Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Sorry, should read "biggest Gas and Oil discovery in the NS in the last decade."
Literally up to the point of the ink drying on a Pensacola FO agreement, the CEO can state completely honestly, misleading nobody, that it is a difficult financial market and nothing is certain in the SNS.
Realistically though, will Deltic be handing back 30% of the rights to the biggest Gas and Oil discovery in the NS for nothing. Will nobody even bid £1 for them - let's face it for a better than evens chance of a return measured in the hundreds of millions of USD. When the Government is in the process of opening up the NS again, and business is already starting to gain serious traction!
Deltic will exhaustively evaluate the new licences & yes there is a possibility of handing them back, as there always is, if they do not meet the necessary criteria. But they will be doing this anyway - not because Deltic no longer see the new licences as viable, before they are even scrutinised & fully evaluated for their commercial potential.
Will Shell as a major JV partner, wanting to keep to its agreements with the UK Government on the NS, and currently on track to hit profits for the year of around $30b USD, not be able to exert some financial leverage that ensures the continuing success of the Deltic partnership on Selene and Pensacola & prospective future projects. Is Deltic an exploration company or not - the RNS alludes to Deltic running away at any hint of success - is that likely!
Do people really think that 30% of the potential success of Pensacola, along with valuable new NS licences are going to be relinquished by Deltic without realising any value whatsoever?
Yes David your optimism is admirable but I'm afraid things have now got very complicated and the future is very uncertain. I do of course hope you're right though!!
David: not the best time to be ramping without evidence/substance, frankly, as much as I for one would love for you to be right!!!
Meant negative shorter is done and dusted.
Strong reversal on Tuesday very possible.
Next week can be huge for investors as a way over done done.Now funding will be much easier.Exprcting big JV by majors.👀👀👀
Exec options were issued at varying times to be exercised mostly in equal (1/3) traunches. The exercise is based on pre-determined SP value over a set period ( mostly July). Execs would be crazy to exercise as although based on the Old share price, they would now be exercised at values exceeding 50p/share. There is also the probablity some options will be approaching an expiry date.
Fair point re options, but if this is not resolved, Delt will only extract value from Selene and be wound up, in my view. That value will be a fair bit more than the current sp, but they will gain very little, if anything at all, from these options.
I guess the thing with Options is - if the price tanks, they haven’t lost anything. All that’s happened is they won’t exercise them.
And as the most recent ones are valid for 10 years, they can sit this maelstrom out and wait for the price to rise.
Re: "If the Director holdings are indeed so low, there’s nothing to stop them worrying about wiping out SH value."
The key thing is for as many as possible writing Deltic that a fund raise should include ALL shareholders pro rata. Like that the price doesn't matter and everybody will benefit fairly. And if not, we need a proper shareholder revolt because otherwise we will be short changed due to the unnaturally low share price.
Email:
ir@delticenergy.com
Not correct guys. The exec team has a potentially very large pool of options at stake. Check historic announcements.
If the sp is destroyed, they will get NIL! If they pull it off, they will eventually end up with life changing wealth. As simple as that.
I am sure they are fighting hard to get this resolved. Dirty deals with large investors are always a possibility, but I doubt it.
“The total net cash paid to the Pensacola joint venture partner during 2023 for the Pensacola exploration well and post well cost was £12.0 million (2022: £2.1 million).”
They’ve already spent £14.1m on the Pensacola well, there’s no way they’re walking away.
If the Director holdings are indeed so low, there’s nothing to stop them worrying about wiping out SH value.
Thing is, Swindells and the other board members own only 0.33% of the DELT shares between them. That's hardly what you might call incentivised, to make this work.
It's all about Other Peoples Money.
So, would they care that much if the equity dilution of this imminent placing is on a truly HE1 scale massive?
Candlestick - these are exactly the sort of questions I feel should be getting asked and addressed at a shareholders meeting. Both a general consensus and a plan need to be developed, with all shareholders.
All the Directors and the NOMAD need to see and approve the RNS. AS far as I know its the NOMAD who releases the RNS on behalf of the company.
Does the NOMAD not bear some responsibility for the RNS? I understood that they have to approve the content before it's released??
NG
…and I know what happened to HE1 post-raise, so maybe that is the plan. Lots and lots of short term pain but with a big end result based on 2 big well results?
I’ve read through the RNS a few times now and really don’t get where we are (I mean, I know we’re fooked, but the whole message doesn’t make sense. We’re not able to complete a JV, but we can’t raise funds either. For a project with an NPV of $200m net to Deltic.
