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I think this actually easier to understand, if the company was insolvent and going away why would Meridian allow it go forward. Their loan is secured by KL and if they consider their equity to be gone why wait for the company to reduce the value of the asset any further.
It's only a guess but my bet is that they are in no hurry to foreclose on the company and are working with these guys to resolve the big issues the company is facing.
We should see an announcement that they are beginning trading again or that they need more time. I doubt very much that we will see an announcement stating that they are going away.
Fortunately we can still buy and sell in the US while we wait for them to sort this out.
Ok, this is probably the hardest thing an oil can face.
When do you call it a dry hole. It could be argued that if you don't take it all the way to bottom you really don't know. At the same time, if you have evaluated the seismic and made determinations and they don't pan out, when do you call it. Well Buccaneer called it.
I'm sure they knew what that would mean back in Australia, but I am not sure Australia knows what that means in AK.
Here is a company that realized they had nothing and instead of sticking the State with more ACES rebates and prolonging the agony they stopped drilling.
This preserves their capital and is going to give them credibility to get their bonds back. They could just have easily cost the State more money.
Now the question is what happens now. The West Eagle project didn't have any reserves booked, they had never borrowed money based on it's success, so the overall picture of the company has not changed.
If Meridian is happy then the company continues as is. If they are not then all hell breaks loose. For those predicting the companies demise, it would take more than this to do that, unless Meridian wants to crater the company. I think not.
The trading halt does concern me though, why are they in a trading halt, unless they are out of money, but the overall picture doesn't show that.
Just wondering.
Interesting little company, one minute they are flying high on Cosmo with a JV partner claiming they are going to pick up the tab on everything else and the next minute they are out of money, the State is chasing them on royalties and the partner has evaporated.
They are drilling at West Eagle on leases surrounded by Hilcorp so one can bet that any success is going to get swallowed, they are late so the State could take their bonds (1.2 million), they are drilling without a partner and trying to find gas for the State at the States request.
The drilling is slower going than they thought it would be, I heard they were losing drilling fluid into the formation, but they are pretty excited about it.
They sold their ownership in the offshore Jack-up, they let Southern Cross go, they kept Tyonik Deep. A well known but difficult to reach target.
Now their share price has tanked, they have a new board and the only one still on board that has a clue about the business is Curtis Burton. Rumor has it he wasn't happy with the advice he was getting from the old board so maybe now he will be able to get things moving.
Not to be ignored is that they have fired their Alaska team leaders and added a whole new G&G team. That must of been fun.
They have a billion dollar fund behind them, Meridian, and now we just have to wait and see where this goes. At 1 cents, I can't imagine it going down from here.
Green oil, natural gas, has become a real challenge for these guys.
The pictures show pretty severe whether, but I think an all new board is having an effect. Perhaps Alan has less patience than Dean for performance. It seems that Jim Watt was just let go and Andy Rike is taking over his duties.
http://www.buccaneerenergy.com/updates_from_ceo Perhaps the board took a look and decided that Alaskaman was right about what was wrong with the Alaskan strategy.
http://seekingalpha.com/instablog/650237-alaskaman2030/1747491-we-all-love-the-blame-game-but-who-really-stalled-buccaneer-energys-endeavour-s
You have to believe they took one look at the "Stellar" deal that these guys cut and the performance they have turned in and it probably became pretty clear why Curtis has been adding bodies. What probably wasn't clear was why these guys were still there. How many geologists do you need anyway.
Interesting that the only things that have actually gotten done are stuff that was bought after the purchase of Stellar. It also seems that Andy only took over all operations after Kenai number 3. Then a long pause before Kenai number 4 and now with all the issues surrounding the lease hold, the expiring Units, etc. Jim gets fired. Very interesting.
