Member Info for bluerill

I meant 'gotcha' as in, exposing squirrels for the ratty little rodents they are is not exactly rocket science, but it can take a bit of the right kind of bait sometimes.....

gotcha

Never mind, it just came to me while watching Forrest Gump

on how to respond to a bobble-headed nabob who thinks he's clever while trying to emulate a simpleton.

Look again, genius. Otherwise, wait for the close and then read a book

To think I used to count serious hedge fund managers among my enemies and now I have angry sock puppets popping up to have a go. Heavy sigh

unlikely you'll find out anything in next few days re this morning's price action. Unfortunately, this is well within the common boundaries of how dozens and dozens of AIM resource names trade. Wait for the close

yeah, they're making me look a bit of a mug for writing my previous post, but let's see where we close....

· The boards of Medco, Medco Global and Ophir are pleased to
announce that they have reached agreement on the terms of a recommended
acquisition pursuant to which Medco Global will acquire the entire issued and
to be issued ordinary share capital of Ophir (other than any ordinary shares
held by Ophir in treasury) (the "Acquisition"). It is anticipated that the
Acquisition will be implemented by way of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act 2006.
· Under the terms of the Acquisition, which is subject to the
Conditions and further terms set out in Appendix I to this Announcement and to
be set out in the Scheme Document, Ophir Shareholders will be entitled to
receive:
for each Ophir Share: 55 pence in cash
· The Acquisition values the entire issued and to be issued share
capital of Ophir at approximately £390.6 million.
· The Acquisition represents a premium of approximately:
o 65.7 per cent. to the closing price of 33.20 pence per Ophir Share on 28
December 2018

This is the second takeover of a prominent UK small cap oil E&P after Faroe Petroleum in just the last couple of months, and while Faroe is pretty boring North Sea-focused, Ophir is more frontier-style company, with assets in developing Asia and Africa. Mergers and Acquisitions in the oil and gas patch is already a major theme in equity markets this year due in part to relatively steady commodity prices, but mainly due to the fact that investment by the majors and mini-majors over the past 10 years has continued to decline outside of special areas like Alaska, and the continued relative cheapness of listed development companies like Faroe and Ophir as institutional investors have abandoned the sector.

i'm not suggesting this backdrop necessarily makes any particular name, San Leon or otherwise, a target per se, but I do say that hedge funds and certain institutions tend to hunt in packs and when/if they decide that a couple of successful (both deals made good money for the hedge funds who were willing to take a bit of liquidity risk) takeouts constitute a trend that requires them to have exposure, it can act as a catalyst for anything from sector re-valuation to the tail wagging the dog. Anyway, can't hurt.....

Like being attacked by an angry sock puppet

No, TB, I think what PC means is that someone may be building a position at these levels in the hopes that the company does initiate a buyback and, due to tight conditions, produces something of a squeeze in the shares resulting in the company paying increasingly higher prices in the market(a very possible outcome as has already been described here). In such an event, this current buyer would likely then be able to 'turn' his position in the market for a tidy profit. Maybe not the kind of market activity longer-term holders might want to see, but perfectly common when a company begins a material buyback. PC was just using a shorthand expression 'offer the company' for what this mystery buyer would effectively be doing. Of course if someone is building a position of some size, it could just as easily be someone like most of us, who sees the medium-term value and loves the fact that by early Feb, the company will have his back!
No foul.

Ha, I'm Batman! Suck it, Al!

I fancy the effort to make that post appear authentic - I don't know, what are these Secret Squirrels going for? Nigerian Del Boy with a hint of The Inbetweeners, I reckon - must have burned more than a few brain cells. My favourite - and there are so many to choose from! - is sticking 'ever' and 'done' into a new compound word. Classic squirrelling.

(cont)
didn't really finish properly....

first i meant '(although many of US are looking at this chart and seeing the beginning of a breakout)'

otherwise, the unifying theory here - including the reasonably big block that Manu cites of 350k or so - the circumstantial evidence is that a buyer or buyers of some consequence (volume has been steadily increasing of late) continue to support and advance this share price, in all likelihood on the back of the buyback story and improving fundamentals, all the while taking out various sellers who either don't know or don't care. And honestly, that is as strong a reassurance that the market understands the opportunity here as shareholders could hope for. A more acute rally into early Feb would be great, but its absence is in no way an indication of the market not taking the company seriously or in some way, rejecting the importance of what the it is likely about to embark on.

The reality is as I've described. Overall, this remains a largely a 'show-me' situation, where the market will continue to see sellers who simply refuse to believe this will happen until it actually does, or in fact have no idea of any pending corporate action at all and just see a 25% rally in 6 weeks, 13% this year, and are selling some every day at what some traders will see as the top end of the share price's range (although many of his are looking at this chart and seeing the beginning of a breakout).

