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Long wait
Next to nothing? How about Fastnet?
Yes, Sound Energy :)
I assume from you answering my question with a question, that you don't know of any deals that came close to a 1328% premium.
Back to the original question though, Soundingoff - do you know of any?
Do you know any examples of a company offering for sale an area twice the size of Qatar, in which commercial gas had already been found, and investors asserting that it was worth next-to-nothing?
@Longwait: The price was 7p when i wrote that, so 1328% premium if you really want to be pedantic.
I asked if there were any examples of that kind of premium being paid for a takeover or asset sale over the prevailing shareprice... That's all.
100p per share would be a premium of 1150 percent, not 1400 percent.
However, I don't think S/O was predicting an offer that high; he was giving his estimate of SOU's valuation.
50p per share would be a premium of 525 percent.
Usually, a takeover results in a premium of less than 100 percent.
Do you imagine that companies will tell Rothschild's: 'We can't offer more than 16p per share because it would look excessive'?
@SO - while I understand your viewpoint that the price we'll get for Tendrara is completely unrelated to the current share price, out of interest do you have any examples where a takeover or asset sale was done at a 1400% premium to the prevailing share price?
'If your estimate of 100p includes Sidi, how much is your estimate for Tendrara alone?'
Around £1 Longwait ;) I've been conservative using the Broker calculations.
"Success doesn't always slap you in the face"... it certainly doesn't.
High risk for me
High rewards for JP
Though the company hasn't achieved a lot
He's been paid my pension pot
....please feel free to continue the composing of this this little aria
On 1o August, S/O, you wrote:
' I took our NPV10 for the Horst and then applied acknowledged broker calculations (on other O&G companies) to our appraisal and exploration assets (including Sidi). It's just coincidence, but my calculations are just over £1 on the very limited data we have. '
If your estimate of 100p includes Sidi, how much is your estimate for Tendrara alone?
Please trellis, I stated forward not into energy independence. Development of gas fields takes many years and hopefully we have started that for Morocco. The TE5 development will however allow Morocco independence from Algeria, that is a fact is it not? It's rather sad that you have to jump on these words like a rabid animal.
'I cannot point to a single success since Te7, and that was sometime ago now...'
Usually small cap O&G companies can only rely on binary drills to advance the company. Clearly we wanted and needed this too. However, despite what some on here say (repeatedly), Sound have moved themselves and Morocco forward in terms of energy independence (TE5 Horst development, seismic/grad programme etc). Success doesn't always slap you in the face.
'Shaun, if you don't think that potential buyers will be referencing the SP in their negotiations u are mistaken.
They will use this as leverage.'
This could be true if we have very little interest in bidding. Those engaged in the process will know there are multiple interested parties but may or may not know if they are going to bid. If we have multiple bidders then their offers will need to focus on our development and exploration assets in their bid. Of course they will also apply some discount for the fact we are running out of time/money. However, given the makeup of our shareholders, the advice given to us by JP and the net cost to shareholders of their shares, bidders will realise it would be a very dangerous game trying to reference the SP. AIMO of course before the shouters pipe up.
We must not forget that most companies that are bid for are valued close to NPV, usually based on earnings, DCF etc. Many also hold additional value in their MCap for potential based on sales targets, new markets etc. Here it's much easier for shareholders to reference this, but for good or bad, Sound have chosen not to provide us with this information. Using broker calculations, I estimate our risked NPV north of £1. These are the reference points for any buyer, but with these situations anything can happen and nothing can be discounted.
'Additionally we raised funds near this value, which was a shockingly poor piece of planning by the mgmt team when they could have raised for 20p a few months before that.'
This is a well used tactic to show funds can be raised easily if need be.
Well said Davey. When push has come to shove, this team has been found wanting.
James said he wasn’t a practising kind of guy, he performed on the day ( something like that said in his ‘Churchilian’ speech ) .....I sincerely hope this is true, but really not holding my breath. I cannot point to a single success since Te7, and that was sometime ago now...
Should have said "they will be referencing sp"
Shaun, if you don't think that potential buyers will be referencing the SP in their negotiations u are mistaken.
They will use this as leverage.
