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I'm glad to see all the resolutions were overwhelmingly passed at today's meeting.
So now we can look forward to a very interesting afternoon by the looks of it !
Try putting in some dummy orders & then you'll know what I mean.
They are wanting way over the offer price, if you put in a decent sized order, something I've not really seen with Capricorn before.
Prime Examples
177.314 4000 O 175.0 176.8 12:41:58
176.97 3500 O 175.0 176.4 13:02:44
176.69 3936 O 175.2 176.4 13:32:10
So either they are already short of stock or they don't want to be short of stock ahead of the share consolidation - effectively overnight (but officially 8am in the morning)
LOTM
The meeting to approve the Special Dividend of £0.56 per share, followed by the share consolidation of 2 new shares for every 3 existing ones is tomorrow Thursday 5th Oct.
The shares will then effectively go EX dividend at the close of business on Thursday 5th Oct. The share consolidation occurs ahead of the market opening on Friday 6th Oct.
Only this time round unlike in May ahead of the previous special dividend & share consolidation. The share price is above the balancing point. That means the gearing is in our favour this time round not against us.
The balancing point is 3 x £1.68 = £5.04 less the 3 x £0.56 dividend (£1.68) leaves you with £3.36 which when dividend by the 2 new shares would equate to a price of £1.68 each.
If the current price of £1.80 turns out to be the closing price on the 5th Oct, then the new shares should return to trading around £1.86 (£5.40-£1.68 = £3.72 / 2) to have the same market value as before.
If the share price goes higher then the gap will grow out from that £0.06 difference, if it falls it will shrink in size.
Tick Tock, Tick Tock especially for those institutions that have sold/lend for cash there voting rights to other's (all 19% of them) , which might be the reason behind the scramble for shares that looks to be occurring.
LOTM
I made a further 2 purchase's yesterday morning neither of which showed up in the trades list, the larger one at what turned out to be a pretty crap price £1.77 & the smaller one at just below £1.74
It will be interesting to see how they try to trade the stock Wednesday, ahead of the vote on Thursday morning.
LOTM
RagstoRich,
Clearly you don't see the value here, nor the income stream that will be coming in 2024 & beyond.
You stated previously "You sold out a while back" so how can you sell Egypt now & get any benefit from it when you don't own any shares?
You got the benefit of a higher price for your shares when you sold them, many here will not have been so lucky, but I'm sure they will in time be rewarded for there patients.
LOTM
Some interesting trading today, there appeared to be a number of trades going through at well above the market price at the time!
177.478 17000 O 176.2 177.0 12:46:17 17,000
179.98 20000 O 178.0 178.6 12:55:45 20,000
179.42 91648 O 176.2 177.0 16:25:29 91,648
It will be interesting to see what tomorrow brings with the clock ticking & only 3 trading days left until XD of the special dividend & share consolidation.
I think we may see some more "Holding announcements" before then
Tick Tock
LOTM
And I dont disagree with some of your comments, the previous board were horrific, and as you say spent like mad.
BUT - I maintain that the NewMed deal was a HECK of a deal compared to where this company is now. I'd happily sell Egypt on the "cheap" (if its worth anything...) and get £2.75 !
Half of the "Cash" is IOUs from a country that is the worst off outside Venezuela globally.
Egyptian bonds will also give you a great return, probably with less risk!
There must be a high % chance that this company will start to financially struggle now that its income stream is purely Catcher & Kraken payments, and the CAPEX continues to be ploughed into assets which dont pay you in Egypt....
After this weeks consolidation....Any opinion , if this stock will decrease in a downward trend, like the last 2 conidiations? This sems to be a cycle. The only way I see the stock trending up, is if revenues exceed operating cost , for at least 2 quarters in a row....
Any other view points ????
I see they want to play games today, perhaps trying to trigger some stop losses etc.
Well I've just done 2 topup's with another 5,000 shares at £1.7374 & 500 shares at a similar price neither is showing up on the LSE.
LOTM
RagstoRich
This should interest you as you're worried about the cash going forward .....
The G&A savings going forward are the game changer.
I've just been through the half year accounts looking at them & a lot of the $70M expected in G&A this year has already been paid for. So there will be a lower amount to be spent in the current half year, than you might imagine.
"Administrative expenses of $34.4m include $13.0m of redundancy costs. $6.9m in other expenses relate to expenses incurred on proposed merger which did not complete."
For comparison the figure was $21.2M to June 2022 & $40.8M for the year to Dec 2022 so $34.4M is an ouch but expected. The $6.9M is a one-off type of expense that brought the total to $41.3M.
There is also "The total additions of $16.8m in right-of-use assets include $16.0m addition in connection to additional office lease contracts in the UK."
