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Money is so cheap now that it would be foolish to do a placing now rather than borrow.
Germany has trillions of euros it was to lend at zero rate - even at below zero rate - so as long as you have the credibility just borrow say €30m, do the survey and do the drilling and kiss APEC goodbye.
When you consider that the €25m loan Providence is getting from APEC has a coupon of 5% + Libor were 12month Libor is about 0.45% so borrowing at that rate will save Providence 5% interest on the money the $25m they are supposed to be getting APEC.
Use the loan to complete the survey and drill one or two wells rather than the five and then look for a partner by which time the share price should be at a level of say 25p and you could then pay off the debt with a placing if you liked.
If Providence do not do this, it proves they have absolutely no credibility with the banks and that would be a major worry.
Totally agree Manyana, it make a lot of sense
If PVR could've borrowed enough to go it alone, why have we waited all these years to find a second-rate partner? I'd say the chances of it raising a loan of $30m are nil. Also, would you trust TO'R with that sort of money? APEC clearly wouldn't. Look at all the time wasted on the permitting fiasco. You could argue it's not TO'R's fault, but when he's been so "unlucky" for so long, something begins to smell a bit off.
ps.."Also, would you trust TO'R with that sort of money?"
Why don't you go to the forthcoming AGM and make this accusation, in person, instead of hiding behind a nom de plum on a bulletin board.
The several Institutional Investors are more trustful of TOR than you are and I am sure they have more at stake than you have!!!
How many shares do you own ps?
If he doesn't, I will!
We will know this weekend if no ship shows up for the survey.
Anovas, they don't need to attend the AGM. It's a fairly common sense statment. There isnt a bank in the world that would lend PVR money currently.
EAS10, it is the word TRUST that I am objecting to.
ps seems to be insinuating that no bank would trust TOR with that kind
of money, but they would anyone else. I find this very derogatory.
anovas, "would you trust TO'R with that sort of money?" ... that's a question, not an accusation. My answer to it is no. There have been too many tardy RNSes in the last few years that reveal bad news the shareholders should have been made aware of much earlier. I'd actually prefer someone else to have the control over PVR's destiny, even APEC. Anyway, it's not a matter of choice -- I find it laughable that someone thinks a bank would lend PVR $30m dollars.
As to whether I'm going to the AGM and how many shares I hold, how about quit the macho posturing -- it's none of your business. What, you want me to give you my real name and address and the password to my broker account?
ps...What do you mean by "macho posturing".
Your "you want me to give you my real name and address and the password to my broker account?" is a load of nonsense. Why would I or anyone else for that matter, want to know these personal details of yours. Are you suggesting that I may want to fraudulently enter your account. The only thing I asked you is how many shares you own.
Will be interesting now there is a decision on Iolar whether APEC and CNOOC will put up the cash as they now will have to either quit Ireland or concentrate on Barryroe.
And if you think banks or institutions would not lend Barryroe €30m why have the following shareholders with their respective holding percentages stood their ground? Why haven't they cut and run if Barryroe is a dead duck? They are not charities and I am sure they do not want to be diluted further with a placing.
M & G Investment Management - 14.67%
Pageant Holdings Ltd - - 11.04%
Merseyside Pension Fund - - 7.20%
Capital Group Companies, Inc - - 5.90%
Goldman Sachs International - - 5.05%
Kite Lake Capital Management (UK) LLP - - 5.05%
Marlborough Fund Managers Limited - - 4.86%
Henderson Global Investors Limited - - 3.98%
BlackRock Inc
And why did ExxonMobil up up €42m for the drilling of Druid/Drombeg if they cannot raise $30m.
ps and EAS10...are you now going to criticize Manyana as well!!!
Remember also, thats list only includes shareholders who hold in excess of 3%. The rule is once you exceed 3% you have to declare it as it is a protection against somebody buying a strategic position.
So, let us presume there are another 12% of the company held by hidden institutions you then end up with over 60% of the company held by the people with more than 3%.
So O'Reilly might run the company but technically it is owned by these shareholders.
