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I think some big buyers will hold back waiting for Equinor to confirm they are in, but others are making hay now and filling their boots.
However, I think the news has been released like this to allow the big buyers to buy loads of JOG and clear out most PI's........and then Equinor confirm their 50% and the share price doubles again.
They want to ease the share price up slowly, so will release news slowly, all the time clearing out the weak holders and moving stock from weak to strong hands (eg the big boys looking at the big prize long term).
Apologies. Just wanted to check that people hadn't given up reading before the end :-)
The last sentence meant to say: My target price is north of 300p though likely to sell & buy in the c. (circa) 200-300p range (with up to 50% of the current stake).
I give up, what does the "c" stand for.
Pro If I may, the position with the tax losses is that we have circa £25 million gross but the usable tax loss element is around 40% of that figure. Hence we have tax losses to use against future production profits of approx 50p. The cash is around 65p, I believe.
In my view we have been languishing in the 50-60p range because the market didn't believe that Verbier would ever get developed and thus our 4.5 million share was priced at zilch. The market is now realising that the OGA are serious about extracting remaining oil reserves form the Greater Buchan Area and they are happy to have JOG as the lead pony rider based upon everything we have done (largely behind the scenes) since the Verbier discovery in 2017. Jenny Morris the head of Equinor UK is part of the MER group committee at the OGA and everyone is aware of the relationship between Equinor and JOG. The pieces of the jigsaw are slowly coming together. Let's not forget that Equinor's stated strategy is to tie in small discoveries, either to existing infra structure or to develop new hubs should the volumes warrant it. They have the same policy in the Norwegian NS.
Michael great research and analysis...thanks SP target I agree 300p/400 plus on yesterday's RNS
In trying to mitigate the emotional factor in making sell or buy decisions especially as the JOG share price oscillates as it does, I thought a productive way would be to set some kind of target price.
That task is like pulling chestnuts out of the fire but any sell trades would -most likely- concern only up to 50% of my holding. As my view is that JOG still has a lot of inherent value compared to the share price.
Before we were talking about 4.5m of recoverable oil now we have 105m (i.e. 23 times). However that doesn’t mean that the share price at 70p x 23times!
Let’s not forget that as much as 55p was -and still is- cash. So difference between the share price, of up to a few days ago, of 70-75p and cash at 55p gives a net value for the oil business at 15p-20p: 15p x 23 = 345p OR 20p x 23 = 460p.
Isn't the broker now valuing the company at (around) 450p? Of course, broker target prices are only one of the reference points and one should read the analysis before deciding on their credibility.
However, the share price has also been at 60p or 65p. That left only 5-10p for the oil business (on top of cash) and 5p x 23 = 115p and 10p x 23p =230p. Realistic? Unlikely, as the 60p and even the 70-75p recent share price incorporated a significant degree of doubt as to whether Equinor would get out of bed to develop a 25m oil field.
Let’s not forget that Shares magazine considered 215p a floor: subsequently they apologised for that irresponsible (to say the least) article.
Let’s also not forget that the market was getting excited about the possibility of Verbier coming out in the higher range of 25m to 105m. An 18% JOG in Verbier would have sufficed to send the share price in the multi-hundreds (SP was already 200+p in anticipation of the outcome) if the reserves had come out towards 100m barrels. Now we are talking about 100% share and 100m of recoverable oil!
Therefore should we talk about a five-fold increase of an anticipated price (net of cash) reflecting an 18% share in a potential upper estimate of Verbier (e.g. 300p to 500p x 5)? Well, best to stay realistic.
Now, the stock market is full of examples of companies that hardly ever trade close to their fair value. In the case of an oil company there are at least 4 years to production (hence the low value for undeveloped reserves). More importantly the markets are impatient and they are driven much more by news than by value. So, what do we have in terms of news?
- Decision by Equinor whether they will exercise their option and any updated terms of team up.
- Any news regarding the FDP (submission and approval) or any aspects of it.
- News on the 25m barrel field (will it be part of a broader development?)
- A surprise announcement of a new partnership.
In the short term, it would be good for any future movements of the share price if a new baseline was established somewhere between 175p - 225p. My target price is north of 300p though likely to sell & buy in the c.