Columbus Energy Resources Share Discussion Threads

[edgein] 11/9/2017 10:17

Brasso,

Well as the company suggests we're on target to be cash flow positive by Q4 and that's with the ongoing costs of waterflood etc. LK had a target price of 6p around this stage which would be Lind converting at 9p if that happened. Since old Ed holds at an average of 2.2p its now game on. Great to hear that they've already started injecting water its why many of us have been buying over the last 6 months.

Regards,
Ed.

[1waving] 11/9/2017 10:11

.
I strongly suggest someone qualifies with the company what this granting of shares is for.

Are they freebies for Lind for raising the first tranche exercise price to 4.5p ? --
or are they in payment for part of the outstanding first tranche balance and if so what is the outstanding balance on that first tranche ?

" -- The Company has granted Lind 17,992,308 shares, to be escrowed by Lind for at least six months from the date of issue (expected to be 23 September 2017).-- "

Nowhere in the RNS does it say these shares that are 'granted' are for repayment of the first tranche !!!!!


.

[brasso3] 11/9/2017 10:06

Lind must have been given some firm re-assurances about where production will be by year end.

[edgein] 11/9/2017 09:17

TDH,

Well perhaps it is a sweetner too but the substance of the deal remains, free cash flow and the company can elect to convert at 50% premium to the VWAP 20 on tranche 2, tranche 1 remains converted at fixed 4.5p per share.

That's a cracking deal when you're about to extend trial waterflood (as they're injecting currently) up to field wide waterflood. He must have given them some good info to get them to convert well above the share price and to do VWAP + 50%. Probably told them about the upside on our recoverable oil or some such. That 60mmbbls+ of recoverable C3 is waterflood dependent after all.

Regards,
Ed.

[gemlotte55] 11/9/2017 09:07

22p, whats the lead time on that

[jcgswims] 11/9/2017 09:05

Columbus Energy Resources (LON:CERP)

Columbus Energy Resources (LON:CERP) has announced a favourable revision to the terms on its lending facility with Lind Partners. Following the agreement announced in December 2016 for a US$8.9m convertible loan facility of which US$1.825m (T1) has been drawn down, CERP has negotiated an increase in the conversion price, an increase in the facility and an improvement in payment terms.

• T1 conversion price increased by 50% to 4.5p/sh.

• Issue of 17.9mn shares to Lind, held in escrow for at least six months from 23rd September.

• The next monthly repayment of T1 will be paid in shares (2.3m) at a price of 3p/sh.

• Lind intends to exercise its right to increase the size of the facility by US$750k (T2) with funds available to CERP in Q4 2017. T2 will be repaid at a monthly rate of US$38.7k in cash or shares as determined by CERP.

• Lind will be eligible for 7.6mn share options on provision of T2 exercisable at a price of 50% above the preceding 20 day average to the award date for up to 40 months.

The additional funds will aid in furthering the new management’s turnaround strategy. This includes field optimisation, well stimulation and the water injection pilot programme for which an application has been submitted. CERP expect to be cash flow positive during Q4 2017 as a result of these initiatives and we believe this can be achieved from the expanded cash resources given their low cost nature.

Furthermore, we believe that Lind’s decision to improve the terms of the facility, which has weighed upon the shares in recent months, reflects positively on the new management and their strategy, underpinning our positive outlook.

We reiterate our Buy recommendation and 22p target price.

CERP will announce interim results on 13 September and hold an AGM and investor presentation on 14 September at the company's solicitors, Kerman and Co LLP, who are located at 200 Strand, London WC2R 1DJ

[the dark horse] 11/9/2017 08:56

you repeat the rns which i've seen but i believe miss the point which is the sweetener is not one month at a 3p conversion rate but 17.9m free shares. do the maths if we pay off remaining tranche 1 instalments (cap&int) at 4.5p plus 17.9m shares VS if we pay off the remaining instalments at 3p

Clearly CERP intend paying in shares from here on or this deal doesn't make sense.

I still agree it is a good deal as CERP get funds to keep going forward but not going to wear rose tinted specs and think Lind are being generous

[carpadium] 11/9/2017 08:54

Late riser today! Great news, well negotiated LK, increased secure funding = faster progress. Good posts Ed.

[12bn] 11/9/2017 08:50

Notice of AGM

The Annual General Meeting ("AGM") will take place on 14 September 2017 at 11.00 am, and will be held at the offices of the Company's solicitors, Kerman and Co LLP, whose address is 200 Strand, London WC2R 1DJ. /////// That will be when real info comes out about how badly CERP/LGO are doing,imo.

[brasso3] 11/9/2017 08:50

break out!!!!