Letter from State of Alaska to Conoco telling them to reopen LNG facility
September 5, 2013
Trond-Erik Johansen
President
ConocoPhillips Alaska
700 G Street, ATO 2100 (99501)
P.O. Box 100360
Anchorage, AK 99510-0360
Dear Mr. Johansen,
I am writing to you to request that ConocoPhillips take action to support the State's broad
interests in continued investment and exploration in Cook Inlet. Recent filings at the Regulatory
Commission of Alaska (RCA) indicate that local utility demands will be supported by contracts
that cover the next five years, or until 2018. The State's objective is to foster an environment in
Cook Inlet that continues to provide supplies of gas that are adequate to meet demand and can be
reliably contracted for by local utilities. This requires market opportunities in the near term that
incentivize companies to invest in the exploration and development today that will lead to secure
supplies in the future. Robust oil and gas activity in the Inlet is critical to the State's primary
focus on energy security - that an adequate supply of natural gas from Cook Inlet is available for
Alaskans' heating and electricity needs.
To provide an additional market opportunity for gas from the Inlet, I request that Conoco Phillips
file an application with the Department of Energy's Office of Fossil Energy for a three year
authorization to export Liquefied Natural Gas (LNG) from your facility in Kenai, Alaska. In
addition to promoting energy security, the oil and gas activity this market opportunity would
support also advances the State's interests in economic health, robust employment, and
responsible development of the State's abundant natural resources.
The current supply oflocal utilities' contracted gas is the result of a resurgence in investment in
Cook Inlet during the last several years. A variety of factors have supported the recent increase,
including legislative support for tax credits, ownership transitions, and state advocacy. Recent
years have seen significant spending in the Inlet by new companies with substantial exploration
budgets, as well as in-field developments that are revitalizing existing fields. This investment
brings jobs and economic opportunities to Alaskans in addition to energy security. It is very
much in Alaskans' interest that these high levels of Cook Inlet investment continue, both within
existing fields and in new exploration areas.
2
Now that contracts can support local utility demands through 2018, there are concerns that future
exploration budgets may be significantly scaled back. Without market opportunities for gas
discoveries, companies lack the incentive to invest in continued exploration activities. In
addition to the economic challenges this would present for those employed in the Cook Inlet
energy industry, a lack of healthy exploration now may lead to supply contractions in the future
as existing wells' production levels decline.
Diminished exploration budgets also hurt the State's interest in seeing its resources developed.
State lands in Cook Inlet hold tremendous amounts of possibly recoverable natural gas, and the
United States Geological Survey has estimated that the entire basin may still hold trillions of
cubic feet. More market opportunities would create a more attractive business environment for
gas sales that would in tum encourage aggressive exploration to utilize the State's resources.
Were exploration efforts to encounter significant success, new long-term industrial and economic
opportunities in the State's interest, including long-term LNG exports, could be considered.
While it appears that Agrium is interested in re-starting their facility, which would support a
long-term demand for Cook Inlet supplies, their project start-up date could leave a gap in the
near-term. It appears that the only near-term market opportunity for significant additional
demand lies with the re-opening of the Kenai LNG facility.
As you are aware, limited market opportunities threaten the long-term deliverability of existing
gas wells in addition to future exploration prospects. When existing wells that could be in
production are 'shut-in' due to lack of demand for gas, water can migrate through the reservoir
and mix with sandstone clays. This creates sand in the well bore and causes serious operational
problems when there are attempts to restart production. Such operational problems negatively
impact the State- especially in cases where the State is the resource owner - as they limit
resource recovery and thus economic activity on leases. Renewed operations at the Kenai LNG
facility will allow wells to maintain flow during the summer months when local utility demand is
at its lowest and avoid these problems.
Consistent with the interests described above, I also request that you install an appropriate LNG
truck-rack and other necessary equipment at the Kenai facility to support the shipment of LNG
by truck throughout Alaska. The Governor and State Legislature have taken important steps to
support the use of North Slope gas in the Interior of Alaska, including financial support for the
build-out of distribution infrastructure. The installation of truck-rack equipment in Kenai would
provide a back-up plan to strengthen Interior Alaska's energy security, as well as another
possible outlet for Cook Inlet's gas supplies.
The operation ofConocoPhillips Kenai LNG export facility is needed to sustain exploration and
development budgets and activity in the Inlet. The State's concern is that the recent rise in
investment will falter if these kinds of market opportunities are not available in the near future.
