Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
@asimpleinvestor let's not be pedantic...
You would settle for 8p!?
How have you reached that valuation?
"They may word the notification clumsily but they are stimulated by some form of official communication."
My guess is they use some form of NLP which keeps misreading the RNSs.
@Chatboardnovice, I admire the spirit, but I believe that email will be a waste of time. Maris won't tell you anything about the FSP, and to be fair he wouldn't be legally obliged to tell you anything.
A better question might be to ask why we can't be given a dividend in spite of the FSP. After all, surely they could simply minus the value of the dividend ($70m) from any bid?
"What will Gov policy be in 2025/6?"
It will likely be a labour government... so likely not good for O&G (Not that the current government is any good)
I would be wary regarding Goldman Sachs. They always seem overly bullish on oil.
Huh, well I'll be damned. Then who knows, most likely just nothingness as usual.
I think this a case of no news being good news... the fact CA haven't released a RNS stating they wish to recall the EGM means they should have either received a significant offer or be expecting the return of capital shortly.
@littlened you're not allowed to disclose information which may affect the stock price during the stock exchange opening hours. Dividend announcements, FSP outcomes or EGM announcements will affect this, so they are not allowed during these hours.
I wouldn't expect anything to happen until outside of stock exchange opening hours... they can't legally post about things like FSPs, EGMs, dividends etc. until then.
Then I guess the real question comes back to whether one believes if the tax credits hold any value or not... which we could all argue until the cows come home, because (to my knowledge) none of us are expert UK O&G tax experts.
What I will say though, is I find it a little suspicious for hurricane to be putting the $370m tax credit in their RNS relating to the FSP if they believed it was worthless: https://ir.design-portfolio.co.uk/viewer/60/54030
If tax credits aren't included in the valuation, then we shouldn't be selling or giving dividends. Instead we should be buying an oil field and utilising those tax credits ourselves.
Something people here aren't appreciating is that 6th February is the MINIMUM date set by CA for EGM requisition.
If they don't set it, that may well be a good sign - i.e. dividends may soon be set/FSP may be going well.
@asimpleinvestor:
"The most widely accepted calculation for 'fair value' is future 'free cash flows' discounted to todays prices so going by your figures is $100 mil free cash plus 'assumed' $150 mil oil in the ground divided by the number of shares in issue. Which equates to 10.8p"
Also @asimpleinvestor:
"Thats why tax credits are included in working out 'fair value'. There is the elephant in the room 'if they can be transferred' which takes them out of the equation and needs to be looked at separately. Tax credits aren't free cash flow they're tax reduction on free cash flow."
So which is it then - are the tax credits included in the fair value or not?
"But how can the business be valued at 50p if there is a going concern issue?"
Because in cat5's example they had £1b in cash, which divided among the 2b or so shares that hurricane have would give 50p per share.
"You can can have £1bn in the bank but without a product, you don't have a business and your share price is zero!"
No it wouldn't. Why is everyone getting so hysterical? We've seen these share price drops before, all it means is low volume trading.
"The most widely accepted calculation for 'fair value' is future 'free cash flows' discounted to todays prices so going by your figures is $100 mil free cash plus 'assumed' $150 mil oil in the ground divided by the number of shares in issue. Which equates to 10.8p"
You're not looking at the tax credits correctly. They are, provided they can be transferred, effectively a source of free cash flow to a potential buyer.
Sorry, that should be $400m in cash, worth £333m, or about 16-17p per share*
- Approx. $100m in cash
- $370m in tax credits, likely worth another $150m
- Oil in the ground, likely another $150m
- All costs to plug well 6 settled in advance
I get $450m of value, worth £375m at current rates - that's about 18-19p per share.
I very much view it as an if else statement. If the requisition is called on 6th February, then it will mean the FSP is not going well/dividend likely to take an extended amount of time... else one of those things will be going well.
I wouldn't be surprised to see an RNS with a further update on Monday from CA.
It's a no from me. I can see the FSP taking many months - it would likely do so even if we had a competent CEO.