Why do some people assume that institutional investors are acting on insider information when they deal. For a start it would be a criminal offence to do so. They are adding to their position as they hope, like the rest of us, that something good will eventually come for shareholders.
i am out and about right now so bit hard to look but are you sure it was $165 for 25%, i know BLVN went down to 25% but was our holding 50% of etinde before the farmout?
i recall we sold 50% for $250m and it was about $170/180mil immediate cash payment with rest to follow?
so on that basis we would be getting $125mil for our 25%
but also bear in mind that at the time of the farmout oil price was over $100 a barrel and is $72 now..............although we did have KH negotiating back then so we were always going to be short changed because of his incompetence. So with more competent negotiators in the next deal but with lower oil price we could be looking about that same return?
but of course on top of that the last deal was based on "resource" numbers, when COC sell the company we should have firm "reserve" numbers so a premium should be built in to the offer price, reserves are far more valuable than "contingent resources"
i think your 60p is about right (75/80p at a push), i would love to see 120p but i dont think that will happen without some extremely good results and substantial increase in oil/gas price
p.s. it is mind boggling to think about it, but we would potentially have near $150mil in cash right now if KH hadnt pi55ed all that money away on Bomono, i cant believe his incompetence could cost shareholders that much!!! and why there wasnt more outrage about it is beyond me. its staggering that kevin hart wasnt investigated for complete lack of fiduciary responsibility
I think the issue with KH is that he talked this asset right up now it has to deliver - we have to trust Lukoil really looked hard at the data for the $165m they have already paid for 50% ....we have to hope we can double up resources and get another $165m for our 25% ....or even a bit more as it will be P90 (?)
so current value:
$83m cash 25% Etinde $40m free carry drilling + $15m on drill complete, P90 531bcf and 74m barrels = £100m = @32p
Two appraisal well locations have been agreed with our partners targeting combined additional volumes of approximately 1 to 2 tcf of gas in place (GIIP). A 2 tcf increase in GIIP resource approximates to an addition of 0.8 bcf of dry gas and 131 mmbbl of condensate.
I don't see much downside - maybe 22-25p (and we get $15m + something for what they find......) ...but upside has to be 60-120p - as I don't think doubling P90 resources just gets another $165 ....I think it 'should' be a fair bit more......
· Up to $40 million (net) carry for two Etinde appraisal wells, including testing;
· $15 million cash to be received on completion of appraisal drilling; and
· $25 million cash contingent upon and to be received at Etinde development project FID
"Indaknow good to see you moderating your position and acknowledging the risks."
winnet - yet another imbecilic comment
first off when has indaknow not acknowledged these risks?
secondly, moderating from what? where has he ever stated this is nothing but upside?
thirdly, these risks have ALWAYS been present even during KH's tenure, but of course now he is gone they are being brought up by you, if glorious leader won that vote we wouldnt and didnt hear a whisper out of you on this front! fraud!
your pro's - yes agreed and high COS drills, but naturally always a risk of disappointment remains
your con's -
1) lucky we dont have KH at the helm anymore then!
2) well yes - everyone wants to make money dont they?
3) well they are shareholders so why not, they have near 30% stake so why wouldnt they want top dollar for that holding?
most likely scenario in my mind is COC wait for results of drills, get reserves numbers and then based on those they flog the company to the highest bidder - could be anywhere between 45p-60p IMO, really good drill result, oil between $75-$80, we could be seeing around the 60p mark
yes 60p seems a long way from where we are now, but as drills get closer SP will move up, i reckon to around the 40p mark, good results we could see 50p and then the offer will have to be at a decent premium to the market price to get accepted - hence i dont see 60p as wildly optimistic
if we get that amount i wish i could be a fly on the wall on jac's and winnets trailers when that RNS hits, that look on their faces would be priceless - eagle too but naturally that fly would be on the wall of the smoking room within his stately home, however the butler would no doubt make short work of it, so bit risky entering those premises
Winding up the Company would require the passing of a special resolution and COC can currently block this with their 25% + stake. COC could bide their time, wait for the 12 month average SP to be sub 20p and then launch a mandatory takeover. In this scenario shareholders would be over a barrel - sell for 20p or be locked into a private limited company (I think COC would take us private in that scenario).
I'm not worried about the worse case scenario as I don't believe it will happen. The COS of the next phase of drilling is high (in the context of exploration) and we're fully funded. I'm hopeful for 50p + rather than worrying about what happens on a dud drill.
Can you not imagine a scenario where after a failed drill, the sp is say 15p/share and the cash value is 25p/share, Lukoil have decided not to go ahead with development in the foreseeable future, then COC would come under pressure from the other 70% of shareholders to liquidate and payout the cash reserves.
That was the 'worst case scenario' that I was considering in my mind.
Not sure why you thin shareholders would get zero in that scenario?
Indaknow good to see you moderating your position and acknowledging the risks.
I think the penny may eventually be dropping!
