Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
In regard to legal action by BOO, I would ask what grounds they have for legal action?
In order to sue REVB or its board, it would have had to incur some kind of loss. They certainly have not lost out financially as the shares are up considerably on what they were yesterday when suspended. I would imagine that they could only sue Jeremy Schwartz as he made the decision to reinstate the other directors. Imagine the laughter upon any legal professional reading BOO’s claim explaining that they intended to bring legal action against a director which BOO had only just voted in favour of because he made a decision in the interest of all stakeholders and not just BOOHOO.
His rationale makes total sense to me as below:
"The decisions I took today as the sole director of the Company following the AGM were not taken lightly. I had to consider my duties as a director, and act in what I genuinely believed to be in the best interests of the Company, for the benefit of its members as a whole. Among other things, without the board changes effected following the AGM, there was no certainty as to when (if at all) the Company's shares would be restored to trading on AIM. As a result of the appointment and re-appointment of the board, however, the shares are expected to be restored to trading imminently, something which is undeniably in the interests of all shareholders, including boohoo, as well as all of the Group's other stakeholders. The board will proceed to call the general meeting requisitioned by boohoo for a date to be confirmed in late July or early August, as previously announced."
Anyone who is a director of a company will be aware of their duties and independent judgement is one of them as it requires directors to exercise independent judgement as below:
Directors are meant to develop their own informed view on the company’s activities.
Directors should not be delegates who simply implement the commands of other parties (such as major shareholders). Nor should they avoid their responsibility to make independent decisions by relying on the knowledge or judgement of other directors or experts.
A director needs to form their own view, and this may require some effort – especially if they are not already familiar with key aspects of the company’s activities.
It seems to me that Jeremy Schwartz who as the only remaining Director was very much independent, looked at all the facts and developed his own view, was not swayed by a major shareholder and took a decision which benefitted all stakeholders.
Not sure if this has already been posted, offers a concise recent history of the problems with IOG and might be useful for new investors. Seems positive that they are writing about IOG and the mention of Warren Buffet is hopefully a good omen.
https://www.thearmchairtrader.com/iog-share-price-well-control/
Thanks JHFH for this. It may be very out of date but how the interview ended is very apt to where we are today.
It's a process. It's not like we decided to do something today, and in a couple of weeks, voila, we are there. No, it's a constant. It's a it's a tedious process. We go step by step, overcoming different obstacles, learning new skills. And ultimately we will go into clinical trials with our source product, candidate CAR-T, and then hopefully with others. So I think I think we are on the right track and we will get to where we are going. And I firmly believe that the share price and this is very sensitive for many people who invested in our company will follow our scientific and engineering and manufacturing progress.
I was searching online for CBR information and found the following information albeit an from old website, it gives a great background understanding of CBR. Never seen this on here before so apologies if it has veen posted before.
http://sharediver.com/chimeric-bait-receptor-cbr/
Also, on the same website http://sharediver.com/blog/ there is a great amount of detail about HEMO's recent history which might be useful for any new investors and also those thinking about an investment in HEMO. The interview link below discusses the patent and discusses timelines.
http://sharediver.com/2022/03/23/interview-with-total-market-solutions/
EV/2P Ratio - A key metric used to value oil and gas companies in the energy sector
In trying to calculate the value of COPL on its reserves I have tried using the EV/2P Ratio but would appreciate precise values for Market Cap, Current Debt and Current Cash.
I have used the following values ($US) for my calculation but the result is so low, I must be missing something:
Market Cap $50m
Current Debt $34m (taken from FT.com)
Current Cash £11m (figure taken from memory in recent results)
Reserves: 746,906,000 (I added P1 and P2 reserves together)
As per link: https://corporatefinanceinstitute.com/resources/knowledge/valuation/ev-2p-ratio/
Calculation and Example
The EV/2P ratio is calculated by dividing the enterprise value (EV) of a company by the sum of its proven and probable (2P) reserves.
Where:
• EV = Market Value of Equity + Market Value of Debt – Cash and Cash Equivalents
• 2P = Proven Reserves + Probable Reserves
Here is an example to better understand the EV/2P ratio. Let us assume an oil company reports a market capitalization of $800m and a net debt of $400m. The company also holds $60m of proven reserves, $40m of probable reserves, and $80m of possible reserves.
Thus, the enterprise value of the company is $1,200m ($800m + $400m), and the value of 2P reserves is $100m ($60m + $40m), which leads to a EV/2P ratio of 12.0x ($1,200m / $100m). It means the company is valued to be $12 for each dollar value of its 2P reserves by the market.
This means for COPL
50m + 34m – 11m = 73,000,000 divided by 746,906,000 = 0.97
So by my maths, COPL is valued at less than $1 for each of its reserves.
