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you cannot seriously allude to fact that the BOD is issuing options now that they have seen results or indications that S2 will be successful?!!! Seriously?!!
At some point in time, possibly in the near future, expect the board of directors to confirm how many shares they have received in lieu cash salaries, and, notice of the reinstatement of cash salaries.
Just another spanner to throw into the works.
Just because the share options mention share prices that are 2 - 3 times what they are now, does not mean the SP will reach those levels.
It costs CEG little to nothing to arrange share option schemes so what they set as targets should not be what you assume the SP to be in the future.
It could very well reach those levels if everything goes right but it will be wrong to say they will definitely reach those levels and I know potential investors / people looking to invest more may see this as a quick profit but remember this is oil drilling - a high risk business.
They have a lot more to gain from this than you have to lose. To them all they have to say is "oh well we're not going to meet those targets, lets move them down next time and release another RNS". On the other hand you went all in with everything you have and come out with nothing.
Completely agree with SC - This BB is a massive negative joke. I invested before P1 results and i think the BOD can turn the business around.
if the didn't merge with CERP where would we be now...
If I hated this company so much I would cut my losses and walk away, why would I want to hold so much hatred its unhealthy.
Sc
Yet another confident summary, based on pure speculation. You are so out of touch with the mood of this bb and more so of the market and its sentiment, but yet you expect a positive reaction from the market next week, well of course you do.
Star
I believe they had to release it now, as by 7am Monday they’ll be production testing and hence will be in another closed period.
Cheers
Patoir
Edgein: Your 15:55 post was very informative. Please remain in a holding pattern for the S2 result RNS and give us your tech insights.
All: my frank opinions of the RNS https://www.londonstockexchange.com/news-article/CEG/incentive-arrangements-update/15071983 .....
1. Background and logistics
When BPC merged with CERP in Aug 2020, the BoD incentive scheme was the only resolution rejected at the EGM. At the 17/5/21 EGM it was passed and implemented by the BoD yesterday, hence the RNS.
Options when exercised must be paid in cash by recipients. They are not freebies. If sold, those in senior positions must publicly disclose the fact. In BPC’s history to the best of my recollection only once has this occurred. Many years ago, a BoD member who sold a chunk publicly disclosed he had severe health issues and needed cash for medical bills.
Refer to the sentiment on PRD since 21/7 when a director sold a large chunk https://www.lse.co.uk/ShareChat.asp?ShareTicker=PRD&share=Predator-Oil . When an exec sells shares, it does not go down well!
The CEG BoD are not traders. They will never pay money and buy CEG shares at 4-5p for a quick 10%-30% flip. It is for the long-term and will rarely get exercised unless the recipient believes the SP will substantially increase and never get below the price. Otherwise capital is locked, potentially for years.
If the SP never reaches those levels, the options will not be triggered and therefore the RNS irrelevant.
Only one third have been made available, the balance for future use. A biproduct, is it gives leverage to lower salaries as part of the 20-30% G&A reductions, with incentives in return. This conserves cash now.
It has positive inference that the BoD believes the SP has the scope to go a lot higher than 4-5p and 1000boed.
2. Market Sentiment
The timing of the RNS is interesting. Assumptions: The BoD like what they see so far on Saffron 2, believe production can more than double to 1000boed, which implies funding will be available, which further implies the Stena issue can be resolved. If most of these assumptions are wrong, frankly there was no point wasting time discussing incentive schemes and issuing the RNS.
New holders who bought in the OO/Placing and new ones as of Monday will see a positive inference and this potentially includes Arena. Many LTHs who are sitting on 90%+ losses are currently clearly unhappy.
3. My take
If I was advising the BoD which I am not, the timing would not be an issue, but I would have suggested a new mega incentive for Bahamas asset monetization and the production goal to be 2000-2500boed, not 1000boed. This out of sensitivity to LTHs sitting on mega paper losses.
IMHO, I expect the market to react positively next week, however some investors may wait for the S2 test result. It is interesting the RNS was issued after close rather than Monday morning.
DYOR. GLA
Starchild
https://www.lse.co.uk/profiles/starc