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Doorstop, a few big differences, firstly the eps and dps would be higher if they debt funded. And secondly, there wouldn't be much (if any) 'short-term pain' for the same 'long term gain'. Pretty simple to spot the difference between debt funding versus share printing. The bod didn't do it though, and I doubt they even tried. You are however correct in saying we'll never know the truth of the matter.
As for debt being hard to come by, I find the whole thing preposterous. It's like an individual being given £25k debt when they had no income or assets. Suddenly they have £75k income (equivalent of our NOI) with +£1m assets (equivalent of our 2P Reserves), and they're looking to take out another loan of £20-40k on the back of their current income and assets, plus another £75k income and +£1m assets guaranteed from the additional loan. And people on here are trying to tell me the same bank that gave them £25k when they had nothing is going to say no? Or any other bank for that matter? When banks are handing out bigger loans to people earning less with more debt...?
Ultimately people will believe what they want to believe. It's only human. It's just some people are better at spotting bull****@artists, and less likely to believe everything.
I think Rajbury is making light of the apostrophe usage in the word 'ego' :)
But eps and dps (Dividend per share)
The debate is getting a bit repetitive tbh.
Yes, it’s annoying after we rose up to 16p to be bought back to sub 11p by eps and dps will both be higher post deal - Short term pain for long term gain.
Well never know about whether access to debt was there or not but I suspect would have been tricky with loan notes outstanding.
Let’s move forward now!
Grammar police.
Egos
Anyone else tired of the battle of Ego's?
Sorry who has debunked my debt assertions? You? Or the bod saying they couldn't access debt? What do you think they're going to say Tony, yes we could have gone down the debt route but we preferred to give the IIs 360m cheap shares (again), so they now own even more of the company, and so they can then trade all their excess shares for a fast return profit. But in the end they will still hold more ownership of the company. And the IIs will also agree with any resolutions we put in front of them to continue looking after themselves and us before PIs. This means our +£500k salaries and tens of millions of options PER YEAR are safe.
Now try to get your head around this Tony, maybe you can use a spreadsheet or pizza to help:
- Same deal, so same financial returns. Except we debt fund half. So we now have debt of £45m (versus +$80m NOI), so amply covered and hardly leveraged, except we have 180m less shares in issue. What happens to the share price Tony? You still get all the benefits of the deal remember, just 180m less shares in issue. And how fast will the share price rise Tony?
- Now repeat this exercise with a higher debt ratio.
It's like you've never seen a company wisely utilize debt before. When debt is paid off by acquisition economics in a flash you should use it. And guess what, the underlying value of the company not only goes up, so does the share price because there's less shares in issue. Tell you what, let's see what happens in the coming months. And let's see how my 'risky trading strategy' works out. Just remember one thing's for certain Tony, I can't lose with my strategy.
Tony, you really need to read my posts. You've consistently misrepresented what I've said. And consistently avoided any questions posed back to you.
1. I've explained this before, try to wrap your head around it. So again, PIs are creating the share price movements at the moment. And PIs will create any share price increases in the near future. But for that to happen they have to be willing to buy excess shares off IIs for a premium. Until the bod give plenty of reasons to keep buying above the 11p profit making mark for IIs, the increase will be slow. PIs selling now will be doing so because they need money for bills, or for summer holidays, or because they see another opportunity they believe will pay off quickly and recognize we'll be down here for a while. So now you have PIs slowly selling for a variety of reasons and not enough buying the shares being sold. You getting it?
2. Wtf, are you serious? Re-read my posts. Go from way back. As for things not making sense, how's the share price behaving? Like I said it would? Remember last time Tony when the same thing happened - Who was right then? The fact you haven't learnt from last time simply says you've got blinkers on. Now go on, tell us what your spreadsheet says about the underlying value of this deal, then explain why the share price is staying down here? I'll give you a hint - look back at my posts and the answers are there for you.
3. Same can be said of you Tony, except you take the bull**** from the bod and then dress it in horse****. Simple facts of the matter are debt is freely available in the US, Canada and the UK. And the same IIs they gave free shares to last time, and 11p shares to this time, are the ones that gave them debt for EXPLORATION in a higher interest rate environment. Not profitable production. Read a little more widely and you'll find a lot of articles talking about Nth American O&G debt being renegotiated for highly leveraged plays, alongside t/o's involving debt (also with highly leveraged companies).
4. How can they lose money if they trade a spike genius? So how is it risky? That's the whole point, you can't lose money. You make money, and you bet that IIs will do the same and the sp will drop back to re-purchase. I'll say it again for you Tony, my strategy is to overload on shares here then trade the spikes. If I can get to 5m shares (now just over 4m) I'll take 1-1.5m shares and trade into things like the f/o agreement. If it spikes to say 15p (unlikely) I'll drop 1.5m shares into the spike and bet on it falling back to 12-13p channel. I'll then re-purchase another 1.75m shares, gaining at least 250k shares. But lets say it goes to 17p and doesn't drop back, well I still will have made 40% on the excess shares I've purchased and still hold 3.5m shares for further capital appreciation over time plus divis. Not risky, a f@cking monkey could execute this and not lose money.
