Columbus Energy Resources Share Discussion Threads

[the guardian] 15/7/2018 17:18

I would prefer not to have another OO because each broker allotted shares differently and mainly because the share price never recovered afterwards. That was the turning point where the euphoria ended.

[h van der h] 15/7/2018 16:18

Very good agm media well worth a listen.. TG also special resolution 5 explanation made reference to shareholders wanting to be included in any issue via an OO, something that LK said would have been automatically included but this guarantees inclusion, rejection of resolution is probably more a throwback from previous managements antics than present..imo

[the guardian] 15/7/2018 13:48

It is very common on AIM to allow pre-emptive rights. Basically it is a sign that you trust the BOD to only issue additional shares when it will be value accretive to the company. By not doing so, the company has to either take a loan without providing share cover or it is forced to ask shareholders permission to issue shares if a deal becomes available.

Positive: By refusing, we have more control over the company and dilution due to share issue

Negative: If a sudden opportunity arises that needs a quick decision, it may be missed.

[nexus7] 15/7/2018 10:46

From LLL Sat 17:55
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AGM Resolution 5

CERP directors wanted the power to be able to make non-preemptive allotment of shares. It is no surprise that this resolution was defeated. I imagine that certain major shareholders voted against adoption of this resolution.

But how many of you understand the implications of this resolution and the power it would have conferred?

This article will hopefully give you some insight. It primarily references Asian companies but that does not dtract from its relevance.

'If you own stock in a listed company, the value of your investment is not only the monetary value of these shares but also your share of control in the company. This technically gives you the right to either approve or oppose certain management actions. And as a shareowner, you typically have the right to buy any new shares that the company may issue — referred to as "preemptive rights." But many Asian companies seek approval for a shareowners’ mandate at annual general meetings (AGMs) to issue shares without these preemptive rights. Such mandates give management the right to issue shares to hand-picked investors, and usually at a discount to market price.'

[nexus7] 15/7/2018 10:37

From phillipy Sat 12:39
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SWP outside consultants

One thing I noticed in the RNS which doesn't seem to have been commented on was this:" New technical work on the SWP has been commissioned involving specialist exploration consultants to develop a technical roadmap for de-risking 2019 drilling locations. "
Now I've always been under the impression that with all the soil chemistry, seismic, Arkex FTG, etc, surveys, plus the stated fact that they have identified prime drilling targets, that it was mainly logistical prep work left to do before drilling could start. So why the sudden need for outside consultants?
When we were last trying to buy Trinity Inniss, it was owned through a complicated series of percentages by Rex Holding International, and they are still heavily involved in Oildrum ( which hadn't been formed back then). Rex have involvement in some specialist 'derisking' technology:
"Rex International Holding Limited is a new generation technology driven oil company that owns a set of proprietaryand innovative exploration technologies, Rex Technologies, developed by the Company’s Swedish founders. These include the liquid hydrocarbon indicator Rex Virtual Drilling technology, which can pinpoint the location of oil reservoirs in the sub-surface using seismic data. The Rex Technologies allow the Company to de-risk its geographically diversified portfolio of onshore and offshore exploration and development assets.
Wholly-owned subsidiary Rex Technology Management Ltd (“RTM”) provides Rex Virtual Drilling screening services to partners and clients, while Rex International Holding has been using the Rex Technologies to grow and de-risk its geographically diversified portfolio of onshore and offshore exploration and development
assets. Its joint venture company Rexonic AG (“Rexonic”) offers the Swiss-developed Rexonics ultrasound
technology that is used for well-bore cleaning which allows for significantly increased oil production in wells that
have issues with clogging and deposits." (Taken from



All of which sounds highly relevant to both Goudron and SWP, Qu. is this a hidden benefit of the Oildrum deal I wonder?

[the guardian] 15/7/2018 10:09

At first, I thought that it was simply permission for the board to issue more shares if and when it needed to raise cash but it seems to be more than that. Unfortunately, the sound in the video was not very clear at that point.

[holly day] 14/7/2018 14:11

Correct. Res 5 rejected, though the wording of the res confused me. Anyone to give a simpler explanation?