The State is making every effort to continue to support exploration in Cook Inlet and advance
Alaska's interrelated interests in energy security, economic security, and resource recovery.
3
Thank you for your consideration. I would be happy to discuss these issues further and answer
any questions that you may have. I look forward to continuing to work with you to support Cook
Inlet's oil and gas industry.
Joeseph R. Balash
Acting Commissioner
Dept. of Natural Resources
I can't say that I am overly thrilled with this stock, but as a short term gain I can put 100% behind it. First of all, the stock got pummeled on a board shake up. The idea was that the current board would be removed and the new board would sell it all off.
However, that didn't happen. The core of the old board was put up against the new board and the old board won, and the assets were not sold. But they were, at least 50% of them in the offshore. Who knew that was in the works, besides current management.
Now the company is in an expansion mode, this was not going to happen before the execution of the Farm In, now the company is looking for new stuff. Before this they were looking at survival now it is expansion.
Short term this company will see rapid growth while others stagnate. A great time to get in.
Board shake up is interesting, it was obvious that the Pacific Sun and Harbor wanted control, they didn't get it because Meridian came in and bought the majority share. However, Meridian did give them the nod and add their members. But the new direction would only have worked if Meridian agreed. They obviously didn't.
Meridian must be looking for something beyond the squash and privatise that these guys were after. They are ready to abandon the singapore investors and proceed on their own which is a good thing in my opinion.
These guys will take profits and get out.
Gotta love face book, they are flaring again...means "last zone" is going great guns. Gotta be at least 6 by the size of the flare.
Well looking at the pictures circulating on the internet, that flare has to represent at least 4 million a day or better. Stopped the Coast Guard cold.
Ok, didn't see that one coming. Meridian the new cornerstone investor votes in the proposed directors from two disgruntled shareholders. Dean moves to Chairman, some guy named Brian gets appointed and Curtis gets the most votes.
So we seem to have a short lived stalemate. What is Meridian doing? Are they in a takeover mode, and don't want to make a bid for the rest of the company? Are they really a "Republic" front? Are they simply confused because they rushed into this investment?
What is going on?
Did the new guys even know they were being supported? What are they getting paid? Who is going to be an ED and who is a NED. And what happens to DART?
Lots of questions, very few answers and that means share price stagnation for the foreseeable future.
DeepDown,
You bring up a good point. I went and looked into this, this afternoon. It seems that Arrow was bought from Nicholas Davis and the others by CNPC/Shell. Yea for them, but what did they get out of it? It appears that they were able to create ACER and DART from the remnants and profit heavily personally, but it didn't stop there.
With ACER it seems that was done with Republic, another Chinese investment group and the first group to be associated with the 249B. That was probably too obvious so they pulled. But they are all still closely related and heavily Chinese money. It seems they initially got money for Arrow, then they got support for ACER and they got loans for DART.
In exchange Arrow seems to have been able to buy things and add things to the portfolio that CNPC couldn't get on it's own.
So lets look at this one. Davis and crew have already said they would focus onshore. Perhaps they need a partner for the offshore, like CNOC to provide the dollars to develop the offshore. Would those assets be sold to a JV? If they do that, I'm out because that would be the majority of the upside going to the Chinese.
If the end game is to bring in more Chinese money/government they are going to have to deal with the US very closely. That didn't work out too well for UNOCAL that ended up being sold to Chevron because the deal cratered thanks to CFIUS.
It looks like these Singaporeans simply need to get rid of the board in order to make the strategy work. Of course they will pump up the price to get a little extra on the side and then execute.
However, if the US government decides this is a no go, then shareholders lose big time and I would bet these guys are out even before the game begins.
The Chinese are patient but they are not stupid. A foothold in Alaska could lead to a seat at the table for Arctic trade routes and that may ultimately be the motivator to go after a small company like Buccaneer. It would certainly be more palatable coming from an Australian company than from the Chinese directly.
http://seekingalpha.com/instablog/650237-alaskaman2030/1747491-we-all-love-the-blame-game-but-who-really-stalled-buccaneer-energy-s-endeavour-s
I know the "replacements" are intending to keep the current board, have they seen this posting? Perhaps there is a reason Curtis has been making the rounds with the politicos in Alaska.