Which was the posh new office in Edinburgh no longer going to be used & so I presume now leased to others.
The previous board spent money like confetti
LOTM
RagstoRich
Probably easiest to do this in $ terms rather than £'s
Current value of the company $300M (lets call it $200M after the special dividend is paid)
Cash $300M
( of which $100M is about to be paid as the special dividend & a further $10M is to be used for the share buy-back)
Debt's of $126M
Therefore giving us a starting position after all of the above of $64M in Cash (300-100-10-126).
There is then $121M of working capital tied up in Egypt production.
The current estimated receivables position for the Waldorf assets is put at $75M ( which personally is on the low side & Waldorf have a figure of $100M which I still think will be topped at the end of the payouts, but we'll go with the lowest figure)
They have $40M still to pay to Shell over the next 2 years assuming oil prices are good for the Egypt assets.
So we're now at $210M (64+121+75-40) which is the value of the company come 6th October
That's after having already spent $76M on drilling in Egypt this year alone (up to end of June), with only a few of those wells actually onstream so far.
In addition the book value of the Egypt production assets is currently listed at $267M & will likely be increased when a new reserve report is produced.
Now we haven't even discussed the $50M a year that is going to be saved on G&A costs starting in January. The last board paid themselves & the staff like those of an oil major, not a $1.5B dollar company & didn't concentrate on achieving optimum production from the assets they had.
So Imagine you're looking at the annual accounts for 2024 right now, you'll be seeing that EPS are $0.60 per share better than the old company could achieve & that will be the case for years to come.
So even if you thought the company could only break even currently when producing 14,000 boed (and growing), there would still be an additional $50M ( $0.60 per share) that a significant portion of could be distributed to shareholders annually.
Not to mention when they get near the end of development the only cap-ex will be just to do work-overs when needed & all that extra cash is suddenly available for distribution as well.
LOTM
RagstoRich
I have to go out for a couple of hours & will reply to your post later.
Perhaps you would like to study .....
https://www.capricornenergy.com/umbraco/surface/media/mediaitem/capricorn-hy-2023-results-presentation-140923_final?path=/media/3650/capricorn-hy-2023-results-presentation-140923_final.pdf
In the meantime slide 23 is the one you want to look at, you'll see there that the current valuation of Capricorn implies no value at all to the Egypt production.
LOTM
The company is currently valued at £255mil, which is probably what the assets,£80M of cash to be paid out, buy-back cash £8M and the working cash in the Egypt business & the difference between receivables & payables is worth.....
You would have to claim that to be worth £500mil + to get the lost value back.
If Egypt continue not to pay, where does that leave the company in 1-2 years?
Good luck
I really didn't want to be paying this price for the parcel, as its the highest I've paid for one in a while, but I finally pressed the buy button.
Its not showing up on the LSE trades so it most likely took place elsewhere 4K at £1.767257 at 9:12
PS Barclays seem to have a source of stock that the rest of the market hasn't access to
LOTM
I know it wasn't a lot of volume just over 48K in the closing auction, but it's the first time I can recall the matched price being above that of the last quoted trade in normal hours.
26-Sep-23 16:35:07 176.40 48,184 Buy* 175.40 176.00 85.00k UT
So this maybe the 1st signs that there is a shortage of stock out there & the insto's are starting to scramble to get hold of those shares that are available.
Tick Tock - only 7 days to the consolidation
LOTM
Hi RagstoRich
Ok let me try to explain it again in your terms -:
NM offer:
315M shares in issue, £2.75 per share = £866M value
Pre-dividend value:
315M shares in issue, £2.18 per share = £687M value
Post divi value (now):
Dividend payout: £362M (£1.15 per share)
Share buy-back to date £12M
143M shares in issue, £1.76 per share = £251M
So you have:
Total delivered value to date: £625M (div + buy-back+ current SP)
NewMed deal: £866M
Thus there has been £241M of value destruction. Still a colossal amount!!
--------------------------
And there will be more "value destruction" to come via the share consolidation & the rest of the share buy-back.
--------------------------
The difference is that you call it "value destruction" RagstoRich, I don't.
Have they sold Egypt on the cheap ? given away the future UK contingent payments to anyone else, or the possible Senegal one ? No
What they've done is stop any more expenditure on Mexico, the other UK licences it had & the other exploration stuff.
Were these given any real value in the NewMed offer ? No
So where's the missing £241M of value ?
Well its still in the company, in the form of the 3 assets I listed earlier, plus the £80M of cash that is about to be paid out, the rest of the buy-back cash £8M, the working cash in the Egypt business & the difference between receivables & payables.
