Nice to see some movement here. With oil north of $60, have borders finally found a farm in partner?
I've said before, Borders is very, very cheap. Trading at near cash-value, Darwin and the vast exploration potential are not priced in. At an option price of almost zero, this is a very high leverage play.
A sideways play, but I think borders could be a multi multi bagger from here.
...Whilst the external environment may continue to be challenging in the short term, the Company is well positioned for a recovery in the oil price. We have an excellent discovery with a low break-even oil price, attractive near-field prospectivity and additional block-wide potential from different play types. Our balance sheet remains strong, our overhead low and we have a clear strategic focus on monetising our discovery.
This is a bet on price of oil, but if you expect returns within 6 months look elsewhere.
When/if a farm-in partner is found, we'll likely go up 10x. For that eventuality, I'm prepared to (a) take a risk, (b) be patient.
We know that as at AGM 2014 they had had two serious approaches (I posted a report at the time). I would suppose that the 3x increase in H1 this year was because of a rumor (perhaps fact) of another approach.
Had a few drinks with the Barman tonight. He tells me that Borders are a million miles from a farm out. No serious interest unfortunately. South Falklands basin will not see any new holes until the next decade.
Its a real shame as one day the basin will produce commercial quantities of oil.
Howards a quality geoscientist but this bad boy is going nowhere unfortunately.
Borders and Southern interim results are due to be announced by Thursday, which should tell us more about progress towards a farm-out. At this price, the reaction to any significant progress should be rapid and substantial.
The oil price is recovering as supply and demand return gradually to balance. Large oil companies, having cut back drastically on exploration spend, will find themselves scrambling for new projects to secure growth.
Against this backdrop, interest is stirring once again in the Falklands. RKH has bounced strongly from recent lows as the odds shorten of Sealion being sanctioned in 2018.
However, Borders is still trading near all-time lows and now may be a great time to build a position before the herd moves in. Here's why:
1) Borders already has a high-quality find in its portfolio. Darwin contains 360m barrels of condensate and is potentially commercial at $40. Further, Borders has substantial exploration potential and many lookalike prospects including Sullivan, which has an AVO response very similar to Darwin and has the potential to contain 5.6tcf of gas in place with 473m barrels of recoverable condensate, according to management.
2) If Sealion is part-funded through UK export finance, it puts Borders in a good position to avail the same source of funding to appraise and develop Darwin, in conjunction with a farm-in partner.
3) Development of Sealion opens up the opportunity for a farm-in partner to share some of the infrastructure costs with PMO/RKH. Yes, it's a different basin but there would still be significant synergies allowing costs to be reduced and improving the marketability of the SFB.
4) Sealion sanction and development, particularly one supported by UK government funding, would allay any fears of perceived political risk. Suddenly, many potential farm-in partners, formerly put off by the political risk, would stand up and take notice.
5) Borders is very, very cheap. Trading at near cash-value, Darwin and the vast exploration potential are not priced in. At an option price of almost zero, this is a very high leverage play. A trebling of the market cap would still leave it worth less than £30m.
I recall that it was suggested previously by Borders' management (at an AGM, perhaps?) that they had been close to securing a farm-in partner but the deal fell through, not on commercial grounds, but because the potential partner took fright due to the threats emanating from Argentina at the time.
Sealion sanction (and the increasing likelihood of it) has the potential to be a game changer for Borders and the SFB, making it a very attractive proposition for a farm-in or even takeover.
Nowt new. Market selling them off a bit. Cash headline figure not looking especially impressive, but in reality, it's quite comfortable. At current rate of burn, they've enough money to keep going for five years--so plenty of time to find a farm in partner (though I'm not assuming anything in that regard). With that in mind, Borders' results play up their exploration potential in particular.
"As previously reported, Management's un-risked P50 Best Estimate recoverable resource for near-field prospects (not including Darwin) - those located within a 15km radius of the discovery well - exceed 1 billion barrels. Many of these prospects are supported by seismic amplitude anomalies and are considered by Management to be relatively low risk."
Have they been reading my posts??
" In my opinion, the main appeal of this company is the "cluster" of low-risk exploration and discovered assets, with over 1bn barrels of prospective and proven oil and condensate within a 10 km radius of the Darwin well. It's pretty impressive......"
Hi rpoodle, on reflection I think this is a controlled rise - in other words a large buyer. We've seen two strong ups, followed by several weeks of gently rising price. Third up starting? We shall see today.
Question is why?
If I were an institution wanting to build a stake, this seems a good strategy: buy enough to raise the price, and mop up sales of those persuaded to sell. When selling dries up repeat. You get more for less that way. That is a good scenario - someone thinks we're under valued, and that now is a time to buy.
A perhaps less good scenario is a forthcoming fund raising, and resulting dilution. I have not done the maths to see whether it makes sense to buy shares to raise the price in order to issue shares at a higher price and so reduce dilution - or for what size of raise it would make sense, if any. But I think it unlikely that they would dilute by 30% in order to raise £10m or so - they can keep going for 3-4 years in any case. So, to me this scenario does not make sense.
So, on reflection I think there is a buyer and I'm happy to see the rise. But I am wary all the same. As you say, the annual results may provide clues, and perhaps the buying is in anticipation?
Every afternoon I see a sea of red on the trading board and yet the share price holds up. It's all very peculiar.
Maybe it's because it's not tied to a dead weight, like RKH are with Premier? Or perhaps because there's more faith in Borders management (who are doing a decent job with cash preservation)? Or is there an institutional buyer in the background? Lord knows....
Anyhow, perhaps--and it's a faint hope, admittedly--we will be given some guidance as to what's going on in the upcoming annual results (they're usually before the end of March)? If the company gives us some generalities about the firmer oil price helping their prospects, as is most likely IMO, then it's all a rise built on hot air and hope. If they, however, mention that there is at least some low-level interest in Borders' acreage specifically, then it might start getting intriguing.
