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The lift rate in Russia has been about $18, but that will have changed with recent exchange rate shenanigans. The Russian oil and gas industry is taxed harder than any other. The main tax is the mineral extraction tax (MET) which is on a sliding scale. The tax is based on a urals blend of a barrel of oil. If say a barrel is $70 then MET would be about $12, at $80 a barrel it would rise to about $14. So the company is getting fixed margin regardless of the price of a barrel of oil. Obviously we would not benefit if oil rises to $150 as MET increases accordingly, but at the same time as the price falls MET is reduced. The government has started to reduce tax such was its negative effect on exploration and production. The problem is public spending is locked into tax revenues from oil, if they fall Putin may change the terms, but he is not far from making the industry unprofitable as it is so I can't see that happening. In this market cash reserves and cash flow are everything. Exillon are safe, they have great cash reserves , great cash flows and very low costs. They can weather a very serious storm. Doesn't do much for the valuation of the company though. Still see this being bought on the cheap within a few months.
Read that Saudi has the lowest 'lift cost' at $4 per barrel if this makes sense. If correct how would this compare to EXI cost if known. Afren and Cairn being hammered by falling oil price and the ' lift cost' for off shore will be considerably higher than onshore like Saudi but someone on a different blog thinks it costs Afren $80 a barrel which sound way OTT to me. Any thoughts Gambier. Thanks
Russian oil taxation (escalator) means that EXI will be somewhat protected from current oil price. Fortunately the previous board built the infastructure without debt whilst the sun shined, now we reap those benefits. Of course we are now in the hands of people of unknown character.
strange day as way down earlier on and now up alot. Then again it is EXI!!
Not sure why. Sept production was up circa 500 barrels a day v august but nothing spectacular. Not huge volumes being traded either ?
5% of the company bought in one day, 4% in one day last week, but no news. Why no comment from the board? When controlled by a Russian, never expect an explanation.
Just noticed that also. Just as last years bidding process started, coincidence maybe
Very very bizarre trading in this share, failure to declare anything on drilling, hiding the reserves update = something from nowhere is likely to happen
Four trades for the whole day, all sells, 600 grand in total. Next stop third quarter report. Further fall in production and more cash piling up in the vaults. I wonder if the CEO gets bored of firing elastic bands around the office all day?
I'v been saying that for years about 'some' area's of the world....and i get nothing but scorn.
The average daily production of 16,927 bbl/day for August. Why publish a monthly production report? It is not industry practice, three monthly is normal. I suggest it is to make it look like they are being informative. The linear decline in daily production that has been allowed to happen further erodes the economy of scale achieved over the last four years. All the investment in infrastructure and field analysis over the last four years to achieve this critical rate of return is now being put into reverse. Exi has capacity for over 25k a day without any infrastructure spending, so every ruble spent on drilling will bring back a huge return. We have lots of cash, great understanding of the fields, and a great exchange rate for low cost drilling. The company is being blatantly defaced and run down. The silence will continue for the rest of this year thus making EXI a no go company for large investors. It is such a shame, as the company had been very conservative over the years making sure they had lots of infrastructure to get the a good rate of return before big production was developed. They never went for big production numbers with lower net backs, everything was done for the medium long term. Debt was always non existent and the 2P reserves upgrade converted the company into a billion pound company once production was over 25k. A once great company now being stripped to a shell. This is certainly a lesson regarding the importance of geography when investing. Some business cultures are so backward that I guess they require a dictator to keep control.
Whilst I've got no evidence for saying this, I doubt that we're seeing the true trade price. I think private trades could be taking place off exchange and being reported with prices designed to keep the market price low. Why else would someone sell £8m worth of shares so cheaply, and probably at a significant loss. We all think the true value is well over twice the market price so what other explanation could there be. Price manipulation rules could be being broken here and the regulator is taking no notice. My only hope is that when the twelve month waiting period is over in January next year that an offer will be made that at least allows me to walk away without a loss.
strange to see such a large trade and so little price movement. can someone explain why there is so much negativity here ? if a low ball bid is coming soon ,my guess for what its worth would be 240/250 that is still 50%above the current price . quite happy waiting for that.
It is greater than the 3% threshold, if it is the same person, it will need to be declared.
Interesting to see the origins of this buy
It's comin :)
The Panel on Takeovers and Mergers (the “Panel”) is an independent body, established in 1968, whose main functions are to issue and administer the City Code on Takeovers and Mergers (the “Code”) and to supervise and regulate takeovers and other matters to which the Code applies. Its central objective is to ensure fair treatment for all shareholders in takeover bids. The following is a brief summary of some of the most important Rules: 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). When interests in shares carrying 10% or more of the voting rights of a class have been acquired by an offeror (i.e. a bidder) in the offer period and the previous 12 months, the offer must include a cash alternative for all shareholders of that class at the highest price paid by the offeror in that period. Further, if an offeror acquires for cash any interest in shares during the offer period, a cash alternative must be made available at that price at least. If the offeror acquires an interest in shares in an offeree company (i.e. a target) at a price higher than the value of the offer, the offer must be increased accordingly. The offeree company must appoint a competent independent adviser whose advice on the offer must be made known to all the shareholders, together with the opinion of the board. Favourable deals for selected shareholders are banned. All shareholders must be given the same information. Those issuing takeover circulars must include statements taking responsibility for the contents. Profit forecasts and asset valuations must be made to specified standards and must be reported on by professional advisers. Misleading, inaccurate or unsubstantiated statements made in documents or to the media must be publicly corrected immediately. Actions during the course of an offer by the offeree company which might frustrate the offer are generally prohibited unless shareholders approve these plans. Stringent requirements are laid down for the disclosure of dealings in relevant securities during an offer. Employees of both the offeror and the offeree company and the trustees of the offeree company’s pension scheme must be informed about an offer. In addition, the offeree company’s employee representatives and pension scheme trustees have the right to have a separate opinion on the effects of the offer on employment appended to the offeree board’s circular or published on a website.
Good work. There is no valid reason to wait until 2015 though. Conveniently that is a date that will be after the 12 month date in which the original bidders can make another bid. I doubt we will ever see the report as they will make a reduced offer based on an old reserves report that does reflect the new reserves developed from last years drilling campaign. Total set up, nothing that small investors can do.
Had a response from Sergey Koshelenko, the chairman of Exi, saying that the report will made up to the end of this year and published in Q1 2015. lets see but at least i got a response which i was not expecting!!!
Has anyone tried to contact the BOD of exi directly? Probably futile but just wondering. On their websie there is a mr Koshelenko as chairman and mr Blackwell. I sent them both an email but do not expect any sort of meaningful reply if any?