Member Info for foresight

no 1.13.... maybe the market already senses this is a dead deal and we will soon be back at £1 before rebuilding the business and getting on with the day job!

FX rate has worked against us and now CAD1.95 is equal to £1.16. This is a 7% premium on the day - laughable. At this rate there will be no premium and we will still be being told this is a great deal for all shareholders. The board has really made some fundamental mistakes here - the timing of the offer, the premium, the pricing in CAD when the institutions are in GBP. This should be an MBA class in how not to execute M&A

The reason they need to drum up support is because they know there is a good chance the deal will fail and if it does, so do they. Les is fighting for his job and reputation. Att he current price we are virtually getting no premium. The low price may reflect views that this deal will fail and there will be a drop in the share price. I would not buy now but will when we are back to £1 and then look for it to climb to £1.5 under new management later in the year. Ithaca is in a good position to grow through buying assets from the majors - lets see the pain of the past 3 years be turned to our advantage.

Agree Londoner - there are more major shareholders for sure who will reject it. I found Les to be patronising - having to make sure we understood that $1 means $1 - repeating in case you did not understand it the first time... Also there was a value of $2.36 - that is £1.44 the same as the GMP valuation in January. Why are we not getting that as an offer? That is the upside and if we wait then that is what we might get later. I am sticking.

just do nothing - its a tender so if you do not proactively tender then it is in effect a no vote

As I see it, they have confirmed volumes through the independent reserve report and have confirmed rates through the annual guidance. They have not said anything negative about the mechanical performance of the facilities. Therefore, all seems to be in line with the previous guidance. Unless there is a material change to the end year numbers, then I am not sure there is anything more that needs to be said. The increase in reserves in my view is significant and production now started de-risks the asset. So we are in a better place than previously where the analysts were calling £1-1.4 share. Absent the bid, would have thought this would be upgraded to £1.5 share. We are in a period of weaker oil prices affecting the sector. My view is that prices will recover next year to the $60 range. There has been a lot of damage to the industry that will feed through sometime. So I would think based on past performance that this could be a £1.5-£2 share in the next 12 months. The fate of the bid is in the hands of the small retail holders as I do not believe the main institutional ones will take this. It is touch and go whether Delek get the 40% they need but I am happy to be a minority shareholder in a Delek controlled company backed by them to grow through acquisition. Unless you want the car, then I can see no logic in selling out now at the current premium. If the offered £1.5 I would be happy and on my way. Lets see....

Yes - slow to ramp up but not an issue as seems a few weeks more to reach maximum output than originally planned. Still giving guidance for 20k bpd average this year in line with last forecast. Operating costs also the same at $18/barrel. Big increase in reserves to 76million from 55million. All in all - things seem to be on track and with Harrier on stream next year, then Vorlich and others, there is a good story around Stella. If we get to higher oil prices in the next couple of years when eventually the non-Opec production declines due to the lack of investment, then we will see the benefit of higher oil prices and higher production. Ithaca a good platform to do some more acquisitions from the majors at good prices and build form here. Hopefully Delek don't spoil the party...

The results are out tomorrow and this will be the last communication I suspect before a decision on tendering your shares. Lets see what the tone is. All previous presentations have been bullish reflecting what a great job management have done in the face of adversity. Will be interesting now to see if they highlight the risks more than previously in which case the are working in collusion with Delek. It is worth noting that it is very early days in the start up of Stella and there is a risk that any downtime or technical issues in getting the system fully operational will be jumped on as evidence that there is plenty of risk left and so getting out now is a great opportunity for us!

BUT if the shareholders are going to reject it then Delek may up the bid price and you will lose out having sold, so makes no sense selling now if you think that is a real option...

Doesn't seem to say anything new from the last release - why did it take so long? Seems they have changed their tune from being positive and bullish in the tough years to only focussing on the negatives and why its a great offer (now less than last time because of FX)

It takes a while to ramp up production and there will inevitably be teething problems - especially based on past performance. There will be some useful data int he results but it may not be we are at full flow rates and that does not really matter. We should give it 6 months to establish plateau and that would be the time to price this bid. Right now you probably have enough facts to downplay or ramp the story depending on your perspective. Given they have to defend the £1.20 bid, they may well understate the news whilst being factually correct. Our issue is one of trust and the timing of the bid and everything around it just smells wrong. So not the best way to present the results - which absent the bid would for sure have been rosy!

I think thats right. They could end up with the same 20% they started with. Thats why they will up the offer to get to at least their minimum requirement of 60%. Anyone have any idea why it is taking so long to get the formal offer out and this process under way? Really looks like they rushed the press release out before they were ready to get in before first oil. Being an insider and with all the delays, you would have thought this was going to be easy for them. What are they up to?

