Columbus Energy Resources Share Discussion Threads

[12bn] 20/6/2018 11:38

'Jam tomorrow company' as per usual or a 'piece of stale dry bread in the next decade company' might be more appropriate. I think I will watch the paint drying,it is more interesting.

[12bn] 20/6/2018 11:29

• On company strategy: “We changed our strategy and moved away from drilling cheap vertical wells as a way to increase production levels. These wells were not producing enough oil to justify the expenditure. With new leadership in the company, we are focusing on creating a cash-positive business by taking our costs and increasing our performance in the field, not by drilling.”////// PMSL,cost cutting tiddler soon,is it worth £30m??????? NO,way over-valued.

[offerman] 20/6/2018 11:13

With that interview then there isn't really a lot more that can be added for the what was highly anticipated July quarterly update then. Expect the share price to be betweenAnywhere from4.6p to 5.2 now until next three months or so . With 800bopd most likely year end I expect an share price in the range of 5.5- 6.6p Aimho of course BWTFDIK

[offerman] 20/6/2018 11:07

Credit to h Van d er as he recently mentioned exactly that about why not look at further ISPC contracts So nice call H Van D er

[offerman] 20/6/2018 11:00

Thanks JCG Much of all this we already know . A confusing part for me is :" Where else do you see attractive E&P opportunities in Trinidad and Tobago? We will move from just investing in Goudron to investing in the South West Peninsula, where we expect to close two main deals in Q3 2018, one of which is the renegotiated Beach Oilfield Limited transaction. In the other deal, we are taking over the remaining 50% of the Icacos fields from Primera/Touchstone. We have announced both deals and we are hoping to complete both in Q3 2018. With these deals done, we will have access to the entire South West Peninsula."So what about the material massive transformation deal then that is bigger than SWP that is to happen in 2018. The two deals mentioned for closure in 2018 to me doesn't seem to indicate the massive deal ? Beach and iacos are seperate deals aren't they ? And also LK mentions 3-5 years should it not be 2-4 years ? In one or two years time willThey still be saying 3-5 years? Also to me they are now saying OP of 60'is bad because of the 18% tax after 50 To me it sounds like things haven't quite gone to plan albeit just slower than LK earlier interviews .Personally I expect 800bopd to not be rose tinted specs as I have done far too many timesBefore . My verdict: ProsA great company in the making with top class management and prospects. Cons : everything will just take longer than expected and more bumps will appear along the way no doubt as that's business .Patience , a lot of patience is key here . It will pay off though.

[jcgswims] 20/6/2018 10:43

Interview with Leo



Improve performance in Trinidad

June 20, 2018

Leo Koot, executive chairman of Columbus Energy Resources, talks to TOGY about plans for the Goudron field and South West Peninsula assets, recent changes the company has undergone and how it will continue improving and growing its operations. E&P company Columbus has been present in Trinidad and Tobago since 2011.

• On company strategy: “We changed our strategy and moved away from drilling cheap vertical wells as a way to increase production levels. These wells were not producing enough oil to justify the expenditure. With new leadership in the company, we are focusing on creating a cash-positive business by taking our costs and increasing our performance in the field, not by drilling.”

• On the tax regime: “Industry and government have been in discussions in an attempt to revise the SPT structure, unfortunately, without a positive result to date. The present system gets in the way of growing businesses in Trinidad and reduces critical investments necessary to achieve the government’s ambitious goals.”

Most TOGY interviews are published exclusively on our business intelligence platform, TOGYiN, but you can find the full interview with Leo Koot below.


How does Columbus view Trinidad and Tobago’s Supplemental Petroleum Tax (SPT)?
When oil prices rise above USD 49.90 per barrel, SPT becomes payable. If you do sums, the SPT is like a cliff edge. It kicks in at USD 50 per barrel and you start paying 18% extra in tax. Only when oil prices get beyond USD 60 per barrel do oil companies start benefiting from the increased oil prices.
Industry and government have been in discussions in an attempt to revise the SPT structure, unfortunately, without a positive result to date. The present system gets in the way of growing businesses in Trinidad and reduces critical investments necessary to achieve the government’s ambitious goals. This tax destroys value, especially when the oil price hovers around the USD 50-60 per barrel “death zone,” where business’ after-tax revenue goes down.
Collectively, we need to come up with a different mechanism that gives government and industry a share of the revenue increase that allows businesses to reinvest in country.
An equally important issue is that we would encourage faster decision making and action by the government in all areas. For example, we have been waiting a number of years for the grant of a private petroleum licence over two of our assets. We are waiting for a VAT refund, and yet, we are asked to pay our taxes on time.
This is not unique. It creates all sorts of issues around valuations of businesses for future transactions, purchases, sales, M&A deals etc. The markets stall if there is no certainty of action and it can result in a lack of available capital to invest in the country.

