
Oil Production Bbls Daily
212 212 212 212 212 460 460 460 460 460 460 460
Oil Production Bbls Monthly
6572 5936 6572 6360 6572 13800 14260 14260 13800 14260 13800 14260
Total Production 2019: 130.452 BBls

Brent Crude Oil Monthly Average Price $
59,41 63,96 66,14 71,23 71,32 64,22 64,73 62,00 62,00 62,00 62,00 62,00
Discount on Brent $
20 20 20 20 20 20 20 20 20 20 20 20
UKraine Crude Oil Price $
39,41 43,96 46,14 51,23 51,32 44,22 44,73 42 42 42 42 42

Gross Revenues Monthly $ (Jan-Dec)
259.003 260.947 303.232 325.823 337.275 610.236 637.850 598.920 579.600 598.920 579.600 598.920 -> Gross Revenues Yearly $ 5.611.789


Production Taxes/Fees %
38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25% 38,25%

PT&F Tot.$ (Jan-Dec)
99.068 99.812 115.986 124.627 129.008 233.415 243.978 229.087 221.697 229.087 221.697 229.087 -> Yearly $ 2.176.549

PT&F Bbl (Jan-Dec)
15,07 16,81 17,65 19,60 19,63 16,91 17,11 16,07 16,07 16,07 16,07 16,07

Net Revenues $ (Jan-Dec)
159.934 161.135 187.246 201.196 208.267 376.821 393.872 369.833 357.903 369.833 357.903 369.833 -> Yearly $ 3.513.776

Net Revenues Bbl/$ (Jan-Dec)
24,34 27,15 28,49 31,63 31,69 27,31 27,62 25,94 25,94 25,94 25,94 25,94

OPEX Net Bbl/$ (Jan-Dec)
15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75 15,75
OPEX Net $ (Jan-Dec)
103.509 93.492 103.509 100.170 103.509 217.350 224.595 224.595 217.350 224.595 217.350 224.595 -> OPEX Net Yearly $ 2.054.619

Gross Profit A/”Ebitda̶1; $ (Jan-Dec)
56.425 67.643 83.737 101.026 104.758 159.471 169.277 145.238 140.553 145.238 140.553 145.238 -> Gross Profit A/”Ebitda̶1; Yearly $ 1.459.157

Gross Profit A/”Ebitda̶1; $/Bbl
8,59 11,40 12,74 15,88 15,94 11,56 11,87 10,19 10,19 10,19 10,19 10,19

Gross Profit A/”Ebitda̶1; Margin 21,79% 25,92% 27,61% 31,01% 31,06% 26,13% 26,54% 24,25% 24,25% 24,25% 24,25% 24,25%

D&A $ (Jan-Dec)
35.417 35.417 35.417 35.417 35.417 58.333 58.333 58.333 58.333 58.333 58.333 58.337 -> D&A Yearly $ 585.420

D&A $/Bbl
5,39 5,97 5,39 5,57 5,39 4,23 4,09 4,09 4,23 4,09 4,23 4,09

Tot. Prod. Cost (OPEX Net+D&A) $/Bbl
21,14 21,72 21,14 21,32 21,14 19,98 19,84 19,84 19,98 19,84 19,98 19,84

Gross Profit B/”Ebit” $ (Jan-Dec)
21.008 32.226 48.320 65.609 69.341 101.138 110.944 86.905 82.220 86.905 82.220 86.901 -> Gross Profit B/"Ebit" Yearly $ 873.737

Gross Profit B/”Ebit” $/Bbl
3,20 5,43 7,35 10,32 10,55 7,33 7,78 6,09 5,96 6,09 5,96 6,09

Gross Profit B/”Ebit” Margin
8,11% 12,35% 15,93% 20,14% 20,56% 16,57% 17,39% 14,51% 14,19% 14,51% 14,19% 14,51%
-----------------------------------------------------------------------------
Production Taxes/Fees included: Production royalties and taxes (Oil well 31%), fees paid for the rented wells and other direct taxes (estimated 7,25%);
OPEX Net included: direct staff and other costs for exploration and development, utilities (electric energy/fuel..) for E&P Assets, direct administrative expenses;
D&A included: depreciation and depletion of Oil&Gas Assets, depreciation of Other property, plant and equipment;

* The Unallocated administrative expenses is an "open problem" because:
1) I don't know how many Cadogan's employees was transfered to WGI in January 2019 together with Deb&Cher (licences) natural gas fields/assets (reference to Cadogan Petroleum RNS 12/11/2018 - exit from the shale gas project);
2) Unallocated admin. expenses 50-50% between O&G and NG Trading? or based on their respective Gross Revenues?

