Member Info for aligator

IOG Market cap ca £56m, about 10% of its net asset value (20% if CalE 50% farm in entitlement taken into account). This is now a real buy opportunity- first gas ca 18 months away.

bandit, I have given up trying to analyse and predict what will happen to IOG and its sp based on known facts and fairly predictable future timetables, etc. Rather, I have come to realise that, until first gas, and maybe beyond, this company's stock market fortunes lie firmly in the hands of MMs and other entities capable of manipulating its value at their whim.
That said, I have been buying under 14p as I feel the sp should eventually move towards 30p within the next 18 months (first gas).
As for RRE, all I would say is that, compared to its cash pile of £270m, BH has 100 times plus that sum in its coffers and will undoubtedly move swiftly to protect its investment in IOG. Thus Mr Austin can huff and puff as much as he likes but I doubt he would succeed in any competition for IOG. Notwithstanding, I would be delighted to be proved wrong and to see a bidding war for IOG propel the sp beyond 30p.

Just bought a modest amount at 13.39. I agree that being gas (not oil), fully funded to production, associated with Berkshire Hathaway etc etc sets IOG apart from many if not most of its AIM counterparts.
Time to hunker down now and wait for the positive announcements over the next 12-18 months.

trellis, Totally agree with all that you write. To be honest, I had not thought of BH representation on the BoD but it does make real sense, albeit BH is not an equity investor (at the moment...).

factcheck, Do you think BH, which now has a sizeable exposure and future financial commitment to IOG via CalE, would sit idly by following any such approach by RRE or any other predator for that?
As already stated, nothing has changed at IOG. Indeed, with each passing week, it gets closer to first gas. However, at this point in time we have what could be described as a perfect storm of global market negativity, courtesy of COVID19, plus an complete overreaction by the MM's to global events and local market pressures.
I continue to view anything below 20p as a buy opportunity and at 13.30p I am sure many existing shareholders are reducing their average cost by buying at this level, on the assumption that they can get quotes for small volumes.

But we are talking hard numbers here so how do you explain a 80% differential between company value and market cap?

butd, I acknowledge what you say but we are talking about small trades here which, in the course of a day, would not ordinarily have an impact on the sp. What is fundamentally illogical though is how a company with a significantly de-risked core project with an npv in the region of £450-500m (equivalent to around 95p per share) and benefitting from the inherent support (financial and otherwise) of Berkshire Hathaway, can be valued by the market at less than £90m, some 80% less!
I appreciate the LOG overhang but IOG has stated that there is an agreement with the administrator which will result in the orderly sell-down of this holding. With regards to LO, my personal view is that it is building its position purely for short term gain - I cannot think that it is buying on behalf of a third party simply because any bid attempt for IOG will be thwarted by BH.
Thus, to my mind, the only entities capable of creating this mismatch of value and share price are the MM's.
I totally agree with you that, at 18p this is a massive buy opportunity but, simply put, how can the MM's get away with this brazen manipulation of a company's market value in such a highly regulated and policed environment such as the LSE?

Phippsy, I don't see the sp's of Shell, Bp, Exxon, Gazprom, etc, etc suffering unduly in the current market. The reality is that gas will continue to fuel the world's economy for some years/decades to come because the science of wind and solar power is simply not advanced enough to replace it. For example, to power England by wind turbines, you would need half the country and our offshore waters covered in them in order to provide electricity for the other half. The clear alternative is nuclear (look at France) but environmental lobbying will limit this also for years to come.
Back to the case of IOG. What would appear to be happening here is a simply outrageous manipulation of the market value of the company by MM's, possibly working in tandem with investment houses. It is shameful and the LSE should investigate all such scenarios, specifically within AIM. As de-risked as it is, IOG is worth multiples of its current sp.

With an NPV of ca £400m, the core project alone is worth ca 85p per share - say 75-80p after remaining rights are taken up. This does not include core project extensions/add-ons, other developments from existing assets and third party tariffs from the Thames pipeline. Nor does it include gains from other business ventures entered into via the alliance with CalEnergy. Accordingly, one could suggest that the current npv of the company is in excess of £1 per share. The brokers don't quite agree with this and have predicted 40-60p. However, even they would have to admit that their numbers are conservative to say the least.
So can someone please explain to me why we have had an sp previously hovering in the 18p range and now down in the 17p range. These are proven assets with proven reserves, fully funded to production and benefitting from the support of one of the biggest investment institutions in the world - i.e de-risked to the ultimate degree.