Again, please correct my maths where necessary and also update with more accurate figures but I have always understood reserves to be valued at least $10 in the ground so there is something seriously wrong with COPL’s market cap and resulting share price.
If its reserves were valued at $10 then the market cap would be ten times where it is today and its share price £1.60, not 16p. I welcome corrections to figures from others with more accurate numbers or greater understanding of the oil industry. I am also aware that COPL is awaiting RBL, flaring news and new wells but this is simply calculating a value from its updated existing reserves today.
Also, it would be beneficial to compare these figures with a similar oil company in the same safe jurisdiction as Wyoming so if someone has a similar benchmark it would be great, failing that if someone has the figures for 88E it might make an interesting comparison.
Links
https://www.investopedia.com/terms/e/ev-2p-ratio.asp
http://investingsidekick.com/how-to-value-an-oil-company-part-5-novus-energy/
From information on https://revolutionbeautyplc.com/shareholders/ and recent sales/purchases the disclosed large shareholders are:
Thomas Allsworth 15.77%
Adam Minto 15.77%
Boohoo 12.8548%
Jupiter 8.43%
SFM 6.38%
Pentwater 5.98%
AXA 3.76%
Premier Miton 3.07%
This gives a total of 72.0148% of the available shares which are not for sale. I include Jupiter as they seem to have stopped selling and would make sense but then again its Jupiter, so who knows. This means that there is less than 28% of shares available which are currently in demand. Simple economics tells me that with reduced supply of shares available and increased demand, there should only be one way this share price moves but somehow the MM's are able to suppress its movement. This has to move up into the 30's soon or am I missing something?
Just released by thearmchairtrader.com and worth reading the full article.
https://www.thearmchairtrader.com/revolution-beauty-shares-punished-delays-results/
Problematic accounting practices
As part of the audit, issues with “certain accounting practices”, were raised with management which, “could have a material impact on the results for FY22”. The company warned that: “…In the event that material adjustments are required, the group profitability for FY22 could be materially reduced across a number of potential adjustments including stock and bad debt provisioning and revenue recognition.”
Analyst, Zeus cut its 2022-23 EBITDA forecast for Revolution Beauty by 38% to GBP19m, and its pre-tax profit forecast by 64% to GBP6m, or 1.5p a share on the back of a higher net debt burden. Jupiter Fund Management reduced its stake from 16.8% to 11.5%.
The problematic accountancy practices have not affected Revolution’s net debt position, which was GBP21.2m at the end of July, driven by higher levels of inventory, working capital and capex. However, a GBP40m revolver should offer enough headroom in terms of future liquidity.
Arguably, the market may have over-reacted to Revolution Beauty’s news stream and the company’s shares aren’t reflecting enterprise value-to-sales and EBITDA multiples of less than 0.5x and 5.5x respectively.
The issues with the audit have not, to date, categorically revealed any material issues, and Revolution Beauty may well surprise many when it eventually releases its results.
Fashion is very fickle by nature, as seems to be the AIM market, and a delay in reporting results doesn’t mean that the gloss has come off Revolution Beauty’s appeal to many retail customers, as the foundations of the cosmetics firm are more than skin-deep.
Yesterday, someone/people were paying 17/18p for batches of 250000K shares.
2022-08-10T15:17:24.533 GBX 17 250000 42500
2022-08-10T15:17:11.620 GBX 17 250000 42500
2022-08-10T15:13:30.247 GBX 17 250000 42500
2022-08-10T15:13:07.057 GBX 18 250000 45000
2022-08-10T15:13:07.057 GBX 18 250000 45000
Today they can buy for half price. Wonder what they are thinking today and if they are buying more?
Their website traffic and engagement stats are also improving. Up almost 12% in July from June.
https://www.similarweb.com/website/revolutionbeauty.com/#ranking
Taken from Jupiter Chrysalis Yearly report written on 31 March 2022 - It seems the problem is with Jupiter and not REVB as per their report. They sold just over 1% in May and just less than 2% today so is hopefully part of a structured withdrawal. The real problem at the moment regarding this is that the Directors are in a closed period until the end of the month. A possible solution for Jupiter might be that the Directors Adam Minto and Thomas Allsworth own nearly 16% each and could purchase Jupiters remaining shares direct from them. I would assume that they would have the means for such a transaction especially at 20p and it would see an instant return for them on such a purchase.
Revolution Beauty Group PLC (“Revolution Beauty”)
Revolution Beauty’s share price has been reasonably resilient over the period, considering market conditions, (albeit post period end it suffered more significant declines) and we are highly encouraged by the trading performance of the business, particularly versus many other retailers.
The company released a trading update for its year to the end of February 2022, which was broadly in line with market expectations. Revenues were £194 million over the year, which compared to analysts’ consensus of approximately £198 million, and represented a growth rate of 42% year-on-year.
