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Hmm that's an interesting move & gets both companies out of a hole, not sure if Waldorf or Capricorn got the better deal though!
We'll let you off the hook with that $48M of yours that's tied up for years to come & in return you pay it to us immediately & thus you don't need to make the big payment to us in a couple of month's time.
I think Waldorf has got off the better initially longer term harder to say. At least Capricorn has the cash to pay Shell in January now without having to borrow it from elsewhere.
But will shareholders get to see any of that $48M in 2024 ?
GLA
LOTM
There is a further update to the major shareholders list for 1st December on the company website.
I'm just not sure how accurate it is ......
Citigroup had a large holding of 5.29% on 28th November & its not on the list & there's been no notification to say its dropped.
Honestly Goldman Sachs seem to be the only one out there that seems to be on top of compliance issues & give holding updates as required.
GLA
LOTM
Hi Blowntobits,
I must admit I've also been close to 100% invested constantly in the past.
I've started to change, as its become very apparent to me in the last couple of years that holding shares long term is no longer the right thing to do. Yes there are shares you want to hold most of the time but there are also times when it is wiser to be out them & to reap the benefits for doing just that.
Good Luck
LOTM
Lotm-13. Yes that was me. This was a pot of money from several companies dividends in my ISA. I , as I said feel this was high risk, could have taken the cash out and spent it or just left it there, decent interest rates just now. My investment strategy has always been to be as close as possible to 100% invested though.
Waiting with interest to see if they were the ones behind the single trade for 40,244 shares at 11:59 on Friday at a price of £1.39
Friday was the 1st time in a long time that there was decent volume through the LSE.
Otherwise the buy-back has been going at a snails pace for a while now.
LOTM
Hi Blowntobits,
I take it the 3,202 share trade was yours then.
On the one side hand you've done a lot better than re-investing the dividend immediately when it was paid out either at £2.11 to buy-back the shares for May or £1.82 for October, or a combo of both. So well done in that regard.
As for buying at this price, well all I can say is your a lot brave'er than me that's for sure.
They've had a terrible run of things since early September.
Good Luck
LOTM
Welcome to the below 140's !!!!
Decided to make my twice yearly purchase from accumulated dividends, modest purchase of 3000 odd this morning. To me the price has fallen too far and the latest RNS did not warrant the heavy fall IMHO. Of course it will continue to fall for a bit perhaps but I can't time the market. Sure this is at the high risk end - we shall see.
Hi RagstoRich,
I have to totally disagree with you regarding the boards, I really don't think you've grasped just how abominable the last board were, incompetent across the board , except for spending & wasting shareholders money which they excelled at. Thought they were BP or Shell with there largeness.
If they hadn't cut G&A by $50M a year, where do you think the company would be right now ?
I'm totally out at the moment with a banked loss of £3K. If I'd still been in it would have been £10K at £1.50 & @£16K at £1.40
I see one insto is shorting the stock following the operations update.
I still see significant potential but there a lot of questions that need answers ....................... & none of them are going to be forth coming until 2024.
LOTM
True, but I cant see how management wouldn't see that coming. The old board made many bad decisions, but I cant help feel that this new one is doing even worse. Its very short term focused which could end badly.
I hope you and anyone else in here is made whole if your still in. And I hope this company turns itself around.
Hi RagstoRich,
You did say so, but my own projections in October showed everyone how tight it was going to be cashwise.
I'm not sure where that $26M that I was expecting has gone to.
There are clearly other issues that have arisen in the past few weeks ......... with there partner (Cheiron) that we're not fully aware of, that's having a big impact ( looks like they can't deffer D&P as an example)
LOTM
Hi LOTM, don't take this personally (and thank you for single-handedly keeping this board updated, its the only reason I occasionally come back to see how things are going). But I have to say "I told you so" regarding the cash stressed position this company looks to be heading towards.
Even IF production was within guidance, this would still be the issue. Look at Egypt, facing one of the biggest macroeconomic challenges in recent history, they are not going to pay because they CANNOT pay.
