Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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Yes, I agree 8Capital crippled the 90p level: it was a punitive discount and the company could have been better served by the fellas in the City. I will ask the company WHY when the dust settles.
Eight capital are the guys who released a high price target then proceeded with a dirty placing?
Don't get me wrong great potential but the shambles of the placing has knocked the wind out of the share price, for now.
See where we are at in 3 - 6 months.
Last reference was to "poor hedging" @ 20.22
Whilst another check has to be done are you sure of a poor hedging factor?
My information is otherwise and I understand the Mt Olive E site has no hedging constraints. In sum the measure applied to not more than 20% of production prior to the 3-batch drilling.
If existing 5,000 ft laterals continue to be drilled @ ~$2m each a $30m war chest - plus revenues - seems excessive/surplus to remaining H2 drilling targets. Another drilling batch in Q4 is unlikely to exceed $10m. There is every reason to remain optimistic on further news. And it is expected "soon".
Souc's finances are summarised in the Eight Capital report appended to viable's post. The hedging issue is explicitly discussed at page 14. It is a short term issue and seems to me to be of limited relevance beyond this year. Indeed Eight Capital estimate that SOUC will be free cash flow positive by Q4 of this year. Net debt at end 2022 is predicted to be $1 million. All seems easily manageable given the recent doubling of production revenues.
.From the RNS announcing the placing
...."Following the encouraging test results of our ongoing operations at Gwinville, utilizing our improved Generation 3 completion design, we believe that this is an opportune moment to finance the business for further, operationally-driven growth through the Offering. In tandem, we continue to see significant opportunity for accretive acquisitions in our area of expertise and believe that this financing will allow us to continue to act nimbly and opportunistically as we execute our growth strategy. These are truly exciting times for Southern Energy and our shareholders."
.......
Note that they specifically mention using proceeds for 'operationally driven growth' and it seems probable that this will include new wells and possibly incremental improvements to infrastructure. An acquisition is not immediately required but will accelerate growth and increase reserves.
There is no obvious justification for the share price trading at a significant discount to the placing price and I can't imagine the board being happy with that. They will want to keep the institutional investors happy so I also anticipate one or more positive RNS's in the coming days and weeks.
The loss is q1 has nothing to do with the capex wells. Poor hedging doesn't help.
There are 11 top producers of gas in Jefferson Davis County of which we are one of them.Looking at the production figures of each its not beyond our means to make bids imo Info can be found on Jefferson Davis County gas producers
There are 11 top producers of gas in Jefferson Davis County of which we are one of them.Looking at the production figures of each its not beyond our means to make bids imo Info can be found on Jefferson Davis County gas producers
I think you will find that was because of the CX over $6M on 3 Gwinville wells
But Q1 1.9m Loss with cash down to 6.5m. Current liabilities also greater than current assets by 5m.
I note that Dec21 fully year profits where $10m after tax and they had $10m in the bank.Judging by the fact that gas is higher than last year and they are are producing over double the amount of gas, profits should be a lot higher this year and we have a M/C 38M forget about the placing.With the new shares we will be back to $65M M/C.No allowance has been made for the extra profits generated
I see. So basically they sold some new shares so they can buy them back with the proceeds of the sale to try and mitigate reducing shareholder value by 50%.
Sounds like a plan!
My take on the situation is that the directors have probably identified one of several production assets for sale that they would quite like to buy, and know that an impending recession is likely to allow them to be purchased cheaper than normal. Our recent high share price was the perfect opportunity to raise cash from the markets to give us the cash to do this. He wouldn't be able to be specific at the moment about the asset he is most keen on buying because it is an essential requirement for negotiation to be able to walk away and to feign dis-interest.
Actually with the share price currently below the placing price, even if he chooses not to spend the cash, he could instead use some of the cash to buy back shares, generating a small risk free profit on the round-turn.
In the same way, going forward, once he has finished raising cash in placings, it is in all shareholders' interest for the share price to be as low as possible, below the intrinsic worth of the company, because that way the company can use profits to buy back stock at a discount, increasing the per-share value of the shares of existing holders who haven't sold.
Thanks for your post viable
. . . still very much here but busy replacing windows, CH rads, electrics and plumbing.
I am satisfied in that circa 07/07 there will be some useful news. Obviously dissatisfaction is expressed over a heavily discounted cash raise. Even more so as 8Capital have been very upbeat with their $3 projection. And together with UK over-subscription there has to be criticism over why the cash was not raised here.
Although not conversant with modern 3G 5,000 ft multi 40 - 50 perforations there must be confidence over a 3-batch drilling formula. (Someone might be able to look up results from similar 50-frack laterals.)
It was understood the next Gwinville drilling would take place in October. "Accelerated" plans surely indicate something is in the wind. As the US branch is located in New Hebron, MS, it suggests there will be pre-October activity in Jefferson-Davis and not east Texas, Mechanicsburg or elsewhere . . . and/or an acquisition. "Organic" growth has been a mantra until 23/06 - with gas mostly unhedged - and it is reasonable to believe something has happened to hurry things along; it could even be the drillers saying they do not have any spare capacity in Q4.
The following link possibly omitted in April:
https://research.viiicapital.com/Report/Viewer?ReportId=UlAwMDAwODA4Mg==&ClientId=Q0wwMDAwNTA5OQ==
NG up over 9% making up for the drop the last couple of days
Ive missed Viables posting recently any good news coming soon viable
I do wonder if certain posters were on a commission to inflate the share place ready for the placing, seems all too convenient in hindsight.
I shouldn't worry too much about the Canadians they haven't done us any favours they pushed this up to 88c on Monday then promptly dropped it every day since ,thanks a lot
LOL !
Also agreed !
I did note that, however the word 'potential" is not to be overlooked either.
Agreed , I`m thinking it`s game on .
Unless `The Plan` has gone t*ts up ~ BUT ~ note this :
~ " potential accretive acquisition opportunities " ~ S ~ opportunitieS !
Perhaps` Plan B`.
It’s going to be interesting to see how this pans out, the Canadian investors are locked in but the ones on aim can sell out when the price eventually rises. By selling they will cause the price to drop which will **** the Canadians off. Not sure the board have thought this through
I wouldn't bet again corporate action in the weeks ahead
I think all we have here is bad timing in a bad market. The placing was heavily discounted to the share price at the time but perhaps this was because they were raising so much money.
I don't believe we have anything to worry about here once all the placing shenanigan's have cleared through we should recover strongly. If we get news................