Member Info for Benjie

Looking at the Egypt assets I read that they will produce around 35,000Bopd and that the operation costs are $6per barrel. So at an oil price of say $60 per barrel that would equate to a cash inflow of 365*54*35,000 = $689m. Cairn owns half of this so over $340m for Cairn Am I going wrong somewhere or is this about right?

What I don’t understand is why they needed to do a share placement. They had £30m of cash in may and £75m revolving credit facility. In November’s trading update they say that they had a non revenue cash burn of £2m per month so should have enough cash for a few years. The share placement came out of the blue for me. Ok maybe they are being ultra cautious. They raised only £65m earlier in the year for 20% of equity and this time raised £25m for 5% of equity so maybe thought the higher share price was an opportunity. Anyway enough to put me off especially as private investors were shunned with the 5% discount. So I sold. I would imagine the directors would be given a bonus to buy their 5% although pure speculation I really don’t know.
Still I think the company is a good prospect and months but in again if the share price crashes like it did last year

Note that the government has committed £500m to developing mass testing techniques. If they haven’t already, integumen should be well placed to securing some of these funds for developing

If the deal goes through then integumen will definitely be bought out by the end of the year for at least three x current sp. you have to ask yourself why do the deal now? It’s because the Covid opportunity is real but they need a big player to realise it. Hence they are positioning themselves with this merger

It wouldn’t surprise me if a large company is looking to buy out integumen but the barrier to that would be Modern Water being a separate company. By combining the two companies they are then an attractive target. This is a part 1 precursor to a larger deal particularly if the covid19 opportunity is real and requires significant investment for scale up.

Just for clarity - the bbc website didn’t mention evgen!

On the bbc website today it states that the one thing that individuals have in common when they suffer complications from Covid 19 is higher levels of inflammation. Evgen has been selected for the trials because sfx01 has potential properties for reducing inflammation caused by viral infections.
So this is potentially a game changing drug IF trials are successful. Any other thoughts on this or am I being too simplistic?

In the RNS in June it said the Covid trials won’t be completed until 2021 so we shouldn’t hear anything until next year at the earliest. Unless it’s normal to give updates?
But if you need certainty before you invest you’ll never get the upside

Let’s also remember that note people will buy second hand cars instead of using public transport, much better social distancing in a car. Petrol prices cheap. Bonanza time for AA

Even though I think Ariana will prove to be a sound long term hold:
1) I can’t see the deal happening
2) I can’t see any dividend bring paid
3) I fear that AIM will be shut down for a fewwreks even months due to huge volatility - ( I think the main index will stay open for now)
With all the money printing by governments there’s going to be a huge inflation problem heading our way soon, easily over 10% by the end of the year, maybe even hyperinflation to come. So no point in having your savings in cash. May as well stay invested despite all the risks.
Ariana is a good long term bet but I’m no longer putting all my eggs in one basket so sold a lot last week to buy blue chip companies which are more tradeable.
But still holding some Ariana for the longer term
GLA

One of the other things to bear in mind is that the company will not want to be seen to be profiting too much from the current situation, to prevent any further government action against spread betting firms. So it may suit them to put it out there that there’s a lot of caution etc. Whilst at the same time raking in lots of profit. Smart investors will realise this.

I think the big question mark is if they close the stock market down for a while then it could hit spread betting firms - the news release says as much towards the end of the statement. Although my view is they couldn’t do this for long anyway and you could still trade commodities, gold and currencies!

Anyone thinking of topping up just remember that the companies that will go out of business are the ones who run out of cash. The is close to zero chance of any company succeeding in doing an equity raise at the moment. So bear that in mind when making any investment decisions. Consider how much cash opti has and how long that will last for. Difficult times

Hi moneymaker - totally agree. The gold price is around $500 more than original plan which equates to around $12.5m or £10m which is £5m each. That in itself justifies the market cap. Whether the deal goes ahead though is anyone’s guess given all the current political / health uncertainties. I doubt it.

Ash - if you’re reading this you did a piece of research on who you thought the proposed partner is? Do you have any information on them? What else do they produce and how well funded are they? Do you have any info you can share?

I would also think that the share price may be impacted by the risk that the deal may not happen. We don’t know who the prospective buyer is and whether they are invested in other commodities other than gold such as copper, coal, oil etc. If they are, recent events may impact on profitability and they may walk away from the deal to preserve cash.Short term investors who bought in hoping for a quick profit may be having second thoughts.

Hi van van
Nice post. I think the gold price will continue to prosper in the medium term especially as the health crisis will likely give rise to money stimulus from the elite politicians who will not wish to see their wealth fall during such a crisis so money printing low interest rates etc all good for gold. As far as Ariana is concerned I have been a long term holder but like johnpwh I’m not sure whether the deal is in the long term interest of the company. So for me it has become a short term play and I would hope for more clarity once the deal is done The way that I think it will play out over the next few months is that the deal will happen, the share price will rally, they won’t announce a dividend until the results in June to give them time to decide how much and then hopefully they will announce future plans including what they plan to do with any surplus cash not returned to shareholders which I think will be as much as they can get away with. If their plans are to sink a small fortune into Cyprus I’ll probably sell as I would have sleepless nights wondering where the money was being channelled! Anyway I think we’re safe for a share rally in the short term

Totally agree. It’s not unusual to extend an exclusive period and the fact that they are moving to legals means that the dd must be progressing nicely. And it also means that the prospective purchaser is taking this seriously. Would Ariana have the nerve to open up to other suitors if the deal is not agreed by the end of March. They should. Perhaps the proposed purchaser is considering an outright bid if they like what they see to date.

Totally agree - 3p will look cheap in two months time. The deal has to go through for momentum to build

Paul - thanks for comments. I probably am getting mixed up in some way but if you can elaborate on Cyprus/kibris it would help understand where I’m going wrong
Many thanks