Member Info for aligator

All valid thoughts represented in this morning's posts. What has not really been considered though is CalEnergy or, more specifically, Berkshire Hathaway. It is difficult to comprehend that, with the farm-out due to be completed shortly, the AMI agreement and option on Harvey, BH would stand idly by and allow a new owner of IOG to emerge. I have posted before that I believe BH view IOG as a very important part of its plans to develop CalEnergy's oil and gas activities, specifically in the UK. BH, it would appear, has no equity in IOG but I would be very surprised if it simply allowed a third party to enter the ring and take this all away. This is modest investment money by BH - it is a colossus in the investment world and is quite capable, if it was minded to, of throwing much larger sums into IOG.

I would suggest it is quite unlikely that either PY or MR are selling at this time. They departed from the company some time ago (PY mid 2018 and MR late 2018) and, to my knowledge, have no greater insight into the company's activities than the rest of us. The hype about Harvey could well be right but, at this point in time, we simply don't know. If negative information has leaked why would Lombard acquire another 7m shares? Makes no sense.
One also has to consider BH in all this. It will be keeping a very focused eye on events but remember that Harvey is not part of the farm-in agreement - BH has an option to acquire 50% once the well results have been made known.

Hi Mole/600T, I had also thought about this issue and concluded that, had LOG's administrator started dumping shares at that time, which was a period of huge doubt about IOG, the sp would have dropped considerably if not collapsed. This was why it was so important for IOG to reach an agreement with the administrator on this very issue at that time. It is my further conclusion that the selling over the last week or so has been largely down to the administrator (although they may also have negotiated off-board deals with II's) as these trades are taking place in a much more positive IOG environment.
As for the sp itself, logic would dictate that the II's and MM's have already discounted the LOG/additional share overhang into the current price. These are experienced, specialist professionals and I feel there is just no way they would somehow forget or otherwise ignore the fact that so many shares have yet to be issued.

butd, I simply don't understand what you mean by your words "...because of the 70% further dilution to the sp". Are you referring to past performance (e.g. 28p down to 19.5p - but not sure where 28p comes from) or to predicted future events, which would mean the current sp collapsing to around 6p (i.e. 19.5p less 70%). What I am missing/misconstruing?

Meant to question whether the 2.5m trade is actually a sell, since the SP has remained stable at 19.50p? Frankly, trying to interpret the reality of trades on the board is simply impossible.

butd, Are you really suggesting that, per your words, the price could plummet. Or have I misconstrued your meaning?

Where is the second one?

Morning Mole, Logic would dictate that you are correct in your thinking regarding the "muted" share price. This was a benign RNS designed to line us up for, hopefully, very positive news shortly down the road. So the drop in the SP appears strange. However, I have difficulty comprehending why the LOG overhang has not been factored/discounted into the SP for some time now. The II's and MM's know full week the length and breadth of the LOG story and they are the ones determining the market, not the PI's. Which for me makes these downward movements strange.
As you also say, it was IOG's fundamentals that underpinned the success of the bond but BH's proposed farm-in will also have contributed strongly to the process so I expect a decent uptick when this is finalised.
That said, with all the de-risking that has taken place over the past weeks/months, I still find it difficult to understand why IOG is valued at no more than £65m.

Thanks Mole. Always good to get other views/opinions. I take note of your thoughts on the bigger institutions taking advantage of LOG sales to build their positions. It will be the II's and not the PI's who propel the price. I am assuming that the market has now factored in/discounted the LOG overhang into the sp and am comforted by the agreement reached between IOG and the administrator.

Hopefully this northerly drift in the sp will continue as further announcements are made regarding the bond issue, farm-in, Harvey and core project FID. Risk wise, it is difficult to identify any one issue that would bring this rise to a halt - I take great comfort that, having committed itself, Berkshire Hathaway is in the wings should anything unexpected occur, specifically from a cost/funding perspective.
As a wish list, I would like to see 25p achieved as the bond issue and the farm-in agreement are formerly closed with 30p being the next hurdle, courtesy of Harvey and/or FID. I would then like to see continuing strengthening to 40P as development commences on the core project with possible spike to the 50-60p range (broker predictions) if new positive fundamentals are brought into play such as new tariff agreements for the pipeline, acquisitions or joint venture opportunities with BH. That said, as I have commented before, I do not rule out a sensible bid from a third party before first gas. In such a situation, I cannot see BH just standing idly by and therefore we could see a bidding war for the company, to our benefit.
So good to put the misery of the previous 9-12 months behind us and be in the current position. I give full credit to the board but, if I had one suggestion, it would be to enhance/improve on the company's PR. I don't think the board has done enough to promote the company and I would believe that any serious money spent on such an exercise would be well-rewarded. At the bottom line, IOG is about to develop a considerable, import substitution, gas reserve with all the security that that provides to the UK in terms of future domestic production. It should be getting this news out to as many media outlets as possible.

All beyond my, and I suspect many other posters', knowledge and experience. As I noted before, seems to me that investment logic for most is out of the window in favour of the few manipulating the market for short term gains.
No doubt, some more experienced posters will ask why am I and other similar people investing in such a market or share? Short answer, because I am an expert corporate analyst with considerable knowledge of the oil and gas industry and what I see in IOG is minimal risk long term value, but which is in no way reflected in the current share price. I have also witnessed this with other AIM stocks in which I have invested - not just in the oil and gas sector.
Could someone please explain to me why the LSE turns a blind eye to all this?