How is the development of the Goudron field going?
We are now producing around 500-600 bopd from Goudron. That extra production gives us free cashflow and, at the moment, we are choosing to invest that cash back into Goudron to further build production. By the end of 2018, we expect to be anywhere between 800 bopd and 1,400 bopd, depending on how successful our projects are.

Are EOR techniques such as carbon dioxide injection being considered for Goudron and other mature fields in the country?
No, our crude has a lower viscosity than a glass of water and it is of very high quality; it is effectively condensate. Our APIs are 35-55 degrees. You could run your diesel car on Goudron crude without treating it.
I do not believe CO2 injection is an obvious solution for Trinidad. The reservoirs are often semi-isolated sand lenses further compartmentalised by natural fractures. Furthermore, the state of the existing infrastructure and wells is insufficient to inject a highly corrosive gas, so chances are that CO2 will be released uncontrolled in the environment. The cost for new sour-grade infrastructure and wells will be prohibitive.

Where else do you see attractive E&P opportunities in Trinidad and Tobago?
We will move from just investing in Goudron to investing in the South West Peninsula, where we expect to close two main deals in Q3 2018, one of which is the renegotiated Beach Oilfield Limited transaction.
In the other deal, we are taking over the remaining 50% of the Icacos fields from Primera/Touchstone. We have announced both deals and we are hoping to complete both in Q3 2018. With these deals done, we will have access to the entire South West Peninsula. The area sits right on top of the Eastern Venezuela Basin, 7 kilometres away from Venezuela.
We have good seismic, geodetic gravity and geochemistry data. We can see mud diapirs, which are effectively clay squeezed from deep down to the surface, like a volcano. That effectively creates a natural trap for oil in the reservoirs, so there is evidence of oil in the region. We know there is reservoir-quality rock and we have a trapping system to support our confidence in finding new oil accumulations.
We have already identified around a dozen prospects of material size. The range we are talking about now is 20 million-400 million barrels of oil in place, for each prospect. With the free cash from Goudron, Bonasse and Icacos, we will start drilling shallow targets first. Then, as we become more successful, we will explore deeper.
There are two existing oilfields in the South West Peninsula: Icacos and Bonasse. The latter is producing only about 5-10 bopd. We built Goudron up from 30 bopd to 600 bopd, so we believe we can materially improve production from Bonasse, maybe to about 100 bopd.

Are your Goudron and South West Peninsula assets under the same type of contract?
Goudron is an IPSC [incremental production service contract], which is an agreement with Petrotrin. We are effectively providing a service to manage the field and to build more production.
The South West Peninsula is ours through private petroleum leases. We have contracts with the landowners and will have private petroleum leases from the ministry, so we are only subject to the corporate tax and royalties to the landowners. Moreover, we are paid in US dollars, which helps with the forex challenge in Trinidad.

What next steps will Columbus take towards operational improvement?
We changed our strategy and moved away from drilling cheap vertical wells as a way to increase production levels. These wells were not producing enough oil to justify the expenditure. With new leadership in the company, we are focusing on creating a cash-positive business by taking our costs and increasing our performance in the field, not by drilling. We are doing things more efficiently, focusing on details and making sure that everything is optimised.
The second step is to refine and optimise our well treatments through a general cleanup of the well bore.
The third step involves longer-term actions. The Goudron field has been producing for 50 years, with nearly 5 million barrels of oil extracted, and all the energy has been drained from the reservoir. To boost production, we are restoring that energy by adding pressure through water injection.
The biggest challenge we have is getting the organisation used to change. Before, a very small team ran the company, doing a very good job and getting a little bit of production at a very low cost. We had to move away from that family structure to turn into a structured operating company with proper reporting structures, and with the right skillsets and safety and performance expectations.