That last point is interesting. In fact, the trading this year - at least 'on book' - has been sellers hitting bids. Normally that is associated with a falling share price, but ours has quietly ground its way to just below 30p. This is strongly suggestive of a material buyer patiently building a position as he sits on the bid every day and gets hit by various sellers who, as I've described, can have any number of innocent reasons for selling shares every day - just plain ignorance of a pending buyback chief among them. This is not bizarre at all. In fact, in my own 30 years, I have seen similar 'irrational' behaviour in the trading of many companies into possible/likely corporate actions, particularly small caps.

I have to say PC, I for one continue to find you a quirky little egg. For instance, if you go back a bit before you first referred to 'sle 2.0', I think you'll find that i had coined that term in a long post responding to the most recent squirrel attack. 'Funny thing to do', I thought, 'flattering even.' But I couldn't shake the feeling that maybe you were trying to wind me up a little. Fast forward to today, and, not for the first time, I pen a long 2-part post, primarily to help you understand better how markets work and how and why the shares are being valued the way they are, and.....nothing. Now I certainly don't need thanks or recognition from anyone (though I admit it sounds like I am pitching for some), but it is certainly true that my post was content-rich and directly addressed much of your confusion about the share price. I would have thought your natural next post would be to ask me a follow-up question or 2 rather than the relatively fluffy exchanges you posted. In fact, at the risk of sounding paranoid, I'm pretty sure you have never addressed me directly, though I have often help clear issues up for you. Odd, though harmless, I'm sure....

So, in the spirit of never giving up, let me clear up another misperception you seem to be labouring under: it is absolutely not uncommon for a company, even one as small as SLE, to have a '2.0' as it were. In fact, it's pretty much as common as dirt. Happens all the time, up and and down the market cap scale, and side to side across various sectors. In the end, if the story is sound, the capital is still there as it clearly was when Oisin brought the Mart Resources/OML18 deal to Martin Hughes at Toscafund.

And let me be the first to say: don't let the acorns hit you on the way out

and another thing:

There is also a lot of of other developments going on at the company, which are obviously more focused operationally: our first new well in forever, our operating partner's dramatically improved finances, pipeline development to separate the company from reliance on Shell, opex increases to help improve daily production and reduce leakages, etc. As those operating improvements begin to become even more evident, suddenly going into the market and building a position, even at higher prices than now, starts to look very attractive indeed, particularly with the company by your side every day showing its support for your holding.

In other words, with the help of continuing improving fundamentals, there is a high likelihood of a dramatic, if delayed, reaction to the share buyback!

As Alaric touched on, I'm also informed that the rules for a buyback of this size for AIM companies are now covered by the Takeover Code but the text I have found so far is somewhat shall we say, interpretable. As a result PC, answering your questions of the 'how' the buyback can/will be conducted and the 'why' isn't the market taking the share price higher now are simultaneously non-trivial and related.

The bottom line, before I even get started, is to stop getting caught up with why the shares are not moving yet and simply let the next few weeks play out, but here are some thoughts: Firstly, as evidenced by this board, there is likely enough skepticism in the market that there will be any kind of capital return in the first place - even though there is compelling evidence already discussed here that it is on course - to keep punters at bay. Second, as per above, it is not clear how the company can/will conduct itself mechanically every day in the market. It's quite possible from my reading of the 'rules' thus far that there may not the usual restrictions on volume and/or price, thus putting the company in a powerful position to possibly drive the share price materially higher if it so chooses. As I myself pointed out long ago, the free float is severely constrained, making a buyback of this scale an even more compelling proposition. However, I could be wrong about the rules, and even if I am right, the company may well not choose this course, at least not initially. They may choose to be less aggressive, providing bids in the order book at various levels, for say the first few weeks/month, to see if there are latent sellers in the market that they can take out at modest prices. An attractive backdrop for anyone getting long today as it significantly improves a buyer's risk/reward to be sure, but hardly sexy.

i hope the picture is starting to become clearer: because this is such an unusual situation (£125m developing commodity companies do not usually embark on material capital returns. Though, for many of us, this is a tribute to SLE's impressive cash generation, now and going forward, the weirdness factor of seeing such a small company at this stage of its development - particularly compared to the parlous state of the balance sheets many of its peers - is, for now, probably also keeping some smarter punters, who are otherwise focused on such special situations, on the sideline for now), because the small cap AIM market is sparsely populated (ie., not enough smart money), because of SLE's history and the caution and cynicism it has produced (I have never hidden from this fact) and because the rules of engagement for any buyback are unknown, the share price is not reacting as some might hope. Yet.

More soon as i continue to root around......

Don't be so modest, jumkie. I'm sure you've provided constant comfort to blackswan; knowing you're out there means there is always a chance that someone will post something that makes him feel clever.