[xippy] 14/7/2018 11:15

The auditors weren't rejected, watch the presentation link. It was Special resolution 5. that was not voted through.

link to AGM presentation

[dafrog] 14/7/2018 10:58

Anyone know the reason why the Auditors were rejected please?

[pr100] 14/7/2018 10:48

Despite raising cash a couple of years ago for exploration drilling, Steeldrum appears not to have made any progress with its assets while major (25%) shareholder, Rex International, is struggling after burning exploration cash in Norway and Oman and wants to shift focus away from T&T - which could make this deal a steal or a burden for CERP.

Steeldrum seems to have diluted shareholders heavily at the end of 2016 with an equity cash raise which Rex chose not to participate in. As a consequence, Rex's 2016 annual report (note 30) revealed that its Steeldrum equity had been reclassified as an available-for-sale investment at the reduced "fair value" of $US1.1m. Prior to the Steeldrum dilution, Rex owned 37% of the company but it dropped to 25% on dilution.

So at this point, Rex values Steeldrum at approx US$4.5m/UK£3.4m, which is rather less than CERP is acquiring it for. But back then POO was around US$52pb and it is now some 40% higher - which would make 120bopd worth an extra US$920k/UK£695k per annum more now than in 2016. And then there's the Leo premium to factor in - albeit Rex seem to specialise in all manner of modern exploration techniques which presumably failed to deliver anything of note in T&T.

As for the RNS, it starts off by stating that the SPA has been signed by Columbus but down in the detail it says that the SPA "will be entered into" by Columbus snd its subsidiary Columbus Energy (St Lucia) Ltd. So it's not 100% clear to me that this deal has been done yet. It is also subject to the usual regulatory approvals as well as the approval of the JV partner and unnamed third parties (who presumably include Rex but I would have liked them to be listed).

As indicated at the AGM, the gang will be spending most of the summer in Trinidad (someone's got to do it) but I assume all the DD has already been done and that the deal is not dependent on their visit…albeit the RNS says that the deal should complete in Q4, which could mean the end of the year. I'm assuming that's to give the regulators enough time to approve it.

[offerman] 13/7/2018 22:28

NOT stop mentioning materials should have said keep.... bloody phone changes so much too much Wish iPhones texting typing prediction autospell was as clear and concise as Leo's presentations .......

[offerman] 13/7/2018 22:14

Good evening everyoneI just watched the presentation.Absolutely brilliant. What I love most is their transparency good Bad and the ugly approach. I like the fact they are looking still for the small acquisitions to boost production and stop mentioning the material deals. They have a heck of a lot going on in different areas. And can also use the stimulation techniques right across the board. Credit to Leo ,Gordon ,Stuart , Tony , and ground crews. Big thank you to all involved. Does look like a great 2019 to come . Feeling very happy about our prospects.

[carpadium] 13/7/2018 18:12

Interesting AGM presentation, thanks jcg for making available. They looked tired but explained the long night before! To me it looks like LTHs are in a very good place with these directors in control, confidence in the future should appease times of impatience.

One question I am going to put to GS though concerns cash balances. Close to $1.73m revenues received, net of taxes, royalties (based on Q1 percentages) added to their closing Q1 cash of $4.1m = $5.83m

Detailed Q2 expenditure, incl Lind, $1.48m, = $4.35m

Closing cash declared $2.4m. So a shade under $2m in company running costs?

Fully realise production is not keeping pace with a company in dynamic growth mode, increased labour costs etc etc but, with the aim before year out of positive profitability I feel it right to query what this $2m covered. It just seems too high for pure quarterly running costs.

If I receive a reply from Gordon I'll not copy but relay the gist of reply. Incidentally I am not an accountant by any means so if there are more learned posters that could add explanation to the above, and in case I've made a glaring omission, much appreciated.

