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This will be a New Show after next week---A compay free from long term liabilities- A new beginning-- Premier Oil (LSE:PMO) will soon make a major comeback. Chrysaor Holdings is acquiring the company and re-listing as Harbour Energy on April 1. This will create the largest independent oil and gas producer on the London Stock Exchange. It also presents an exciting fresh start for the highly indebted firm.
Looks like a lot of action with short positions currently
whether it x billion this or y billion that, surely given all the uncertainties surrounding what the market will value PMO's existing shareholders 5-5.45% holding of the new enlarged (HE) company the appropriate thing to do (for most) would be to sit it out and wait for it to re-emerge on the 1st April and then decide IF the SP on the day has added value or not.
IMO this is like holding a share going into a make or break exploration well for a junior oiler on the red or black drilling results and the only ones who normally do that are the gamblers and rainbow chasers.
investing in the unknown ?
well it's not really an 'investment' is it :-)
Many of you are getting fixated with trying to predict the opening SP and worrying that the current shares in issue of PMO represents only 5% of Harbour Energy after completion of the merger. We are not getting screwed over. The combined assets are impressive and the financial picture post merger is considerably improved. It's now up to the new BoD to build a real powerhouse of a company and the potential is there. By the end of this year I expect HE to be a shining light in the oil and gas sector.
Let's hope a new Combined Group evaluation will be strong enough and attractive enough to get the share price growing fast to recover a potential devaluation against existing PMO share price.
As the new group is healthier than PMO itself and the current PMO price rise is mostly on a back of merger sentiment, I am going to continue holding these shares. It's to late anyway for me to sell them now. So all or nothing, but I expect some surprises at the beginning. Hopefully these will be a pleasant ones as not many oil giants with a strong book of business has share price below £0.26
I think the SP will be heavily dragged down this week to allow for:
1. A higher number of shares assigned to Chrysoar and the rest of the party;
2. Lower value of non-voting deferred shares for PMO present shareholders.
18.31
Based on what ? I think you are being very hopeful, and MTC is remaining very risky..... Good luck, but it's a high risk game with both these shares....
Pearls, professionals tend to differ
https://shorttracker.co.uk/company/GB00B43G0577/
kenni, it is a poor deal for LTH, but a great deal for all of us that got in since November. I see the price going to around 35p - 40p range by 1st April, moving to 50p+ by a month or two
These debt for equity deals are really worth keeping an eye open for. There's another one in Mothercare you can take advantage of currently.
Not quite sure what PIs in PMO expected when the reverse takeover was announced. It was a sale of the company to save what could be done to keep the whole house of cards falling down due to the massive debt. Blame the BoD for their overzealous purchases.
At least still have some shares in the new company but hope they are more prudent.
1.5x more bpd and 20x dillution. Yeah... great deal for pmo LTH..
Outofideas, if you topped up 100,000 at 30+ last week, then you were happy last week the SP was good value. The fact it is down means its even better value. None of the fundamentals have changed. You should be buying more, not worrying about the HE valuation. If it helps, I think the SP will reach 40p at least this year.
There aren’t many direct competitors at the 200,000 boepd level. Aker BP (Nor:AKRBP) produces a similar amount, with a valuation of $9bn compared to Jefferies’ forecast of $5bn for Harbour, so offers some comparison.
One industry valuation metric – enterprise value per barrel of 2P, or proven and probable reserves – sees Aker BP at $15 a barrel and Harbour at $13 a barrel, according to Jefferies’s forecast opening share price of 30p. This is not far off smaller producer Tullow Oil (TLW), for example, which is valued at $12 a barrel using the EV/2P metric.
Once the first-half results are out, the costs and margins of the new company will be much clearer.
so with the new entity being valued @ 3 billion would equate to a SP of @ 16.21p, 5 billion would equate to SP of @ 27.02p, not looking like a very good outcome for us long termers from where i stand, i would like to be proven wrong as i have a large position here, i even added another 100k shares last week @ 31p, probably would have been better adding to my Tullow holdings instead, glalth.