Once you get your head around that point, (that it's still there in plain sight) the rest all makes sense.
The Shell Payment $25M & the exploration costs in Egypt would all have been factored into the NewMed offer as they were known about as would most if not all of the development expenditure that's taken place in Egypt.
Now you could argue that some of the "missing money" figure should be reduced a little because of Woodside's delay of getting Senegal up & running & yes it could end up at nil & I have no problem if you want to take that view in getting to the valuation of the parts.
The only difference is the value hidden in plain sight as I call it is now going to be shared out amongst far fewer share's.
On top of which the company's G&A expenses are going to be £40M lower each year going forward & that's something that wouldn't have been factored into the NewMed offer. This is a significant annual bonus that the market is not recognising for now.
So in summary - If NewMed were to make that same offer or a similar one come the 6th of October using the same criteria as before, for the assets still in the company it would be for roughly £400M (£850M less £454M paid out in cash & buyback [£362M, £80M + £12M]) which with 95.2M shares left in issue works out at over £4 per share instead of £2.70 previously.
I hope that clarifies everything for you RagstoRich
LOTM
After this next dividend, going into next year leaner.... if profits surface for multiple quarters in 2024, cine is prime candidate to be sold.......
I've been glancing now and again at this board after selling out a while back. But had to log back in to correct this.
Anyone who has held since £2.17 has made a large loss
The NewMed deal (£2.75) was massively more valuable than where the company is now. trying to argue anything else is madness.
Here is a simplified breakdown below. I dont follow LOTM-13's calculations at all. Lets show the amount of shares, share price and the divi values in £ to make it simple:
NM offer:
315M shares in issue, £2.75 per share = £866M value
Pre-dividend value:
315M shares in issue, £2.18 per share = £687M value
Post divi value (now):
Dividend payout: £362M
143M shares in issue, £1.76 per share = 251M
So you have:
Total delivered value to date: £613M (div + current SP)
NewMed deal: £866M
Thus there has been £253M of value destruction. A colossal amount!!
MMMmmm, I think that is flawed as anybody who paid £2.70, and holds for the last divi will be sat on a loss...
Dai2belts,
Its not the consolidation that's done it, its the price the shares were bought back in for :)
see below from before .......
There were 315M shares in issue back then when they rejected £2.70 or £850M valuation for the company.
They paid out £362M (£1.15 per share) & reduced the shares in issue to 148.5M when the share price was like £2.18 a share. Which meant they effectively added £0.56 to the value of the shares that were left in issue to that previous £2.70 people had been willing to pay to buy/merge with the company.
The buyback has only enhanced that value further with 6M shares bought so far.
Now they are going to payout another £80M or £0.56 per share to reduce the number of shares in issue even further & they are doing it at an even cheaper price than before !
If you add the numbers up we will end up having 95M shares max in issue having paid out a total of £452M (362 + 80 + 10).
So if you think about it that means £400M (that someone was willing to pay previously at similar or lower oil & gas prices) is in those 95M shares ie the offer would be over £4 per share now.
LOTM
Not sure the equivalent works out, as I would be in profit not a loss
I've just bought 4,250 at £1.737 & I'm just waiting to see if they are stupid enough to lower the price even further before I buy another batch.
Sorry I forgot to mention I bought a parcel back of 1,750 at £1.7093 in the middle of last week.
LOTM
Dai2belts,
I don't know the notification period for short's its not something I study, I just read what's listed, to be honest its actually the 1st time I even went & looked at the short position feature on CNE.
As to how high it can go, well remember the calculation I posted not so long ago ..... what was the £2.70 offer's before would post the consolidation be the equivalent of over £4 per share from 6th October & any shares bought via the buy-back will increase that price.
LOTM
Interesting, ...
Also If your able to manipulate the share price around both sides of the inflection point its a win win. Especially if one loaded up heading towards the 150p low, and then pushed the share price to near 180p on consolidation.. An increase return from the divi, and increase in price post consolidation(at least on paper).. Thats seems to be whats happening, but not sure how much higher it can go ..
But we can only guess, ...
Whats the notification period for changes in a short position ?
The higher the price above the inflection point will add more pressure on the shorts post consolidation...
Dia2belts,
The price was certainly manipulated by the institutions between the half year report & the terms of the share consolidation being announced (I posted about it at the time).
The data I just posted gives you a good understanding of why.
If the consolidation had taken the number of shares in issue down to 90.25M or even 88.5M which is where it was headed prior to the ramp instead of 95.4M, Then it would have been even harder for the institutions to rectify there positions cheaply in the scramble for stock, that's going to occur. The free float is going to be very small until they unwind the mess they've got themselves into, not to mention the cost.
LOTM