[h van der h] 13/7/2018 18:01

If nothing else we have tons of stuff to talk about again... very positive imo.. Goudron is obviously still suffering from the sand issue on some wells, but I think we all agreed that field was just a means to an end, keeps the company running, it has been widely accepted that more active fields would be needed to boost production and therefore cash flow, especially if he still wants to go it alone on SWP, and that was always going to be via share issuance. Not necessarily the fields I was expecting but nonetheless still good, maybe just maybe more will follow from petrotrin..have a good weekend, Goodwood FOS Beckons

[the guardian] 13/7/2018 17:06

Thanks jcg. The question about Predator was answered but I don't see how the company can say that we will own 100% of Innis Trinity if Predator are effectively a partner - unless they decide to take the option to buy the field in full in which case they will have the 100% ownership.

Overall, it was very honest and interesting but a pity that the fall off in production, requiring further stimulation of some wells had not been made clearer earlier. Had that been the case, we (I) would not have expected the overall Goudron production to change very much and thereby avoid disappointment.

If all goes to plan, then I think that 2019 will see a significant ramp up in production and a significant increase in share price

However - and I hate to say this, but Rossannan was correct in pointing out from the start that looking forward to a 0.5 billion company did not mean that the share price would increase to 86p. We are talking about the purchase of new assets and the issue of more shares to increase our market cap, not simple organic growth from existing assets.

Still a very good investment. Production and share price just moving slower than expected.

Have a good weekend all.

[jcgswims] 13/7/2018 15:51

Leo on Brr

AGM Presentation

[ccr1958] 13/7/2018 15:43

Seller still in the house🙃

[northpole2] 13/7/2018 14:58

It is you who is the total idiot here 12bn. Columbus hasn't raised £1 through this transaction. Not £1. They have created a $3.25m loan drawdown facility with Lind which they can tap into if they want more funds, a facility put together for just $35k of fees. Amazing! They have bought Steeldrum in shares, with no cash payments. Don't you get that? In equity. So no raise (you were wrong on that too, no placing) and if they do drawdown from the Lind facility in future they will presumably repay monthly in cash which is what they're been doing on their last Lind loans for over 18 months. Those monthly cash payments are clearly stated in the RNS. Don't you get it? Read the RNS. Deal done IN SHARES, 92 million of them, equivalent to £4.4m of share value for the acquisition (@ 4.7p/ share value). NO CASH PAID! It is you who is the moron. Seda tap? It is a hell of a deal which you clearly can't work out. Look at the Lind slide on the AGM presentation. The extra $1m available is simply another part of the drawdown facility. They are not converted into shares, IT WOULD BE AN EXTRA LOAN AS PART OF THE $3.25m FACILITY. It is not a share conversion. Idiot!

[nexus7] 13/7/2018 12:52

From jcgswims Today 12:45
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AGM presentation

[ccr1958] 13/7/2018 12:48

Afternoon guys ,blinding deal by LK ,thanks for all informative posts .. onwards !

[garnhiem80] 13/7/2018 12:26

I tend to look at the bigger picture! You crack on.. doing a grand job 👍

[spangle93] 13/7/2018 12:13

AGM Presentation is uploaded on the CERP site



Could be a long presentation, slide 2 alone would take 15 mins to brief

[12bn] 13/7/2018 12:05

Garnheim80,you are happy NOT to talk about the terms of the $3.25m Lind deal on the jcqswims thread and go along with the false reading of the RNS that is prevalent there (that the loan is at 8.1p a share,when it is at MARKET PRICES). Shame on you,as I suspect that you are intelligent enough to understand the error that is being perpetuated there,but it suits your stance. A shameful position to take.

[12bn] 13/7/2018 11:59

This is a SEDA tap 'death spiral' in a complicated form. Let's have a closer look at the terms of the $3.25m (NOT £3.25m as in malcys blog). The first $2.25m has to be taken in the first 180 day period and it has 120 day repayment free window,so no repayments for 4 months and then repayments over 20 months. This 20 month period will be the time when the deal is likely to act like a Seda tap 'death spiral', as imo the company is likely to preserve cash by issuing shares at MARKET PRICE at that time (not 8.1p). A further $1m can be converted into shares at MARKET PRICE but only if the share price supports a £25m market cap.The present market cap is over £32m so there is room for the share price to fall and the final $1m be raised./////// Turnover (m) Profit (m) EPS - Basic PE ratio Mkt Cap (m)
OIL & GAS PRODUCERS 4.8 -5.0 -0.94 0.0 32.1