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Hello
I am new to Deltic and wonder how close the newly awarded licenses are to Pensacola? Is the geology the same.
I am ignoring bad and trying to focus on potential, though I do see the Final Results mentions Going Concern. But assume that is standard financial stuff.
Selene is probably slightly ahead in terms of maturity and access to existing infrastructure (as I recall), but otherwise I would say they are fairly similar. Most brokers have valued Selene slightly higher than Pensacola. The windfall tax thing is an old story and no different from say Normay, so should not really be the main issue here. Political uncertainty has clearly been very very unhelful, although Labour more or less have shown their cards.
It's profoundly confusing to me that they are struggling with the farm out; even a mediocre one.
Are the economics of the projects very different? I would have thought that the overriding 80% tax is the key factor?
What has happened here. I almost invested more money here few weeks back expecting a steady rise for the planned 2024 drilling
Bdogg, it's clearly not worthless. The operator, Shell, is pushing ahead full steam Q4 (all planned, long lead items ordered etc).
Whether we get our fair share is the ONLY issue!! Those selling are assuming it is lost (and more!)
Yes and no. I feel Labour's position has been made clear and not changed since the Dana farm out.
I think the big oil&gas boys are sending warning signals to politicians (incl potential for Shell listing going to US) and may just feel it is easier to avoid the NS.
The problem here is NOT the (current) tax regime as much as the lack of clarity about what will happen under a new government.
The problem here is the (current) tax regime as much as the lack of clarity about what will happen under a new government.
Is Pensacola is worthless under the tax regime why is Selene any different?
FWIW - I have not had the benefit of any of the broker research that's out there. For my own understanding I have used the numbers of page 13 of the Deltic 25 May 23 presentation. Note that these were before consolidation (so x20 gives the current per share). At 75p/Therm gas price: Selene is valued at 200p/share and Pensacola 120p/share (so Selene 5/8 and Pensacola 3/8 of total).
How is that working for you David6576?
We need concrete news, we are stuck here for now. The big rinse probably done, so everybody else just on standby!! TBC
Glad I topped at 19p back to 30 p and that equates to a 50% gain gla
Expecting strong reversal tomorrow.Not many know the value of these two licences value.👀👀👀💼💯
On your last point, Selene is worth slightly more than Pensacola (as things stands) subject to both being funded. A total loss of Pensacola is more than baked into the current shareprice due to the psychological shock!
Selene on its own is worth a great deal more than the current sp in my view, but we may need to wait for the drilling results to overcome the current shock and fear!!!
So they’ve said they’re not able to raise funds (they’ll always be able to, depends on the terms).
They’ve said they’re not able to get a jv (they’ll always be able to depends on the terms)
Which leaves giving back $200m worth of asset.
One of the top two will happen (maybe a combination of the two) because you can bet your life the bottom one won’t! (And if we did give it back, what would happen to the sp?)
Oh, so happy times for one of our largest shareholders!!!
In reality everybody is exposed here - both small and large shaeholders - if not done fairly and with all shareholders' interests in mind.
EGM followed by fundraise with particiaption of most shareholders would be ideal, I am just not sure if there is enough time. Should have been planned a while back as plan B!! A fundraise has actually been my preference for some time, but now it's a different situation due to the deadline. The CEO has also repeatedly and categorically said it was not a part of the plan to have a fundraise.
Be interesting to see what would happen as Richard Sneller sold all of his shares in SCE the day it was announced 😮
And this cannot solve the problem of raising the full amount anyway, as far as I can work out, even more so if the maximum unused allotment is sold at a discount.
Although we have a couple of large shareholders, I doubt they can muster support from the rest (70% or so) afterwards if such a trick is pulled. Also not in the CEO's interest to undermine his own options...
I am very doubtful this will be tried, but thanks a lot for sharing!!
Nasty idea!!
"This is what SCE did last week" - Clearly very popular with their shareholders !
https://lbndaily.co.uk/surface-transforms-seeks-8-5m-amid-investor-anger/
This is what SCE did last week - there’s always ways around it if you look hard enough…
“The Placing will be conducted by way of an accelerated bookbuild ("Bookbuild") which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement.