It will soon be a month since the verbal offer from Delek. Given the length of time they have had to prepare the work to be comfortable to make the verbal, surely they do not need another month to get the paperwork in place to make the formal offer? And they are an insider so privy to all the data. Would you not want to get everything lined up and minimise the time between the verbal and the formal? Maybe they rushed the verbal through and now need all the legal stuff to take place. But why did they rush? Maybe to get it out before first oil announcement? But why do that? Maybe to beat any re-rating on the share price? So why would the BoD have acceded to that tactic as it is not in shareholders best interest if the share price would have gone up some more? So odd timing for the announcement and now an odd length of time to get the formal proposal. It just gets more opaque and messy. And do not be surprised that the results out later this month are down playing the assets as they can not now come out saying anything positive -they have to justify that £1.20 is a great deal for shareholders because its such a risky business - as if we did not know that having spent 2 years supporting them through the oil price and endless delays... I just do not feel I can trust anything now.

This should all be made clear when the formal documents and offer are issued soon. Which is another thing - why announce this deal before the start up of production but still be a way off being able to issue the actual formal offer? They knew that they were going to make an offer, they could have got the documentation ready and then issued a statement at the same time or just before. It seems that they rushed the announcement out so as to be before first oil and then had to get all the paperwork sorted several weeks later. Therefore, getting this out before the first oil RNS was their tactic and I can only assume that this is because the price would have gone up after the RNS making it more expensive. Fine for Delek, but the board should not have allowed that. I keep coming back to the timing of the announcement - and can't get away from this being a stitch up between BoD and Delek.

We are told that the bid premium is low because the shares have performed so well over the last 6 months to a year. But EnQuest, the nearest comparison, has out-performed IAE over 6 months and not much difference over 12 months even with the bid premium. So it is reasonable to think that IAE is perfuming like ENQ and recovering from a sharper than average fall due to oil price and FX. We would need to be above £1.20 to be the same as ENQ over 6 months absent a bid.

spot on Kejoglo - we will never know what might have happened to the share price and that is inexcusable. It was heading up based on oil price, moving to first oil and the exchange rate. It could easily have got to £1.20 on the back of the results in march where we will get an increase in reserves and some positive comments on future business. A bid then would have to be £1.50. Hence Delek went early. A new bid of £1.35 would look good now, so understand their tactics. They are not wanting to pay more than a single cent more. At £1.20 I think the bid fails but we will end up with a lowe price than we should have. And the board has ensured that is the case.

I agree - when oil first reaches the tanker then it has proven the system is now operational. There is nothing more that can be said. It was a landmark in that there were so many delays - that actually worked in our favour as we are producing oil at a higher price having stored it for a couple of years. So no issue with Ithaca there. Also, the ramp up will take time and it does not matter how long really - 6 weeks, 8 weeks, 3 months.... The board has given repeated guidance on production for this year and we will now at the end of the year how good that was, but only then. Any lost oil from this year will go into next year's tally. So there is nothing we can do or they can do, we just have to sit back and let it unfold. The project on stream will de-risk it and the analysts would have come out with a new re-rating on the back of first oil. The new price target could have been £1.2+ like GMP had £1.4. So a bid post first oil would need to be £1.5+ to make sense. So my view is that the news flow we are getting is fine and expected, the timing could not be worse. And the recommendation by a board that is staying on just looks so bad that they have got to be at best woefully naive. Trust has gone despite them not doing anything wrong in terms of the assets - so people may question whatever they say now as to trying to downplay things to justify a bad position they got themselves into. So they are in a lose lose position. We really need a new independent chairman to smooth the waters and steer the route through this mess.

The board could have rejected the offer as too low and wrong time. They could have come out with a neutral stance. The unanimous support is wrong in any circumstances.

Agree - there is security in a Delek backed business with access to capital to grow. It's just that there will never be a takeover premium as its now out of play. The best deals for exit are when there is a bidding war and that's off the table. So there is no cap on the upside but it's still less than if a bid was forthcoming in future. I am happy sticking for the ride with Delek and like the security a major well financed shareholder brings.

It must have a drag as there is no option of a takeover. Delek would need to find a price that clears shareholders out over time if they want to get it all - you are not forced to sell until they get to 90% but lower thresholds will enable a delisting. Overall I would suggest the ultimate price would be less but a lot higher than now. Also having a majority holder strengthens the company as they would not want to fail and lose their investment so there is less downside risk given they are a well capitalised company. In conclusion - a Delek controlled entity will have less downside and less upside but can increase in value significantly especially if they pump more assets and cash into growing the business which they will.