Regarding your comment about "if the board could rewind 3 months they would likely have delayed the dividend". What has changed? Why did they pay out that amount of cash when it was clear Egypt is in a financial black hole and not likely to pay?
Sorry this was a very long post & I've had to split it into 4 parts to get it posted here.
This is my updated view following Friday's Operations update announcement.
Part 1 -
I made my year end prediction's on this thread on 28th October.
Sadly since then Capricorn have released several negative pieces of news, including yesterday's operations update.
They are meant to be open & transparent with there communications now, but sadly they are not as detailed as they should be in spelling things out for investors.
It has taken me several of there announcement to get a better understanding of what's being said between lines, or has been left out for a reason!
Sadly this is not going to be pleasant reading for many ........
The production miss is much great than you might initially think, originally production for the year was forecast to be 32,000 boepd with an exit rate of 34,000 boepd & increasing into early 2024.
Instead production is now forecast to fall from just 30,600 boepd at the end of October to @ 30,000 boepd for the year as a whole. That means production for November & December combined is going to AVERAGE just 27,010 boepd. Yes that's right 27,000 boepd ((30,000*365 - (30600*304)) / 61).
So this Miss isn't just the 2,000 boepd it appears to be on the surface ie 30,000 instead of 32,000. No the miss come the end of December is in actual fact 7,000 boepd. In other words Capricorn will enter 2024 with production over 20% below where it should have been.
Part 2 -
The announcement talks about more project delays & lower than expected new well contributions which is not a good sign.
It then goes on to add this very interesting bit "Capricorn is working closely with the Operator to assist it to focus on high-grading new well opportunities, deploying the appropriate scale of rig fleet to ensure effective exploitation of the asset base, and delivering the most efficient drilling campaign and optimised reservoir management.
They've talked about "high-grading" before but the new bit should be causing alarm on a number of fronts.
Its basically saying the operator is using the wrong rigs !
Now this could be one of 2 things, the operator is using cheaper lower powered rigs in the hope of saving money, which usually ends up doing the exact opposite, with breakdowns, controlling the wells while drilling higher pressure sections, damaging the productive formations etc. Or it could be them using far more powerful rigs than are actually needed & thus these are likely to be far more expensive to hire & them hiring more rigs than they need!
It all points to disagreements/friction with their partner Cheiron & EGPC !
Which is alarming considering Capricorn has just passed operatorship of all the licences it operated over to Cheiron !
The fact the D&P budget is unchanged from previous guidance, re-enforces my alarm at what's happened, it doesn't make sense at all. If you've had to push back all these well's then a large chunk of the D&P money should have been pushed back into 2024 as well until the work takes place.
So something is definitely not right there.
I'd go so far as to say CEO Mr Neely will be taking the same approach to Egypt as he has to the UK, I doubt the head of Egypt is still in a job along with several others in senior positions, if she is I'd say its highly unlikely that she's there much longer. Those at the top there clearly have no idea of what there doing recruitment wise. Which leaves you wondering how Capricorn functioned at all previously! when they were meant to be an operator & the staff capable of doing so.
----------------
As to the financial numbers. Well the first key observation is this, why didn't they wait until Monday/Tuesday to put out this update ?
Because if they did they could have incorporate the end of November numbers instead, but there's a good reason they didn't want to do that !
There well below the $70M I was expecting for cash receipts in the 2nd half of 2023, now in part a little of that will go down to the lower production numbers but still $44M seems on the low side.
Part 3 -
Receivables & Overdue payments both increased by @ $26M up to the end of October ( I had allowed for $50M for each to end of December). So no real progress so far in quickening up payments to us & they conveniently didn't give an updated payables number, so NO way of knowing the true net position!
Debt was reduced by $13M which will help to lower Capricorn's interest payments.
Now to the net cash balance of $45M down from $174.6M at the end of June (need to deduct @ $97M for the special dividend & @ $4.5M for the share buy-back (£13.255M-£9.7M to 31st Oct).
