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Yes peak if anyone makes a move it would flush out others. Of course IOG may be left alone but I would inagine they are being watched. The problem IOG has is the concentration of ownership with LOG, LO and the other larger holders. Someone only needs to tap up a small number of holders to secure a significant number of shares.
The wider macro view in the market isn't so good. Utility type companies would normally hedge reasonably well but with the talk of windfall tax does not help.
Absolutely - BH have no inclination at all to become operators (IMHO) - so that is a non starter - why do people suppose it's a "done deal" and more a case of "when rather than if"?
The best chance for take over was years ago and would likely have added significant value compared, to time value of money held here. So much opportunity cost here in the interim.
IMHO, best of luck all.
mole - thanks for your observations, always a well reasoned read. But I think your phrase "happy to sit" regarding CalE tactics seems to apply to any would be suitor out there with regard to a move on IOG. I have no idea what would appeal to LOG in terms of price setting for their holding, but quite sure that Malcy's comment to me at the PI meeting that an offer of around 55p from a party with the requisite "saddlebags" would do the trick. At that stage we were hovering in the mid-30s, so I am surmising that - since nothing has really changed - a more scaled down figure would be worthy of consideration.
Again, all this is meaningless unless there are genuinely interested potential bidders out there?
Peak why not yet?
I would guess wait to see how phase 1 production and infrastructure stabilises.
Having waited do you then wait to confirm Southwark at least first drill finds resources. Maybe. The question of timing then is in part whether there are more than 1 potential bidder. First bid will force hand of others. LOG not selling at a low price now could indicate they see this as a possibility as well!
Marine I've been here long enough to watch it go up and down and up and down overs years not weeks or months! I am still well in profit on a substantial investment having supported the company through the ups and downs.
The company don't do alot of publicity. They never have done. Would it make much difference? At the margin maybe. Rightly or wrongly the share has a low profile and alot of large holders mean the share register I suspect is very stable.
As a fundamental or takeover opportunity play it's clearly under priced.
It will rerate of that I'm comfortable holding and I'm actually adding still at this price even though it's well above my average.
Peak if the results in a takeover it will come out of the blue. I don't think CalE seem to want to be operator. They seem happy to sit with their fixed price farm in and let IOG carry the risks on cost. They were smart enough to pass on Harvey and Redwell so the joint exploration ones I hope are better quality prospects.
What else are CalE active on in SNS? That may be an interesting comparator to glean what their future strategy might be. I don't think CalE necessarily provides cover for IOG in a takeover unless it was with a party they disliked. Money talks.
Which nicely comes back to the fundamentals in IOG. It is generating money and strengthening the balance sheet every day we pump gas. Quite simply if that carries on they would be able to invest further or pay dividend. If that does not lift the share then I would be pretty confident they will be taken over.
mole - I have been reading on posts for a very long time now of all the likelihood of an imminent Buyout/takeover, with loads of opportune moments along the way - but nothing happening. All the IIs here are looking for is profit on return, whatever their agendas. Knowing the buying power of BH/WB, and all the invitations that have been made on posts for them to step in, I am wondering just what is holding up these potential suitors? If they are out there, now is surely the time to strike at this level of SP - and all the fanciful talk of 50p+ would not need to be reached to seal the deal IMHO. We have gas prices we could never have expected and the prospect of substantially more product coming on stream later this year, so I find the silence slightly un-nerving, especially when we read of the cash pile and acquisitive nature of the larger and more active gas producers in the region.
Moleinahole,
I first became aware of IOG when there was a small mention (a paragraph) of it in a March 2022 article in Investor Chronicle. In the paragraph, lack of attention was cited as the cause of the lack of rerating expected of the massive first gas profits. When the half year earnings report is released that should bring the the attention to this share it deserves.
Bear in mind that in March IOG hit its all time highs in its share price, a 4.5 bagger for those who bought in at the 9p lows. As reported, big individual holders My Griffiths had sold 6.9 million shares in March to lock in some of those profits no doubt, and in April last month Az assest valour manangement sold 11.3 million shares.
Technically, the price has found support at current levels, which is when I bought in. I did try to buy in a 33p but the profit taking pullback wasnt deep enough yet ,so I sold and waited for another and better opportunity to buy, which appears to be now. I will sell if i I see big drops from here, because, you can never tell with shares. But will £15 million in the bank every month since March 2022, and to become 30 million when Southward comes onstream this winter, the risk is the upside not downside.
Under basic economic principle of supply and demand, why is energy pricing in UK so high if there is over capacity of gas ?!
Wolster what it needs is another institution to see the value and buy the shares holders like LO have released. Unfortunately LO effectively traded a portion and have simply reloaded.
I really do think that a buyout by someone is a serious prospect now. With the pipeline and onshore facilities in place and 2 producing assets with a 3rd on the way the low share price is inviting an offer from any cash rich producer looking for somewhere to spend some cash. If your looking for a share price driving event that is the one that can happen at any time when least expected.
Getting first Southwark well completed and some sort of flow number is obviously going to help.
But for the share price to maintain an upward momentum it needs more volume from new buyers to pick up the stock.
So far we haven't seen that since the price was bashrd down post first gas.
Timing is often an important factor and IOG just missed the key winter 2021 price bonanza for various reasons. The result is they landed it as price was softening and as we now know there is over capacity in UK with no storage. The Russian dimension should be helping IOG but so far it has not.
So any buyout bid should be made by mid August latest to get cheapest price possible before your anticipated re-rate on half year earnings figs.
