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I do not intend selling.
I do not fear share consolidation
BUT I would be disappointed by someone buying deltic potential cheap and our BOD being given positions on the buyout company.
No point worrying just let it ride.
Ol, I with you.
A cheap takeover is pretty unlikely unless both large shareholders and management are involved. I can't really see the benefit for any/all shareholders unless funds are raised on decent terms; cheap takeover would not be that!
Then it's better to just keep Selene only.
If Deltic let Pensacola go, there won’t be a company to invest in.
Look at the highlights on the 2023 Final Results, almost all of them relate to Pensacola. Look at the business on that very RNS - “the AIM-quoted natural resources investing company with a high impact exploration and appraisal portfolio focused on the Southern North Sea ("SNS")”.
Give Pensacola back and there’s nothing left beyond Selene. Except an acknowledgment that the business plan doesn’t exist anymore.
They’ll find the funds, one way or another. It just may not be pretty for current PIs 😬
Dr, a take over bid at the right price would be acceptable, as for just keeping Selene, this would not be the best scenario at alll it might be a dry hole, then what ? no the hard work has been done on Pensacola it's a discovery and at the top end by all accounts, and we have spent upwards of £15 million i think all the stops need to be taken out to keep this, if they don't i am out, The management are paid to manage this company , so manage it or walk. I am sure the major shareholders will have something to say and tha last fund raise was over subscribed at around 3.5 pence old money if my memory is correct and that's about 70p ish now, i still can't believe they have supposedly signed up for a drill they maybe can't afford or do a deal, with the only recourse is to give it away for free, this is really bad management if it is so.
If the major shareholders do a deal with the company which causes the small shareholders to loose, can legal action be taken??
In short yes, but can be tricky to pursue. In our case, we have a going concern (fact), so it would a high risk strategy to try and do this (somehow easier to get a away with funny deals when a company is faced with bankruptcy as the directors have a duty to the company survival before shareholders).
Fraud, breach of fiduciary duty, shareholder oppression...lots of possibilities.
High risk and not easy to pull off, as the 2 large shareholders do not command control in any case. I cannot see it happening to be honest. The biggest risk (and basically an inconceivable outcome, as others have pointed out) would be the loss of Pensacola. I think some sort of solution will be found; too much at stake for all parties.
So if most on here find it hard to believe that Penascola will be given away for free (I agree wiht btw), there's only two options remaining.
1. f/o on poor terms. If we're to put no money in at all you're looking at holding onto 5% of the field. This would be the worst option imo.
2. capital raise for everything. This would mean doubling the share count. If possible, this would be a better option than 1 (if possible), as we'd still keep hold of 30% of the field and have a decent cash holding for a future f/o on better terms should the appraisal be successful.
3. Combination of one and two. This to me is the best, and easiest avenue to pull off. If the company can raise £8m and command a fee of £1m for 10% ownership give-away they can hold onto 20% of the field. If they can raise £5m and command a £1.5m fee for 15% give-away they can hold onto 15% of the field. Easier to achieve as I think the fee would be reasonable (Serenity got $500k), as would the capital raise. They would need to tap into their cash pile for £1m.
I haven't included a reserve based loan, but if they could do this it would be the best of all options.
I think the main thing here is not to give away too much of the field for nothing, and not give away too much company ownership. Providing they can hold onto 15% or more of the field I think the sp will re-rate to 25-30p very quickly. Capital raise is most likely going to happen, so I imagine they are speaking with our major holders at the moment to see if they would be willing to cough up the requisite £5-8m. Retail will probably give them another £250k if they do a Primary Bid raise with little to no warning. AIMHO GLA
There are no reserves, so no change of reserved based lending.
I think you are being way too optimistic by assuming the share count would only double on a capital rise - they are in a hole, a farm out process hasn't found any value for Penascola, so it would need to be on heavily discounted terms and I believe they have already sounded this out and its either not available at all, or its at such a cost the main shareholders won't approve the dilution of their Selene stake which has much better development potential due to existing infrastructure.
I'd tend to listen to what they told the market - they couldn't farm out and didn't expect to be able to raise equity.
I think the mostly likely option is that Penascola is relinquished - next option would be someone takes pity (maybe even Shell for good relations) and goes with option 1 where Deltic is left with around 5% for free carry on this well.
You could be right Spike. My thinking on any equity raise is our biggest shareholders, and perhaps another player joining, would cough up the cash required. Providing our bigger shareholders maintain their amount of the pie they won't be worse off, just PIs. I'm not sure why they'd want to write off their prior investments for a couple more £m. And if they want the shares at 10p the company can say no deal and hand back Penascola. So it's in their interest to raise at a reasonable value. The company is valued at Selene alone now, so feel this is the right level for any hybrid ownership / raise if they intend to do this. Either way mgt have royally f@cked up on this one. Why they didn't get the deal done last year I have no idea. Amateurs.
GGG: surely Selene is worth more than the current market cap on its own? (Assuming a dry well is highly unlikely)
The end of May deadline might come and go with no updates, the rns states the company doesn't want to be open to further costs involved with the drilling if no f/o but if talks are back on track they probably don't need to give up the license straight away, just got my invitation from Halifax today regarding the annual meeting i think i can't afford to miss this one.