It is also interesting to see that O'Reilly's and O'Sullivan's options have now gone. With 21m share options between them that would have been a dilution on the company so in effect we are technically better off now because those warrants have been crushed and O'Sullivan's salary of nearly $500k has also been eliminated.
So even if O'Reilly et al's warrants were to float say 21m shares at say 9p (not unreasonable given the current price) that would raise the equivalent of about $2.5m (9p = 11c) and we would be no worse off.
So the demise of O'Reilly and O'Sullivan's warrants gives us a breather of about $2.5m at zero cost and given the new cost regime without doing the survey or the drilling would carry Providence into the new year as they look for a better partner than APEC.
You seem to be comparing Exon Mobil borrowing power with PVR there at the end of your post!
Appreciate the roll call of investors. It still doesn't mean a bank's credit committee would sign off on a loan to PVR.
Why don't you people stop talking out of your rear ends and start doing some research.
All the information is on the net if you know where to look for it.
Exxon Mobil did not "borrow". It invested $42m as a 50% development cost for Druid/Drombeg. And ExxonMobil certainly does not need to borrow - it is flush even though it has lost more now that IOLAR is a dud.
Furthermore, the list I supplied from Providence's shareholders all are investment companies and were, in the main, the investors in Providence's previous dilutions at 12p and previously at 25p when Providence went from 60m shares to 600m. They have more than enough to invest $30m in Providence to protect their investment.
Preference, borrow. with 600m shares Providence is well diluted and a placing to dilute further would be at silly money.
Mayana - simple questions in your opinion
Will a bank lend 30mln to PVR?
If so, give an example of a bank that would?
Anovas, you and Manyana seems to be operating under the delusion that the institutional investors trust TO'R. What makes you think they're not in the same boat as the rest of us -- stuck with a share price so low it's not worth getting rid of them? What have we got to show for the last time PVR raised $68m back in 2016? We paid off the litigation against TransOcean which the shareholders weren't kept up to date on, we paid our share of one failed drill, and we burned through the rest on god knows what. After the last raise and open offer, the CEO and Technical Director between them held less shares than I did. Is that the sort of thing that fills you full of confidence? I wouldn't trust TO'R as far as I could kick him. I am hanging in here because I trust we have a valuable asset, although even there it took Jimmy24 on one of the bb's to point out that compartmentalisation was a serious risk until higher resolution seismic was collected. So I wouldn't be at all surprised to find out that our flagship asset is tainted in some way.
Anyway, all that said, this topic was started by Manyana who said "it would be foolish to do a placing now rather than borrow". And I say again, if you think a lending institution is going to advance $30m to a company struggling to keep the lights on, you're nuts. Even if it did a raise it would only be enough to do the site survey and drill one well, plus pay for whatever delays and blunders we manage to be jinxed by this time. (The impending global economic downturn springs to mind). An appraisal drill does not come with guaranteed success, so we'd either be back at square one or, best case, have a proven asset and still be looking for a development partner. Nope, I reckon this whole endeavour hinges on APEC coming up with the goodies. Do or die, as Manyana's hero across the water might say.
It would not need to be a bank.
For example, Providence has in the past partnered with numerous oil companies on various projects in return for an equity share in the enterprise.
So in this instance it is possible it would be somebody like Tullow, Woodside, ExxonMobil, Cairn,ENI, Repsol,Total,Sosina all of whom are partners in or have been partners in the past.
The issue is not the $30m to do the survey and drill the wells but to then go on and spend probably about $150m putting in the infrastructure. If it were only the first, Providence could probably do that on its own but it certainly has not got the finance to do the second phase. That will depend on a "big" player.
But if Providence does the first part the share price will increase substantially and the information gathered will probably bring in a big player along the same terms as APEC.
As I said previously, my preference would be for Tullow and with Pat Plunkett and Angus McCoss we have the interface for that. Alternatively I would like Woodside who made me a lot of money in the past when I bought shares for pennies in a company called Keywest which was bought by Woodside and my Woodside shares increased from about 25p until I sold them at $44 a share.
A repeat of that in Woodside and I could probably buy Greenland instead of Donald Trump.
Mayana
Yes or no - will a bank lend PVR 30M?
