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thats it Olivia keep pressing on that $39.15 support.
good girl Olivia. $38.80 do it now!
come on Olivia. target today is $38. you had your fun yesterday at $40. WTI figures.
LTT. Absolutely agree with your logical thinking!
Longterm Absolutely agree unless a private oil company swoops and takes advantage of situation.
I think if ARCM haven't been able to exit (of course nobody knows for sure), then it really shows that the outcome will have be to do the deal and extend the debt out another 4.5 years and they all happily get their 8% return. I mean come on, where will anyone with cash get returns like that?
It's clear to see there is no reason to call in the debt and kill the company; it would be a fire sale and even thought PMO assets are lucrative and cash generative without the debt, who want to buy or have the money in these uncertain times. Also let's not forget the $4b in tax loses PMO have on North Sea production, hence buying the BP assets. Anyone breaking up the company would lose that $4b.
Way back when this all started, PMO stated they would end the year neutral at $35 a barrel, at time of this post we are at $41 for Brent. This means they can service their debt. Yes they have cut back on expenditure as everyone has, but they are weathering the storm so far.
The low oil price is not just an issue for PMO, the ramifications of not just this year but the past 4/5 years with a lack of investment are not being talked about; it's the elephant in the room people are imagining is not there! Yes there has been demand destruction; the economies of the world have been hit; yes companies will fold; sadly many jobs will be lost, but talk as if nobody will fly abroad again; people will stop going to pubs and football matches and live like hermits indoors is crazy!
The big producers like Saudi, Russia are in big trouble balancing the books; many smaller producers are just pumping to get what they can while they can, but no-one is materially developing and adding production and investing in exploration, the only reason nobody is talking about this is because demand is down, but this isn't an environmental drive to Electric cars and hydrogen (investment in these comes from higher oil prices), they demand will come back as soon as a vaccine becomes viable or scientists start showing a 2nd wave is far weaker and thus let's get back to work. It might not be next month, but 2021 will be very interesting for many reasons I think. Never mind what the results of US elections will do!
The companies that survive this will reap the rewards; gaps left by companies that have failed, will be filled.
Good luck whatever your plans.
LTT
I'm not so convinced Jennifer, but hey. Anyone's guess. That's why I'm parked at the moment. Taken my profits and awating on news.
Unlike Happy, I think it will survive, but as I've said before I think there's more pain to come first. But I agree, it looks very grim at the moment. I also thought the deal was the best one available, but I'm just not convinced enough of the large creditors do. So, it's a volatile position to be in. Not a greatindication, but ARCM not being able to exit has helped the company I think. Unless they try again at much lower price, which would really erode confidence.
10p because the road to zero has been delayed and is not a straight line. They will limp on for while with a waiver in place.
I do agree that a material and sustained rise in the oil price would change the outlook. That's looks a forlorn hope right now.
Drift, delay, more drift, more delay...
I would agree things look very grim at the moment but it just shows it's in no ones interest to have a fire sale of assets at current prices. Debtholders and shareholders have to look longer term and I'm pretty sure the oil price will recover although probably not until the latter half of next year. The deal they are currently trying to push looks to me like the best chance of debt holders getting their money back and shareholders saving their investment. We were in an even worse mess at the start of 2016 and after that there was a great recovery. I'm just hoping ARCM don't throw us all under the bus because they have turned chicken!
Why .10p if you think that they are worthless ?
...the equity is probably worthless given how far below par debt is and ARCM's reported difficulties in ditching it. There's little chance creditors will get all their money back. There's even less chance of a successful fundraising.
10p is odds-on by November...
Best
Happy