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Indeed - I think everyone here is broadly in the same space. I'm optimistic that there is enough value here in the proposition to ride out the divestments of both LOG and any of the institutions that want to take profit. One of the dynamics here is that with interest rates falling institutions and funds will need places to get a good return. This prospect offers the opportunity of a good yield to the bondholders and future capital appreciation and dividends should it get to that stage. So I can see them taking up LOG equity leaving LOG with some future warrants to execute as a lower risk run. The orderly disposal and willing buyers will be key to protecting the share price over the next 12 months.
The key to me here is that the business is moving from the concept/exploratory to the execution phase. So many AIM companies never get out of that first phase that it will be good to see a nice steady growth in this business. Its a change from seeing the wild swings on little substance we see elsewhere and still surprising to see low number of trades.
It is indeed a great and unfolding PR story both for the UK SNS and the salvage of some value for LOG bond holders. Maybe that card is one for the back pocket to play out later - in the license rounds for instance! But I really get the felling that since Q1 2019 the action is going on behind the scenes and PR is not required. At some point if there is value here this will get tipped and followed. At the moment I'm using this period to quietly increase and I'm close to my target so a little bit more time on this sideways move suits me fine as my average is around 21p I'm a buyer at this level.
alligator with funding nearly in place, institutions committed and building or holding their positions and BH poised to take their stake in the opportunity I would guess we passed the point where they need to promote the company. They now need to seal the deals and then concentrate on the execution phase. Also in the current climate against hydro carbon development I think a lot of business will tend to be more cautious around general PR. What will be interesting and where they may need to sell the concept again is once LOG get their next tranche and begin their orderly disposal. With any luck the institutions will use it as an opportunity to take bigger positions and the shares don't flood onto the open market as its clear the PI buying capacity is not there to absorb them. However the next lot have a bit higher strike price so we seem to be well underpinned around 19p.
The possible catalysts for short term value are clear and imminent in closing the agreements and Harvey will be interesting. And yes another run at the company can't be ruled out and that would also be higher than here if it were to occur! Whether that converts to a higher short term share price will depend on the orderly disposal you would think. But value would come out in the end.
I did some sums yesterday on the LOG shares the original expected number on completion should now be higher if they have been divesting of the shares they already held with a bit less held in convertible to stay under 30%.
Hopefully this northerly drift in the sp will continue as further announcements are made regarding the bond issue, farm-in, Harvey and core project FID. Risk wise, it is difficult to identify any one issue that would bring this rise to a halt - I take great comfort that, having committed itself, Berkshire Hathaway is in the wings should anything unexpected occur, specifically from a cost/funding perspective.
As a wish list, I would like to see 25p achieved as the bond issue and the farm-in agreement are formerly closed with 30p being the next hurdle, courtesy of Harvey and/or FID. I would then like to see continuing strengthening to 40P as development commences on the core project with possible spike to the 50-60p range (broker predictions) if new positive fundamentals are brought into play such as new tariff agreements for the pipeline, acquisitions or joint venture opportunities with BH. That said, as I have commented before, I do not rule out a sensible bid from a third party before first gas. In such a situation, I cannot see BH just standing idly by and therefore we could see a bidding war for the company, to our benefit.
So good to put the misery of the previous 9-12 months behind us and be in the current position. I give full credit to the board but, if I had one suggestion, it would be to enhance/improve on the company's PR. I don't think the board has done enough to promote the company and I would believe that any serious money spent on such an exercise would be well-rewarded. At the bottom line, IOG is about to develop a considerable, import substitution, gas reserve with all the security that that provides to the UK in terms of future domestic production. It should be getting this news out to as many media outlets as possible.