* I didn't/don't consider the VAT Recoverable in the above estimation.
_______________________________________________________________________________

Based on estimation the E&P Business Unit is profitable or seems to be profitable.
Gross Profit A Margin >20% -> with Brent Crude Price =/>60$/Bbl and discount price 20$/Bbl;
Gross Profit B Margin >12% -> with Brent Crude Price =/>60$/Bbl and discount price 20$/Bbl;

Estimated Gross "Cash Flow" E&P Business +1.400.000/+1.450.000 $ (Gross Profit A)

_______________________________________________________________________________
# the Brent Crude Price of July 2019 is the average price until 21/07/2019;
* Cadogan Petroleum Average Released Price 2016-2018 43,30 $/BOE (2016: 37,15$ - 2017: 41,6$ - 2018: 51,3$);
* E&P Break-Even Point estimated in the range 34-35$/Bbl (Production Taxes/Royalties/Rent Fees included + D&A);
________________________________________________________________________________

ByeBye

[spangle93] 18/7/2019 14:22

Brumbrum. No problem at all regarding his nationality.

But board and senior management appointments in this sector only rarely are chosen through a recruitment consultancy search, and are more likely to be filled by personnel already known to the incumbents. Hence since half the board is Italian, the company has a stake in an Italian engineering company, plus other pointers to links to ENI, it wouldn't be surprising if the new appointee fitted this culture.

[brumbrum79] 18/7/2019 13:43

TargaTarga until today we know this.

Cadogan's Press Release 27 September 2018

'The Monastyretska reservoir study has been completed, as planned. The study has highlighted significant upside potential from infill drilling and the implementation of a water injection scheme.
The study predicts that infill drilling can add up to 2.3 million barrels (MBbl) to the cumulative production of a do-nothing scenario with a further 2.1 MBbl coming from the implementation of water injection.
Future cumulative production of a do-nothing scenario, i.e. from the three exsting wells only, is predicted to be 1.2 MBbl and is in line with the current estimation of 2P reserves.

The study has been conducted using a reservoir simulation model validated by matching the historical performances of the existing three producing wells.
An assessment of the cost of the various scenarios is on-going in order to select the optimal development scheme.'

Based on available informations/data, IMHO - Monastyretska 2P:
with infill drilling: 3,5 MBbls (Future cumulative production);
with infill drilling + implementation of water injection: 5,6 MBbls (Future cumulative production);


Blazh-10 well succesfull and production rate (initial 275 bpd on natural flow) could change/update the above scenario.

[targatarga] 18/7/2019 13:07

The other question I have is how much oil does management believe is in and around the Blazh area.

[brumbrum79] 18/7/2019 12:39

excuse me guys but I find quite ridiculous the "problem" about CEO's native language.

Lastly, the first or most important Cadogan's Shareholder is SPQR Capital Holdings -> Director/Chairman Mr. Alessandro Benedetti (also CEO of Schwarzfield)...

Imho, the important things are:
* investments in the E&P Business Unit;
* Conversion of the Monastyretska license from exploration to Production;
* Sidetrack of the Blazh-2 well -> new Blazh 21 well (location nearby to Blazh-10 well);
* Construction of the Oil center in Monastyretska and related facilities;
* implementation of water injection in the Monastyretska license to increase Oil production (Blazh-50 well water injector well??);
* development of the Bytlianska License, with or without farm-out... 2 workovers + production test of 2 old wells... spud/drill 2 new wells in the license... Target: Oil & Natural Gas Production;

ByeBye

[spangle93] 18/7/2019 12:16

"Hopefully a person from outside the company and not a board insider."
- hmm I share your thoughts but I think this sector is the last bastion of non-diverse practices for staffing the board room. I'd be surprised if the new CEO can't speak Italian..


He's also CAD's representative on the Proger board, so if he's no longer with CAD, then he's not representing the company, and CAD will put a different board member onto Proger's board to replace him


Targa*2 ref Proger. The difference is that Lamprell has a yard and builds things, often with lumpsum contracts. Proger are engineering and eng/construction management consultants, which is (a) more often reimburseable, and (b) doesn't leave you exposed to needing loans and whopping outlays

[targatarga] 18/7/2019 10:55

I admit to knowing nothing, but I wonder how UK companies like Lamprell can make huge losses in a short amount of time on a project with wafer thin margins. Proger goes for growth and offers larger interest with little alleged risk.

[itsriskythat] 18/7/2019 09:47

The RNS is positive as Michelotti's attention had turned to his board position at Proger. But I wonder if the personal reasons mean he is also resigning from Proger?

It would be wrong for Michelotti to now execute the company's call option to take a share in Proger now he is leaving. The independent directors need to take a fresh look at the Proger deal, and leave a decision to the incoming CEO. I think the new CEO needs to move quickly to use the cash pile to grow the business and should be on an industry standard salary and bonus for the size of company Cadogan has become. Hopefully a person from outside the company and not a board insider.

[brumbrum79] 15/7/2019 22:59

Hi Spangle,

I will contact Cadogan for a Job in the comunication team! Smiling!

As I wrote in my previous message..
The Stock Market & many Cadogan's Shareholders might be amazed...

Bye

[spangle93] 15/7/2019 22:24

Thanks brum brum - I think you should apply for a job in the Cadogan PR department (if there actually is one...)

[targatarga] 12/7/2019 15:31

This is getting silly again. Imho