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Still find it difficult to get my head round the general southerly movement of the SP amidst considerably more buys than sells over the last week or so. Given, in the absence of any company announcements, we can only assume that everything is moving forward appropriately on the development/funding front, one has to question whether there are indeed info leaks. That said, I would have thought that negative news would have seen the SP drop more considerably.
My background is risk assessment versus reward. Risk here has not changed to my knowledge so why is reward decreasing? Or is this MM influence?

Hi Spazway, Not having an investment background, I am nonetheless perplexed by the nature of trading over the past week or so which has presumably contributed to the price moving south. As you say, nice to see some big block buys but do you have a further read on the situation?

I spoke with Finncap this evening and asked first if they were educated about the formation of the Avalonia subsidiaries. The chap I spoke to admitted that he was totally unaware of these companies but was quick to reiterate (as I spelled out in my previous post) that, if the formation of such companies was important to the company, Finncap would have been informed ahead of the what has occurred.
With regards to the Bacton terminal discussions, specifically that the exclusivity period expired on 30 September, I have to say that he appeared to be equally less informed but, again, stressed that, if anything important related thereto, Finncap would have been informed.
In essence, one has to take these response at face value from Finncap, which would confirm that, in the absence of any important notifications from IOG, everything related to the FDP, FID, Harvey well, funding, etc is proceeding basically according to plan. That said, I would personally have thought that Finncap personnel would be a little bit more on the ball than was my experience. Notwithstanding, as Longside said, some further comfort can be taken from the presumed in-depth analysis of IOG by prospective bond investors.
I just wonder if all the announcements will be made basically at once or trickled out over a period of days or weeks. Time is now passing quickly and I would presume IOG will not want to make such announcements during the dead period between Christmas and New Year but would appreciate views of those with far more knowledge and experience than me.

Like all LSE listed companies, IOG is required to report important information which could impact on its value and therefore its share price. Specifically, section 11 (General disclosure of price sensitive information) of the AIM Rules for Companies, March 2018, states "An AIM company must issue notification WITHOUT DELAY of any new developments which are not public knowledge and which, if made public, would be likely to lead to a significant movement in the price of its AIM securities." It goes on to define such developments as relating to a change in the company's financial condition, its sphere of activity, the performance of its business or the expectation of its performance.

I would therefore expect that, if IOG had experienced, or was experiencing, any significant negative issues in relation to, specifically, the Bacton terminal proposition, the field development programme or anything else, it was not only morally, but regulatory/legally, obliged to make this known to the market via an RNS.

Since IOG has not posted any such information, I personally have assumed that there is nothing negative going on and that the creation of these subsidiaries companies is just part and parcel of the overall project process. However, in acknowledging the comments of Spazway, Dusteringmong and Peakview on this matter, I intend to call the NOMAD tomorrow to seek clarification and will post here when I have a response.

Hi Spazway

The OGA has, for many years now, had in place a system whereby it requires companies involved in nominated NS projects for the recovery oil and gas to advise it of meetings where, to be basic, important issues are to be discussed/agreed - the OGA reserving the right to attend these meetings at its own discretion.
The prime purpose of this is, very basically, to ensure that, from the UK's perspective, project developments are optimised resulting in maximum recovery of reserves from oil and gas fields, resulting in, inter alia, reduced reliance on imported hydrocarbons and maximum tax revenues.
I have never really understood the need for this strict oversight since it is the OGA which, ultimately approves any FDP for oil and gas field development in the UK North Sea. Thus, any company approaching the OGA for FDP for a specific field has, in any event, got to explain its plans to maximise hydrocarbon recovery (which is of course an economic given) and to prove that the development will meet all regulations and legislation covering, inter alia, environment and safety.
Thus, from my perspective this oversight is not really necessary. I am not aware that it exists in any other UK industry but happy to be advised otherwise.
Accordingly, with regards to your question, I don't read anything sinister into this announcement regarding the Bacton terminal complex (I think there are about 6 different terminals on the north Norfolk coast which collectively are known as the Bacton terminal).
IOG owns the Thames pipeline which feeds into the Bacton terminal - i.e. it does not own the terminal itself. "Shippers", for the purpose of the OGA announcement, invariably means companies delivering oil or gas into a terminal, ordinarily by pipeline. This, in this respect, IOG would be considered a shipper.
Hope that assists.

