Member Info for aligator

I have to say that, as someone with a risk finance and oil and gas background, rather than investment background, I am simply astounded as to how the sp of IOG has seemingly, and so easily, been manipulated by market makers and derampers. Assumedly, most on this board are investment professionals who will comment that this is par for the course. However, if one considers this company from a pure risk assessment perspective, the conclusion can only be that very little has changed in terms of its assets, their respective values and the relevant risks involved in drilling wells and transporting gas through the pipeline to the domestic market. Indeed, the relative variable here is the issue of funding but, as we now known from the RNS, the company is opening up its options in terms of considering an industry partner, either with direct funding or through some form of farm-out arrangement. Clearly, we had all hoped that the funding would have been secured before now, but yesterday's news, in my opinion, not only underwrites the existing value of the assets but also potentially enhances them.
So how has the share price dropped in the space of 6 months from low the 30p's to circa 11p - a diminution in the value of the company of around 66%? Have the reserves been halved? No. Has the pipeline proved operationally unsound? No. Have the contractual negotiations come to a shuddering halt? No. Has the board and personnel failed in their duties or resigned? No. Get the Picture?
Personally, I think it is high time the LSE and the FCA took a hard look at the goings on in AIM. It is quite frankly scandalous that the share price of a company can be manipulated in the way that IOG's has.
Of course, I expect a lot of negative comments from those who dabble in the dark arts but surely there must be others on this board who have similar views?

Redmac, In times like these banks and major finance houses tend to reign in their lending parameters for fairly obvious reasons (i.e. economic and financial uncertainty). I think they have been in this mode for some time - possibly, for those whose crystal ball was clearest, since last year. That said, the bond market does not necessarily act in unison with the banking sector and I would agree with GGiTS' comments about the company's possible funding strategy, except to speculate that a gas offtake agreement with BP, including an up-front payment structure, plus contractor deferral agreements could, in my view, be part of the initial funding package, with equity raising (and associated dilution) coming later when hopefully the SP will be considerably higher.

Peakview
Thanks. SP up again this am so looks as if you may have missed the opportunity you saw at 18.50.
I would agree that, from a layman's perspective, AIM shares follow no logical path, if not trend. I just get the impression that the market is controlled by MMs and rampers and reflects little of the merits or demerits of a company's value.
As I said in a previous post, I believed that the SP drop was overdone, ending up with a company market cap of ca £24m when the stated NPV of the core project, Harvey and Goddard is ca £740m. From my banking and risk/reward background I am simply unable to correlate the massive disparity in the two figures. Sure, there is a chance that the figure will be considerably lower than £740m but, even if it was halved, we would still be looking at an NPV of £370m. If the future number of shares in issue was 300m this would still represent a value of over £1 per share.
Or, as I also said previously, is critical information leaking?

Sellers proliferating over the past week so, logically SP is dragged down to 18p. Yet earlier this pm, on the back of zero news, the SP accelerates to 19.85p. Somewhat illogical, or is there information seeping out that we don't know about? Fiona MCauley's news should be a positive for the company but not enough to create this leap.

I suspect that these option take-ups are more to do with the low share price than anything else, since anyone so doing will trigger a current year tax liability based on the difference of the value of the SP and the 1p issue price. That is, based on an SP of, say, 22p and 1p option price, there will be a 40% tax liability on 21p. This equates to 8.4p per share. Given that 534,420 new shares have been issued, this will represent a total tax liability for those individuals of ca £45,000. Not a bad statement of intent from non-board level personnel towards the future of the company and increasing the shareholding of directors and personnel by another 0.42%.

Fair comments GGiTS.
For those doom and gloom merchants among us, let's not forget that the gas is still in situ, this delay is minimal in the context of the project duration, the UK is desperate to produce more domestic gas in substitution for foreign gas - which has to be paid in currency, the government will be keen to get its hands on the additional tax revenues arising therefrom and the company is saying that, as things stand, the critical path to first gas is now just subject to funding of phase 1.
Further, the Harvey appraisal well (which is already funded) is, to quote AH, "...a low-risk, high impact near-term catalyst for shareholders...". It is estimated by the company to have a 63% geological chance of success.
In short, this drop in the SP is, in my opinion, substantially overdone and I would not be surprised to see it climbing back up during December/early January towards the Harvey spud. If Harvey does come in then I would hope to see the first of the SP leaps, to be followed by those which should accompany FID and FDP.
I have always viewed this as a long term hold. We were in the position (if not lower) about a year ago and subsequently recovered to ca 35p. This will happen again IMHO.

Disappointing news yes but the gas has not disappeared and a 3 month delay on a project that will run for 10 years plus is, frankly, fairly minimal. I therefore think the negative reaction by some and the share price drop is overdone.
This BoD has shown its merits previously and this decision to defer the financing arrangements could be positive in the long run. That said, I would have liked AH to give a little more detail as to what made the BoD take the decision to defer.
Even with 300 million shares in issue (which would be ca 2.3x more than currently in play) the forecast NPV10 of ca £300m would equate to £1 per share, which underscores the 92p target price set by Finncap this morning. With Harvey and Goddard included the NPV10 increases to ca £785m, which would equate to £2.60 per share (optimistically assuming no more dilution). Not bad for a share price now hovering around 24p.
This is all about patience and being committed for the long term.
All imho of course.

ps What company does Monique represent?

