Member Info for Analysister

Really? Being a conduit for raising cash is one thing. Actually drilling, completing and hooking up wells is something I don’t see them influencing much at all operationally. Unless you have seen them out with their spanners and crowbars.

I hope he is busy sorting out new debt facilities for Spire, they expire in 2019. Falling ebitda won’t help his discussions with the banks.
Perhaps an all share offer from MDC wouldn’t be the worst result.

...and the external auditors the rest of the Board, management, finance team etc etc were where exactly while he was busily doing all this alleged “stuff”? Eating delicious cream cakes down Basingstoke way?

Bank’s KYC procedures working well here again I see.

S&S have created an oil Investment vehicle with little operational influence or control. In fact they’ve made a virtue out of that fact! Plus they are City guys and not drillers!!
So patience is the order of the day here as RBD can’t control much other than the original and follow-on investment decision. They (smartly in my view) got into some small, low risk, onshore early drilling in California while they waited for the much bigger offshore prospects to be prepared for drilling. However oil projects almost never happen earlier than expected!!!
My view is that investor patience will be rewarded here, but the larger offshore wells have to work to give any material SP upside in my personal opinion. Assuming that is they can exit their minority Corallion shareholding at a profit!!

Fingers crossed!
Let’s hope it’s not HMS False Dawn.
These North Sea reserves are valuable barrels (if they are where the 3D seismic thinks they are :) that is).

According to the ST Ocado are searching for two more “customer fulfilment centres” in the midlands and north of England. This is in addition to “hundreds of new Aldi & Lidl” store openings! Meanwhile in the same newspaper Tesco are waving the white flag on home delivery saying it can’t make it profitable to deliver grub...
As a country we must be eating a lot more than before :)

For me the interesting question here is how Ocado plan to fund these proposed two new CFCs as I can’t imagine these technologically advanced warehouses are too cheap to build. Presumably a landlord will fund the land, building, robots, software, new trucks, plastic crates, new drivers, etc etc etc to deliver my £50,000 box of tea bags haha or my keg of Kool Aid.. no doubt we won’t have long to wait for an RNS if it is in today’s ST...

I did cringe at his wedding pics, but if his “ineptitude” is only a “possible” then get him in there!
I’m sure the B&Q guy could use some help choosing the sweaters.

Founder, creative genius and largest shareholder with 18.5% ownership!
Why the hell would any Board resist his offers to help?

Or is it Ocado? Or both :))
At some future time In History these types of companies have to start making a profit, generating free cash flow and paying a dividend. Surely? Either that or they get acquired by some ridiculously overvalued US company :))

£260m market cap. No sales ever! Looks an E&P company valuation from the good old days :)) or Ocado :)) today!

Agree with you the sp fall at MDC looks overdone and their last update, although not screamingly positive, didn’t deserve the sp reaction that it got! If they finally landed on the Spire holding one can only help thinking this would help the MDC share price.
Can’t help fleeing sorry for Spire and MDC as that Aspen group in the U.K. that NMC recently acquired is not of any great standard but it’s “valued”at many times the SPI/MDC valuation. Markets are funny things!

Should be possible to drill & complete in 2018 if they can get access to a rig, get the necessary casing and wellheads etc and crucially obtain govt approval. Tricky as the operator of both Colter and Wick is a private company and they probably don’t care too much about keeping us punters informed of their every move!!! Reabold guys will I assume.

I’ve just had a dig through NMC investor relations pages after reading your comment. Boy are you correct about the NMC valuation level!!!
It’s complete alchemy! They go around buying small healthcare businesses at 8-10 X ebitda and immediately get them re-rated at more than double that level :)) great work if you can get it! Plus around 25-30% of NMC revenue comes from a genaeral distribution business making tiny margins :)) haha poor Spire & Mediclinic, they need to buy a few trucks and a warehouse and distribute stuff to themselves and their share price would rocket.

It’s quite a growth story and quite difficult group to value given the complex and diverse nature of the operations.
No denying they have been busy buying lots and lots of different things as their home market in the UAE is clearly very small and very limited and I assume that’s why they have now moved into KSA, Africa and Latam etc.