So that leaves $73.1M less the $45M cash balance which means $28.1M of existing cash was used up in the 4 months, plus the $44M of new cash receipts, ie total spend of $72.1M over 4 months.
I had 2nd half expenditure previously pencilled in for $120.1 - $130.1M, that figure will be wrong now because of lower opex costs etc.
There still saying $40-50M D&P, lets stick to $30M for G&A, Egypt loan interest $5M, lets cut Opex to $23M & $8.4M for the rest of the share buy-back (but I'm going to exclude $6M of that for now), gives us a new total of $102.4 -$112.4M.
So if we deduct total estimated spend for the 2nd half of this year ($102.4 -$112.4M) from that already spent $72.1M it leaves Capricorn with @ $30-40M to pay against a current cash balance of $45M.
Therefore they have enough cash to last them through the end of December.
Then it becomes very tricky indeed & they are at the mercy of EGPC & the payment that is due in January & whether it arrives on time or not because if it doesn't then how are they going to pay the $25M that is due to Shell ?
Even if it does arrive on time its going to be a lot smaller than I had previous forecast due to the considerable drop in production that's occurred.
Let's say the payment is enough to cover that $25M, they still need to have enough cash to get hem through to there next payment.
Now Waldorf are going to be due them a payment of @ $50M currently, but given the current situation at Waldorf I doubt they'll be paying that until the very last minute possible (if not beyond) so in my opinion that cash won't be going into the bank account until at least 31st March 2024.
Given the G&A spend of $6M for the 1st Qtr of 2024 not to mention Opex costs for the same period they will now simply run out of money.
I talked about borrowing some in my forecast, that is still possible, but the cost of doing so will be much higher, given the falling production profile (instead of a rising one) the Senegal legal position that arisen etc.
Part 4 -
In summary the next 5 to 6 month's are now going to be extremely difficult for Capricorn, because of falling production, there failure to deffer D&P expenditure into 2024 & much lower cash receipts because of the EGPC than expected (that $26M lower than my forecast is hurting big time now)
If the company could turn back the clock 3 months knowing what they know now they wouldn't have gone ahead with the $97M special dividend payment. They might have paid out 50% of it instead or delayed it into 2024, citing EGPC for the delay due to the failure to pay on time & having to constantly increase the amount of working capital currently require in the meantime until its resolved.
I'm not sure how much longer they will keep going with the buy-back there is still @ $7.5M to be spent on it to reach the minimum $25M they promised shareholders. I suspect there will come a time when it is halted temporarily (until the Waldorf payment is received for example or EGPC makes a back payment covering some of the overdue amounts).
There won't be room for any new D&P expenditure until that Waldorf payment is received & its just as well they've cut G&A by $50M from now on otherwise they'd be having to find another $4M a month from January just to keep going!
------------
I still see potential here, but the company has a lot of explaining to do to its shareholders & it really needs to do so soon, but it may not have all the facts itself yet to pass on !
I'm not sure what the big American banks / brokers see that we don't that keeps drawing more of them in to buying a stake in Capricorn.
If you offered me as many shares as I wanted to buy at £1.30 right now, I'd say thanks but no thanks. The answer would probably be the same at £1.20 until I know more facts. Yes that is a big difference from the current share price but in terms of market value it's only around $25M ( or the cash I was expecting them to have received but haven't & no its not in the receivables number instead, as that's kind of where I was expecting it to be end of October)
Good luck all -
LOTM
I tend to agree having all the eggs is one basket is a big gamble, nothing to fall back on just in case?
What was wrong with the Mexico assets ? Had a big discovery there..
There is unfortunately an air of desperation creeping in. Production way down, new wells less than expected, being paid 50% of the next lifting, Egyptian Debt 170million, Senegal Tax demands 40mil more. Before anyone bleats about deramping ( a ludicrous notion that small PI's can sway prices) - I have been a holder and added from Cairne pre India settlement.
The board have set all their hopes and strategy on Egypt only and a low cost base - the latter was definitely overdue, but maybe the haste to exit some areas has meant all the eggs - every last one - is in the one, slow/none paying Egyptian weave basket! Just a personal opinion.
