Member Info for aligator

GG, Good morning.
Valid comments. Indeed, I would suggest that the presence of BH behind CalE will do no harm, quite the opposite, to the prospects of signing the bond deal. Investors in the Nordic bond markets have proven to be both canny and perceptive insofar as the North sea and its prospects are concerned and IOG will undoubtedly be assessed beyond the core project. That said, I can't help but think that, notwithstanding CalE's deal, many midcap/major o&g companies may well be running their slide rules over IOG. That would be an interesting scenario to see a large o&g producer go head to head with BH since, as I have said before, I do believe that BH has more than just a farm-in in its sights in the deal with IOG.
All just theoretical but interesting nonetheless.

Interesting to see the board almost completely red for the whole week but the sp holding firm. While I have been educated that one can't always rely on whether trades are buys or sells, I nonetheless get the impression that such sp firmness should be read positively - in essence specifically reflecting the de-risking of the core project and the future potential of the deal with BH. Or am I off the mark?

butd, ps I am a LTH and also believe that there were many more LTH's than STH's at both interactions with the company. Certainly, the people at the EGM were primarily LTH's.

butd, I agree with your comments that FM told us during the cc and at the EGM that there would be no more dilution - "end of" as you say - as I attended both. So the additional dilution announced also came as a shock to me. Have you emailed Andrew Hockey to ask for an explanation on this matter?
As I have said before, I do not have confidence in FM and I think that, given the incredibly fraught environment within IOG over the past 12 months, she has neither been able to fully grasp the complexities of what was in play and has either made statements which she thinks investors want to hear or somehow misrepresented the reality of the situation. Either way, AH needs to provide a clarification.

edgar222, An interesting article which reinforces my previous posts that this deal with IOG is not just opportunistic but part of a longer term plan by BH to become a relative force in north sea gas production. This view requires a little understanding of CalEnergy's current operations.
In Poland it has a 49% interest (as operator) in the development of two gas fields in the Baltic. Production date unknown.
In Australia it has a 100% interest in the Whicher Range permit area. It would appear that two exploration wells were drilled but these are now being plugged and decommissioned. No production.
In the UK it has:
1. A 5% interest in the Victor gas field (operator ConocoPhillips), but production ceased in 2016 and the field is currently being decommissioned.
2. A 15% interest in the Platypus area (operator Dana Petroleum) with FID due later this year.
3. A 20% stake in the Skerryvore licences (operator Parkmead E&P) which envisages an exploration well in due course.
Thus, at this point in time, CalEnergy has no production and therefore no cash flow and I am of the view that this is what has galvanised WB/BH into entering the IOG deal - i.e. a means to a greater end, which is pretty much what the Times article is implying.
Of course, it would be silly to celebrate before the farm-in contract is signed (mid/late September), but I think IOG is now going to get a lot more attention from the mid-cap/major o&g companies and institutional investors, which augurs well for the share price.

Viticoltore, Agreed but, should Harvey prove better than expected, new awards in the last offshore round, pipeline tariff revenue over 20 plus years plus the unknown factor that is Berkshire Hathaway, I think the "upside" aspect has real merit.

Viticoltore, Just to add that Finncap's 26 July initial review of the farm-out deal with CalEnergy concluded that the current share price was "mispriced" and subsequently upped its target price from 56p to 60p. At 60p and 583m shares in issue, this equates to a market cap of £350m. In the back of my mind, I have an NPV for IOG's key assets totalling ca £500m, not including tariffs from the pipeline. So, all told, this would suggest, possibly, an sp notching upwards of 86p - just to be optimistic!

600T, I agree with your predictions (with a little hope in there as well). The tie-up with CalEnergy has been our saviour and I believe there is much to come from this relationship. CE has limited activities in the UK, Poland and Oz and I think BH is viewing the farm-in as the beginning of a larger and more expansive project to allow its subsidiary to expand its interests in the North Sea.
That aside, the more I have re-read historic RNS's and done my own research, the more I am suspicious of what has occurred over the past 12 months. That is why I think another conference call is needed so that pertinent questions can be posed to the board.

Good news I guess on today's RNS and the limited movement in the SP - it is apparent that the market had already all but discounted this dilution factor into to company's NAV. However, put simply, the genesis of what has unfolded over the past 12 months was the involvement of LOG in the company and the introduction of Hume-Kendall and others.
Yes, Hume-Kendall and his colleagues look likely to face serious charges in court in due course but further analysis of their involvement leaves some unresolved questions in relation to the conduct of IOG's board. Specifically, it is now clear that any in-depth analysis of LOG would have shown that it was wholly dependent on LCF for funding and that the likes of Hume-Kendal etc. had absolutely nothing to contribute to the development and operation of an oil and gas company. Yet they were not only allowed to take senior places on the board but also substantially influence IOG's day to day activities and its longer term plans.
Further, any in-depth analysis of LCF would have shown that, as an investment company, it was living hand to mouth and was wholly dependent on attracting further investors in order to keep its own activities, including those of LOG, going. Further, such analysis would have shown that LCF was paying a near 25% commission on all money raised to its agent. Frankly, given what we now know, this scenario would have been patently obvious to any individual with an ounce of risk management and company analysis experience at the time of discussions between IOG and LCF. So who on the board of IOG undertook the due diligence on LCF and saw fit to recommend it as the new investor/partner and was there any dissent from other board members to the proposal? Further, when was Berkshire Hathaway Energy identified as a potential partner? Evidence would suggest that it was prior to the equity raise earlier this year and, therefore, one has to question why said equity raise was then necessary if such a massive company was in the wings, having given solid indications early on, that a deal could ultimately be struck.
I distinctly recall FM stating during the conference call that there would be no further dilution beyond that of the deal on the table, which we duly voted through. She needs to be questioned on this response for clarification on what she believed was the status quo at that time. I have said before and will say it again that I do not feel that FM has any great contribution to make to the company and that her role should be reconsidered.
What this all suggests to me is that the Board should agree to another conference call to answer the above and a myriad of other questions as to how, in the space of 12 months, IOG went from hero to virtually zero, only to be pulled out of the fire by Warren Buffett and to fully understand how the decisions to get into bed with LOG/LCF were made.
In my opinion, there are people within IOG who have some serious questions to answer.