I sense we have the mother of all fundraising coming, there’s no way they’ll give back their share. The problem will be the dilution at this level (or lower). If they need to raise the full £15m - and I’d suggest they should or there’ll be another raise on the way - we may be looking at HE1 or SCE levels to get those numbers.
Even if we manage somehow to raise at 18p, that’s 90% dilution.
At 15p it’s 127%
At 12p it’s 184%
At 10p it’s 241%
And a very worst case of 7p it’s almost 400% dilution. I don’t see it that low but SCE SH were diluted by almost 200% - they raised at a discount of 66%, where HE1 raised at a 72% discount. Something close to that would be sub 7p here.
Maybe they are trying to play hardball, but who in their right mind would go down the route of screwing over the shareholder base as they have, just as a tactic 🤷♂️
Getafgrip, I agree with you, there is zero chance of a meeting/getting more details during May.
I have supported a fundraise for a while, as that's the way of retaining maximum value in the asset, but clearly that was not part of the strategy. The CEO has been very on that. However, if we are genuinely on the ropes now, an emergency fundraise should be attempted. It may have been aired with the large shareholders or other parties, with no great interest. This may explain the RNS, as it will call their bluff.
It doesn't actually matter at what price the fundraise is done, as long as ALL shareholders are given the chance to buy their fair share. This is my biggest fear, ie that an accelerated bookbuild will give large investors more shares, relatively. Without them investing, you cannot realistically do a fundraise with just small investors like us.
The post funding value would jump significantly as you would have 2 fully funded drills, with 30% retained in Pensacola. From a cap sheet perspective, it's a big winner. If we are left out, we will get diluted to hell, in which case we are better off letting Pensacola go to be honest.
Emails to the CEO should really focus on getting a fundraise done asap, fairly!! That's what I will do.
Getagrip, there are very many disgruntled shareholders. The RNS, like the Face of Janus, faces different ways, which does covers GS whatever the outcome. That said, Swindells is responsible for issuing a very badly crafted RNS, that led to a catastrophic collapse of the SP.
Done ive e maild the company requesting a meeting Rot
Getagrip - While I strongly suspect you will be right, a clearer strategy communication would be helpful, esp if they may be looking for funding from shareholders which I continue to view as being an alternative that should be explored rather than simply losing Pensacola - it may already have been with the large shareholders which is another reason for an open meeting accessible to all shareholders being helpful. If us smaller shareholders don't ask for the same access to information that larger shareholders (may) be getting then they'll continue to keep us in the dark so while an open shareholder meeting may not happen I'd encourage everyone to ask as this would give us the best chance at having questions answered.
I'd also note that a shareholder meeting is not the place to air past frustrations it's about understanding the current challenges and board decisions so we can decide to support the board going forward or if I should be selling my shares at the moment I'm guessing if there any future or if all hope is lost and a lot can be gleamed from the way something is said.
I still think there's a future and so I'm still invested.
A few requests from disillusioned shareholders, e-mailed to Deltic, has a chance of achieving anything meaningful that hovers around zero. Deltic will not be involved in delicate negotiations with regard to the FO of Pensacola one minute, and then give away the essentials of its negotiating stance to a few disgruntled shareholders the next!
This is not going to happen! It is the application of their business strategy, priorities and objectives, in a complex, pressurised & highly competitive market-place. Otherwise they would be in danger of involving themselves in "a camel is a horse designed by a committee" scenario!
May will probably see the objectives of the RNS become clearer, but I don't think Deltic will reach a point at any time/soon where they can give shareholders a detailed explanation of the rationale, true objectives and true motivations behind the RNS!
I've emailed Deltic and suggested that a shareholder update meeting would be helpful so questions can be answered. I'm firstly surprised by the material change in tone of the RNS information in the last 3 months, moving from 'significant interest' on 19th Jan with $200M valuation to a potential loss of licence on the 30th April with nothing in-between, even in the annual results on the 17th April (13 days earlier) no update to the 'significant interest' position of the 19th Jan was given. I'd encourage others to also request a shareholder update meeting so questions about the current options be progressed can be answered as it does feel like there must be alternatives rather than zero interest in a potentially $200M asset that Shell feels is still worth drilling simply being lost at $0 value. There's also the question over how they are safeguarding Selene from ending up in a similar situation.
Yes I'm also in shock at this turn of events and hope it's not just small shareholders being shafted, but it's business and as a shareholder I principally want to know what's going on rather than being left to guess...like why a fundraise isn't being considered, even at a heavily discounted price.
A shareholder Q&A (in the very near future) would help close the information gaps that the RNS has created, please ask Deltic to make this happen.