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"Why would Cambridge petroleum sell 2.5% of a Royalty so cheaply?"
CP have been in the Royalty business for years - it is low risk and it is low reward but it brings certainty. I'd guess they've ben sitting on some of the Claymore/Piper royalties for years. Oil price is up and is sort of stable at around $ 70 per bbl so the forward cash flow is higher, the price of the units has gone up and they can cash out and do something else.
It's a slight punt on the oil prices really but with a steady cash flow to help out - transformational it isn't . What is worrying is that they can't or won't find an alternative investment.
DB bought the Royalty mid March 2021, in mid March 2022 - just 6 months from now - we should all demand to know if the Royalty has paid for itself within the 12 months as promised (or is the cash still held in escrow).
the Royalty may or may not be a good deal, it's hard to tell from the limited information given by DB, usually high-risk means high reward but DB is selling this to shareholders as low-risk / very-high-reward. Why would Cambridge petroleum sell 2.5% of a Royalty so cheaply? DB says "...payback of the original investment, including working capital adjustments, is estimated to be less than 12 months". Another 25%, another low-risk high-reward purchase? What's the catch?
Assuming that the placing goes through, it will be at least the second time that info has leaked in advance (watch the Dec 2020 you tube interview with DB) and that has undermined my confidence in this as an investment, whatever the Assets.Given others are getting the important info in advance, pi’s are disadvantaged and I now want out .
Mirasol....I think that unfortunately you are correct on both counts.
Now good old Dave can see now he's given himself a 25% pay rise last year the sky's the limit!
As for West Newton.....................................
" if they get 25% Royalty for about £1m that's good business."
Well its a GENUINE asset at least
problem is that these royalties are traded regularly and they are fully priced - you make a small but steady income. It can't be transformative, and there isn't a lot of upside. Most companies who do it do it to cover fixed costs like G&A, office costs etc. No-one who invested in UJO wanted to be in a low risk, low return finance operation - there are better people at that elsewhere.
The reason is a) one of their flagship O&G properties is clearly in deep trouble b) they need to lock in cash to pay their salaries and bonuses going forward.
This is becoming a bit of a joke. 3 years on the bounce of a leaked placing and two fingers up to lths. How much patience does one need to have to make any kind of money here. I sold most a while back and should have sold the lot. For me it’s all on the next few weeks with WN but why place now if they were confident with WN as price would be higher. Does DB lack confidence with it? History repeating itself with another massive dilution on the way and people will still defend him. Confidence now at a all time low. Hoping for a result at WN but not confident. Is becoming a bit of a s**t show.
Nothing wrong with another 25% of this.
https://www.offshore-energy.biz/union-jack-oil-buys-royalties-from-three-north-sea-fields/
And you can expect the placing has been sold forward at 30p +, SP pumped up by Heid, the paid siren seducing retail investors onto the rocks.
doesnt give a toss about us small investors
Don't let the riff raff get to you Mr I. The leak is disappointing, that's for sure, but if they get 25% Royalty for about £1m that's good business. A bit more for other works isn't too bad dependent on the amount of course...
Rns only in response to market speculation not intimating the story. This is the 3rd time leaks have predated the decision. It is time Bramhill resigned he leads a very leaky ship