[edgein] 11/9/2017 08:45

When you read the deal you think wtf how did he manage to get them talked into converting debt at 50% premium, actually more than 50% premium to the share price (we closed last week about 2.7p). Clearly Lind see them making money above 4.5p per share (more than that if the share price rises as their next tranche is vwap based and its only a matter of time before they start waterflood. I just wish all my investments got financial agreements at +50% premium to share price. No wonder LK left their office with such a smile, I just want to know what he told them to get this deal.

Regards,
Ed.

[edgein] 11/9/2017 08:40

Lind has agreed to increase the conversion price by 50% for the First Tranche to 4.5p per share from 3p per share upon completion of the deal.

-- The Company has granted Lind 17,992,308 shares, to be escrowed by Lind for at least six months from the date of issue (expected to be 23 September 2017).

-- Lind has agreed with the Company that it shall receive the repayment of its next First Tranche monthly instalment in September 2017 in shares, totalling 2,307,692 shares at a conversion price of 3p per share.

The above explains it all. Lind are happy to get shares for payment, the conversion price is 4.5p for tranche 1 of the funding. Tranche 2 is for vwap 20 + 50% premium. This can be paid in either shares or cash depending on what they decide at the time. Therefore as stated they'll be able to use the free cash on operations and Lind take shares with a conversion price of share price + 50% premium. A great deal for us. We have to make a September payment of 2.3m shares at 3p though, I guess the sweetner for Lind.

LK has obviously told them they're gonna make their money when the share price is well above 4.5p, they'd have potentially 21m shares then with an average just over 4p. Clearly if the company elects to give them shares per month for tranche 2 their average price will change a little especially if we go over 3-4p on waterflood etc.

Regards,
Ed.

[the dark horse] 11/9/2017 08:25

So Ed are you saying that the 17,992,308 just granted are going to be used to pay the instalments? It is not as I read it. We have always had the option to pay in stock but haven't to date but now seem to be about to pay the September with 2,307,692 shares at 3p.
As I understand Lind have the option to convert current balance of £1.344m at 3p. That has not happened and instead they increase the conv. price to 4.5p but we give them 17,992,308 shares, held in escrow so they can't sell them, for 6 months. This seems more shares than the loss to them of increasing the strike price and We still have to make the monthly instalments on 1st and 2nd tranches and retain the right to pay in shares.
Please feel free to correct me as this is only my reading and I haven't delved back into the small print of loan details.

Still clearly positive for CERP - not saying it isn't - but just don't like continual dilution and had hoped the new broom would not resort to old habits

[luckyvince] 11/9/2017 08:16

And, clearly,Lind expects the share price to get to at least 4.5p.

[dodge city] 11/9/2017 08:15

There you go - from 139

"I suspect he may have made some progress re finance."

[nexus7] 11/9/2017 08:09

Re-negotiation of Convertible Security Funding
RNS Number : 3033Q
Columbus Energy Resources PLC
11 September 2017

[edgein] 11/9/2017 08:00

Basically the company is now fully funded to start the waterflood and will see significant free cash from the growing production.

Regards,
Ed.

[edgein] 11/9/2017 07:57

TDH,

Clearly you don't get it, Lind always had the right to convert the fist tranche at 3p, now that has been upped to 4.5p. Lind are also opening up a second tranche to CERP of $750k I guess for the waterflood. So CERP don't have to make monthly payments, they hold the converted shares escrowed for at least 6 months. therefore the monthly payments stop being paid by CERP (that free cash can be used now to grow the company). On Tranche 2 they pay less than $40k per month which will be during field optimization and waterflood. So LK can basically use nearly all free cash on our assets now. That's why its an excellent deal.

Regards,
Ed.

[the dark horse] 11/9/2017 07:50

Am I missing something or have CERP not just GIVEN Lind more shares than Lind gave up by moving the price on the option to convert? Also getting another chunk at 3p by allowing CERP to pay in shares for Sept and entire second tranche
Hate dilution, its like slow puncture that eats away shareholder value :(

[edgein] 11/9/2017 07:50

Excellent news, not just the renegotiation of Lind and them accepting a 50% higher conversion price as detailed in the RNS, but the fact that they've now started to inject water. Once the application is granted they'll be able to increase this trial up to full field wide waterflood. No wonder LK expects the new floor to be 3p and Lind are happy to accept shares at 4.5p conversion price.

Regards,
Ed.

[tmmalik] 11/9/2017 07:44

Seems we r moving towards 4p finally

[ccr1958] 11/9/2017 07:20

Yes TG better !!

[the guardian] 11/9/2017 07:13

Leo has pulled off a very good deal with Lind. See the RNS.