Hi Spazway<br />I must admit that I did interpret your post from a negative perspective and happy to be corrected.<br />Here are the published facts - Avalonia Goodard Limited (previously known as Avalonia Energy Developments Limited) and Avalonia Abbeydale Limited are both 100% owned subsidiaries of IOG plc - both companies having issued just one share each, both of which are owned by IOG.<br />The only nominated person to date for both companies is MR but this seems logical until the format and population of each company has been decided. That said, both companies are clearly IOG subsidiaries set up for future purposes which will perhaps be made known at the same time as the announcements on FDP, FID and funding, if not earlier. I will put in a call to the NOMAD to try and extract more info.<br />Interesting to see the SP drift down below 29p and I continue to mop up here and there when available.<br />As you say, MR said this would happen - I believe him and this experienced and capable BoD.<br /><br />

I have no thoughts on the formation of these companies, but cannot believe that the UK government is going to seek to thwart the development of a series of import substitution, tax generating gas fields at this particular moment in time. Further, since we have had no announcements of anything untoward re contracting, funding, etc, I have no reason to be suspicious of the fact that the FID has yet to be issued.
Apart from that, I am reminded that, in triggering options earlier this year, MR was obliged to make a substantial 6 figure tax payment to HMRC. You don't do this if you have doubts about the company itself.

Morning GeneK
You are quite correct but, as outlined by GGiTS, I have assumed that there is some form of agreement from LOG and that IOG/LOG will deal with this in the funding announcement. Either way, I don't think I would reduce my predicted SP ranges any great degree as I feel I have been relatively conservative.
As always, happy to hear other views, etc.

Hi GGiTS
No doubt there will be some posters who feel we are being too optimistic in our predictions. However, I would stress that I am basing my outlook on specific risk issues versus corporate NPV and not on investing analytics. For example, should equity dilution result in ca 150 million shares (i.e. ca 20% dilution) and the company base its FID on field NPV of, say, £300 million, then we are potentially looking at a share value of up to £2. Of course, it is not as simple as that and MMs and derampers could reduce this substantially. However, if field development, platform installation etc etc go to plan then we could expect to see this potential value.
This company will shortly become the talking point on AIM, at which point it is possible that all our predictions, calculations, etc prove to have been too conservative!

Afternoon GGiTS
I seem to recall that you may have asked that question previously for which I apologise for not responding at the time.
Yes, any announcement of full funding will not only underpin curent valuation of the company but add to it. The $64k question is by how much?
I agree with you about the funding mix and therefore limited equity dilution. If I am right in my prediction of less than 20% dilution, I would expect the share price to elevate by around 50% from current figure and possibly more depending on market sentiment at the time and the interest/hunger of the big boys. In fact, I might be tempted to suggest up to a 75% price rise. This would suggest a post announcement price range of ca 45-55p but I could be considerably off target if the IIs decide it is time to get involved with the company. That, to my mind, could see the price strengthen to ca 60p.
The Harvey well could also be transformational alebit its reserves have probably been discounted to a degree in the current price.
The second part of the share price performance will be success with the entire field development front and, ultimately, first gas. This will, I hope, bring the share closer to the higher predictions of the brokers (i.e. 96-120p) as the NPV of the company at this point should, in theory, be at its maximise based on known reserves.
All in my opinion of course but hope it accords/helps.

The only current variable here, insofar as the company is concerned, is the price of gas and analysts' predicitons of where this is heading. That determines the company's NPV and, in theory, the SP. However, we all know that the MMs are quite capable of throwing a spanner into the works in order to make money.
I see this drifting up and down of the SP as reflecting the fluctuating views regarding future gas prices. That said, I would not be surprised to see the SP begin to climb as either a large II seeks to establish a significant holding or in reaction to propsective company announcements - i.e. we are now at the end of October which leaves just 8 weeks for the company to deliver on its FDP, FID and funding undertakings.
I cannot see that the Government will impose anything overly onerous regarding the FDP and, with everything else largely in place, one could assume that the FID would not expose anything unduly negative.
As I have said before, I am optimistic that the funding programme will contain some innovative and interesting elements with limited equity dilution.
All my own opinion of course.

As I can interpret, the global markets were under pressure yesterday for a variety of reasons, the resulting falls in most indices being reflected in SP falls across the board, the UK being no exception. It would also appear that concerns over global trade agreements, and possible declines in manufacturing output as a result, combined to put pressure on energy markets (i.e. less manufacturing, less energy consumption). Ignoring the antics of MMs, any alternative views appreciated.
That said, such global market influences have not meant that IOG's proven gas assets have declined. They might be considered slightly less in NPV terms at this moment in time because of falling energy prices (i.e. less demand from manufacturing) but, the reality is they are still in situ and just waiting to be developed. Consequently, I will try to buy more shares at these prices. It will not impact my average buy-in price to a great degree and, with FDP, FID and funding announcements due in the next couple of months or so, I would hope to be in decent profit on these new shares relatively quickly.

