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Spike, Shell haven't pulled the pin. They're still going to drill Penascola and Selene. Any discovery and appraisal success will realise value for them or another Nth Sea player especially if Labour don't change what the Tories have in place at the moment (or don't tinker too much). Drills are going to happen, it's just a matter of Penascola ownership.
As for Michael Spencer, you've already pointed out why he would need to pay nearer 20p. There's no way mgt would give away so much of the remainder of the company (Selene) for nothing. They may as well just give away Penascola, which in turn would drop the sp by another £5-10m with less chance of a decent return for Spencer. Point being, it's better for Spencer to put £10m in and have a chance at the company re-rating to £80-100m value on the back of Selene plus Pensascola. Or he loses another £10m in value by doing nothing, on top of what he has already lost. In for a penny, in for a pound.
Company also has +£5m in cash and no debt. Anyway, let's take this over to the other board. Sorry i3e posters.
G_G_G - I doubt it, Deltic have just run a full farm out process and no one was interested on commercial terms so why would Michael Spencer throw good money after bad? They are completely dependent on Shell for monetisation and it seems obvious Shell have limited near term interest.
However even if Michael Spencer was interested he is investor of last resort - so why do it at 20p, why not 5p? And so the board have got to decide whether massive dilution of all other assets for Pensacola that the industry has just turned its nose up at is worth it.
Reckon you might be surprised Spike. Michael Spencer owns 20% of the company and is a billionaire. He can watch us lose Penascola for nothing, which would cost him more than £10m. Or he can stump up £10m and make it all back and more. If I were him I'd hand over the money required to get both drills turning. I'm thinking today's news could have been to wipe-out the sp so a 20p raise is more palatable. We'll find out soon enough. GLA
“I have no idea where they go from here, but think the best case scenario would be to find some parties with deep pockets and raise £10-12m. This would mean an extra 50% shares in issue at today's sp. “
G-G-G - Deltic announced in their RNS today that they did not believe they could raise equity.
Market cap now is £18million, any raising would be heavily discounted, so I’d suggest they would be looking at 100% more shares, but even at that there is no interest. I think the last hope is following the announcement today, someone comes and takes the rest of Pensacola off them, other than a small revenue share of maybe 3% if it ever gets to production, which frankly I doubt it will subject to a complete shift in political direction.
To answer your earlier question, yes I'm completely out of DELT. Too much risk now.
As for the f/o, given they managed such a great deal recently on Selene (well to be drilled in July) I think it was fair to assume the f/o was nailed on, and only a matter of getting decent terms. For it to not only fall over, but be flagged as potentially worthless and handed to Shell is almost unbelievable.
I have no idea where they go from here, but think the best case scenario would be to find some parties with deep pockets and raise £10-12m. This would mean an extra 50% shares in issue at today's sp. They can probably get an additional £1-2m from the market. And they have £5m in cash. So it's possible for them to get this over the line. And I won't at all be surprised if they manage to pull it off at this sp. If they do then I'll probably go back and pick some shares up as they're likely to jump very quickly post raise with 2 guaranteed drills and having maintained 30% of their significant discovery. Will have to wait and see now. They may have already spoken to parties who have said they'll stump up the money at 20p so need the sp to drop to these levels in order to sell the raise. Who knows. As you've said, this is AIM and you only need to look at what happened with SHG to see how murky the waters are in this market.
Bottomsup - I trust the comment was made tongue in cheek. Some may have a problem with you starting a DELT thread on the i3e BB and then telling others to stick with i3e - please tell me you were talking tongue in cheek !
DELT is also a usefull reminder to any investor particularly new investors that there are no certs on the AIM. HIGH RISK / high return. Many have ignored the high risk part of the equation including myself in the past.
I followed the DELT story from a distance and reading some of the posts on their BB - I thought the farmout was nailed on. Was that the case and something has changed in the last few weeks or was the chance of a farmout over hyped on the the DELT BB. I dont know the answer but this highlights the need for every investor to do the necessary DD and not blindly accept what is posted on a BB.
I don’t think any shareholder needs reminding how their share price is doing .
Let’s stick to I3e
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