Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Abatt - Agree for what it's worth. £19m market cap less £9m in cash, so call it £10m currently. I could see someone having a go in the range of £1.50 (~£30m less £9m cash) to £2.50 (£50m less £9m cash) and then the BOD need to take a position (which would be interesting in this climate). If you step back nothing has really changed in the fundamentals. The Concept is a bit late (perhaps helpfully so in the current climate), an institutional investor has sold (maybe they have a refined ESG strategy that sits better with their community and is more on trend, maybe they dont like the volatility of oil, or maybe it's just a risk they dont want vs. safer, greener and steadier returns when a fund manager is less likely to get hammered in the event of a poor return). For oil companies looking forward a few years the GBA (inc Verbier) is interesting. You couldn't easily repackage it in the way it is now, the OGA have cancelled next years round and one assumes this all goes back to OGA if JOG fails (I dont know, but assume that is the case). If so in reality a liquidation would mean someone couldnt get their hands on it until mid 2023 (submission FY 22) earliest and even then they would have to access the licence and convince the OGA they were the best suiter . The world will be different by then, and whilst there will be slightly reducing oil demand I will wager that supply is much tighter still - so the oil price outlook remains positive IMHO (we can debate $50-70 - but you would think in that range). For an acquiring company there is a lot of potential here for a ~£40m investment and a projected $3.2bn ($1.2bn NPV - Source : JOG CMD)) post tax cash flow .. Quite easy to re-route part of an acquiring companies exploration capital for a proven asset with a projected Break even of $32PB (Source: IC). We have 15 months to run, a lot will change, my view remains completely unchanged and I've been in for just under 2 years, I'm sitting tight.... and BTW I think £2.50 would be awful value for us! It would however start to heat things up.. which might prove interesting. Again purely IMHO. DYOR.
Welcome! No, your assumption on Brent is sound @ ~50 by then in my view (but the bigger point is what Brent is believed to be worth is 2025). Farm out wise though if we don’t have a deal by then I would suggest we have a problem, unless the bod have consciously chosen to delay the process and rationally explained this (with a proposed raise). £5m would last another year, c. 25 percent hit. That said not sure a £5-10m raise is going to help much unless there is a deal imminent and we need time to complete, in which case a raise is easy. It’s back to the same point - the farm out needs to launch between Q1-Q2 - we then have c 6 months. If we don’t have a deal it doesn’t matter. So same question really - what’s the probability of some form of deal(farm out or acquisition). My view is probable, but then I’m bullish on conventional oil assets in the early 20’s. Comes down to what you believe..
Herron - Interesting perspective. We’re mid pandemic and the oil price is recovering. Look at the trend of the last 6 months. It just depends what you ultimately believe. If you believe in the recovery of oil driven by a lack of supply as the world recovers which then leads increased value for conventional assets then this is a good investment. If you don’t it’s not. The future of this will be determined by the next 6-9 months appetite of others. Take a look at Premier and Apache - what do you think is driving their behaviour? Directionally things are looking more favourable, and jog is asset rich with a host o1f material catalysts on the horizon in the next 6 months. They don’t run out of cash until end 21 at current burn. We will know long before then whether they succeed or fail - the risk isn’t the raise, the risk is the success (or failure) of the farm out. In my view the landscape is improving and will be better again 6 months from now (it’s hard to argue against that). The question is simply what do you believe is most probable? The good thing is we all get to choose and I’m in! All IMHO of course.
I think this news is interesting as well MP0818. There are some good comments from the 3 brokers covering this including : SP Angel, WH Ireland and Arden. Simon Thompson also remains positive (IC) after multiple articles and share fluctuations. Brent is moving toward $42, approx +$10 above the break even for this project (anticipated) with the pandemic outlook remaining bleak for the time being. The implosion of US shale is making an increasing number of brokers structurally bullish on oil for the medium term, especially in regard to conventional and proven oil assets as the world continues into the 2020's. I think if you throw all that into the mixer, on balance of probability, you end up with an improving outlook from 2021 onwards. JOG may well be incredibly well positioned to realise value when the farmout begins, especially as the game for proven assetry intensifies due to under capitalised exploration. Sit tight and stop looking at the daily price would be my view. All in IMHO of course. Tommy, Ajax, MPO818 Bullson and Dic please keep posting - I both welcome and appreciate your views. In the meantime (as Bullson said) an interesting 6 months ahead me thinks .. DYOR
All. The research note by Arden is available on their portal if you register and see latest updates. It's a good and transparent read on progress and potential catalysts
https://research.arden-partners.com/portal/portal.html#/home
https://expronews.com/exploration/oga-expects-32nd-offshore-licensing-round-awards-in-summer-2020/
Another 'Summer'
Couple of points : Summer seems to officially end on the 22nd September in the northern hemisphere, so plenty of time. Secondly have a look at project lines on the Jan corporate presentation. The concept and FO lines dont align to the end of August, they fall just after.. It all points to the next 1-3 weeks. Lastly does anyone know when the OGA 32nd round has been postponed until? It was due end calendar Q2 2020 originally, albeit there was press speculation about a delay - but an intent to complete this year. One assumes that might also be a factor?
http://www.reuters.com/article/us-ocado-selfdriving-vehicles-idUSKBN19O202. Certainly extending their media reach recently...
http://fortune.com/2017/07/03/britain-driverless-groceries-deliveries-spelling-milkman/
Agree. Interesting landscape.. I imagine the big players are now moderately concerned about whether Amazon will buy Ocado! Can they really afford to take the chance of letting them?. Might be easier for someone else to buy it now and avoid a bidding war. It may also force M&S to accelerate a partnership, as Whole Foods could emerge as a serious threat online to that end of the market in time... This would raise the acquisition price for someone considering a defensive play. Interesting few months ahead IMHO.
http://sharecast.com/news/ocado-rallies-on-double-upgrade-at-exane/26078909.html
http://sharecast.com/news/ocado-rallies-on-double-upgrade-at-exane/26078909.html
New to this forum Rocka999, but pro Ocado and appreciate your insight + that of others who have a constructive (whether negative or positive) outlook on this share. Saw some activity from Roditi on the Ocado alerting service this am. Any thoughts on this?