Given my limited investment background, anyone got a view or views on what I perceive to be a lack of comment from the broker fraternity on IOG. Or are they, as well as we, awaiting FDP, FID and funding announcements? If I recall, the last range of target SP was ca 60-96p. Can we expect this to increase with these announcements, given the further de-risking which will have occurred?

Hi GGiTS,

I have to say I am eager to hear the announcements on funding as I am increasingly of the view that this BoD will produce some interesting and innovative arrangements, including contractor funding - all with the view of minimising equity dilution. I have previously predicted the possible split of debt, contractor funding and equity and remain of the view that the latter could be no greater than 20% of the total, perhaps even below 10%. My optimisim is borne not just from what I think is the art of the possible in terms of funding from debt, possible up front gas payment arrangements with BP and various contractor finance arrangements, but from the fact that the BoD and senior management are all heavily invested in the company - in total some 25% of issued shares. Of course I would stress that this is my own opinion and everyone needs to do their own research.

Morning JBS,
I agree with you. I thought AH's responses reflected real in-depth knowledge of the length and breadth of the company's activities. Ok, he does not look at the camera all the time but who among us can sit in front of a video camera in such a formal interview process? I am certain that Mark Routh would not have vacated the CEO role if he did not have full faith in AH. To have both these people involved, together with the exceutive and management teams now in place, gives me considerable confidence on their collective ability to deliver on their announcements.
Onwards and upwards!

Called back by Finncap within a minute of my earlier post. They had been able to contact AH quickly!
Reading bewteen the lines of what was said, the company acknowledges that the use of "prospective" delineates reserves with less certainty than those defined as "contingent" and, therefore, this needs to be borne in mind in considering the recovery prospective of the figures published yesterday. That said, as with the May announcement, all these reserves are subject to be proven or otherwise by the well.
In the greater scheme of things I don't see this as having much impact on the SP, given the FID, FDP and funding announcements to come. However, I did ask if the company considered it necessary to issue an explanatory note but was told that, from Finncap's perspective, the fact that this issue had been identified by the investment community meant that the RNS was appropriate.

I called Finncap to enquire about the nomenclature used in the 23 May RNS and that used in yesterday's announcement, specifically that the May announcement stated "contingent" only whereas yesterday's stated both "contingent" and "prospective". Finncap could not provide an immediate response and have undertaken to approach the company for more details. I think this is the basis of willuneverlearn's question/concern and I will share the response on this board.

Hi willuneverlearn, I am always interested in contrary views. With the share price holding above 30, even with this RNS, and FID, FDP and funding announcements to come, what is the basis of your prediction for a 33% drop? I appreciate that the May Goddard numbers were descibed as "contingent" versus today's numbers which are described as a combination of "contingent" and "prospective", but cannot create a economic scenario in my own mind which would result in the entire NAV of the company slumping by such a large percentage. Can you expand a little on your thought process or am I barking up the wrong tree?<br /><br />

Given the background and, more importantly, the experience and achievements of the executive team (specifically the Chmn, CEO and CFO), coupled with my thinking on what the banking/finance community is currently willing to comprehend in terms of risk and return, I would not be surprised to see a two-tiered funding solution being announced, possibly along the lines of GG's and T35's thinking. The clear advantage of this would be the limited, if any, equity dilution of the first tier, thereby underpinning the NAV/SP and potentially minimising SP decline following the second tier introduction.
I cannot foresee no dilution but, as I wrote earlier on the subject, it could be that this is limited to a spread of 10-20%. Just my opinion of course but I will be very interested to see what this competent BoD come up with.

I have to say that I am a little perplexed at the perceived negativity in some of these postings. Of course, we are all entitled to our own opinions but it does seem that certain posters are simply trying establish new/undetermined risks and potential problems in this entity. I cannot think of many companies on AIM who are sitting on such a de-risked spread of assets. The company has already contracted for the drilling of the Harvey well and one can only presume that it is in advanced discussions with fabricators, etc for the field development equipment. We also know that it has signed heads of terms for most, if not all, of the funding requirements.
A small but significant reiteraion is that Mark Routh established a very large personal tax liability courtesy of exercising sizeable options some months ago. As Executive Chairman of a company, you don't chuck money into the UK Treasury based on your perception that said company is going to fail to perform.
Or have I misread some of these posts wrongly?