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Ithaca Energy = Production 700,000
Market Cap 1.25B
Tullow Oil = Production 62000
Market Cap £549
Enq = Production 43,000
Market Cap. £325mln
Gulf Keystone
22,891 Bopd
Mkt Cp £261
Capricorn Energy = Production 30000
Market Cap £157mln
On the above basis, Rkh can be reasonably expected to be valued around £175/200 mln on production of around 15000/17500 bopd.
This is the reality & is very different from doing Daily Production X Oil Price !
Spacehoppa, That's all well and good posting figures like that and whilst I agree the shares will increase in line with profits- figures like that are a gross oversimplification because in reality it doesn't work like that because they will also be continually investing for the future (after debts paid) so it will never be total earnings @ high price = total profit like you portrayed.
For example ; let's look at Harbour last year, operating costs $16, $3.7Billion revenue @Oil price of $82.50, so massive profits expected yeah ? ..No, Profit after tax was $32 million.
Harbour is just an example, you can X bopd by oil price on any producer and the profits are rarely simply the figure of the two.
Of course, each company is unique and rkh will be vastly different to Harbour but the point is you can't simply pick a high oil price X it by bopd and expect that to be the profit, it rarely, if ever works like that as new capital is always required for growth & the future .
Also, the project won't start @ 50kbopd and they must pay the debts off first , so it could be 5/6 years ( depending ) before profits start rolling in and many investors want to see returns sooner and that's why a T/O may appeal to some holders.
As a guess, I think a more realistic profit figure for rkh would be around £100 to £150 mln a year as I take a more conservative $70 and production will not start a 50,000 and no one knows when this will be attained. I also expect new wells to be drilled as the basin opens up and more development costs once the debts been paid off so it's a gross oversimplification to simply times daily production by a high oilprice.
Personally, I will bank some profits along the way to production but may also keep some for production & beyond as once rkh get FID this becomes a compelling medium term investment and regardless of the lack of market participants - the shares will nevertheless increase in value, just not to the degree most of us would like or expect.
The maths with POO at perhaps .....$85
The maths with POO at perhaps $95 and life of field costs $25/bbl
50,000bbls x $60 = $3M revenue per day, $1,095M a year
Royalty 9%, Corp Tax 26% = $711M profit
Rock 35% = $249m profit net to Rock per year
Rocks current market cap is just $88m !!
I can't speak as to what interest there will be in Rocks shares, but I am mildly confident the Market Cap will be multiples of the yearly $249M profit, and so will the current share price, regardless of what exchange(s) it is listed on.
RKH would need an SP of around 50p to enter the FTSE 250. Quite possible after first oil.
Yes to a US listing, only after SL first oil, after Shell leaves Ldn, and after Sam retires as CEO hopefully to Chair Rockhopper.
Patience
Ok, so the share price may not reach the heights some have been hoping for, but lets not forget the potential for future dividends here once the oil starts to reach the markets and debts are paid off.
Yes I know it is some time away (years) but it could happen!
I did mention a while back that a T/O after OM & FID might be our best hope of realising some value as it's difficult to see how the few lse aim market participants can push rkh anywhere near where it should be after FID & OM.
The market system relies on participants buying good news & selling bad news but in the absence of participants and the ensuing exodus from both P.Is & IIs, good news now only gets a temporay mini-few days spike before selling off and no news gets sold regardless, just not as heavily as bad news so T/O might be the best option to realise capital gain.
The lack of liquidity & market value of many UK shares is of great concern to investors as the fleeing masses create lower shareprices,which only exacerbates the problem and makes even more investors leave and shareprices go even lower.
Even the very best UK shares ( Ftse100) have barely moved in a quarter of a century, valuations were similar in 1999.
Would FIG have a say in any buy out/take over?
Their licences
Their water
Their oil
It’s RKH that have put them on the map so to speak and they might like the relationship as it is…
Just a thought
GLA
Boboil
Nope not a chance things are changing nicely imho
They wouldnt need PIs aproval though and it wouldnt necessarily be a throw away price.
LTT, I can guarantee none of us who have any holding in good old Rocky will ever approve a hostile takeover at throwaway prices. I doubt management will. Neither will Aedos
Anyone wishing they were all in on gold and mining shares ATM instead of this dog currently.....
I'm about 50:50 weighting gold/ gold miners :RKH
but that's 50% in RKH going nowhere....