Peakview, My thoughts entirely. And if I may rant further, it is frankly illogical, if not ludicrous, for a company sitting on proven reserves conservatively estimated to have an NPV of upwards of £500m and which has achieved so much derisking over the past few months, to be valued at just ca £60m. It is simply not right given the fundamentals of IOG in play. For example, the pipeline, having been tested and recertified for use, is probably worth £60m alone. Further, CalEnergy is a superb farm-out partner and its presence undoubtedly assisted in getting the bond issue away. Warren Buffett is no fool and he and Berkshire Hathaway would never had agreed to farm-in unless they were certain their funding would bring about substantial returns.
As you say, the share price is around 50% of where it was a year or so ago - when none of this derisking had been achieved! How can even experienced investors (which I am not) hope to make money if the MM's are so capable of manipulating the markets to suit their order books. No wonder so many AIM companies go to the wall because they cannot raise equity funding courtesy of negative sentiments being fed into a share price by the MM's.

Ctw, Many thanks. I am intrigued by your experiences in the market over the past 2 years as this has mirrored my own results. I have modest shareholdings in other o&g companies and a few technical stocks which, from a fundamentals perspective , have excellent prospects but have simply failed to reflect this in their share prices. Cant believe I could have made mistake after mistake in my analyses so am once again left to ponder what is actually going on. It would appear that the mm's have been enjoying a very profitable 24 months!

Many thanks Ctw. I have to say I continue to be amazed at how mm's can influence and manipulate the price of a stock, specifically on AIM, in what we are told is a highly regulated and controlled market. All too often commercial and investment logic are thrown out of the window in favour of "market making". No doubt those among us who are veteran investors have long accepted that these shenanigans simply go on but for those of us more recent entrants (ie. less than 10 years) I have to say that I find this activity difficult to swallow.
I am not unintelligent and have faith in my ability to analyse risk and reward, but on a level playing field. That said, and correct me if I am wrong, this control/manipulation appears more of a short term challenge which should not, over the long term, hold back share price gain such as in the case of IOG. Otherwise, what is the point of brokers/analysts calculating target prices etc?

I can only presume that the decrease since the RNS is due to remaining LOG administrator selling. However, the physical drop suggests far more share sales than displayed. Could it be a private trade? Appreciate people’s thoughts as I think this slide is overdone.

Given the experience with the Skipper well and the events of the last 12 months, I am not really surprised with the "measured" wording of this RNS. In reality, the company needs to evaluate the characteristics of the reservoir, specifically determining the total volume and pressure environment, before knowing what it actually has, and I believe it would be somewhat unwise to try and put a positive spin on anything until that point, except that, as Hockey says, the gas discovery has been confirmed.
The fact that the column height is almost 60% higher than initial calculations is nonetheless quite positive but I imagine that caution remains the watchword within the company at this time.
As Trellis notes, a further positive would be the life of field royalty payments from CalEnergy should it decide to take the 50% option on Harvey, which would underpin the long term value of the company.

Afternoon GG, I am certainly aligned with your thinking and there will be no happier person on this planet than me if the sp eventually gets to 100-120p. As you say, credit to the BoD - I just hope that they don't now sit back on their laurels and will continue the effort through farm-out completion, FID, development and first gas.
Keeping an eager eye on RNS's and other media outlets!

Hi Peakview
I can assure you that the process of getting the bond placed would have been substantially enhanced by the fact that it took IOG closer to finalising the farm-out with CalEnergy. Those not involved in these markets underestimate the influence of companies like Berkshire Hathaway and WB himself in providing considerable weight to the sales story that is IOG. For that I give the BoD credit in securing such an impressive farmout partner. It is that alone that, in my opinion has now greased the skids for all that is taking/about to take place.
Having said that, and given all the understandable positive hype now expressed on this board (me too!), I trust that the BoD will continue to work its proverbial off to complete the farm-out, FID, etc.
A year ago, we were talking about a share price target of 100-120p and above. Today, courtesy of some thugs from LOG and the ambitions of RockRose, we are talking half that. It has been a bitter journey and I for one will not forget the rollercoaster ride of the last 12 months. It is not over yet but I am nonetheless happy, as a long term and sizeable shareholder, to see light at the end of the tunnel. Let's hope Harvey puts some short term cream on the cake.

Thanks GG. I had actually forgotten about these announcements. Notwithstanding, I cannot imagine that Finncap has miscalculated the numbers. As joint broker and NOMAD to IOG, it would not publish figures it was not sure off. Thus, as I suspect all posters agree, this is a real buying opportunity.
As a Long term and fairly large private investor in IOG I have to admit that I have committed the cardinal sin of having far too greater % of my portfolio in this one stock but it is a company that is relatively easy to analyse and risk assess and all the current signs suggest a positive and rapidly growing future. Having deliberated on this conundrum over the last few hours, I will be selling other investments to buy at these prices. It will raise my average cost but I will still be considerably below the current price overall.
I think there are a lot of posters on this board who have the same background.

Interesting situation it seems. Knowledgeable investors have explained that trading over the last week or so has probably been LOG converting and selling its shares under private agreements. Yet no TR1's or Issue of Equity statements by the company. I would have thought that such announcements were required immediately, specifically where an investor holds more than 3% of the equity. Could someone in the know explain the rules in this respect.

Nowt to do now but wait for the results on the Harvey well (late Sept/early Oct?), confirmation of the bond issue to secure remaining funding required for the core project and FID.

All that said, the company's market cap is only £62m which suggests a significant undervaluation and, accordingly, an excellent buy opportunity for those with full knowledge of the company. Finncap just recently upgraded its target price to 60p. Sure, that is a future prediction but at 18.25p I would have expected to see more blue on the board than has been the case. Or am I not viewing the situation correctly?