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Share Views Episode 9 - Early Stage Investment Opportunities


Faroe Petrol Share Chat (FPM)



Share Price: 71.50Bid: 71.50Ask: 71.75Change: 0.00 (0.00%)No Movement on Faroe Petrol.
Spread: 0.25Spread as %: 0.35%Open: 68.50High: 72.25Low: 68.50Yesterday’s Close: 71.50


Share Discussion for Faroe Petrol


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RG1973
Posts: 22
Off Topic
Opinion:No Opinion
Price:65.00
RE: Simon Thompson
4 Sep '16
Here we go...

Faroe Petroleum's slick deal

About 18 months ago I highlighted an opportunity in Aim-traded Faroe Petroleum (FPM:68.75p), an independent oil and gas company primarily focused on exploration, appraisal and production opportunities in Norway and the UK ('A slick operator', 5 Feb 2015). The shares were priced at 75p at the time and I had a target price of 94p. In the event the price came within pennies of that objective in April and July last year, before the subsequent oil price plunge dampened investor interest in the sector. I last rated Faroe's shares a buy at 86p ('A slick investment', 25 Jun 2015), a level that has yet to be seen again as share price rallies in both April and July this year petered out at the 82p level.

However, with Faroe's share price slightly below my initial buy in price and also adrift of July's 70p placing price, a fundraising that raised £66m primarily to fund the acquisition of the production assets of DONG Energy, I feel that the risk:reward ratio is skewed to the upside. Not only are the shares trading well below core net asset value of 84p a share, according to analyst Werner Riding of brokerage Peel Hunt, but it's clear investors have an appetite to support small-cap oil companies willing to exploit selective acquisition opportunities in the current environment.

For instance, the five Norwegian North Sea producing oil and gas fields acquired in the DONG Energy transaction added 8,000 barrels of oil equivalent (boe) per day to Faroe's production and have lifted its 2016 average daily production to between 15,000 and 17,000 boe. The $70.2m (£53.2m) cash consideration paid equates to a price of $3.50 per boe based on 2P reserves, and $2.30 per boe based on 2P reserves and 2C resources, little over a third of the average price paid in Norwegian oil and gas asset deals in the past two years. Estimated unit operating expenditure is around $19 per boe, so with Brent crude recovering to $50 a barrel, then the acquisition will bring in substantial cash flow to support Faroe's promising development programme.

It's worth noting too that Faroe retains a healthy balance sheet, with forecast year-end net cash expected to be around £88m, or 24p a share, thus offering scope for further exploration acquisition opportunities. And that's not being factored in to the share price, which is 20 per cent below core net asset value and on a near-50 per cent discount to risked net asset value after factoring in appraisal and development upside. The shares have obvious recovery potential, albeit largely driven by the future direction of the oil price. Speculative buy.
 
Treadstone
Posts: 3,172
Observation
Opinion:No Opinion
Price:65.00
Simon Thompson
4 Sep '16
has put a speculative buy on FPM in fridays Investors Chronicle
Beanup
Posts: 254
Observation
Opinion:No Opinion
Price:71.50
Tullow Assets for sale
19 Aug '16
Another 15% of Butch up for sale now Tullow are exiting Norway - lets have another rights issue - not!!
BertyW
Posts: 567
Premium Chat Member
Off Topic
Opinion:No Opinion
Price:67.00
Please sign this petition
11 Aug '16
Beanup
Posts: 254
Observation
Opinion:Hold
Price:67.25
Dana dilution
28 Jul '16
As I suspected - no take up by Dana - or me !!
Beanup
Posts: 254
Observation
Opinion:Hold
Price:69.00
Very Quiet on Here
27 Jul '16
So another 6 million share's to raise circa £4.2 million at 70p - that's 2% off the share price and a rump to get rid of then
Beanup
Posts: 254
Observation
Opinion:Buy
Price:73.25
1 in 60
22 Jul '16
Little bit like the crumbs from the table with regard to shareholder participation in the DONG asset purchase. With additional 88 million shares now in play reflected in the 73p share price, I get the opportunity to purchase a further 1680 shares at the princely sum of 70p. POO volatility will probably bridge this gap, but 70p is now a very good baseline and a buying opportunity.
Beanup
Posts: 254
Observation
Opinion:Hold
Price:72.75
Dana
18 Jul '16
Be interesting to see if Dana was involved in the placing. 34 Million write down against its 18% shareholding, which is available for sale. Maybe they have more than enough and like the last time didn't assist. We will no doubt find out shortly
Beanup
Posts: 254
Off Topic
Opinion:No Opinion
Price:76.75
Re: RNS
15 Jul '16
Timing is exquisite after two drill successes. Not to keen on my 100,000 shares being diluted, but its a bold move.
topteam
Posts: 17
Off Topic
Opinion:No Opinion
Price:79.75
RNS
14 Jul '16
What are people thoughts on the purchase of assets from dong??




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