The Firm Placing will be effected by way of a cashbox placing of new Ordinary Shares for non-cash consideration, further details of which are set out below. The cashbox placing structure is being used due to the Issue Price being at a substantial discount, which would otherwise limit the net proceeds receivable by the Company given the existing allotment authorities available to the Board for issuing Ordinary Shares on a non-pre-emptive basis.”
So my read of this:
Raising say £12-15 million or whatever the amount is cannot just be done. The current limits are stated below. There is disapplication of pre-emption rights in place, but puts a limit on shafting small shareholders, as far as I can see.
If they want to raise the full amount, presumably they need to arrange EGM, serve the proper notice etc. I have not checked the finer print, but it will take more than to the end of May, let alone do the book build afterwards.
Bridge loans? Bad farm out? Ask Shell for extension? Or merely let Pensacola go?! Lots of moving parts!!!
Thoughts?
Last AGM:
8. Disapplication of pre-emption rights (Resolution 8)
In line with the previous year, the Directors seek a 25% disapplication of pre-emption rights in respect of allowing the Directors to allot new ordinary shares for cash. The Board recommends that Shareholders approve a 25% disapplication of pre-emption rights at the coming AGM, in order to provide your Board with the flexibility to quickly and efficiently raise any further funds that might be necessary.
This resolution will be proposed as a special resolution. The Act also requires that equity securities which are to be allotted for cash must first be offered to existing Shareholders on a pre-emptive basis in accordance with the requirements of section 561(1) of the Act. In accordance with normal practice, the Directors are proposing resolution 8 as a special resolution to disapply the provisions of section 561(1) in relation to certain share issues.
Resolution 8 will, if passed, empower the Directors to allot equity securities for cash otherwise than in accordance with the statutory pre-emption requirements either in connection with a rights issue or other pro rata offer or otherwise up to a maximum nominal amount of £2,327,415 representing approximately 25 per cent. of the Company's issued ordinary share capital as at 26 April 2023 (being the latest practicable date prior to the publication of this document). The power will expire at the conclusion of the annual general meeting in 2024 or, if earlier, on 31 August 2024.
Last AGM:
7 Directors' authority to allot shares (Resolution 7)
This resolution will be proposed as an ordinary resolution. Under the Act, the Directors may only exercise the Company's powers to allot shares if authorised to do so in accordance with section 551 of the Act. The existing authority conferred on the Directors will expire at the conclusion of the AGM and it is proposed under resolution 7 to confer on the Directors authority for a further period expiring at the conclusion of the annual general meeting in 2024 or, if earlier, on 31 August 2024. The authority will be limited to shares up to a maximum nominal amount of £3,103,220 (representing approximately one third of the Company's issued ordinary share capital as at 26 April 2023, being the latest practicable date prior to the publication of this document) and a further £3,103,220 (provided that such additional authority may only be used for the issue of shares pursuant to a rights issue).
Although at present the Directors have no current intention of exercising this authority, it is considered prudent to maintain the flexibility that it provides.
As at the date of this document, the Company does not hold any of its shares in treasury.
As I've said previously I think they'll do a raise of some size in 2-3 weeks. Can't see it happening before-hand. The big question is how much they will raise. Keep in mind that any give-away should attract a small fee. And every 10% lowers the cost burden by £5m. So if they give away 15% for say £2.5m, they'll have a £5m burden. They could perhaps fund up to £2.5m out of existing cash balances. So they'll have anywhere between £2.5-5m to find. This would be a good outcome, even with the 15-30% dilution that would occur at current sp.
If this happens I also think they'll make an offer to retail investors in the form described by fairdealer i.e. accelerated book build via Primary Bid. I don't think the major shareholders will be too fussed about this happening as these types of actions rarely make more than £500k from retail, which is why they cannot rely on much money coming from it. Bottom line is any major investors are still likely to end up with more of the company. The one thing that's for sure is the raise value will depend on how much is being guaranteed by the big boys (and who they are).
Either way I think the best outcome is for the company to try and hold onto 15-20% via a raise. If they can achieve what I've described then 30p within a few weeks is very likely. AIMHO GLA