Also I really hope the CEO surprises us with the farm out news imminently and a lot of PI's who are selling at these ridiculous low price are all caught out and will have to pay a big premium to buy back
We are still expecting this news, should be tomorrow, Friday or latest Monday
"The rig is now being de-mobilised and tie-in and equipping of the wells is expected to take five days following rig release, with production from both wells anticipated to commence in late July."
Your comments on debt funding have basically been debunked .
The only argument left following your logic is whether I3e would have been better off turning down the deal and continued on its path of incremental growth. The answer to this is absolutely not - the deal gives i3e the scale it badly needed and it gives it to them today not 18-24 months from now if they had continued down the path of incremental growth.
All in my humble opinion of course - DYOR !
GGG,
You posts are a little disingenuous :
1) I didn’t say surprised at selling – I said surprised at selling at less than 11p – big difference. Please explain the logic of selling less than 11p.
2) In your previous post – you seen to have pivoted from “this is a bad deal for PI’s” to “it’s a good deal – its just going to take some time for PI’s to see real value”. There’s also some other stuff that absolutely makes no sense.
3) It appears that you didn’t take the time to post a question to i3e on the reason for the lack of debt in the funding of this deal. Other posters have and have received a response. You could have asked and had it posted on the Q&A section of i3e’s website. Instead you seem to be content peddling ill informed opinions bordering on misinformation.
4) You seem to be encouraging fellow posters to trade the spike when all conventional wisdom says that this is a mugs game and best left to experts. Only a fraction of traders make money – why are you encouraging fellow investors to lose money by promoting risky trading !
GGG- mostly agree, however, within next 6o days or so farmout of Serenity is expected (Q3) and that should create fomo sometime in the next few days and an upsurge in sentiment an important factor on AIM.
GGG…yes agree in the very short term ..
Though the rewards of the gains in sp at this level outweighs the risk of further pressure downwards …
This sp below the placing price imv is a good bet..
Now my holding probably is half of your holdings!
GL
'Does the selling make sense to anyone ??' Does told you so answer the question?
People really need to stop posting 'look how under-valued we are on metrics' and start looking unemotionally at the reality of our situation. The bod created the current situation when they gave 360m shares to their II mates. They happen to be the same II mates who got free shares (and 5p shares) last time. Plus the bod got free shares as well. And easy options. Last time we broke below placing price. And we were grossly undervalued for over 6 months (until the recent raise). And we were traded by the IIs all the way until they were commandeered for the most recent hand-out, which is why we moved so quickly in the end as they stopped selling to take advantage of this 360m hand-out. So our situation is similar, and why I've been saying 'Groundhog Day'.
Now common sense says we will move closer to full value quicker this time. But because the bod have been treating PIs money in this way it may take longer than you all think for us to break 15p, let alone fair value in the low 20's. Yes we're grossly under-valued (just like last time). And yes there's a lot less shares. But the obvious disregard for PI money means it will be warily invested here. More PI trading money will enter because they know they're buying from IIs who are dropping their excess shares for modest profits. Bottom line, we will struggle to break 12p because IIs will be selling up to 50m excess shares (my estimate) and PIs like myself will be trying to copy their profiteering.
This will happen until we start getting significant news that can create a re-rate that sticks. Drilling success of 100-200boepd may take us above 12p for a short period of time. And the f/o will no doubt add a few pennies, but both types of news are likely to see us lose a lot of those gains as IIs offload and PIs trade. The only thing that will create a step-up that holds will be half yearly results that demonstrate the significant value attained by the recent acquisition, accompanied by a big dividend payment (alongside the hundreds boepd added in production and f/o). This is when I see us breaking 15p. By the time we start drilling the f/o I'd expect the over-hang to have cleared and stickier hands holding the excess II shares versus traders and be in the 20's. But that could be up to 12 months from now. And spikes will still occur the whole way up.
Simple way forward for the near future is to buy excess shares down here then trade the spikes on news. I bought below placing last time, except I didn't trade my excess shares. It will be different this time, and yes that will mean my 1-1.5m share trading pot will probably accelerate the lurch back on news when the IIs are doing it as well. But hopefully I can secure another 250k shares for nothing if I play it well. Have a problem with this, then speak to the bod. They created the rules of the game to suit them and IIs, so my advice is to play the game like an II.
Does the selling make sense to anyone ??
The "smart money" have just put in $56m at 11p - this has to mean that they believe that fundamental value is a minimum 11p with a significant margin of safety - why would anyone sell at less than 11p unless they've just run out of money on the lekky meter!
I get it that some will feel that the large number of placing shares puts a temporary cap on the SP - but to sell at less than 11p??