Anyhow, apologies for not being able to shed any light on it.
I'm no chartist, but it is very weird all this. I just posted this on the lse.co.uk board:
"Two very big trades reported after the close today--for 1m (from January 12th) and 1.339m shares (from January 11th).
Looking back, it appears that both were buys. The one million share trade, at 4.85p, came when the spread was 4.4p-4.75p, so definitely a buy. The 1.339 million trade, at 5.30p, came when the spread was 5.0p-5.5p, so probably a buy.
It would seem to me that someone is building a position. Which begs the question: why now, and what prompted it? This may all be a pump and dump, or alternatively a simple share price correction. But could it be that positive news is leaking? Very difficult to tell with this clandestine company, but I'm watching with fingers crossed...."
Great to see you posting Fadilz. Seems we have a similar approach to share buying...
Was looking over today's share price behaviour. Seems the massive uptick came after a 664,000 purchase at 8.32am (which was reported after hours). Very big purchase for a small firm like B&S.
Must admit, I'm feeling damned smug about my plethora of purchases in the 1.5p-2p range....
For me, Borders remains high risk, especially as the condensate discovery is probably only borderline commercial (despite their claims of $40/barrel break even). In my opinion, the main appeal of this company is the "cluster" of low-risk exploration and discovered assets, with over 1bn barrels of prospective and proven oil and condensate within a 10 km radius of the Darwin well. It's pretty impressive.....
Despite what others may think BOR is a sleeping giant and could at some point years from now eclipse their other relatives. Some may say that their condy and gas is unloved but it is energy non the less and the field development is relatively easy despite the water depth due to less wells needed and reservoir quality. They have other good potentials to answer in Stebbing and the other Darwin look-alikes and others not even explored yet in the license. When considering all the acreage and hyped potential FOGL had but never delivered at 3 or 4p this is a good buy and only needs one other party to take an interest in the Falklands and this will fly. I hold BOR but they stand me at Zero after selling them at 95.5p years ago but kept a few for the bottom draw and for my grandchildren so today's price is academic. I also like the BOD for their attitude in conserving money when needed over the last few years. Lastly - imagine where BOR would be now if they had a Noble or similar partner.
2 trades of 5000 shares go through (These are not destined for share buyback) and the result is, NMS tightens up and increase of 8% showing.
Folk... DYOR etc, but it really is a coiled spring waiting to pop.
The company has an approved mandate to buy back 10% of stock at an average price of £1.42. (£5,500,000) all stock bought below means the top price payable goes up.
MAYA : Mayair.
Very limited PI interest showing in MAYA (Mayair) still, but with just 2 small PI trades showing of £3,700 total the sp has risen some 8%.
The company has an approved mandate to spend over £5,500,000 on share buy back program. Its a squeeze of epic proportions. Do some research people... Im like an over excited kid as I have not seen this situation for many a year.
MAYA : Mayair
Close to £5,500.000 still to spend on share buy back program.
Averaged out that equates to over £1.40 per share, but all those bought lower means the upper price to pay can well exceed that marker.
Tripling of the sp is easy once stock is in demand.
Its a squeeze of epic proportions in the waiting.
And yet another RNS from MAYA showing a further share buy back.
Each and every time the rns comes out the price increases.
Yesterday just 2 purchases.
1 from a PI buying 2,500 shares and the other purchase was a share buy back by the company.
They have the mandate to buy approx a further 4 MILLION shares back.
The SP will explode...
Anyone else here excited about MAYA? (Mayair)
They want to buy back 4,247,500 shares (10%) for a maximum of £5,755,750
They have already bought back 340,000 shares for £205,611
So they still have to buy back 3,907,500 shares with £5,550,139
They can pay up to 142p (£5,550,139 / 3,907,500) to acquire the outstanding stock but for every share they buy below 142p, they can pay more than 142p to complete the buy-back, so the price should keep stepping up.
The objective of the buy back seems to be to get the share price up.
This could triple from here.
19th Oct -2016
RNS today showing they bought back more shares..
In a lightly traded stock like this they have the mandate to buy back almost 4,000,000 more.
Where will the sp be by then?
Many many multiples of todays price is my best guess.
What would you say if I told you that I had discovered a stock that was so lightly traded that majority of PI's would likely have never of heard of it.
That this stock floated at £1,35 yet hit lows of 40p earlier in the year.
That has cash of over $16,000,000
That has orders in excess of $60,000,000 for 2016.
Has tendered orders totaling $40,000,000 pending.
Has margins >6%
Showed pre-tax profit $7,500,000 and operating profit of £8,100,000
That the last 8 of its released 10 RNS statements were about the share buy back program it has permission to execute.
That it has permission to purchase (By way of share buy back) 10% of issued stock.
That the cash value equated to £1.37 per share, but with stock aquired a a much cheaper level now means an average price of £1.47 per share.
That the more they get cheaper the more than can pay for shares as the sp climbs.
That the NMS is regularly restricted to 100 shares to buy online, vs 10,000 to sell.
I used to be very frequent on this forum, indeed you used to follow my posts quite a bit.
I got into a spat with folk on BLM about 4 years ago when at 15p I kept saying it was not a good investment.. The result of the spat was that a load of you clubbed together which resulted in me being banned.. 4 years later I am back. Clean sheet and all that.
I make a broad assumption that you have not done to well over the years as you still peddle out ramptastic stock after ramptastic stock.
Why am I mentioning this stock here and now to you?
Of course there is a reason, and its to generate interest.. The days of the old leader board of posters has gone, and so did my rating, but its still good to share certainties, and certainty is my game..
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