Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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NATURAL GAS NEWS Jun 2, 2023 6:15:am
Great Eastern Energy Corporation (GEECL), an Indian coalbed methane (CBM) producer, plans to invest approximately $700mn over the next few years to increase gas output at its Raniganj (South) block, CEO Prashant Modi tells NGW. “We are going ahead with an efficiency capital expenditure programme in this financial year [FY2024]. This is expected to increase gas production from the existing CBM wells. We plan to further undertake drilling of another 144 CBM wells starting next financial year,” he said. “Thereafter, subject to government approval, the company may undertake d...
https://www.naturalgasworld.com/geecl-to-invest-700mn-to-boost-cbm-output-in-india-interview-105445
Well I hope they can pull it off. I'd be delighted if they re-listed then got taken over at anything >£1 / share
I note that the company's data has now been removed from LSE and there are no results when you insert the name in the company search box. The only way I of returning to this chat appears to be by using the direct link https://www.lse.co.uk/ShareChat.html?ShareTicker=GEEC&share=Great-Eastern
Agree that a divi is a little way off yet. The company have stated that are looking to invest around $2bn in expansion capex over the course of the next 3 to 4 years so would be a timeframe after that for any cash returns. However also book value will increase significantly also not just with the investment but also the return on this investment.
Seem to remember company saying that this year they would invest in maximising output from existing wells. Next year they plan to invest in pilot testing for shale and beginning to expand cbm well count again - suspect they would aim for around 40 to 50 new cbm wells in 2024. 2025 would then see another 50 odd cbm wells and hopefully some shale gas production towards the end of the year. All the cash generated from increased production will be needed to finance another potentially 200 new additional cbm wells and expansion of shale gas in 2026 and 2027 I suspect so maybe a small dividend in 2028 as capex requirements begin to decline and cashflow increases significantly.
I’m thinking though that GEEC has relisted by then in order to tap public markets for the scale of finance needed. Unlikely to be a UK market listing. The US is probably where they get access to a significant number of investors who are still prepared to invest in growth oil and gas plays and know how to value them. Shortly after that I’m predicting that GEEC are bought out by one of the neighbouring O&G companies producing from the Raniganj field. So we’re unlikely to ever see a dividend from GEEC as someone wil have paid £5+ for each of our shares Bismarck before the company get around to paying them.
Been doing some sums based on Stocko numbers which should still be relevant up to delisting date, but will not have been updated.
Book value $85m
Book value PS $0.714 (or about 57p)
Wouldn't be unreasonable to expect a divi of 3 to 4% of current book value eventually so about 2p/share. Of course if they grow to become a major shale producer you'd expect to have to wait longer for it, but could be a lot more when it does arrive. Keep fingers crossed...
Agreed. Only upside of attending would be to take advantage of any opportunity to put some questions to the board about the development timeline, funding requirements and how they meet them and how pipeline construction progress is opening up new markets for sales (and where are those sales).
Next year!
No I missed it Troy, although from reading the transcript I doubt we missed much.
Np Bismarck. Did you manage to attend the AGM? I couldn’t get my act together in time so if you did join great to hear thoughts (or anyone else still reading this board).
Thanks for sharing Troy. It could be that they're just being nice, or perhaps it's to create an opportunity for the BOD to buy up cut price shares that people have become bored of holding. If anyone does obtain a sell quote for a reasonable number of shares I'd be interested to know what price has been offered.
Interesting the company have set this up. Worth checking to see what is possible for those wanting an exit.
https://jpjenkins.com/global-depository-receipts-unlisted-gdrs-now-trading-at-j-p/
Company had no obligation to do this so I wonder what the rationale is?
Due to be released this week based on timing for past 2 years....
Link here to short article highlighting increased investment from Essar in raniganj CBM.
Also alludes to test drilling for shale soon which will share drill rig with geec I’m sure. Positive at the
margin
https://www.projectstoday.com/News/Essar-to-invest-Rs-2000-cr-in-brownfield-CBM-project
Thanks Bismarck. I’ve taken the liberty of setting up the new topic ‘Great Eastern Energy Corporation’ to get us started. Look forward to further discussion in the months ahead.
Have a great weekend
Just a reminder this chat board will almost certainly be removed after delisting so I've reposted my previous suggestion below -
There is another board on this site we can use https://www.lse.co.uk/chat/general/commodities-and-mining/
It only sees a couple of new threads a month so we can start one called GEEC and just reply to it.
With SP currently sitting at around 6% of book price I'll take my chances delisted. My hope being that they'll eventually (hopefully within 5 years) pay a decent divi, in which case I'll just hold onto them indefinitely.
Thanks for sharing Fieldwolf. I hadn’t seen anything on IB and ability to trade over the counter. Worth checking on that as good to know what OTC options investors have.
5 trading days left before geec delists and volumes have been very subdued. The deeply discounted share price encouraging investors to take their chances with the move to private market?
Message from my broker (ii - interactive investor) is:
******
As the shares will no longer be trading on a supported stock exchange you may choose to sell your holding prior to our
last day of trading listed above or transfer your holding to another broker.
If you do not wish to sell or transfer, following the delisting we will endeavour to provide you with a share certificate in
relation to your holding, should one be issued by the company in the future.
*****
In that case it doesn't sound so bad. You could keep them within a SIPP but just certificated and not tradeable?