We consider this to be positive progress given the tough backdrop and a volatile trading environment. Adjusted EBITDA of £22 million implies a growth rate of 73% year-on-year and a margin of 11.3%; the margin for FY21 was 8.6%.
The strength of Revolution Beauty’s financial results demonstrates the resilience of the omnichannel model. For example, UK store sales grew +85% year-on-year as high street footfall recovered post-pandemic and Makeup Revolution was launched in Boots stores. Similarly, Rest-of-World (“ROW”) stores were +79% year-on-year with ROW now representing 35% of the global business. Retail stores currently represent 79% of the sales mix.
The USA is now Revolution's biggest single market at 20% of sales and delivered sales growth of +27% for the full year. This growth was achieved against a strong FY21 comparator, where Makeup Revolution was rolled out across Target stores for the first time.
At a share price of 82p1, Revolution Beauty currently trades on 1.0x FY23 revenue and 8.0x EBITDA. We view these multiples as particularly undemanding and are still seeing private beauty businesses that generate strong rates of organic growth transact at 4-7x revenues.
Our original thesis on Revolution Beauty therefore remains unchanged: we still think management is capable of doubling revenues over a 3–5-year period and
we believe that there is rerating potential in the medium term; this should contribute to a strong IRR for Chrysalis.
Where now for COPL after its acquisition of Cuda Energy assets?
Canadian Overseas Petroleum (LSE:COPL) confirmed this week that it has completed the acquisition of Cuda Energy, making it the majority owner of its Wyoming oil-producing assets. It represents a major increase in the stake for COPL, to the tune of between 85-100% across three oil producing units.
The deal means that the company can look forward to increased unhedged production against a high energy price environment and higher operating cash flow. The company’s 2P reserves are up 47% to 38.2m barrels while its NPV10 is up 47% to $380m.
The new assets will be incorporated into COPL’s asset-backed borrowing base for its current senior loan and the company said it could also use the asset for a Reserves Based Lending scheme with a commercial bank.
Transformative acquisitions for COPL
The acquisitions of Atomic Oil & Gas and Cuda have been transformative for Canadian Overseas Petroleum. COPL now operates three assets within approximately 48,000 contiguous acres of leasehold in the Powder River Basin in Converse and Natrona Counties in Wyoming, which have a 40+ year reserve life and inclining oil production from gas miscible flood, with facilities built and commissioned in 2019.
It fulfils a strategy which sees the company continuing to secure majority ownership of producing assets in the US with long life reserves. This comes at a time when corporate M&A in the space is heating up. The acquisition has come at an excellent price for COPL, at less than what it paid for Atomic in 2021 ($54m was paid for Atomic in March 2021 which brought the company 58% of the asset and operated interests; Cuda brings it 85-100% for $19.15 million in cash, making the total acquisition cost for COPL less than less than $2.00 per barrel of 2P reserves in the United States.
The cash component of the Cuda acquisition is being financed via a convertible bond to the tune of $19.7m. The bond is being anchored by the company’s largest institutional shareholder.
COPL remains a stock to be watched
COPL remains a stock to be watched closely as M&A in the oil space is heating up. This is largely because larger players are unable to find significant growth in production, along with growing private equity interest in the market (PE funds committed over $1 trillion to oil, gas and coal deals in the last decade, according to Deloitte, and companies in the sector remain a significant proportion of PE firms’ holdings).
More producing oil assets are being kept off the table to reflect higher prices, as majors and larger independent E&P’s in the UK and North America are both waking up to the fact that acquisitions cannot be priced as if this is still a $45 barrel environment.
If COPL management can now deliver on its refinancing strategy and its operational plans, COPL shareholders should be in for good things ahead.
Link: https://www.thearmchairtrader.com/canadian-overseas-petroleum-copl-cu
In the meeting today this question was asked by an investor. I was sure that the CFO said that that the shares were the same and that there was no difference between Poland and AIM listed shares.
Just listened again and that is what he said. He also said that there is no fundamental reason the prices should be any different and that he is unclear what justifies the pricing differential. He also said that this information was released in an RNS last year but that RNS is hardly crystal clear. This is all part of the enigma of the share price of SENX, this time last year its results reported it was selling oil at an average price of USD35.56 a barrel and made a loss of USD8.5 million. The shares were 3.2p this time last year. Today the results state an average price of USD65.19 and made a profit of USD8.8 million. The shares are now 1.9p. I know that they are producing less oil as it has reduced from 2,340 barrels to 1,649 barrels but he also insinuated that right now they are getting a price near to $110 (Brent price) and working on improving production. Does any of this justify a share price of 1.9p especially as the CEO thinks a fair price is 6p plus, Shore Capital stated 8.5p and they are 17p in Warsaw. If someone can explain what I am missing other than poor/no PR, it would be very helpful.