Well they issued an update today instead .....
No wonder they postpone the meeting yesterday with all the gloom that's in today's one.
Totally missed there year end production target by a long way, now only forecasting production of 30,000 boepd!
More later
LOTM
Well today should have been the day we were all looking forward & the operational update that was sadly postponed !
Just got to wait several more month's now for news!
Surprised how well the share price has held up so far, but time will tell.
GLA
LOTM
Company Website has been updated today to reflect the share ownership as at 17th November rather than 3rd November (that was a very quick update). It also crucially shows us the shareholdings the day before Goldman Sach's disposed of 4.6945% of Capricorn's shares.
This is name, new position, old position, number of shares & percentage owned of the 94.168M in issue at that date, ( Although I'm not convinced its totally accurate as seem to include stock they've borrowed & others don't)
Goldman Sachs collateral account 1 1 17,699,205 18.77% was (16.96%)
Newtyn Partners 2 2 12,354,001 13.10% was ( 9.33%)
Palliser Capital 3 3 7,431,767 7.88% was ( 7.86%)
Kite Lake Capital Management 4 4 7,163,629 7.60% was ( 7.58%)
Irenic Capital Management 5 5 6,136,349 6.51% was ( 6.49%)
Dimensional Fund Advisors 6 7 4,154,447 4.41% was ( 4.49%)
Vanguard Group 7 8 3,948,378 4.19% was ( 4.18%)
Total = 62.46% down from 67.29% on 3rd November & down from 62.59% on 20th October as well.
As you can see only 7 names this time round !
Bank of New York Stocklending 6 6 6,063,656 6.41% was (6.31%)
Bank of America Merrill Lynch 9 9 3,769,531 3.99% was ( 3.97%)
Are missing since 3rd November yet we know from Morgan Stanley's documentation that there holding never went down only up on 20th November ( it could be listed here under Bank of New York Stocklending instead if Morgan Stanley is part of that company)
Clarity is need regarding why NO Merrill Lynch declaration
--------- 3rd November comments --------
Very little in the way of changes over the 2 weeks other the the significant increase in the Goldman Sachs holding that we knew about, an increase in Bank of New York stocklending & a drop in the Vanguard one.
Note the very slight changes in the other holding %'s is due to the effect of the buy-back over the 2 week period.
----------------- old stuff ---------
So we have a new name on the list Bank of New York Stocklending collateral account - No hiding what that account is all about going by its "STOCKLENDING" rather appropriate given how much stock is currently on loan to the 4 longs.
Madison Avenue Partners who were previously 5 6 6,233,034 6.55 have now left the building 20th October ( for now at least) - yet have not submitted any holding notice to say they are now below the 3% threshold.
Morgan Stanley don't show up on the list yet they only reached the initial threshold on 13th October 6,377,792 shares or 6.718569% & there has been no notice to say it's gone below 3% again
--------------
Blackrock used to own 3.13% as of 8th Sept so they have clearly fallen below the 3% threshold since then, yet no notification of such has been issued to the co
Centiva Capital who had acquired the voting rights to 3.01% of the company around the 22nd Sept don't show on the list & we know Bank of America have a far larger holding in the company's voting rights than is listed above, but the record seems to only
Hi Bigbas2all,
I would only be speculating on the topic without lots of data on other companies to say whether it could possibly be happening with others.
In Capricorn's case it could well tie-in with all those "long" positions I used to go on about.
I mean how can 4 companies borrow the voting rights to close to 20% of a company & yet other holders aren't having to declare in effect their "short" positions! (yes they still owned the stock but couldn't vote - which means they had no power) . Similar to a company with voting & non voting shares - The non voters have no say on resolutions or a take-over offer - other than to accept or reject the payment for themselves, they can't stop it proceeding.
It was & is unprecedented to have such "long" voting rights in a company.
As far as I'm concerned there seems to be a lot of Major Capricorn Shareholders who haven't followed the reporting rules when crossing thresholds. Something you couldn't accuse Goldman Sachs of as they seem to do it very diligently.
