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We’ve probably been a bit unlucky with the timing of the relist as oil has been a bit weaker and there is a general lull in the market anyway at this time of year. Then again it has done 100% odd, so can’t complain too much. Wouldn’t be surprised to see some more II holdings as well
Some of that info, enough to give you some idea, might be available in the past accounts of the other companies involved in the asset. When I was doing some rough calculations based on $100/barrel oil price and the original 4,000bopd (just from Sonangol) I got to free cash flow of around $130k per day by extrapolating figures from the other partners.
You have to remember though as well that the deal is yet to actually complete, and the licence extension to be issued, plus other risk factors around production, so it is never likely to trade at the full 2P valuation. I see more value here than the current market cap, but we were bound to see some selling - plus some of the trading groups have been all over it as well and tend to only hold for a day or two! Having waited nearly a year whilst it was suspended, I’m happy just to be patient anyway.
You obviously completely fail to understand the maths of how these convertible bonds work! The bondholders only paid 78k for every 100k worth (at face value) of convertible bonds that were issued. So when converted into shares, their break even point is effectively around 13p and not 16.75p (due to the discount they received on buying those bonds initially)!
Devilbhoy - re-reading it my post was probably badly worded in terms of mentioning naked shorting. What I meant is that although the shares aren’t yet issued (naked shorting is basically selling something that doesn’t yet definitely exist - before shareholders vote to agree on the issue of new shares in a placing for instance, NEW being an example some years back!) they do definitely exist as via the convertible loan notes and the terms of those, even if a moratorium is in place on actually issuing tym hem at this moment in time.
Of course they can forward sell them - they open a covered short (the convertible bonds cover that position so it isn’t naked), and then once they receive the stock from the bond conversion they use that to close the short rather than having to buy stock on the open market to settle it! Happens all the time
The bondholders make money at anything above 13p (78% of 16.75p) - the convertible bonds were priced at 78% of face value (as per the RNS). For every $10 million worth of bonds issued, the company only received $7.8 million. If not converted then the company also pay a massive premium at redemption in addition to any interest. It’s all there in the details on the RNS announcing the convertible bond financing!
I thought they did a brilliant job with the funding - although I know a lot didn’t agree with me at the time! I’m not at all surprised that the share price here has fallen but I’ve always been invested for production, so am not too fussed what it does in the meantime (although obviously I’d always prefer the SP to be higher!). I’d only be buying now if you’re looking longer term.
Can’t see a takeover approach at the 140 level as the IIs would only break even on what they paid for a big chunk of their equity - especially as a couple of them have been big holders for years, and are also in the mining business. Personally can’t see a takeover coming and am happy to sit and wait for production.
They’ve also got a fair amount hedged for 2023 as well - as most airlines do. Plus USD hedges as well. Figures are all in their financial reports. Sometimes those hedges work in their favour, other times they cost these companies money, but over the long term it all tends to smooth out and avoids any nasty sudden shocks due to the underlying volatility, especially for fuel prices.
Pretty much flat here, give or take a few per cent and a wide spread. I see Glencore have just announced record results with the first half of the year being as good as what they often achieve in a full year, would certainly be interesting if they did increase their stake, or decided they want the whole thing ( although I suspect they'd need to make a good offer for the other major holders to be happy). One of the few shares I've held onto (having added more recently) after liquidating a lot of positions a couple of weeks back prior to the Jubilee weekend when I felt a drop on the markets was imminent (although as it turned out I went to cash slightly early).
The money currently being effectively earned on the 4,000bopd, since April 20, should also be able to be used to offset against the final consideration due? Six months of that is going to be a fair amount, at current oil price levels.
Not sure what is going on, unless some of those trades are both halves the same trade (like you sometimes see with T trades etc) - given the volume today, it would seem strange to me if the share price was pushed up to that level and enabled people to actually sell at 7.8p or above, especially in one chunk?
Everyone's entitled to their opinion, but personally I'm very happy as I saw a low chance that Afentra would get the chance to take a stake in 3/05 and was expecting the exploration block, 23, which wouldn't have been anywhere near as good. All comes down to what you were expecting though, but I'm comfortable with my average of 14.7p here and see little risk given how much is underpinned by cash in the bank (even if we see a placing to raise funds for the transaction).
Personally I’m not too bothered about waiting longer as long as it comes good in the end with a producing asset. Sonangol are obviously confident that Afentra have the fire power available in terms of existing funding and ability to raise more. It may also be the case that all of the data wasn’t available prior to Afentra being selected and they now have to go through that to reconfirm their decision to take on these blocks? Due diligence always takes a while to complete - especially when we don’t know what funding arrangements will be made as part of this deal (if additional capital is required it might not necessarily come via equity, and if there is any sort of loan/reserves based lending etc then that would also require further due diligence).
Looks good to me - and I would estimate a profit of circa £43-44 million for the second half of the year; final dividend of about 7.5p; and an annual yield of around 4.6% (based on current share price). Obviously this is just an educated guess by me when I ran the numbers and we will have to await the final results.