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It’s as simple as if they weren’t expecting the transaction to come to fruition then why bother to extend it.
Getting paid handsomely whilst we wait!
Trek
Indeed, the key words in the rns are --'' IN ORDER TO PRESERVE the Transaction pending the resolution of certain legal proceedings and receipt of applicable regulatory approvals. .....There has been NO MATERIAL CHANGE in terms ....''
Don't panic, the move down today has been on sales of £6,000 :))
This stock is very illiquid. Small buys or sells can have high impact in the short term.
BTW, the next dividend ex-date is in 7 days :)
It appears a few folk have misunderstood the rns today , provides an opportunity for those who can...
Seplat Energy announces that it has extended with Mobil Development Nigeria Inc. and Mobil Exploration Nigeria Inc. ("ExxonMobil") the Share Sale and Purchase Agreement ("SSPA") for the acquisition of ExxonMobil's share capital of Mobil Producing Nigeria Unlimited ("MPNU") (the "Transaction"), IN ORDER TO PRESERVE the Transaction pending the resolution of certain legal proceedings and receipt of applicable regulatory approvals.
There has been NO MATERIAL CHANGE in terms of the announcements dated 25 February 2022 and 24 May 2023. The headline consideration, effective date and the contingent payment structure remain unchanged.
Seplat Energy continues to engage key stakeholders and remains committed to completing the Transaction as soon as possible.
The Nigerian government want/need this deal to happen as do Mobil and SEPL.
The Oil minister publicly stated it WILL happen and soon.
Tick Tock
I understand your frustration in regards to today's RNS that the deal has been extended. One should note, however, it's exactly 1 year since the last extension; one could reasonably assume it has been setup for one year at a time. With that in mind, I'd say it's a minor positive that Exxon extends the deal without any changes whatsoever. I also believe, as argued a couple of posts below, that the deal is really really close. (I'm obviously biased, bless).
Thanks for your numbers ST. Looks good!
I share your frustration but don't lose sight of the fact that all signs tell us this deal will be signed-off, so it is just a matter of time, also that this merger is truly transformational and Rome wasn't built in a day, and that SEPL is native/indigenous to Nigeria which makes a huge difference in how they are able to navigate the local challenges.
I should also repeat the point I made a while back, that the LNG for export potential of MPNU is very large indeed, which would be the longer term growth story, putting aside the prodigious cash generation and dividend potential in the medium term.
I think that's the key point. IF it gets signed off. It makes you wonder what terms the regulators are looking for given Lokpibiri has said it could be signed imminently from his perpective.
More delays!! Any potential new investors must be rubbing their hands together at the thought of putting money into this country.....NOT!
Maybe a better strategy here would be to cancel this deal and start investing in other jurisdictions that are investor friendly. Just a thought!! It's no wonder the majors want out!
If MPNU is consolidated at end 2024, I'm guessing (very much finger in the air) that the further payment to Exxon will be around $400m, so net debt will circa $800, therefore at today's share price SEPL's EV will be approximately $2.1bn. Free cash flow of the combined entity should be at least $500m, I hope, something we won't know until the prospectus is published. What I find interesting, given there are few attractive large capex projects on the horizon, is the prodigious cash generation and how it will be used. It all likelihood, given what we know, a portion of this cash generation will be directed to dividend to shareholders, whilst the bulk will used to accelerate amortisation of debt.
For instance, if 20% is channelled to dividends, i.e. $100m, that equates to additional 12p dividend in the pocket or 7% additional yield at today's share price. The remaining annual FCF of $400m would be sufficient to erase SEPL's debt entirely within just two years.
Move forward two years to end 2026: SEPL has a debt free balance sheet and >$400m of annual FCF net of dividends, to do what with? If it were to be entirely paid out to shareholders, it would equate to a further 48p in the pocket, or another 28% yield at today's share price.
That would be on top of the 13% yield beforehand (the current yield + assumed extra $100m), so a 41% yield combined at today's share price.
Therein lies the upside, IF or WHEN the MPNU deal is signed-off.
250p a week or two after the market digested the full scope of the MPNU acquisition, would be my personal take; +300p late 2025.
Valuation post run-up: https://i.imgur.com/O9ENA7p.png
Someone bought just over 10,000 shares at 172p, the market is very tight, a sniff of good news is all this will take to whoosh up….. tick tock on MPNU deal closure.
170.14 offer on IG now
167.7 quote buy now
165.8 quote sell
on IG
Referring to the RNS Roger sold some to cover taxes on the LTIP
Usual caveats
Trek
Sold some to cover Nigerian taxes on ones held
Usual caveats
Trek
Is there some tax if you own these shares?
Do you mean Withholding Tax on dividends?
What Nigerian taxes?
The bid has been same as the SP the couple times I looked today. That indicates the MM want stock so to encourage sellers.
It’s just flipped now with this small UT trade at 165p!
Probably trying to put folk off buying!
All indicates limited liquidity to me.
Selling is no problem but I don’t have any funds atm to get a dummy buy price.
Re. The director sell & news, I don’t think the options come into it. My read is Roger sold some to cover tax liabilities on a timebound transaction. They are out of a close period and one could argue that the divestment is no longer market sensitive as it’s been on the cusp for near 2 years!
Usual caveats
Trek
Buyers need sellers.....and vice versa.
That's how stock exchanges work.
There are literally no sellers out there. Just imagine when the MPNU RNS arrives...
Highlighting what the minister said in terms of dates two weeks ago:
“Even when we want to finish that in the middle, we don’t plan to keep you waiting in limbo. We expect that by June 30, we should have finished everything.
So, we hope that no matter what, by August 31, everything should have been done and you have your consent. So, that’s the proposition we have for you today,”
Disclosure: largest position in my portfolio
Isn't there some time limits on when a director can trade before a news item of any significance? I know this isn't a proper trade but must have some control over when they can do this before news items?
Is there some news about to break ????
A huge spread of 5p (6.3p on IG)
The clock is ticking
Sold some to cover Nigerian taxes on ones held
Usual caveats
Trek
Our CEO, Mr. Brown, now own +4 million shares after exercising options awarded to him between 2014-2022.
Good, if not great, entry point for him.
Mentioned in the AGM but nice to see it picked up and reported on.
https://guardian.ng/business-services/seplat-energy-targets-30-million-yearly-dividend-from-agpc/
A video of the AGM is available online if anyone is interested. Link below:
https://www.youtube.com/watch?v=9R6dxdqQhpo
You can watch the commissioning here:
https://m.youtube.com/watch?v=lPoWYnyORuc&feature=youtu.be
(On YouTube, search for NNPC Limited)