Re: Bondholders, it seems that most people seem to think that they hold all the aces regarding HUR. The link below seems to think the opposite.
https://www.lemonfool.co.uk/viewtopic.php?t=21856
The comment reads: The upshot of all this is that if Lancaster is a dud and HUR goes belly-up then the bond holders will get the company but as the underlying value of the business disappears they will only have things of tangible value left to sell of which there doesn't seem to be much almost everything is leased.
So.... it seems to me that the bond is not a major risk to equity holders, indeed the bond holders seem pretty much as exposed as equity unless they managed to put a short position on to cover.
Also on the same website a bondholder also agrees.
https://www.lemonfool.co.uk/viewtopic.php?f=16&t=796&start=1360
The comment at the bottom of the page reads:
I’m a CB holder and surprised you think we hold such power!
HUR a unique situation, $100m cash in the bank and cash flow positive
CB’s likely to be left with sod all if HUR goes into run down mode. The first FSPO break is mid 2022. Bondholders therefore likely to sanction remedial work if decent CoS.
If someone knows or understands how the HUR Convertible Bond works it would be great to explain it properly.
As I see it, a Bondholder right now has an investment which is worth less than half of its original investment but is receiving interest payments from an oil company that is actually providing around $10m dollars profit a month (oil at $50, $25 dollars costs to produce) x 12300 barrels a day is $9.2m a month. (Please correct if wrong). So right now it has a return on its investment.
In 18 months time, it should be getting back 100% of its original investment which according to most on this board is unlikely or impossible. This means that. if they cannot find an agreement between now and 2022 then they are left with 100% percent of potentially nothing. (Leased equipment and whatever money HUR has at that point).
If the above is true, then it does not really mean Bondholders hold all the power. Are they just as exposed as shareholders?
Following the "Kitchen sink" RNS on September 11th, Crystal Amber upped their shareholding from 6.25% to 11.5%. They obviously saw the share price crash as too good an opportunity to pass up on. In their yearly fund statement (September 21 2020) they gave their take on Hurricane as per link below.
https://storage.googleapis.com/crystalamber-com.appspot.com/_downloads/Final-results-for-the-year-ended-30-June-2020.pdf
What is interesting is that they put a positive slant on the outstanding bonds issue and also find the conclusions of the technical committee persuasive but not conclusive adding that fractured reservoirs commonly exhibit rapid initial pressure decline and we note at Lancaster that the rate of pressure decline has in fact slowed. Moreover, the zone now believed to contain residual oil below the oil water contact is very thick, whereas we would have expected an abrupt change in oil saturation at the free water level. Therefore, the Fund believes that significant volumes of oil may be present below the revised oil water contact at 1,330 metres.
They also added this: following the publication of the report the shares are trading at little more than option money and the Fund has increased its holding. Despite these uncertainties, the company has stressed there are currently no going concern issues and it has ruled out an equity raise at this time.
This has obviously changed as per Fridays RNS. Crystal Amber should obviously be more clued up than most and it will be interesting to see if they buy more shares after Friday's RNS.
Looking on twitter, on July 8th he wrote
Getting a lot of questions regarding our irrevocable sell instructions. As stated previously, our instructions were non-cancellable. Our broker will continue to sell down 1% a day, even if I demand that they stop.
Today, on another thread someone posted
Just been reviewing JB’s tweets. He’s been asked repeatedly whether he’ll stop selling tomorrow once shareholder agreement ends. On Aug 23, he said:
“Aware of this question. Am deliberately not answering as need to keep options open. Sorry”
I can see this answer on twitter but not the question which is why I asked. Will have to wait till Friday but either way, if he stops selling or continues to sell whilst also buying, it should be positive for the share price and everyone invested here.
Fridays results are expected to be bad but could be not as bad as expected. We will find out then.
For me, more important on Friday is whether Richmond Group sell another 1% as expected. My understanding is that they are selling down to zero but there have been tweets or posts where others have claimed that he will stop once he is under 10% which is tomorrow. Someone might be about to confirm this?
I would imagine investors will be keenly watching the trades all day Friday to see if the 1% is sold. At the end of the day on Friday, if there is no 1% sale, it means that we go into a Bank holiday weekend in the knowledge that they have stopped selling at under 10%. Also, if this is the case they will probably start buying as predicted by others on this board. What price will AMGO shares be come Tuesday's opening in this scenario?
According to HL website on March 2nd 2020, Glen Crawford bought 3,161,818 shares paying 38p per share at a cost of £1,201,490.84. Right now, with the shares at 12.5p he is looking at a paper loss of just over £800,000 as his shares are now worth £395,227.25. They have lost two thirds of their value from March.
Anyone currently in the red following Monday should probably not despair as it usually pays to follow the money and especially those in the know. A CEO who invests 1.2 million in their company does not do this to lose money, so I am invested and do not expect to lose money either.