Hi Spazway, good to have our collective thoughts confirmed. I really do think it is all hands to the pump within the company at this time as the BoD seek to deliver on their announcement deadlines. Maybe we are too expectant re end of this month and these will come before Christmas. However, it would be nice to get an update on progress and, as GG suggested, regarding the rig for the Harvey well.
All that said, I remain relaxed albeit rubbing my hands in anticipation!

Having been involved in providing bank loan finance for such small/midcap companies, I can say by experience that the focus by management on the tasks in hand at this time will be total and absolute and that external enquiries will invariably only be dealt with once all timeline tasks have been completed. It does not mean to say that anything is wrong and I would not personally interpret such absence of response as negative at this point. Indeed, I would rather all minds were concentrated on such tasks if this ensured meeting the announcement timetable.
One has to believe that, if there was anything seriously amiss, this would be a reportable event and broadcast to the world. Since we have heard nothing I can only assume that progress is going according to plan.

My focus on the 14 September announcement was the word "targeting", suggesting that this is not a given. Clearly, as with any North Sea well, particularly during the winter months, weather has to be factored into the equation of when, apart from rig availability etc. That said, I think we all believe that the BoD will do all in its power to deliver on this statement.
Insofar as anticipated announcements are concerned, I was opining that I felt the BoD would be wholly focused on delivering these before 31 Dec as previously stated and, in my view, preferably before the end of this week.

Interesting scenarios to consider. My own view is that the BoD will seek to deliver announcements within existing deadlines (i.e. by 31 Dec). The Harvey well has been proposed as "Q1" so could be March. I think a delay in any announcement until then would be tough for the market to swallow and one has to presume that the BoD is well aware of this.
That said (and having had my previous timing predictions blown apart!), I would have thought that announcements should commence this week for all the reasons expounded by various posters. Time will tell.

Hi GG, agree totally. I know I am being optimistic in my thinking but I just feel that, given their collective backgrounds, experience and achievements, MR/AH and co are going to present a funding package with minimal dilution, limited to that element of additional equity, if any, required to secure the bond financing. In this scenario, as you and I have exchanged before, I can see SP climbing quickly to 50-60p and then beyond as other announcements are made about FDP, Harvey, Bacton etc. Where to - who knows? - but, again, as I have previously written, £1 plus should be feasible in the next few months based on NPV of reserves and total shares in issue and under option/rights agreements.
As you say, exciting and transformational for the company.

I agree. I predicted in an earlier post that first announcement would be either yesterday or Monday. So I have one more chance to be proved right.
No doubt the entire IOG workforce has been flat out over the past months pulling everything together. There have been no announcements about delays or problems so one would think that, at the very least, the FID announcement should take place next week.
Big question then is where does the SP go? North hopefully but presumably the big impacts will come with FDP and funding statements.

This is an interesting question which I had not given much thought to previously. However, I am fairly certain that the IOG BoD will have.
The known element here is that gas supplied into the UK grid will presumably be paid for in £. However, the bonds will probably be denominated in either € or $ unless someone comes up with a £ alternative which non UK bond investors might find acceptable. Ignoring the £ route, IOG will have a significant currency exposure which it will have to manage over the term of the bonds (said term being another interesting question).
Of course, there are a myriad of currency swap and option structures that could be utilised but I am no expert in this so will comment no further.
Any currency trading experts out there?

Spazway - any response from the company?
Be interesting to see where SP settles this evening. An uptick, small or large, could suggest imminent news flow.

Heerema's decision to offload two of its yards should not undermine the contract for the NUI's. Any problems with this contract would be a reportable event and, to my knowledge, the company has said nothing in relation thereto, although it will be interesting to hear what it has to say in answer to Spazway's enquiry.

As GGiTS says, fabrication location is not an issue. These platforms, and very much larger structures, are routinely transported, or moved under their own power, all around the world and when talking about Poland versus the Netherlands versus the UK, there is probably no greater than one week difference maximum.

I am relaxed on Heerama's announcement.

It is difficult to comprehend that MR/AH would want to make announcements in the week before Christmas and the neutral period thereafter. Further, they will surely want to maximise the impact of any announcements which suggests to me that these should be made before the end of this month, since the beginning of December heralds the onset of the partying season and tends to see market thoughts drift to alcohol and other delights. If this is correct, we should expect something in the next 9 business days. Historically, IOG has announced on every day of the working week. I am prepared to go out on a limb and guess that it will be this Friday or next Monday.

A 7+% rise in the SP based on nothing having changed, insofar as we are aware, to the IOG story and no announcements. Perhaps it is investors seeing value and seeking to buy, but the volumes so far this morning have been modest to say the least - certainly not sufficient in my mind to push the share price to 30p.
Are there, once again, large buy orders in the offing, or are the MMs up to their daily antics or, as GGiTS suggests, is the first statement from the company just round the corner?

Perhaps just a wee seepage of positive news was behind yesterday's closing price. All a mystery to me but I presume that, when the dam bursts and FID, FDP, FEED, funding and Harvey are announced, we will not be seeing 50p share price rises.
For those of us unfamiliar with market mechanics and analytics, I find this seesawing of the SP somewhat puzzling ion not mind boggling. What it tells me is that some people are able to manipulate supply/demand actualities and suggest/portray vastly different corporate/market scenarios with a view to maximising personal returns. This appears to be a particular feature of AIM stocks and I have to question why the authorities, who tout regulations so loudly, don't investigate.