Another release from Buccaneer, it seems that the rig got them a seat at the table with Conoco. First thing they take down is a farm out with significant reserves.
Me thinks that means that Conoco is heading out of the Inlet. They have gas shut in, they are giving away oil rights that they know they won't get to, the LNG plant is sitting still.
Looks to me that Conoco may be another Marathon waiting to be snatched up.
That LNG plant would be very important if you are competing with Hilcorp on the Gas side. Would explain why they were meeting with the Governor and other politicians last week.
Perhaps another enabling asset, attached to natural gas production is in the works. That would explain quite a few off the cuff remarks in the oil patch.
Hey Davo,
Thanks for the post. I think I see it differently because i got in just a little over 3 cents. So everywhere I see is up. Unless the new directors are elected, they review the assets and the financial position of the company and decide there isn't time to raise money and not enough time to drill and the leases are lost. This is why I would prefer the current directors or some sort of hybred between the two.
In my experience any management change equates to long delays while they get their hands around what they have. If they come in and say "full stop" they are going to need to come in with butt load of money in order to pay the overhead of the company, overhead on the Jack-up, and if they don't drill they are going to have to re-buy the leases. That probably is going to be expensive if they are bidding against Apache or Hillcorp. That would get me to sell what I got, watch it crater and then if it survives Ill by back in.
I am planning to attend the shareholder meeting in Houston since I need to be there anyway on business. I will be interested to hear what they have to say and what the plan is going forward. Because unlike long term holders, I only care about the future.
I see lots of talk of the Devil I Know vs. the Devil I don't; What I know is that the Devil isn't involved and that I want to see this move forward and not be pushed into divesting half its assets by default. (losing the leases)
Ok, well let’s hope Dean is strong enough, fast enough, and well enough connected to get some dollars in the door, defend the vote, and come out successful. If he doesn’t I am out of this stock so fast it will make your head spin.
A one to two penny rise on assets that are worth 350 million, are you kidding me?!?!?!?! This should be a 4 or 5 hundred percent rise in share price based on everything I have seen. This is a natural gas play in a land starving for gas, if they don’t develop gas they have a strong portfolio of OIL. Hello, how in the hell could this just be one or two cents?!?!?! New board means new management, and what, another two years of waiting for them to understand Alaska, IF they are going to produce anything.......
Deep Down,
I think the "blogosphere" probably has some idea of what is going on, but they are looking at this through the eyes of Australia.
Houston is a long way from Alaska, but that is the Energy Capital of the United States. If you look at the players in the Cook Inlet. Marathon is head quartered in Houston, Apache is headquartered in Houston, Hilcorp in Houston, ConocoPhilips in Houston. Even Escopeta/Furie is in Houston. The major service groups, Haliburton in Houston, Schlumberger in Houston, Spartan in Louisiana, Armstrong in Colorado, etc.
The main reason to be in Houston is that is where the older, better experienced people are. They did their time up there and moved to the lower 48.
I guess it is kind of like seeing companies headquarter in Perth but work all over the World. The strength of BCC has always been an ability to get things done in market without having to hire hundreds of bodies. A trend which has just changed if you look at the website the staff has jumped from 12 or 13 to over 30 and a bunch of them are in Alaska or travel back and forth.
I think we need to be looking at whether the team in Houston can move their program forward. I am looking for a spud date on KL 2. Not because it makes a huge difference but because they said they would do it. I am looking for positive results at Cosmo and a quick mob to Southern Cross.
These things matter, where the HQ is simply doesn't. If you want to close an office I would close Anchorage. Juno is the capital and Kenai is the operational office. So who's in Anchorage?
Ok, so let me get this straight we have an oil and gas company that has a minority shareholder that holds less than 10% who thinks they have a right to control the board. In the meantime the group that has gotten us here so far is in negotiations to bring on a major shareholder and add one more to the board.
This should be fun to watch.
No matter what happens the share price is going to go up.