Frankers70
31 Mar 2015
Re: Poor results No one could have expected the price of oil to fall and fall so dramatically. Obviously in the current environment Caza needs to adapt and that is what it seems to be pro-actively doing. Should the price of oil rebound and I think we're all in agreement that at some point it will, then Caza will be well positioned to take advantage.The market as ever is worried by the uncertainty and this is driving the share price lower. If you were to get in at 4.5p today day then in twelve months time you could have made a 3 fold return if things to go plan (in my opinion). Let's hope to. As ever, GLA.
phonic
31 Mar 2015
Back In! At these levels seems worth the risk/reward. CAZA is a strong recovery player in my opinion, producing and growing. There will be cash burn but they are at least going to be recuperating it with their sales. Still a tiddler but great potential. Been trading in and out the past years... back in @4.5p! Even if it hits Feb high of 8p... thats 80% from these levels.Good luck all!
spike501
31 Mar 2015
Poor results Disappointing to see but these results are really woeful and unless there is an extremely quick turnaround in oil price there is nothing here for shareholders.Excluding the hedging derivative asset and the notes payable, working capital is at all almost negative $9million - even after the Yorkville funding there is negative net working capital which must be in excess of $5million after Q1 drilling costs. Production for Q4 fell and was just less than 1000boe/d and this generated only around $4.5million in revenue, even with the hedges in place. Approx $2.5million is needed every quarter for admin and financing costs leaving just $2million per quarter free cash, which will be needed to reduce the working capital deficit - there looks to be no money for drilling whatsoever.Finally, although probably not unexpectedly, the oil price has reduced probable and possible reserves - post tax NPV10 for 2P is now just $89million.
forwardloop
23 Mar 2015
info [link]
indolent
19 Mar 2015
Oil article and investment v. trading [link] of the best explained I've seen are at:-[link] few years ago I set up a hypothetical portfolio of small cap oilies on Google. The list was inspired by some of the more err, how should I put this politely, erm ..... those passionate about not jumping in and out of such companies and very sure of their choices. I added Delboy's picks but to a new portfolio as Isa season started. Forgetting about the latter for now in all most all cases the losses would have been material before the oil price route but since then it has been a blood bath. Still, I would like to try one such share again but one that is likely to survive. One thing's for sure it will be for range moves or at the longest a trend trade. The buy and hold mantra might work with carefully selected blue chips but not the small cap oilies. Dogs most of them.
indolent
15 Mar 2015
Re: To charlieeee & other num crunchers charlieeee,A really interesting reply, thanks. I had been thinking management would have been searching high and low for another source of debt. But if no lender is daft enough to lend on fair terms then as with other companies that have had to dilute at share prices holders had argued were far too low when they were at least twice the level applying when it finally happened, dilution may as you say be on the cards. (Petropavlovsk is an example with issued shares about to shoot up tomorrow from 296 million to 3.2 billion.)Maybe Caza is currently more a shorters share on bounces. Anyway for anyone curious there are two article links below my nickname. One is about oil prices including statements by a monitor and the other suggesting that it is natural / liquefied gas next.Indy[link]
charlieeee
12 Mar 2015
Re: To charlieeee & other num crunchers IndyI am not a holder, but the Caza story is fascinating: text book "gearing": high risk high reward playing out.If I was forced to answer the question "will it survive" my answer would be that it should not....but it will.Reasoning.Superb management rolling out a plan, but immediately responsive to change and implementing a survival strategy PDQ.Appollo has more to lose than CAZA by pulling the plug and therefore are unlikely to do so: Caza are Appollo's best chance of regaining their capital, as it is Caza who have the expertise in these wells and some expertise in selling assets on.Up to this point, Caza has avoided significant dilution (a tribute to management's credibility in fund-raising, both equity and debt). Now, significant dilution will be unavoidable and that is probably a far greater threat to your capital than actually going bust.As I do not hold I will say no more.GLA
indolent
10 Mar 2015
To charlieeee & other num crunchers charlieeee,Even with the spread that was an impressive bounce in percentage terms. It looks to be over for now but it crossed my mind that you helped to get the hedging message out there. I didn't check other BBs though. If from, say, May WTI were to average $60 for six months then $70 for another six months before slowly lifting to $80 for a year would you envisage Caza surviving? I ask in case the share price drops to a level where it would be so very tempting to buy some (but not a lot) with a trend trade in mind. It would be about a penny below the recent low maybe a smidgen lower. Thanks,Indy
grewber
05 Mar 2015
Up 25% Good to see but is there any substance or just the fact at these levels it takes very little buying to effect the price dramatically?