You are the one saying people are "talking through their rear ends"!! See if you can research your answer on net!
PS - great post. 100% agree.
ps..all I am going to say is: Let's agree to disagree!!!
Have a very pleasant evening!!!
Grammatical howler of the day: 'I could probably buy Greenland instead of Donald Trump.'
NO-ONE could buy Donald Trump!
I'm interested in your Woodside investment story.
I don't know what the exchange rate was, but it seems your investment increased in value by more than 100 times.
I doubt whether many people here on LSE would allow a profit to run that far.
I would certainly prefer to buy Greenland than Donald Trump.
The issue with my Keywest shares all started back in the 1970s when there was a big to do with Australian oil shares so I had speculated on cheap Keywest shares when all share transactions were paper and Crest. Like many other Aussie oil shares I thought the company had folded and it was only years later that I realised they had been taken over and I had a reasonable number of Woodside Burmah (as it was then) which subsequently became Woodside.
A bit like winning the Irish Prize Bond with a bond you bought twenty or thirty years ago and never realised you had won until you did a random check.
Because it was Crest, paper and you had to trade them through a broker in AU$ I just left them never thinking too much about them, not even checking the price, but then my son moved to Aussie land a number of years ago, got married and when he went to buy a house I did a check and discovered what they were worth so I did a Crest transfer of the shares to him and he used it as a deposit on his house. He is now happily married with a wife and three lovely children and living happily in the house he bought.
But back to the issue with APEC. I don't believe Providence can dump APEC because there was no contingent timescale in the contract for the payment. So until APEC says no deal they have to hang on with these stupid backstops.
Of interest, though, is the drilling of IOLAR. Where did the money come from CNOOC to do that? You must remember CNOOC in Ireland was previously Nexen which was a Canadian company oil bought by CNOOC and it was Nexen which drilled IOLAR except under its new name of CNOOC. So the money came out of Canada to do the drilling.
Perhaps PVR could ditch APEC and get the money directly from CNOOC (Nexen). No problem getting Canadian dollars and now that CNOOC (Nexen) has come up dry, Barryroe would be a nice little project for it.
I'm thinking that the best course of action would be for PVR to raise $1.9M to cover 12 months running costs and then wait for the Chinese money to clear. Given that the market cap is £44M they should have no trouble raising such a paltry sum at 6-7p. Perhaps TOR is waiting on the Iolar result for a possible spike in SP to do precisely that. LOGP is fully funded for almost 12 months so if PVR do the raise then we have plenty of time to wait for the funds to clear.
Iolar duster
Affects others more than us.
We found the oil already. Would have helped PVR I suppose as de-risk of other licences.
LOGP unaffected by Iolar
Think PVR would have raised already if they were going to? They basically told the market they have 3 weeks of cash left. Then extended by a few weeks. No need to do that if you're oging to raise as you just crash the SP (uness you're trying to let mates in cheap) but you know Chinese cash coming for sure ;)
Well I guess they never anticipated the money would take so long to clear and decided to risk it by not raising cash for running costs. At some point they will have to pull the trigger and do what I said if the money still hasn't arrived. The later they leave it the harder it will be so I'd get on with it if it were me. 3-4% dilution is nothing so even if Chinese funding does then clear before the third week of Septemeber it's no big deal. Better safe than sorry.
According to Upstream we already have a decision that IOLAR is a duster but why the collective silence?
Strange that the only one saying IOLAR was a duster was Upstream. Not a dickey bird from anyone else; no paper reports no CNOOC so why the silence? Pride perhaps.
https://www.upstreamonline.com/live/1840837/iolar-wildcat-dry-for-cnooc-off-ireland
Of course if IOLAR is a duster it throws a shadow on the rest of the Atlantic Margin licenses. So perhaps Brid Smith will get her way by default as the whole place comes up dry.
Interesting article in today's Irish Times says Ireland may need €9 billion investment in electricity to power all the data centres. How will Brid Smith get that? - Wind I suppose.
https://www.irishtimes.com/business/energy-and-resources/investment-of-9bn-may-be-needed-to-power-data-centres-1.3994500