Bottom line is that you get one for one shares in the enlarged company so you either believe the company is worth 3 billion estimate from the prospectus when oil was at $44 or you believe it is now at 5 billion with oil above $60. Everyone has their own calculations to do on what they believe the value to be. I've a 32p average i hope to break even short term but can't personally see that being upon opening day but by year end i do see it nearing 40p
'it is not unreasonable to assume', very reassuring not, basically telling us that they don't have a clue as to what the market cap might be, they are saying that it is better to own 5% of something than 100% of nothing though by touting the increased production and stronger balance sheet, look over at Tullow Oil, they have bigger debt than PMO but have come up with a plan to take the company forward without baiting out their shareholders, glalth.
Dear Mr Currie
Apologies for the delay in getting back to you.
The number of shares you own does not change; you will continue to own the same number of Premier shares post completion. So if you have 900,000 Premier shares today then you will have 900,000 Harbour Energy shares on completion. Premier is retaining its listing and is issuing shares to Chrysaor’s shareholders and also to Premier’s creditors. As a result, on completion, Premier’s shareholders will own between 5-5.45% of the Combined Group which will be significantly bigger (>200,000 boepd with a reserve and resource base in excess of 1.7bn boe) and have a materially stronger balance sheet than Premier today.
The value of your shares will depend upon the future market valuation of Harbour Energy although it is not unreasonable to assume that Premier's share price today reflects the value that the market is attributing to Premier’s 5-5.45% stake in Harbour Energy.
Kind regards
Elizabeth
Chrysaor shareholders will own 77% of the new Harbour Energy, while we, the current PMO shareholders will only own 5%, with the remaining 18% going to the PMO creditors, as I see it, this is just an elaborate D4E swap which will leave us PMO shareholders with next to nothing, hope I am proven wrong but it certainly looks that way to me, glalth.
Another Houthi attack which will increase the price of Brent
Stevo, there are exactly 18.5 billion shares to be issued of which 5% is allocated to PMO and that is then still split between creditors and shareholders. It's not like we LTH are given 5%, but less than that. Way less.
Now question is less % of what?
The Combined Group estimated Net Assets value (as per Circular) was set to $3.2553 billon.
Hence my calculation £2.347 BL / 18.5bl = £0.1268 per each share. All based on the circular.
The value of the new share will be the same for all 5% of old PMO and rest.
So for me question remains - what will be the final evaluation of the group that will set the share price value at the start
I don't buy into PMO share price being representative of 5% of the new companies market cap, by that reckoning the new company has lost 18% of its value since the start of last week when the sp was over 31p, total rubbish, in any case we will find out sooner rather than later now with the 1st of April fast approaching, gla.
One thing I would like to know is why every analysis keeps valuing the new company at 5 billion dollars. Should this not be in pounds. Everyone is doing the exact same thing with the valuation for some reason.
I also still cannot find out if the 23 million shares sold after market and the 6 million sold were shorts being closed out.
Gosias
This has no impact on current pmo shareholders or the value of new group. There are approx 17.5b new shares being issued and current pmo shareholders will have 5% of total shares in issue. The current share price of pmo is a valuation of 5% of new combined group. The analysis you are looking at only relates to how the new shares are allocated between various harbour investors.
Huge depletion too. Could me almost decline of 20% per annum !!!!!!!!!
§ Production in 2020 of 173 kboepd (2019: 137 kboepd), in line with guidance, and underpinned by a full year's contribution from the assets acquired from ConocoPhillips and exceptionally high uptime; 2021 production forecast of 140-155 kboepd unchanged
Plus page 88:
"Finally, the allocation of Consideration Shares among Chrysaor Shareholders will depend on the value of those Consideration Shares in the period up to Completion. The 5 day volume weighted average price of an Ordinary Share, ending on the date which is 5 Business Days before
Completion, will be used to determine the value of the Consideration Shares required to satisfy the Chrysaor loan notes, 100 per cent. of which are held by Harbour Chrysaor Equity Holdings Limited. As such, as the price per Ordinary Share reduces, so the proportion of the Consideration Shares
issued to the Concert Party increases to settle the Chrysaor loan note liability, with a resultant reduction in the proportion of Consideration Shares issued to the other Chrysaor Shareholders. Accordingly, the maximum possible holding of the Concert Party could be 7,624,685,025 Ordinary
Shares in the Combined Group."
In short the lower is price of share in next 5 days the more shares Chrysaor will receive.
With the total of 18.5 billon new common shares in circulation and estimate of £2 billions for the Combined Group, the new share price could be around £0.10 giving us loss of £0.1669
Am I thinking right?