SierraBravo
05 Mar 2015
Re: Extent of Hedging...... Additional One of course can't get it both ways. Basically it appears that the covenants require 75% hedging on production going forwards.So, new production coming on stream will still get hedged albeit at something nearer current prices. This gives great consistency and enables the economics - largely mandates in fact - are based around the prevailing oil price.The down side (and it isn't really one) is that recovering oil prices will get give a windfall to improve net backs. (The other side of hedges at lower price will get the benefit, in the same way as they underwrite the loss).It seems an eminently sensible strategy to me. But one needs to be mindful of it when projecting forward revenues because it won't change.It is reassuring that the hedges haven't turned into speculation.
indolent
05 Mar 2015
CNN quickie oil vids & article. The vids slip back in the play list I think. [link] I think is a fair summary:1) Supply likely to exceed demand sufficiently to keep the oil price low this year and next but probably not as low as $50 (WTI)2) The cost of production in the States is high 3) Low oil price a net benefit for the States with obvious longer term implications4) The Saudis aren't in the frame of mind for being the ones that drops production yet again
charlieeee
04 Mar 2015
Re: Extent of Hedging...... Additional Looking at the management information at 30th September 2014, they have carried on hedging 75%...covenants compliance: the barrels hedged for 2015 are an interesting reflection on the expected decline curve (but of course, do not include additional wells on line from 1st October to date).Gain (Loss) on Risk Management ContractsThe Company has entered into commodity price derivative contracts to limit exposure to declining crude oil prices in accordance with its covenants under the Note Purchase Agreement (as defined herein). All derivative contracts are approved by management before the Company enters into them. The Company’s risk management strategy is dictated in part by covenants in the Note Purchase Agreement which require the Company to hedge approximately 75% of its production. The contracts limit exposure to declining commodity prices, thereby protecting project economics and providing increased stability of cash flows and for capital expenditure programs.7Under these contracts, the Company receives or pays monthly a cash settlement on the covered production of the difference between the swap price specified in the applicable contract and the month average of the daily closing quoted spot price per barrel of West Texas Intermediate NYMEX crude oil.The following information presents all outstanding positions by year for commodity financial instrumentscontracts. TotalTerm Product Type Volume $ Price2014January – October Oil Swap 32,161 bbls 92.55January – October Oil Swap 21,308 bbls 90.04May – December Oil Swap 32,044 bbls 96.11November – December Oil Swap 22,141 bbls 81.73November – December Gas Swap 68,669 Mcfs 3.742015January – October Oil Swap 23,106 bbls 87.05January – October Oil Swap 12,105 bbls 83.70January – December Oil Swap 26,639 bbls 89.34January – December Oil Swap 82,062 bbls 80.85January – December Gas Swap 271,322 Mcfs 3.72January – December Differential Swap 143,912 bbls -4.052016January – May Oil Swap 8,428 bbls 85.23January – December Oil Swap 86,613 bbls 80.00January – December Gas Swap 183,349 Mcfs 3.952017January – December Gas Swap 146,564 Mcfs 4.05The fair value of the Company’s commodity price derivative contracts represents the estimated amount that would be received for settling the outstanding contracts on September 30, 2014, and will be different than what will eventually be realized. The fair value of these assets at a particular point in time is affected by underlying commodity prices, expected commodity price volatility and the duration of the contract and is determined by the expected future settlements of the underlying commodity.The gain or loss on such contracts is made up of two components; the realized component, which reflects actual settlements that occurred during the period, and the unrealized component, which represents the change in the fair value of the contracts during the period.For the three month period ended September 30, 2014 the Company recognized a loss of $101,453 (2013 - $nil) on its settled commodity price derivative contracts and recorded an unrealized gain of $1,153,996 (2013 - $nil) on unsettled commodity price derivative contracts due to lower commodity prices. C
indolent
03 Mar 2015
Re: Extent of Hedging charlieeee,Thanks for looking that up.The gambler in me was wondering if there is a price it is worth a quick punt. There is if ones timing, entry and exit are all sound but looking at the last SELL and BUY of the day the spread one way was nigh on 5% say 9% both ways. So to apply money management is awkward because if wrong one is starts off circa 10% down with all costs included. The risk / reward doesn't look to be there for mere mortals given the downside could conceivably be 100%.Indy
charlieeee
03 Mar 2015
Extent of Hedging Additional hedging may have been put into place subsequently, but the declared amount can be seen from the 2013 accounts and it reduces in 2014 and 2015 to reflect the decline curve of the the "currently producing wells".Per 2013 accounts(a) Commodity Price Risk The Company is subject to commodity price risk for the sale of natural gas. The Company may enter into contracts for risk management purposes only, in order to protect a portion of its future cash flow from the volatility of natural gas and natural gas liquids commodity pricesOn November 6, 2013, the Company entered into swap contracts to limit exposure to declining crude oil prices for approximately 75% of its production from currently producing wells. For the remainder of 2013 the swap covers 9,685 barrels of oil at a swap price of $94.25.During the 12 months ending December 2014, the swap covers 40,524 barrels of oil at a swap price of $92.55. During the 12 months ending December 2015, the swap covers 28,410 barrels of oil at a swap price of $87.05. C
spike501
02 Mar 2015
Re: price on news(will rise SB, yes you are correct - net back in Q3 was $51 per barrel, so with hedging it probably remains around $45 - possibly another $500k-$1million extra per quarter, still not really enough.