Hope not Ralph, things are moving forward even if Navitas are not shouting about it, but you a right, someone could come in and make a lowball offer and get the whole shooting match.
I suppose the only thing stopping anyone at the moment is the OM award cash isn’t signed off yet and there is a remote possibility that it will gets partly annulled, then even if we get the whole 80m Euros a good percentage of that could possibly be ring fenced for tax to FIG. Even then Navitas could push FID back and then first oil to 2027/8.
So that is why the share price is where it is, no one wants to takeover now, then find out they have purchased a lemon! Once funding/FID/Partner are on board, that would be the time we become a takeover target, if the share price is still languishing around 15-20p after all that, then someone will start sniffing around for sure.
I wouldn’t be happy, but as I am above my breakeven purchase price I would be ok with 25-30p per share, but I’d much rather see 60p to £1 in a couple of years.
LTT
I wasnt trying to disprove anything, I will be pretty happy to get taken out soon, im not staying for production.
Hi Ralph,
Suppose that proves Chess’s point in a way, because of a lack of interest in AIM and low valuations, it makes sense, bigger players who see value swoop in and take them for a song.
Fo what’s it worth I can see all oilies going this way over the coming decades, as more people shun oil and gas, investors walk away and banks won’t lend, even though they are flying , buying and consuming things provided by oil!
If RKH is not valued properly once oil starts to flow, it will be snapped up, if not before.
LTT
Takeovers of AIM companies have jumped 75 per cent just in the last year, reaching their highest point in 12 years. All is not lost.........
Oscar, you don't seem to comprehend!
£46 Billion had been withdrawn from UK equities by private investors over recent years, add to that however many Billions institutions have pulled out and we have a rapidly dying market with few participants, this is very noticeable with Rkh and other aim shares that have so little volume, its barely a functioning market, especially for players who deal in size.
This exodus means less investors, lower volume & ultimately lower share prices so its important to be listed on the exchanges where you can attain the best valuation.
People have to buy shares for them to rise, the more market participants buying the higher the shareprice, if there are only a small number of market participants as is the case on aim, then the share price increase on good news will be limited.
We will more than likely see this limited market reaction on funding & fid later in the year because of the lack of market participants on lse.
If investors are not present in an exchange companies will leave, sooner or later. Leaving the UK can only be good - for those who have left and those who haven't - in showing them the way. More investors = better valuations!
There is nothing much the British govt or the exchange, in this case the LSE, can do. They can't attract investors which is the main job of an exchange. If they fail in that companies will leave. But then, this is one strand in the decline of British power and influence globally. The days of empire are long past, now its premier stock exchange is struggling to hold on to listed stocks after having lost most of its investors. This is a vicious cycle - once the marquee stocks leave the exchange more investors will give LSE the boot, rinse and repeat.
Given the whole load of help the British govt have given to RKH (NOT!) I for one would love to see this getting listed in an exchange where investors will start caring. Clearly not in AIM - there's no one even to see and know, much less care
Straw Poll : What does Shell, Glencore, BP leaving Ldn for NY do to the remaining £ LSE UK E&P share prices and why?
Nothing / £ UK E&P gains / £ UK E&P loses?
Patience
It's not shares that follow charts, it's charts that follow shares !
They have their part to play for entry/exit points but its fundamentals that move shares not charts, that's not to say some traders can't make money using charts, some can but most won't.
We investors should use whatever tools help us to make money from this one-sided wild game of
chance. Each of us will have our own style of investing & no one style is right or wrong , be it technical/fundamental, short/long term, scalping,derivatives, ect, it doesn't matter; the only thing that matters is if you make any money, which as most of us know, is easier said than done.
Chart patterns are relevant to virtually all companies.
To say “this share does not follow charts” is true in that it doesn’t ‘follow’ anything (no share does) but charts are certainly relevant.
M-D, Ralph and I rarely agree, but he is one of the last posters here who can be accused of ramping.
I am taking a gamble at under 15p as I have stated. It still might not happen.
You complain when people rail at you for your years of fantasies and lies, yet you keep calling out to people. Why don't you just not comment at all ? You were still alluding to your "knowledge" just a few days ago. I am bored with you I usually just scroll past your posts, I suggest you do the same to mine. Block me please
Why the rudness, I can tell You to shut up as well ...stop the baseless ramping.
You were telling to sell at 6p.....have a look at your previous posts...IMHO-DYOR