I'm out of all stocks right now with recession coming, expect for energy and commodity stocks. As IOG is fully exposed to current high gas prices, no hedging, thats a crap load of income for the next few years. Sure gas prices will stablise lower eventually but by then the other fields will have come online, so i don't see a drop in income. From October, Southware is expecting to come o-stream but I think the rerating will come earlier once the earnings report comes out in Auguest.
Course they will they're massive quids in due to "placing give aways" by a set of "management" who acted like rabbits sitting in middle of road with fast car approaching!!
The only thing that will stop this - methinks - is a decent re-rating when Southwark comes on-stream with nice winter prices as well!
All IMHO of course, lol!
The concern is that the big holders will just keep selling into any sp rise though and drag it back down very promptly. A buyout or a deal by the BOD with LOG administrators is needed imo.
It's getting a bigger "bargain" and even "super cheaper" each day, lol!
The half year earnings release will come out on August 24th 2022, 3 months away. I'm betting the price will have significatntly improved by then or from that date as the publication of this report will make this stock known to a much wider audience- many investors search for profit rns. Expecting a decent rerate on the this date.
Also,Porjected PE ratio for current year is a measly 1.4 for IOG.
Harbour energy, also produces in the north sea, and their PE ratio is 4.5, 3 times higher than IOG.
IOG is super cheap right now, and price is only this cheap because its under the radar. Only matter of time before the price mismatch corrects.
Apologies I misread OP post.
OK so 523,844,193 shares in issue at 28.40p = market cap of £148 million
60,000,000 shares at 19p = value of £11.4 million. which is about 7 percent of current market cap or equal to 26.40p.
Ignoring the income of 0.5 million a day, once those shares are issued the price would drop to 26.40p, a 2p drop. Now add the 15 million a month income, and it would only take a month to recover from such drop when those shares are issued, assuming it was issued today.
Its basically nothing.
The problem is with such low daily volumes it tends to have an exaggerated effect whenever a holder sells. It's a waiting game and a bit of a bargain price really. However, LOG and LO have a bit more than 10m shares to play with. They have 26% of issue in shares a £10m loan convertible (not shares) at 19p and the option is 10 million shares at 32p.
LO have Is it 18%?
So between those two holders >50% of the equity is consolidated.
The run up was preceded of course by a steep drop down which is why LOG and the institutions have such large holdings.
@marineclark
It's not 10 million shares. The loan notes convert to 60 million shares (and they have 20 000 000 warrants with an exercise price of £0.3218).
There are 523,844,193 shares in issue. 10 million shares is 1.9% percent of the this total, which is peanuts.
Technically, the pullback was overdue. It was simply caused by profit taking after a 15 month rally (dec 2020) in the share price, and the deep pullback is an excellant opportunity to get in as first gas since March 2022 derisks this shares with 100 percent upside to come as the cash tills rings and to double in a few months time, to double again when further fields come online in a year or two.
I noticed another share jumped intraday yesterday between 40 & 95% on the back of a vox markets update (not because I hold it unfortunately) roughly after it announced repaying a bond. 'If 'that behaviour were to repeat here, the maturity date of the bonds are another timeline to track.
They have a mix of shares, loan note (i think it was £10m at 19p) and the 32p option. They will use the shares to raise petty cash if they need it or to resell the option above 32p or the note above 19p. The problem they have is the market for IOG shares continues to be suppressed. That is partly their own fault but equally LO have traded a portion from first gas with other institutions and some PI profit taking/trader sells and the price have simply not recovered.
That is in large part due to the late delivery of phase 1 means they finally dragged the operation across the line just in time for the gas price to retreat and into a news void while the late Southwark drill finally recommended.
It does look increasingly like Southwark success is the most likely catalyst to push the price and volume up to a level where LoG can make the return they are looking for. The problem is LO could just sell again I to the rise.
That is the problem we seem to be in. There is nothing wrong with the underlying business. The problem is the drag effect both LOG and institutions like LO are having on the actual share price.
In the background IOG will be accumulating cash now and the balance sheet will now begin to look much better.
The trouble is that is more likely to attract predatory interest. I think both LOG and LO will likely sell out to a bidder as their most likely exit strategy around 50p and it will be hard to stop a sale. I don't see either as stable long term shareholders and in combination they are a threat to the company. The alternative is they sit it out.
Log will look to convert the loan at a premium and they won't leave it to last minute. They will do it well in advance as it's not secured. While the price is under 32p the options are not in play. I would guess they were like us hoping the shares were trading alot higher than they are and the lack of trading and pull back has complicated whatever they had in mind. The lower price makes them less likely to do an orderly slow disposal and more likely tempted by an offer at a premium.
IOG has simply lost momentum in the share price and it's going to require something to shift it back upwards. With Southwark billed for Q4 and the exploration drills way off outside a bid or macro events positively effecting revenue then it's no surprise we have found support at this price point. Really disappointing I have to say but the delays have meant we were late to the party in 2021 and that has really cost us. Getting Southwark in on time for next winter prices is really important.
We then have the wildcards of the levy and the bizarre situation where UK gas storage limits mean our gas is selling for under the European price. That I had not anticipated at all. We seem to have too much gas in the UK.
@dunderhead
I am not saying I do know their exact intentions, although I have scanned through their 6 monthly reports.
Even without knowing their intentions, my comment to scoredagainsteps still applies. He suggested LOG were selling shares to raise money to purchase £0.19 share options, so I responded to point out that LOG does not have £0.19 share options, and instead has loan notes that can be converted to shares at £0.19 or repaid in cash if not converted by maturity in October 2024. Hence there is no need for LOG to be raising money by selling shares in order to buy (non-existent) £0.19 options.
Jemand - sorry but do you work for said company please?
Because if not - how on Earth have you got any idea what their respective intentions, time lines and liabilities are?
ImHo.
raising