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Having been around here for a reasonable amount of time and until recently been bullish on BPC’s future I think the imminent cementing of these two companies placed an immutable ceiling on this share price and any hopes of significant multibags from here disappears. That’s not to say there isn’t any money to be made, the sp will undoubtedly climb as the drillship arrives on station, but even with an oil strike this company will not be more than a £500m market cap company based on the market cap of other peer companies in this sector who are very well established producers already.
There is nothing to suggest that’s the valuation of the combined company will be more than the sum of its parts and the only rationale logic of the merger is to allow for some security against a loan and/or a bit of asset stripping to add to the coffers and mitigate any CLN’s.
Remember to not listen to those who promise wealth and riches and fully understand yourself what you are investing in and how it compares to other similar companies. And most of all, remember to take good profit when you can and don’t let this BoD lock you in for another decade - hope kills. You may die of old age or worse waiting for this outfit to deliver, don’t let that be you - I’m being serious.
The only hope this has now of making reasonable money is if the elusive farm-in come off, which it might, but that’s your real risk/reward. People will say that a farm-in dilutes in much the same way but at asset level, however, a sugar daddy oil company is likely to have deep pockets mitigating the myriad of risks associated with frugal one well drill plan.
All that glitters is not gold, this includes the apparent prophecies seen in twinkling stars.
Excellent post jim and one that I'll re-read from time to time in order to remind me of the foolish blind faith and optimism I've given to failed management in the past and the rosy scenarios hinted at but rarely seen. Now, at 75, it's nigh impossible to rectify past mistakes and, as you say, hope kills when you're banking on a reversal of fortunes. Koot promised so much yet in the end delivered so little and yet it makes, for me, selling out at this level after 10 years plus LGO/CERP unthinkable and so I am one of the many that prays for a major farm-in and minimal requirement for CLNs. Really am so ****ed off at constantly seeing fresh placing after placing, management options galore when nothing in terms of shareholder value is ever seen price-wise. I'll ride the share uptil Dec/Jan to hopefully recoup my investment, taking only a small proportion into drill time. Can't risk otherwise.
jim - well thought out post - we do need to see how things pan out of course, but on paper your thoughts appear to be very reasonable. I just wish some of the several newcomers had the ability to create a reasonable post without the personal insults in.
With that in mind I have just today made use of the filter facility and whilst I may miss some nuggets of information I feel I am quite capable to utilise the tools available to us to make life easier. The result of doing so managed to get your post on page 1 Jim. I am sure the noise on the board will continue until at least some interesting news comes along.
Stay safe all. What about an 8.7p party? ;@)