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In the Romanian section of ADX’s press release of 29 October 2021 they stated:
"While the side-track and appraisal opportunities for IM-40/41 and IM31 area are small compared to the IMIC-1 upside potential (ASX release, 30 October 2020), the combination of very low risk, excellent fiscal terms, shallow drill depths, good productivity and proximity to processing facilities (which can be transported by truck) provide for potentially high return on investments in the success case."
A couple of weeks ago I reached out to ADX requesting more detail.
In response to my comment that “Opinion in the UK appears to be that you are concentrating on your assets in Austria and that you have little or no intention of developing Danube any further and that Danube has little or no value.” They made the following comment:
“The Parta and Iecea Mare Production asset has several development opportunities and as such the licenses do have significant potential values, especially at current oil & gas prices. There is currently detailed G&G work ongoing“
It seems clear to me that the short term target is oil rather than gas in the IM 30 and IM 40 areas given that it requires less infrastructure and thus lower capex to get oil into production compared to gas which would provide a “potentially high return on investments”.
In the past ADX have noted that wells on some of these fields have produced at about 100 bopd.
I agree about the severity of the virus but without that we may not have had this opportunity. If I were convinced that it would significantly affect the long term value of this or any other holding I would be selling now. Looking at the long term charts, which include many crises and crashes, including 1974, you will hardly see a blip in the upward slope of the chart.
I agree with your sentiment Persimmon. But I believe that if shares reach your target buying price (however calculated) largely for factors not specific to the company you should act. I topped up at 0.56p because I think that RBD's assets are worth much more. I am happy with this price even though I may be even happier if I can buy more lower down.
Thanks for pointing that out Jack. I had missed the 27 Nov RNS. I was hoping to highlight that there were other IIs who could have sold without triggering an announcement. And that this was not necessarily bad news.
Perhaps I should have said that, post Woodford, I am sure that most institutional risk managers will be much more sensitive to liquidity issues in the funds that they oversee which would lead to divestment for liquidity reasons alone. This may already have had a detrimental effect on the SPs of many smaller companies (including the bulk of AIM companies). As such, it may be wrong to infer from II sales that they are driven by investment fundamentals or better knowledge but that they are undertaken to placate risk managers.
JO Hambro who held 310m (4.61%) on 8 Nov 2019.
Not clear if the large deals were Buys or Sells for the actual bid:ask was 0.68-0.71 when the deals were done rather than LSEs stated 0.70-0.73 when the deals were reported.
Either way it appears that the large deals were all done at the same price maybe indicating that 1 seller of 265m crossed 180m (58.5m + 126.5m) with an II in 1 or 2 funds and 70m (10m + 4 x 15m) with other IIs topping up and the remaining 10m going to MM to clear their long held short position. All this would be positive and possibly confirmed by the improving SP afterwards.
Unless the deal came from 2 or more sellers (unlikely) there are only 2 holders with 265m, Miton & JO Hambro. Miton held 9.14% of RBD in 2 funds both run by Gervais Williams. The post fundraising splits are not known yet but it's possible that only the smaller Miton UK Micro Cap sold . But why would he sell only 1 fund's holding and risk accusations of not following TCF (Treating Customers Fairly) guide lines and leave himself with a still declarable 5.2%. That would be odd.
No declarations will be necessary if JO Hambro were the sellers and the 180m (2.67% of RBD) went to 1 II.
Depressed SP, good results from WN with delays explained by Humber problems & oil rather than gas, confident RBD investment in WN & Parta, BoD purchases, trustworthy management, exceptional II support. In short: LT investor expecting multi-bagger.
M&G have been sellers. From RBD RNSs, they held 408m shares on 5/7/19 but only 262m on 21/10/19.
Looking through published M&G fund reports it would appear that the entire RBD holding was in M&G Global Recovery Fund where on 5/7/19 the Fund Manager changed. Perhaps the new FM no longer wished to hold RBD.
If they were the sellers, are we close to the end of this relentless selling pressure?
We can make some reasonable guesses. M&G were probably consulted before the placing of 2667m shares on 28/10/19 and, if so, would have stopped selling until after the placing had been announced and settled down. Post the placing RBD price peaked on 6/11/19. If they resumed selling on that day and were the sellers of, say, 10m per day it is possible that M&G could have recently completed the sale of their entire holding.
Could they have sold so many in this period? Looking at the volume stats on investing.com the total RBD volume from 6/11/19 to 11/12/19 was 1637m shares. If half were sales and M&G accounted for one-third of these then the market could have absorbed their entire holding.
Why would they sell even at these low levels? Possibly because the holding became so small that it wouldn’t make any performance difference to a £300m fund.
The BoD would be aware of significant share transactions so, rather than take shares in the placing, as would have been logical, perhaps they delayed their share purchases until mid November if they saw that a big seller was coming to the end.
However M&G may not have been the only institutional sellers for none of the institutional placees will be pleased about the SP weakness so close to the year end. This imposes an intense pressure on the BoD to keep them invested. Hopefully this will lead to an improved SP by the year end, perhaps by means of additional RNSs.
So it’s possible that the stage is set for a useful year end rally on the back of much more limited selling pressure and, hopefully, a more news from the BoD.