Implications are to be extremely cautious when dealing in Capricorn & the issue should really be brought to the board's notice for them to consult with the FCA on how to deal with it.
LOTM
LOTM
Hi Again.
Really enjoyed your post's on this chat site, the amount of research you do is very well done, so thanks for that.
If what you say is the case, is it possibly happening to the likes of Shell & BP and others.
Just a thought. What are the implications?
Any thoughts greatly received.
I know there's been so many but I'm guessing most of you didn't pay much attention to Wednesday afternoon & Thursday morning's holding announcements ?
If you had then'd you'd have seen the massive changes that occurred on Monday the 20th November. A day when all of 125,190 shares changed hands through the LSE & Capricorn themselves accounted for 13,531 of that volume.
On the 20th November Goldman Sachs reduced its actual physical shareholding in Capricorn from 13,196,084 shares to 8,773,980 in other words a sale of 4,422,104 shares. They also reduced there indirect holding from 5.48% of the company to 5.41%
So in total there holding went from 19.49% to 14.73% in just one day.
So where did those 4,422,104 shares or 4.6945% of the company go to ?
Well Morgan Stanley (who don't appear as such on the Major shareholders list) on Thursday morning reported that there direct holding in Capricorn had risen from 6.718569% to 8.478502% on that day an increase of 1.76%
So where has the other near 3% gone ?
We're yet to find out .......
------------------------
What's clear from all of the above is that the vast majority of daily trading in Capricorn shares is happening completely out of our sight - on the Dark web or where ever.
The LSE is totally irrelevant when it comes to Capricorn & that sadly is scary.
LOTM
Company Website has been updated to reflect the share ownership as at 3rd November rather than 20th October.
This is name, new position, old position, number of shares & percentage owned of the 94.391M in issue at that date, ( Although I'm not convinced its totally accurate as seem to include stock they've borrowed & others don't)
Goldman Sachs collateral account 1 1 16,030,686 16.96% was (12.23%)
Newtyn Partners 2 2 8,816,666 9.33% was ( 9.29%)
Palliser Capital 3 3 7,431,767 7.86% was ( 7.83%)
Kite Lake Capital Management 4 4 7,163,629 7.58% was ( 7.55%)
Irenic Capital Management 5 5 6,136,349 6.49% was ( 6.47%)
Bank of New York Stocklending 6 6 6,063,656 6.41% was (6.31%)
Dimensional Fund Advisors 7 7 4,239,865 4.49% was ( 4.47%)
Vanguard Group 8 8 3,948,378 4.18% was ( 4.47%)
Bank of America Merrill Lynch 9 9 3,769,531 3.99% was ( 3.97%)
Total = 67.29% up from 62.59% on 20th October
Very little in the way of changes over the 2 weeks other the the significant increase in the Goldman Sachs holding that we knew about, an increase in Bank of New York stocklending & a drop in the Vanguard one.
Note the very slight changes in the other holding %'s is due to the effect of the buy-back over the 2 week period.
-------------------------------- old stuff -------------------
So we have a new name on the list Bank of New York Stocklending collateral account - No hiding what that account is all about going by its "STOCKLENDING" rather appropriate given how much stock is currently on loan to the 4 longs.
Madison Avenue Partners who were previously 5 6 6,233,034 6.55 have now left the building 20th October ( for now at least) - yet have not submitted any holding notice to say they are now below the 3% threshold.
Morgan Stanley don't show up on the list yet they only reached the initial threshold on 13th October 6,377,792 shares or 6.718569% & there has been no notice to say it's gone below 3% again.
-------------------------------------
Blackrock used to own 3.13% as of 8th Sept so they have clearly fallen below the 3% threshold since then, yet no notification of such has been issued to the company.
Centiva Capital who had acquired the voting rights to 3.01% of the company around the 22nd Sept don't show on the list & we know Bank of America have a far larger holding in the company's voting rights than is listed above, but the record seems to only show shares owned not actual voting rights.
LOTM