Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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I'm struggling to see the downside of building an empire (should that be the case)... either way the SP increases no? Patience required and that's no secret. Too many people want multiples of their cash and want it yesterday.
Fernan, only $5M is being allocated for green energy projects.
This management have produced a string of economic failures for the last 10 years.
Once they found a potentially highly profitable project, instead of trying to maximeze shareholder´s return, they seem to be using that project to get money from shareholders, in order to pursue new ventures and build an empire, diluting shareholders in the way.
Anchois looks excellent for us, management not so.
Regards
The Cenkos report confirmed what I said yesterday. Only US$ 15 mm of the placing is to invested in Anchois. The balance is more related to developing marginally economic renewable energy projects, new ventures, etc.
We shareholders have been forced to sell a 13,6% equity interest in a potentially highly profitable project, in order to contribute to management to "build an empire".
I would like management to concentrate solely in developing Anchois, and forget about all the remaining projects. I´m sure our future return per share will be much higher than currently envisaged.
But, without a few exceptions, management always prefer to buiding empires rather than maximizing shareholer returns.
Regards
Bob, I'm not sure what makes you conclude that the longer we wait the worse the CPR will be? Based from what we know by now, the publicly available factual data, we can already establish that the CPR should indeed be good. The 50m surprise extra net pay will likely need more time to process.
all i'm saying is that this could go either way and that the odds of good outcome will deminish the longer this goes on. if we saw a leak for 18p raise, we should over the next couple of weeks get a leak of + 1tcf confirmaiton. people will know and it will get out to the market prior to information being released if this is the case, imo.
Is it possible that CHAR have received plenty of bids, but each bid were merely an insult to AP and the gang so they are trying to make a name for themselves and go it alone and keep the cash? ultimately with other prospects we could be looking at 4/5tcf field. No point mugging it away if you have the patience. Some of the majors will certainly be looking at CHAR as an easy target and would assume that a low ball offer is still a lot of money for CHAR so would likely be taken up. They were wrong!
imo, the longer this goes on, the less likely things are going to turn out good for investors.
you have to put this into context with current world events, if a 1tcf field was in the north sea, this would have been bought out by a major in a heart beat. if it was anything approaching 5 tcf, there would be a bidding war and it would be getting reported in major oil/gas industry journals. to date, we haven't anything like this which is strange to say the least.
mg, that's the +$8 billion question, the gamble and why we are here. without the cpr, all speculation ultimately. the two sides of the coin are that the raise was put in now because results are poor or funds are needed to close out / update project requirements. one thing that is known for certain, speculation will be used to milk this until we get the results - great for the day traders and for those who know the know.
I s it possible that they have fund raised now at a cheaper price pre CPR so when it’s released the upside for existing shareholders is greater?
Let’s hope so
These are the reasons provided by management to perform the equity raise last December:
"The net proceeds of the Fundraise will be used to:
o Re-enter the Anchois-1 discovery well as an additional value-accretive work opportunity capitalising on a low-cost rig rate secured for the Anchois-2 appraisal campaign, due to spud in December 2021, offshore Morocco;
o Finalise negotiations of gas sales agreements and financing to unlock Final Investment Decision on Anchois;
o Progress new ventures on debt fundable, material producing gas assets focused on Africa;
o Fund a feasibility work programme on large-scale green hydrogen project in Mauritania; and
o Progress the rapidly developing Transitional Power project pipeline under recently expanded partnership with Total Eren."
The money was seemingly required to "finalize negociations of gas sales agreement and financing", among other things.
Now, 6 months later, they asked more money to do what it should be completed by now?
"Certainly , I am puzzled why they did not update the cpr before this fundraising"
Doesn't this imply that the CPR is not imminent and could be a couple of months away?
If that is the case they probably felt it was best to raise now so that they can get all the work underway!
The competence is certainly there.
The reason they drilled Anchois-2 was because they competently assessed that they would find more gas. Lots more.
Maybe the CPR is taking longer because they want the Anchois satellites included in the report. In which case they will need to reprocess the seismic data including all of the recent well data.
jimmy, i'm hoping that's not the case as it would raise question about competence and having to revisit data to make number bigger if it wasn't big enough.
Yes it’s true there was dilution of 13% but the npv of the pre drill proven gas reserves of 361 bcf has increased from $500 million to $900 million , so I am ok with that.
Certainly , I am puzzled why they did not update the cpr before this fundraising, I suspect they need to re process the seismic to pick up the 50 meters of gas pay that was initially below log resolution.
Jimmy
....time will tell.
This sentiment I don't agree with on the other hand. I liked the raise.
if i was a big investor already in chariot, i would be a little preplexed with yesterday and it certainly erodes confidence.
Good points Bob and I agree with you. Time is of the essence. The expectation is 2-3 years until first gas, how much will inflation run until then is anybody's guess. Difficult time to be an investor.
bb, i saw this coming, but didn't see at this stage or this order - yesterday was nothing short of a give away. if they had waited another month to do it after the report was released nobody would be complaining. let's hope the ends justify the means and what was done yesterday served its purpose. in the words of ian browne 'time is my everything' and for me the concern is getting 'things' signed on time. i bought wire mesh for fencing in 2019 for £80 and now it's costing me £240 today. the quotes that chariot have given in their presentation for development costs will be subject to similar increases. where they were looking at £600 million for a development, we are now looking at £1.8 billion...come later this year, who knows where it's going to be. for me this these increases are as much a concern for the majors looking to get in on this.
schlemiel,
Agree. Bigger picture.
Also, AEMP is cashflow positive so installing and maintaing these renewable plants is a good side hustle for Chariot to have going into the future. Right now it's all about Anchois.
The ESG (renewable element of Chariot's operations) is essential in securing project financing from banks etc who demand that fossil fuel projects are aligned with net zero legislation etc etc...it's nothing more than that...Soc Gen wouldn't be involved here if CHAR had not committed to this green renewable stuff
Even if the amount of shares outstanding doubles on the way to production Chariot will still be a multibagger. All we have to do is account for stuff like this in advance and we can see how the value is still very much there for us shareholders. Dilution is to be expected and frankly I'm surprised that so many here were expecting no more dilution going forward. I've said it before and I'll say it again, expect an equity portion is the project finance as well.
lol.
They raised way more than $15 million for Anchois. See today's RNS.
And only US$ 15 mm of the equity raise is going to be invested in Anchois (see "Use of proceeds" in yesterday's press release).
The balance is going to be applied to the development of a pipeline of renewable projects (that have minimal economic value) and "working capital purposes".
This equity raise is more related to "building a renewable energy empire" than "maximizing future value for current shareholders".
Regards.