What is the company doing to expand its presence and ensure growth?
We are a properly run company in line with international standards in Trinidad on land. We are very interested in picking up additional IPSCs, so we are in close contact with the government and Petrotrin to see if there are other fields similar to Goudron that we can use our technology on.
We also want to spread our wings beyond Trinidad. We are actively looking at Suriname and Colombia. We have operating knowledge and expertise on running land-based oil wells and stripper wells in a jungle-type environment. If you look at South America, especially Colombia and Suriname, it is all jungle and swamp with a lot of shallow wells. We are in conversations in Suriname and Colombia.
Our skills are very complementary to the subsurface environment in Venezuela, given the right political and economic environments. Eventually, we expect to be operating there as an independent to try and help that government do some efficient oilfield operations.
Financially, one of the first things we did when the new team came on board is build our reputation in the London market, and we got very strong investor interest. Schroders, one of the main institutional investors in London, became nearly 14% shareholders in the business. That created stability in our share price. People know and understand the strategy, and that if they get in now, there is an opportunity to grow and build with the company.

What is the company’s near-term strategy?
We have nearly doubled our production so far and we have already doubled our share price with a market cap of somewhere between GBP 35 million and GBP 45 million.
Our strategy is getting our base production up at Goudron, Bonasse and Icacos, creating an exciting exploration portfolio to give us access to opportunities transforming the business and looking for value-creative M&A transactions. When you consider the scale of those exploration targets, Columbus can become a USD 500-million-plus company in the next three to five years.

[the guardian] 19/6/2018 19:51

holly, if John Wayne were still alive, he would probably say that CERP is the most boring share this side of the Pecos.

[arrynillson] 19/6/2018 13:01

Pleasure to be of service!

[holly day] 19/6/2018 12:00

Nice one arrynillson. Made me chuckle on both counts!

[arrynillson] 19/6/2018 11:55

holly day - a poster on the nutters thread, 12bn, was keeping a tally on Lind sales as he believed every sale of 250000 was Lind - trouble is he isn't renowned for his counting skills and people soon got wise to his B/Shyte!

I'd be surprised if Lind were still holding - if you wrote to them and asked they might even be prepared to tell you or we could let Rosie run with that ball!

[holly day] 19/6/2018 10:39

Seems like Leo has managed to dispense with traders. Now need LIND to disappear with their 'orderly' disposal (with minimal profit) and Leo to present a different projection chart and we can move on. CERP must be the least exciting stock in AIM at the mo.

[offerman] 18/6/2018 22:22

Second that post TG

[the guardian] 18/6/2018 16:38

Decent day today - particularly when I expected all WTI trading oilers to fall. It would be nice if we could have a few more good days with the odd MEGA day thrown in for good measure.

[nexus7] 18/6/2018 15:53

Venezuela Forced To Shut Down Production As Operations Fall Apart

There are now signs that its oil industry is entering a dangerous new phase. Argus Media reports that Venezuela has begun to “proactively shut in oil production to cope with nearly replete terminal storage, further accelerating an output decline and bringing the OPEC country closer to the psychological barrier of 1mn b/d.”

Venezuela’s oil production fell to an average of 1.392 million barrels per day in May, down another 42,000 bpd from a month earlier, according to OPEC’s secondary sources. However, with the crisis in Venezuela spiraling out of control at a horrific pace, the numbers from May might as well be a year ago...

As such, the 1.392 mb/d figure for May, bad as it is, is woefully out of date. Sources told Argus Media that production plunged to just 1.1-1.2 mb/d in early June, heading down towards 1 mb/d...

[arrynillson] 18/6/2018 13:23

Ross - ‘ hopefully there won’t be too much of it ‘ - get over yourself - anyone would think that any trading not done by you is in some way less than wholesome and your relentless spin doctoring is somehow acceptable - dream on Rosie!

[offerman] 18/6/2018 12:06

Just found out from LSE Gibbo is buying shed loads to enter top 10% holders

[offerman] 18/6/2018 11:31

T traders out in force today most likely on T 20s for upcoming promised July news then they'll all bail out.

[arrynillson] 18/6/2018 10:15

12bn - don't pretend you understand this big picture stuff in relation to CERP - boosting production is also CERP priority 12bn - notice you don't talk about our production any more since you were proved wrong so emphatically there!

How's production going at KOD 12bn - seems like producing a devastatingly low price Placing is their latest trick - at less than half your entry price - oooooouuuuuuchhhh that must've hurt 12bn - why didn't you warn people about that instead of exposing innocents to your teasing takeover tosh!