My theory being that at some point in the future (perhaps several years) they will be listed on a recognised exchange again and so tradeable? On a long term basis that could work out. If not, you'd need to organise a transfer to another SIPP where they could be held and traded.
Did somebody mention that interactive brokers (IB) are able to trade OTC stocks? I have a 2nd SIPP with them so perhaps that is a better option where I'd also be able to trade.
I thought the RNS was encouraging in that they seem to be emphasising that nothing will change other than the shares will no longer be traded on an exchange. They have said the reason for the delisting is that the level of trading does not justify the ongoing cost of remaining listed. If this really is the only reason and everything else continues as normal then there are some bargain 5p shares to be had.
Interesting to read the rns this morning. Couple of things stood out. 1) mention of dividend distributions. (Won’t be on the cards for a little while and probably just standard wording for this kind of announcement - nice to see though). 2) company will continue to publish interim and finals accounts on its website. (So no real change to info that we were receiving while listed). 3) at this point at least no restructure of class of shareholdings.
I’ll get around to emailing the company for info on pinksheets and trading of unlisted stock and will share here whatever comes back.
Thanks for the info Troy
I've just read up on the difference between pinksheets and OTCBB https://www.investopedia.com/terms/p/pinksheets.asp
I agree, it does appear that OTCBB would be easier to trade. My guess (and it's only a guess) is that it may be pinksheets only, otherwise HL would have known and informed you it was both, and what reason would GEEC have to choose both rather than one or the other?
Have you emailed GEEC to request further clarification?
Sharing what i received from more broker.
"Thank you for your enquiry and please accept my apologies for the delayed response.
As a result of the delisting from the LSE, which is due to be effective from April 2023, Great Eastern Energy Corp will move to the pink sheet segment of the over the counter (OTC) Market in the US. This market has very few listing standards and little regulation – unfortunately you are unable to trade on this market via Hargreaves Lansdown.
You will still be able to hold your shares in your SIPP.
I can confirm you will receive communication regarding the delisting shortly."
I'm still not clear whether this will mean GEEC share trade Pinksheets OTC only or whether this will be OTCBB. OTCBB appears to be more liquid and requires companies listing here to post annual report and accounts with the regulator. Reading around on OTCBB it might be that liquidity doesn't completely dry up for GEEC and companies do also raise equity via OTCBB - so i guess this angle is still open to GEEC (albeit unlikely i suspect to be how GEEC raises finance for expansion). The list of broker dealers active on OTCBB is quite extensive and can be found here https://www.otcmarkets.com/market-activity/broker-dealer-data
Hoping that GEEC will clear up some of the uncertainty in the coming days. Given it was very hard to trade in any size with an LSE listing it looks as though there could still be some price discovery and traded volumes via the OTC route!
From Stocko I can now only see that 0.41% are owned by Silvercrest Asset Management with 99.59% owned by others. Not sure how up to date that is.
The last RNS concerning share dealing was in Nov 20 and states the following -
"Mr. Yogendra Kr. Modi, Executive Chairman, and Mr. Prashant Modi, Managing Director & CEO, purchased through YKM Holdings International Ltd., 1,200,000 GDRs on 12 November 2020 at a price of 7.55p each in the Company (1 GDR represents 0.5 underlying ordinary share of INR 10 each). Following this purchase, they have a beneficial interest of 64.90% in the Company."
So any further director deals, or significant changes in ownership resulting in thresholds being crossed would be notifiable by RNS. None have been released since.
So who owns the other 35% and why are so few changing hands? Surely not all owned by PI's
I think if it were a UK based company I might snap up a few more to average down, but given that they are half way around the globe and will be subject to less regulation once delisted I think I'll just keep my present holding, moved to a dealing account.
The shares are currently at about 8% of book value. Moving forward I don't think it would be unreasonable to expect an annual divi of 4% of today's book value in the not too distant future, which is currently half the Mcap!
I just wish I was starting from a clean sheet.
Thanks for the L2 info Bismarck. I’ve been surprised that not only is there little selling but also some decent buying. I guess the view is that at current levels the risk reward is still attractive to some investors even with the delisting.
Regarding management buying I would how that there are rules in place to prevent company directors creating a false market by announcing a delisting and then buying up the distressed stock at knock down prices. There are definitely ways they can shaft minority holders once the company is private but I don’t think they can buy shares now before delisting. I might be wrong though.
If I was on boards of Essar or ONGC, as operators of neighbouring licences on the raniganj block, I think I would be buying GEEC shares here before delisting. Taking away public market finance means that geec has to be looking at the farm in option to fund expansion and Essar and ONGC are prime candidates for this given synergies . Why not try and hoover up some cheap stock now to get the average down. They could even collect enough of a holding to be an influential investor. Even if they don’t I suspect one of them stills buys GEEC once the shale reserves are proved up and pipeline to Kolkata is operational. I too have some shares in a SIPP so receiving take over cash for geec shares in the SIPP would solve some issues.
I subscribed to L2 and past few days whenever I've looked there have been buying opportunities at around 5 and selling opportunities at 4.5. I would have expected some people to be cutting their losses and selling and others to be buying/selling to move out of SIPPs and into dealing accounts. I cannot imagine much is going to happen to move the SP much between now and D Day, unless people expect a flurry of buying by the BOD to snap up cheap shares at the last minute?