Statistically the appraisal has about a 70%COS IIRC what Kevin said. If the appraisal is a dud, then it will very much depend on Lukoil if further drills are commissioned and that will depend if Putin and Trump are at war by then.
I don't agree that NewAge are the movers and shakers here. They can't make a decision in relation to FID without the agreeing of other partners. The whole Etinde operation requires someone to buy the gas and oil and someone to fund the infrastructure - NewAge can't fund this project alone. Lukoil are key IMO.
Sadly, Blvn are irrelevant in the grand scheme of things.
I'm not sure that I understand what you mean by COC taking a decision to close Blvn as a going concern?
COC could decide to take the company 'private' by acquiring enough shares to remove Blvn from AIM and cease to trade as a public limited company, but I imagine the company would still be trading with an aim to making profit and would be a going concern.
If the drill finds dust I expect the share price will plummet in the short term (probably below 20p) and will recover if and when a decision is made by Lukoil and NewAge in relation to FID. My view is that value here will only be realised if and when FID happens.
I don't personally see any 'payout to shareholders' unless COC do launch a takeover bid. There is no way (IMO) that the Company will decide to cease and distribute funds to shareholders unless etinde is dead and buried. If etinde is dead and buried you can kiss goodbye to any value being available for shareholders IMO.
What do you think is the "worst case scenario", my guess is a payout to shareholders of around 20p/share, based on current cash reserves being worth around 25p/share and deducting the costs involved should COC ever take the decision to close BLVN as a going concern.
As I understand it, the known resources are sufficient to indicate that Etinde is "commercial" and could be developed. However, that only tells part of the story IMO.
Blvn as junior partner have no control over when, or indeed if, Etinde will ever be developed. This is why there must be a material uncertainty over Blvn's future prospects. If Etinde isn't developed, Blvn have no obvious source of revenue and will burn through the cash and end up worthless.
Lukoil and NewAge will determine if and when Etinde will be developed and I expect that Lukoil especially will assess the opportunity cost of backing Etinde rather than other prospects they own/control. A successful drill proving increased resources will make the development of Etinde more likely as increased resources equal increased gas and oil to sell and prolong the commercial life of the project making FID a "no brainer" for all involved. If the drill proves unsuccessful, Lukoil might decide that they can generate better returns by prioritising other fields and Etinde goes onto the back burner.
NewAge and Blvn need Etinde to be developed as neither has any other obvious source of near term value. Lukoil are not in the same boat.
It's probably worth noting that Etinde was originally explored some 50 years ago and a number of further drills have taken place since. Hydrocarbons have been found in large quantities, but nobody has taken the step to put the field into production as of yet.
Lastly, drilling of Etinde and FID have slipped time and time again. From memory, drilling and FID was scheduled for 2017 and neither happened.
this is another example of winnets staggering hypocrisy
if KH was in charge the drilling risk would still be exactly the same, but of course it would have never been a sell if glorious leader was still at the helm
etinde is the only game in town because of KH, not COC - it was KH's actions that led bomono being a write off, his over spending and farmout meant BLVN shareholders would not have seen a return on that investment for over 30 years - kenya, well i suppose that was COC too, as was sapele?
what happened to KH buying into assets and rock bottom prices when he had the chance? that would have given BLVN a lifeline should etinde disappoint? but that was COC fault too i believe!
If the drilling disappoints the share price will be decimated in proportion to how disappointing the drilling results are. Etinde is the only asset of material value that blvn has. The cash balance is great, but it isn't going to grow value in the same way that a successful drill will.
However, this is not "new" news. Glorious Leader put blvn in this position as a result of the bomono $100m catastrophe resulting in Etinde being the only asset of value.
Bravo on another skillful piece of deception. You originally refer to an article by Simon Thompson who you say suggests halving any investment here, then you post a link to a completely different article that states blvn is still a "hold"......
i wonder if winnet would of posted this is Simon had BLVN down as a buy..........?
Simon Thompsons record is questionable to say the least
what matters to me is who is actually putting their money where their mouth is and staking millions of pounds on BLVN..............but that doesnt matter to those with sellers regret (hi jac and winnet)
If you look at the 3 and 1 year charts we are still in a long term uptrend - havent put in a lower low than jan 2016 when we hit 18p and since July 2017 (when we hit 24p) there have been a series of higher lows and higher highs
I think supports look like 30p, then 28.25p, then 24p
I think any big or consistent buying will dry up until closer to the drills
The only big buyer recently has been COC imo.......I think they want to go to 29.99% (as at 30% they would have to make an offer themselves and I dont think they want that). With their latest holding notification I dont think they will have to report again unless they went over 31%
So they will sit at 29.99% until reserve numbers are firmed up and then flog the company to the highest bidder .............dont see anything under 45p IMO
Or it could be that Simon Thompson in IC said top slice half............
And why oh why are they investing in 'corporate debt funds and investments in specific businesses operating within the wider oil and gas value chain'. For all we know that could be some of COCs other pet projects....
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