I meant to add that, even at 18p, there is likely to be up to a 12p (67%) gain on any initial bid for the company (possibly between 25-30p) and would suggest that anyone with spare cash takes this buying totally derisked opportunity.

billsboro, My take on LO's stake is that it merely buying on behalf of clients and its own trading book. I simply cannot see that it wants to own an oil and gas company - after all it is a Swiss private bank, not an international holding company. Further, I doubt it is acting on behalf of a potential bidder since I cannot see any mid/large cap oil and gas player or specialist fund wanting to take on BH. As I said in my earlier post, I think it can only be a matter of time now before BH plays its hand and makes a bid.

butd, 25p would be a near 40% premium to the current price, remembering that LOG picked these shares up at considerably below 18p, so the gain for them could possibly be nearer 80% - not a bad return for a situation that looked like a 100% loss a year ago. That said, I could not see any final offer being less than 35p, perhaps even 40p and more since this is closer to reflecting the full value of the company.
BH, and Buffett, would not over pay for anything - they are just too canny for that. However, in money terms, £200m to buy IOG is mere pocket change to them for a deal that would transform CalEnergy. I would like to think that my head is getting the better of my heart, but feel that an offer can only be a few weeks away.

GG, Not surprised to hear the question put to AH about the prospect of CalE buying the company. I think this is fast becoming the major question/game changer for shareholders as there does not appear to be any reason why BH Energy/CalE should not do this - it could presumably pick up LOG's overhang for an off-market deal at say 25p and then make a bid for the rest of the company at somewhere between 25-40p, as I mentioned in my previous post. There is just no way in my mind that BH will allow any other company to step in so why not does it not buy IOG now rather than wait until the sp inevitably rerates/rises?

Logically, looking at it from CalE's perspective, I would decline the option as BH may yet make an offer for company, meaning CALE would end up with 100% of everything, Harvey included. As you say bandit, this could be very instructive either way.

With BH in the wings, I just cannot see LO passing 29.9%, even if it was for a client. BH, given its CalEnergy aspirations and limitless funds will simply not let this happen. Indeed, I say again that I am surprised that BH/CalEnergy has not made a bid at this sp since, as I believe we all feel, it will rerate soon to 30p northwards. At today's price, I think CalEnergy could buy the company for anywhere between 25-40p - a maximum cost of less than £200m, which would bring with it the remaining 50% in the core project (ca £250m), the rest of IOG's SNS licence assets, the Thames pipeline, committed professional personnel and local and regional knowledge. As the sp rises or rerates considerably, the cost of acquisition could soar and make the economic case for a purchase far less appetising, hence my views.
I would of course be happy to be proved wrong as this would almost undoubtedly lead to a bidding war for IOG, to our happy benefit.

Agreed Peakview. BH is, as I have said before, the elephant in the room here. Indeed, I remain puzzled why BH has not made an offer for the company at this sp. I understand about waiting for first gas, etc but, by then the sp will be considerably higher. By buying IOG now, BH would energise CalE as its o&g investment company. It already has a large amount of money invested and could buy IOG for, say, 25-30p a share (ca £110-120m) and reap 100% of the £500m NPV of the company.
What am I missing here?

Interesting TR1, confirming that LO has nudged its shareholding from 21.96% to 22.01%. This is a sizeable stake in anyone's eyes and I am interested in posters' views as to whether LO sees this as a strategic investment or more of a short term hold. I am well aware of LO's history and modus operandi but the elephant in the room here is surely Berkshire Hathaway - i.e. it will not stand idly by and watch any investor undermine the value of its farm-in and hard money investment.

on the trading board. Precursor to some less than positive news to come?

butd, I am slightly confused in that, in response to my suggestion on Thursday that LO should be hoovering shares at 18p, you stated "LO dont need to step up to buy the shares as they are trading below market in size( another example is the trade this morning)". However, your post yesterday states that you would not be surprised to see an RNS (I presume this would be a TR1) from LO increasing their stake. Have I misconstrued either of your comments?

Good post bandit - logical and rational.
butd, I had sliced the NPV by 50% so am of the view that this would more than cover a 26% increase in the number of shares from 475m to 600m. I was still ending up around 55p. If the corporate NPV (core project, pipeline, other existing assets, new assets etc) was £300m (which is possibly too conservative), the higher number of shares would still be worth ca 50p.
Pone was to