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Mr. Dealer - End of May 99 is the deadline according to the recent RNS. In the current circumstances, I suggest a raise would/will need to be done in 24 hours (as in the EML raise). MS and RS obviously know far more about the situation (and finance in general) so a lack of their support would kill off any fund raise.
99.... not entirely correct. The last but one, raise was well engineered ( I'll not repeat the details as my concerns at the time are well documented). In essence an RNS was put out after the market had closed. The raise was to close by 8.00am the following morning. Major holders had already agreed their contributions. That raise was subject to a forward arranged EGM, almost 1 month later.
Given the value of our asset, there are institutions (Primary Bid for one) who could raise. However, suspect MS and RS would not be in favour as their holding would be diluted.
Dr. - IMHO, many investors would be influenced by the key investors (Michael Spencer / Richard Sneller) so their backing is essential for any fund raise. Additionally, the traditional offer to all shareholders would take too long with the shareholder vote etc.
We do have the possibility that a smaller raise (e.g. £3 million), might be possible to make the difference in a farm-out (e.g. 15% sold but only 25% of costs covered - leaving 5% to fund). If there were a small issue (backed by the large shareholders) small investors could take part using the REX mechanism (like EML recently).
99ice, you may well be right.
They may have less than great offers and the RNS softens the blow and also tells the large shareholders (who clearly is not supporting a fundraise) that this is what happens when you don't play ball. CEO covering his own back basically! Why not go to all investors? Nothing to lose trying.
It may be time to hedge my bets and buy a few Shell shares. 🤣🙈
IMHO
It is somewhat unfortunate that Deltic got into this position. Trying to do two farm-outs at the same time (caused by drilling them sequentially) was always going to be tricky.
The good news is that Deltic have completed the best of the two farm-outs (Selene is worth approx twice as much as Pensacola, to Deltic).
In all probability the Pensacola farm-out will be done, just not on the terms we might have expected given more time. (i.e. Deltic might want to sell 15% and be carried on the full 30%).
There is now a "fire sale" and the best offer will be accepted (e.g. Deltic sell 20% and are carried on the full 30%).
The best offer could come from Goliath.
I can see Shell covering Deltic's drilling costs and in return taking another 10% or so. I know, fhey can simply wait and get the 30% for nothing but then they will run two risks. First, the possibility that someone else nicks it from under their noses and second the stink that the financial press will make of Goliath 'stealing' the little kid's sweets. I have no evidence for my thoughts and may be it is just wishful thinking.
Sorry, should read "biggest Gas and Oil discovery in the NS in the last decade."
Literally up to the point of the ink drying on a Pensacola FO agreement, the CEO can state completely honestly, misleading nobody, that it is a difficult financial market and nothing is certain in the SNS.
Realistically though, will Deltic be handing back 30% of the rights to the biggest Gas and Oil discovery in the NS for nothing. Will nobody even bid £1 for them - let's face it for a better than evens chance of a return measured in the hundreds of millions of USD. When the Government is in the process of opening up the NS again, and business is already starting to gain serious traction!
Deltic will exhaustively evaluate the new licences & yes there is a possibility of handing them back, as there always is, if they do not meet the necessary criteria. But they will be doing this anyway - not because Deltic no longer see the new licences as viable, before they are even scrutinised & fully evaluated for their commercial potential.
Will Shell as a major JV partner, wanting to keep to its agreements with the UK Government on the NS, and currently on track to hit profits for the year of around $30b USD, not be able to exert some financial leverage that ensures the continuing success of the Deltic partnership on Selene and Pensacola & prospective future projects. Is Deltic an exploration company or not - the RNS alludes to Deltic running away at any hint of success - is that likely!
Do people really think that 30% of the potential success of Pensacola, along with valuable new NS licences are going to be relinquished by Deltic without realising any value whatsoever?
Yes David your optimism is admirable but I'm afraid things have now got very complicated and the future is very uncertain. I do of course hope you're right though!!
David: not the best time to be ramping without evidence/substance, frankly, as much as I for one would love for you to be right!!!
Meant negative shorter is done and dusted.
Strong reversal on Tuesday very possible.
Next week can be huge for investors as a way over done done.Now funding will be much easier.Exprcting big JV by majors.👀👀👀
Exec options were issued at varying times to be exercised mostly in equal (1/3) traunches. The exercise is based on pre-determined SP value over a set period ( mostly July). Execs would be crazy to exercise as although based on the Old share price, they would now be exercised at values exceeding 50p/share. There is also the probablity some options will be approaching an expiry date.
Fair point re options, but if this is not resolved, Delt will only extract value from Selene and be wound up, in my view. That value will be a fair bit more than the current sp, but they will gain very little, if anything at all, from these options.
I guess the thing with Options is - if the price tanks, they haven’t lost anything. All that’s happened is they won’t exercise them.
And as the most recent ones are valid for 10 years, they can sit this maelstrom out and wait for the price to rise.
Re: "If the Director holdings are indeed so low, there’s nothing to stop them worrying about wiping out SH value."
The key thing is for as many as possible writing Deltic that a fund raise should include ALL shareholders pro rata. Like that the price doesn't matter and everybody will benefit fairly. And if not, we need a proper shareholder revolt because otherwise we will be short changed due to the unnaturally low share price.
Email:
ir@delticenergy.com
Not correct guys. The exec team has a potentially very large pool of options at stake. Check historic announcements.
If the sp is destroyed, they will get NIL! If they pull it off, they will eventually end up with life changing wealth. As simple as that.
I am sure they are fighting hard to get this resolved. Dirty deals with large investors are always a possibility, but I doubt it.
“The total net cash paid to the Pensacola joint venture partner during 2023 for the Pensacola exploration well and post well cost was £12.0 million (2022: £2.1 million).”
They’ve already spent £14.1m on the Pensacola well, there’s no way they’re walking away.
If the Director holdings are indeed so low, there’s nothing to stop them worrying about wiping out SH value.
Thing is, Swindells and the other board members own only 0.33% of the DELT shares between them. That's hardly what you might call incentivised, to make this work.
It's all about Other Peoples Money.
So, would they care that much if the equity dilution of this imminent placing is on a truly HE1 scale massive?
Candlestick - these are exactly the sort of questions I feel should be getting asked and addressed at a shareholders meeting. Both a general consensus and a plan need to be developed, with all shareholders.
All the Directors and the NOMAD need to see and approve the RNS. AS far as I know its the NOMAD who releases the RNS on behalf of the company.
Does the NOMAD not bear some responsibility for the RNS? I understood that they have to approve the content before it's released??
NG
…and I know what happened to HE1 post-raise, so maybe that is the plan. Lots and lots of short term pain but with a big end result based on 2 big well results?