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BadA For me, 99% was already signalled via prior RNS. So little new info to get excited about. Cash burn might be a little worrying. Will a cash raise soon be necessary or are the free carries sufficient?
But, in general, AIM stocks have been unloved for a while now. As well as Deltic, I am invest in several AIM 'pearls' (FUM, ATM, IOF, SRT and a few others) and all are trading at prices far lower than (my) logic suggests.
I think there will be a cash raise to safeguard if the drills are not positive
Someone say we might need a Cash raise?
Consolidation starting to make more sense now?
I did say at the time but got poo-pooed by most!
Cash burn in line with expectations and more than enough cash in the bank to take us to well after the drills, subject to farm out deal being made. Fund raise now is not part of the plan. If they need cash going forward to fund the day to day ops, surely they will only do next year; at that time the sp will be very different and other monetisation events may likely take place.
If the 2 drills are not good, then it's pretty much game over anyway, guys and gals!! Very very unlikely in my view.
“This success further demonstrates Deltic's ability to attract world class partners and our priority now is to build on the Selene farm out success with Pensacola.
We are progressing an active and ongoing process to realise value and farm down our Pensacola discovery with the aim of bringing in another high quality partner and reducing cost exposure to the well.“
Active and ongoing, Sounds like excellent news to me.
Jack
Agree on the cash raise. They are sensible directors running this company and they are hardly going to run the cash balance to zero before they raise.
I agree and that was at of Dec 2023. At the end of the day its our investment but their jobs with huge salaries. You do the maths lol
Just profit taking. This always happens when people are waiting on news and they get something else. We may pull back to the high 30's and then continue upwards as everyone starts to think the news must be around the corner. Few things for people to consider:
1. Operations are set to commence on Selene in July. Penascola is committed as part of the H2 plan. And they need to get formal sign off on the f/o by regulatory bodies. So news is guaranteed in the next 12 weeks imo.
2. If they do a f/o they won't be requiring cash for a very long time. The operational costs here are very low as they're an incredibly tiny outfit. Selene is carried all the way to the success case so with a strike they still won't need to fork out on the appraisal.
The most important thing is they retain a large stake on Penascola. I wouldn't want them to part with more than 7.5% as Selene is already carried for some time, so they don't need any money on that front. If they do give up 10% (or more) they would want to receive more than just a free carry on the appraisal. If terms are rubbish they should simply do a raise. The market would be a little p!ssed off at first but they can def. get one away in the high 30's / low 40's and would need about £10m to cover everything, so 25-30% dilution. Hopefully they can get decent f/o terms with Shell or Dana. Getting in another partner would be foolish and make things harder on everyone.
Lemmings jumping also not keeping in mind that we got an extra £500k from the Selene f/o this year, and have ZERO costs on Selene from January 01st up until success case. If we do a f/o on Penascola it will be similar i.e. costs reimbursed plus free carry until agreed milestone.
I haven't done the numbers but would expect +£6m to cover our general mgt and admin costs for quite sometime. Essentially DELT will end up with cash of +20% current mcap with zero costs until we get results from both wells. One well is rated at 70% CoS by Shell (not us). And the other is an appraisal that Shell wouldn't be progressing if it didn't see value. Both have opportunity to open a wider area.
Success case on both, which is quite likely, and we'll be pushing 100p with cash in the bank and no costs. If Selene is a monster then we can maintain 25% ownership and raise $10m for an appraisal with about 10% dilution. Not hard to work out what happens if the f/o is on good terms.
Same idgits jumping for 10% will be buying back in a couple of weeks for 20% more. This is why I don't feel sorry for Aim lemmings.
Will gladly pick up some more if we go below 36p. GLA
'This success further demonstrates Deltic's ability to attract world class partners and our priority now is to build on the Selene farm out success with Pensacola. We are progressing an active and ongoing process to realise value and farm down our Pensacola discovery with the aim of bringing in another high quality partner and reducing cost exposure to the well.'
There really is only one way to read this and while it's buried in the middle of the RNS and with no other mention of the progress of a Pensacola f/o anywhere else, it's about as good as you can hope for while negotiations are progressing. This seems to be a standard, but very important, style of wording Deltic have used several times during negotiations with the result then being declared almost with no warning (suggesting theres little leaking of any info going on which is excellent). I'd agree with GGG that there's a very good chance of news on f/o in the pipeline. I've deffo got my fingers crossed and may also top up a little if so falls any further.
. . . Swindells has perhaps sucked in too many of us once too often. Care required.
Viable, could you elaborate please??
What exactly are you not happy with?
Everything looks in good order to me: 2 x drills lined up this year; next farm up deal being negotiated; apart from Selene and Pensacola, more to come in terms of future prospects. Enough cash in the bank to operate the company for at 18 months.
Reckon the next week or so may be the last opportunity to top-up in the 30's. Selene is mobilised in less than 12 weeks. F/o news will drop in between, and I'd hazard a guess earlier rather than later. Feel free to sell folk. I'll happily pick up some more in the mid 30's if we get to that point. Not long now. GLA
Malcy writes:
Looking forward life could probably not get more exciting for Deltic, with a rig booked I am expecting the drilling of the Selene well to start in July and to be followed by the Pensacola appraisal by the same rig, back-to-back. With success in the 33rd Round of UK Government licensing and potential still for a further farm-out at Pensacola life is about to get a great deal busier. It remains perhaps the stock in the sector with the most upside potential and investors should climb aboard…
Holding pattern over the next 2 weeks unless we get news. Reckon we will start to edge up from mid-May as most will realise the f/o could land any day. Providing it's a solid deal I see us in the mid 50's within a week or two. GLA
GGG, I agree. Playing the waiting game could prove expensive, as once it moves, it may well move rapidly.
I am sticking to my 71p guess from 8 Feb after both funding deals have been completed😀
Psychologically, the second deal is worth relatively more than the first one, as it removes the huge uncertainty (and fear of a fundraise) around funding the 2 drills.
Dr P I have to agree.
Chart looks primed for a cup and handle
Agree Dr P on the Penascola deal being the one that has potential to significantly re-rate the sp as it will open up all the milestones and news flow for 2 x major dills in H2. Having said that, it will ultimately come down to the deal itself. If the value of the deal is similar to Penascola for us, then we could jump quite a lot, quite quickly. Anything starting with a '5' or more before we get results would be a great springboard should we have success at Selene. That's where 100p starts to look like a realistic target.
Either way it's all down to the terms of the Penascola f/o now. Not long to wait before we find out. GLA
GGG, yes you are of course right: the deal terms are really important. Hopefully, the CEO is negotiating with multiple parties and with confidence!(having just completed the Selene deal; with all planning work proceeding well including a rig contract; a solid Competent Person's Report in the bag for Pensacola).