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Oil I am not the only one to have mentioned 3p some have mentioned a higher figure in propertion to the de-risked value
reported by the BOD just over 2 weeks ago.
Is the BOD being disengenuious??
When has the board mentioned 3p? What u need to realise is 2p won’t be its value but it will be part of a bigger group. Lord spencer won’t be losing anything as the assets will be in the wider group.. lord spencer only owns 16% and there are another 84% of voters.
IMO it's a question of the actual value of each company. The share price or current MCAP of DELT or IOG is not what they will be discussing /considering, it will be the actual value of each company. Each company will have their opinion on their own value, the value of the other party and they will come to agreement through due diligence and negotiation.
So what IMO is reasonable valuations for both?
The latest Arden report on IOG, released at the time of the recent license awards had a NAV of £130m for IOG, commenting:
"No change to forecasts or valuation. We have not yet added the new awarded fields into our NAV."
Given the early stage of development of the new licenses I do not anticipate the IOG NAV moving markedly on these additions.
The latest Allenby report on DELT released around the same time and taking into account the upragdes on Sellene had a risked NAV of £192m for DELT, commenting:
"We have upgraded and revised our presentation of Deltic’s risked valuation to focus on the three most advanced projects. For these we now show the valuations using the same valuation quotient of $5/boe as in the success case. For the other earlier stage projects, we have used $2/boe. The risked valuation across the portfolio for Deltic is now £192m or 13.7p/share. This compares with 9.8p/share previously. Our success case valuation for the three most advanced projects remains unchanged at 17.5p/share. The risked valuation on this basis is £120m or 8.5p/share. The share price reflects a very cautious view of valuation and stands at a c. 90% discount to our risked estimates. ."
Personally I think the upgraded valuation quotient on Pensicola, Sellene and Dewar from $2.5 to $5 per barrel is premature. Maintiang the Previous $2.5 valuation quotient for Pensicola, Sellene and Dewar gives these 3 a NAV of £60m. With the less developed assets accounting for £72m combined giving DELT a total NAV of £132m.
Surprisingly similar, arguably very balanced, NAVs.
IOG holders won't like the idea that DELT with no production on the horizon can be valued on equal terms with IOG. However, the high volume propsective resources DELT have on thier books do have substantial value.
Oil, in all of this, MS does actually hold the deciding vote. His 16% of DELT carries alot more weight in this situation than the 30% LOG od 25% Lombard own in IOG.
IMO if IOG know they can't reach the 90% threshold they will not get involved in a takeover. So I do think that MS holds the balance of power here.
I do agree that he will see the synergies we do and he won't be loosing out on future upside return from DELTs assets but anything less than fair valuation of DELT is equivalent to dilution of his investment. IMO he won't go for that.
It now seems like an offer will come and IMO I think it may be surprising to other IOG holders the dilution that my be involved. For that reason, I am actually considering selling my IOG holding until this is all done and dusted.
Major I do agree in part to that. I would love to see 3p but am struggling to see anything near that value. If there was to be a monster bid....I would expect the sp to move in advance of such an offer
the william hill offer has come in lower than where the share price reached last friday
It is a premium to when the company first engaged by 25%
Offer is £2.9bn or 272p per share.
Latest broker note from alpha alue valued WHM on a NAV/SOTP basis at £2.3bn or 215p per share.
So I guess THE offer for WHM is fair.
I would be over the moon if IOG offer 21% over NAV
Could IOG approach major shareholders before an official offer is made and offer more than they intend to offer small shareholders and then once they have got their required percentage mop up the remaining shares will a lower offer?
j1osf, no they would have to pay all shareholders the same value per share
Thanks Major
Should have looked that up myself. Just being lazy.
•When a person or group acquires interests in shares carrying 30% or more of the voting rights of a company, they must make a cash offer to all other shareholders at the highest price paid in the 12 months before the offer was announced (30% of the voting rights of a company is treated by the Code as the level at which effective control is obtained).