Couple of red flags for me but tbh I haven’t finished the full NMC analysis yet:
Red flags:
1. debtor days now up to 130 days (scary as debt levels rise) needs to be reduced.
2. Capex very small compared with Spire, Mediclinic etc. Perhaps they lease a load of equipment & stuff don’t know tbh??
3. Directors/major shareholder doing a price protection deal with Goldman but still retaining voting rights so the three guys keep control of 51% of the equity.
4.Buying loads of businesses at 8-10 x ebitda and immediately they get re-rated to more than double that valuation.
Paying no corporate taxes helps of course :))
5. It’s not a Board steeped with healthcare sector experience (not alone in this of course!).

Based on the recent interims and an assumed $450m of ebitda for this full year the EV/ebitda of NMC at the current share price is c$11billion or 25X!!!
If they can retain this massive valuation they should be using their “paper” to buy every healthcare asset they can lay their hands on! However they have turned to using debt fiinance presumably as the owners don’t want to go below 50% of the equity??
However using debt increases the business risk and also please bear in mind that they are also getting a general DISTRIBUTION business included in the 25X ebitda value. This is clearly a ridiculously high valuation for a low margin, commodity type business. However good luck to them for achieving that valuation :)) the distribution business also provides a chunk of the total ebitda.
So in summary I’m jealous they achieved those nose bleed valuations and not surprised the business valuation will normalise at some point.
NMC does deserve a slight premium to the industry but double the average ebitda multiple (including a distribution business) seems excessive to me.

It should have been a straightforward company, it clearly wasn’t!

In other words they have a minority interest in a private company which itself owns 40% and 49% of the Wick and Colter licences. Although Corallion are actually paying less than this % due to farm-in cost carries.
So RBD have an effective 13% & 16% interest in the two upcoming (hopefully) wells. Good upside potential imo.
Sorry to be so pedantic!

MDC’s a much more difficult entity to value Mulder.
3 Different continents, currency movements and changes in 3 different government health regimes etc.

However looking at the last full year report & accounts to 31/3/18:

Reported ebitda £515m
Capex required to sustain ebitda (tricky as they have mixed in growth capex here as well etc) £200m?
Tbh plug your own estimate in here. As other posters have said these are expensive assets to keep running.
FCF at £315m X 14 = £4.4billion gross valuation.
Reported net debt £1.67billion.
Problems with any valuations is a) what ebitda multiple do you apply (I chose 14X) could be more or could be less, cost of capital driven multiple.
B) how much capex is required annually to keep business running and give the ability to grow ebitda in future. I haven’t been able to break that down and as you multiply that number by 14, it’s an important number to get right!!!
In both the Spire & MDC calculation I’m probably deducting too much capex before applying the valuation multiple. However the real valuation story of both companies is flatish revenues with underlying cost pressures.
Both excellent companies travelling through difficult current market conditions.
However thinking about where MDC operate currently and their relatively strong financial position I would be sorely tempted now to acquire the rest of Spire that I didn’t own. Cash offer, no paper this time! Gives me a fourth leg to my business. Long term the U.K. will be a good place to have quality healthcare assets and people imo.
Good luck everyone. DYOR obviously.

Understand that but rigs can be held up on prior projects testing wells or due to bad weather etc.
I’d be surprised if the same drilling rig was drilling both of these wells due to different water depths and logistics etc.
However I was only expressing a personal wish as I believe Colter has a materially higher chance of encountering commercial levels of hydrocarbons as it is drilling updip from an existing oil discovery. Wick is drilling updip from an existing oil field but in separate fault blocks.

Sorry but not really. Your NAV looks at historic spend and I have calculated future cash flow earnings abilities for this company based on current ebitda levels, this looks currently to be around £1 per share. Obviously if the ebitda rises significantly or the debt falls etc then the valuation will rise accordingly. The Board obviously believed or were advised that future earnings potential would be much higher for them to reject 315p per share last November.
Btw the sp never goes straight to one calculated value immediately there are always lots of different opinions of value, that’s what makes a market!!! DYOR.

Agreed, outside shareholders deserve to have some idea of what’s going on and the timing on share trading resumption etc.
As I said before I don’t understand how the Board and advisors came to the conclusion so quickly that the rescue rights issue at that level was going to be sufficient. I can’t believe they dug right to the very bottom of the accounting and banking mess in just a couple of days! Especially when the FD was off answering questions down at the local police station! If Sir Walter Scott will permit me “Oh what a tangled web we weave, when first we practise to deceive”.
GLA holders.