If the potential dilution is so large, why has the sp not reflected this? Surely brokers, mm's, ii's would not be betting the farm on the convertibles/warrants not being exercised? Indeed, Azvalor may we'll have already been in negotiations with the Administrator.

Pleased to finally see Harvey spudded.

Viticoltore, I think you are correct in your observation. Given all that has occurred to IOG and the share price since over the past 7-8 months, I have to believe that all prospective influences have been taken into account by professional investors, MMs, etc and are reflected in the current figure. No doubt there will be short term technical high/lows going forward, but I am very optimistic that the sp will take a steady northerly route through to first gas and beyond. Exactly where to is anyone's guess.
Further, as others have written, one has to assume that CalEnergy did considerable homework in arriving at its decision to farm-in. In addition the likes of Lombard will not have been buying if they thought that they would suffer a ca 30% price drop in the near term.
One last comment. I hope that this board does not sink to previous lows of insults and abuse just because someone does not agree with another's thoughts. I hope and trust that we can put that all behind us and move ahead as a unified investor group.

600T, I think you are spot on. The tax liability will not be small so this is indeed a vote of confidence on both their parts. That said, I am at a loss to understand why they did not trigger the options when the price was around 13p a week or so ago? By triggering at around 20p they have increased their tax burden by around 54% - strange.

We have yet to see any brokers suggest target sp's. I am not a market expert by any sense of the word so anyone got any views/thoughts at this stage, given that the core project has been significantly derisked now, Bacton looks set to close soon and Harvey should be spudded in a few days?

600T, One can only presume that, given the wealth, power, influence and otherwise of WB/Berkshire Hathaway, LO will be mindful of their actions lest they fall foul of the Sage of Omaha's thinking.

I echo T35's comment that, as long as I am investor in a company, I have every right to question the actions of its BOD, whether its directly (which I do frequently) or via posting boards like this. Blind faith and optimism are the epitaphs of failed investors.
That aside, I would reiterate my earlier post - WB may be a gentleman and friend of investors, but when it comes to boards and senior corporate personnel he does not suffer fools gladly. Indeed, the modus operandi of Berkshire Hathaway is to either replace under performers or place boards under significant pressure to do so. That gives me considerable comfort going forward with IOG.

I have been trying to assess the sp value of the pipeline and reception facility, specifically with regards to third party tariffs. Anyone got views?

lig, I could not agree more. WB is all about building businesses, creating profitability and wealth and rewarding partners and investors. He is old school and, to my mind, Berkshire Hathaway's endorsement of IOG via the farm-out to CalEnergy is a massive vote of confidence in the assets and future of the company and, to a degree, its BoD and senior personnel.
It is feasible that CalEnergy might make a bid for the rest of IOG in due course but this would be based on a realistic valuation of assets and prospects at the time and not some hooligan attempt to buy the company on the cheap (a la RockRose). That said, WB does not suffer fools gladly and will be monitoring the performance of the BoD, which gives me further comfort.

Appears to be stabilising/rising again, presumably because most short termists/profit takers have sold. The reality is that, with the news in the RNS this company is incredibly undervalued. My conservative estimate is multiples of where the price is now. I could even be persuaded that 80-100p was feasible.

Taverham, In simple terms the company has farmed out (in essence sold) 50% of the core project in return for funding which will meet 80% of the costs of its remaining 50% share in said core project. The remaining 20% is to be met by the issuance of bonds in the Nordic market - which was the original plan until the market turned south at the end of last year. Apart from these two sources, I am sure the company will be able to rely on an element of early cash once gas is produced.
The fact that CalEnergy is owned by Warren Buffett is cream on the cake. When you get a vote of confidence from WB, you know you have a good project.

GG, I am delighted for all long term holders who have been rewarded for their faith, albeit this has been severely tested over the past 9 months. That said, per our exchange yesterday, it puts the option exercise by a former officer into an interesting perspective I feel.
I have had my own very substantial concerns but as happy as anyone on this board to see the company now about to reach its full potential. I own a very large number of shares at an average price way below 10p so will be having a beer some time today to celebrate...