Sure, it doesn't mean the company is worth 7p per share, but it will still be a factor.
Additionally we raised funds near this value, which was a shockingly poor piece of planning by the mgmt team when they could have raised for 20p a few months before that.
Shows a distinct lake of strategy and planning.
James ... that's on you!
"Showing interest" is not equal to "making offer"
I saw 100 people at an "open home" once.
Zero offers.
SP is down due to end of year time frames and flakey wording.
How many companies would say to their shareholders that we are taking 6 some time out to see if anyone wants to buy the company. Might be 6 months. Might not.
We will of course all still get paid during this period.
We will make a token reduction in our salaries though, we are fair people after all.
Shocking behaviour.
If it's true that more than ten companies have shown interest in Tendrara , then we can reasonably assume that they realise that Tendrara has not been offered for sale so that JP can recommend to shareholders a sale at 7.5p per share.
I think one can reasonably deduce that there would be no point in their having any discussions at all, unless they were prepared to make a reasonable offer if they make an offer at all.
So if I'm right and more than ten companies are considering making an offer of X x 10p per share, then there is a good chance that at least one of them will.
If, say, an offer of 40p per share were made, we will get loads of derisory posts about JP having been proven a charlatan, ridicule of his four-figure predictions, gherkins etc., but those people who predicted 5-10p per share may not look so clever, either.
Shaun, there doesn’t seem to be much point in providing any defence of the underlying value of SOU at the moment. Some people seem intent on picking an argument with any suggestion that there might be parties who see more value in the business than the current share price. I guess that the gas flow measured at TE6 and TE7 must therefore be due to a desert mirage brought on by hallucination and wistful thoughts. Doesn’t really matter in the end. If you, like me, see significantly more value in the shares than the current price, then the LE will either validate our position or prove us wrong. In any event I’m hanging in to find out.
Shaun,
Perhaps it’s the realisation you have been sold a pup
A current share price, especially for an o and g explorer is nothing more than a reflection of the current sentiment. Anybody who places a variation on the assets based on the share price is not only naive but more than a little foolish. The share price was 10p a couple of weeks ago. We have had no fundamental data/information since then and yet the share price is now 7p. So which is correct? They can't both be correct. 30% stop based on what? Nothing more than sentiment. I prefer to take a more sober and level headed outlook and bade my valuation of the assets(s) on fundamentals, nor emotion.
50p at LE. At least.
'why have individuals or indeed financial institutions with their vast resources and knowledge of the sector not piled in?'
I bought JOG for 68.5p and a fellow poster bought at 57p.
One private investor took a big stake.
The institutions stayed away.
It then rose to 220p.
A poster tipped SQZ at 23p.
It went to 140p.
I don't recall any institutions foreseeing that move, either.
What makes you think the institutions are so smart?
Do you think the institutions would agree with posters here that TE-5, which has been independently valued at 19-27p per share, and which some think needs to be revalued upwards, is actually worth 7.5p per share, and that the rest of Tendrara - an area twice the size of Qatar - is worth 0p per share?
You really think that?
And while you think about that, if the institutions are so clever, why did they take stakes in PVR at multiples of today's price, and hold on?
And of course vice versa in regard to buying/not buying. Everyone has to make a decision based on all available information. Just relying on the SP is rather naive given the historical evidence.
It's very easy to call something nonsense when you don't understand it.
ALGO trading has nothing to do with drilling, the core value of the business etc. What is does have an effect on is the buying/selling of shares etc. It's a really simple concept to get your head round if you try.
'The question still remains, if the expectation is many multiples from here, then why have individuals or indeed financial institutions with their vast resources and knowledge of the sector not piled in?'
Indeed it does. Like the many who have asked the question before on other shares. They didn't get their question answered and lost out on the eventual sale.
There's no conspiracy theory jack, it's just the way it is now with shares. Ignore it at your peril as it can sometimes indicate what is going on behind the scenes. As you say, all that matters is whether we can get a deal and at what price.
I see the latest conspiracy theory now is the sp is being played, naughty algos doing what algos do its all background interference the only thing at this point in time that we should concern our selves with is what someone is prepared pay for SOU the above will not make a blind bit of difference to that figure.