The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
"An FSPO is a storage vessel. I asked how many offshore platforms does Hurricane currently have in active operation. You believe the answer to be zero, so what use is an FPSO if it is unused?"
The user you were replying to is correct: there are no active rigs, however that does not mean that the FPSO is unused, since it is connected directly to the well on the seabed.
"Norway, which hasn’t joined any production cuts since 2002, signalled over the weekend it was ready to cut unilaterally its output if others did"
I do not think that word ('unilaterally') means what they think it means.
@Doubleheadedcoin: "Pretty clear with a little hindsight and the fact that they put it into auction without letting it race out the blocks and get to 12p or above."
There would have been an auction regardless, and my understanding is that any extensions are decided automatically by the exchange using an algorithm, not by anyone with a vested interest in the share price (although I don't see an RNS for an extension this morning - not sure whether we would expect one, or even if that is actually what happened).
@llareggub: "I take your point but it's all about getting the bonds away, and if sentiment has gone positive why not take advantage of it."
The drawback of the holiday season is lower liquidity: even if sentiment is good, there might not be enough money or buyers around to clear the bonds.
Not qualified to say whether this is the best strategy, but it doesn't sound like an unreasonable one, and they might not get a third chance if it goes wrong.
@llareggub: "Why wait until September if sentiment has improved markedly?"
Because of the summer holidays. Investor Relations have purportedly said (according to at least one post on this board) that the company had planned to do the bond launch either before or after but not during the peak of the holiday period.
(Of course they could always change their mind, but as plans go it sounds like a sensible one.)
@chilting: "Yes, the price monitoring extensions are part of the auction process but if you look at the time of the uncrossed trade that is decided before the auction."
That's not correct. The auction would have started shortly after 4:30. The times reported by LSE are:
4:36 - First 5-minute extension of auction period
4:41 - Second 5-minute extension of auction period
16:45:27 - uncrossing trade
Apologies for quibbling, and it wouldn't normally matter much, but in this case I think it makes a difference to understanding what happened as the market closed.
@chilting: "the uncrossed trade was 9.5p but that was followed by the auction and two price monitoring extensions"
Surely the auction occurred first, incorporating the two price monitoring extensions, and the uncrossing trade was the result of the auction.
richardjones: A fall from 6.31% would be nice, but I'd be surprised if it was essential: looking at the historical figures, it was higher than that when the alternative finance offer was agreed.
What we don't want is it rising sharply with no end in sight. The other complicating factor is that the indicator linked to is for somewhat lower-yield bonds than SXX, so it won't be telling us the full story about what was/is happening at that end of the market.
jonesrichard: not GK (and not an expert on bonds), but we would want the yield to fall not rise.
(Note that falling yields === rising prices and vice-versa, so opportunity for confusion if you look at the wrong graph.)
Also the impression I've got is that whilst the absolute level is important, it was the rate of increase that was most concerning - a bit like trying to do an equity placement while the price is in free-fall.
dinger189: "and they didn’t know about this “window” back when ?????"
Not sure what you're asking. The claimed strategy was to sell the bonds by early August, or failing that wait until September, avoiding mid/late August. I haven't seen any proof of this claim, but it sounds plausible. They have missed the first opportunity now, hence the expectation of early September.
My understanding is that we are now in a window in August which they were intending to avoid from the outset due to holidays and low liquidity. That's based on what others have posted here with responses from Investor Relations, but it sounds highly plausible. I think one of the brokers said they were expecting early September.
willjones12345: There's a difference between setting the coupon and setting the yield. That's because when you sell the bond it need not be at face value. If they sell for more than face value then the yield will be less than the coupon, and vice versa (just like shares can sell for more or less than their face value).
@patrickcctx: Also selling these bonds will give them a credit facility, so no more bonds after that.
The bonds should indeed unlock a credit facility, however that does not remove the need for further bond sales, and several more tranches are planned. That is because the revolving credit facility is supposed to be repaid each time it reaches $500m.
The good news is that the funds released by the initial bond sale ought to be sufficient to reach a point at or close to first polyhalite, at which point borrowing more money ought to be significantly easier than it is now.
@verdeceleste: "In 10 years time I envisage people popping up on this board telling us that fracking in Lancashire is about to cause an earthquake and the North Sea will break into the mine workings and us shareholders will lose everything."
As it happens, there was an earthquake which caught my eye a couple of weeks ago: 10th July 2019, magnitude 1.2, "collapse type event". Location: Boulby, North Yorkshire.
http://www.earthquakes.bgs.ac.uk/earthquakes/recent_uk_events.html
(For all I know might be nothing to do with the mine there, but seemed like quite a coincidence otherwise.)
@John2015: "Anyhoo as far as their valuation is concerned I'm down 0.04p today."
Yes, but that is a problem with how they do the valuation, not a problem with how the share price moved today (not that +0.1p is anything to get excited about).
Once the market closes it is common to see the reported bid price go down and/or the ask price go up, however that due to the order book not being populated in the way that it would be if the market was open. Best to disregard any prices you see that have been calculated this way, because they are not meaningful.
@John2015: "HL price on the bid so today 15.84 is 0.04 down on yesterday."
If you are looking at 15.84 / 15.95 then those prices match a trade showing on LSE at 16:39:56, however that was after the market closed. For the closing price you need to look at the uncrossing trade, which was at 16:35:23. LSE shows a bid price of 15.89, but normal practice would be to quote the trade price which was 15.96 (up 0.10 on the day).
@15LIVES: "Does this mean after this looming $500m raise we have to do this further down the line again?"
Yes, several times. Or at least, that's the intended course of events, and things start to get expensive if it doesn't happen that way.
However, it is important to bear in mind that the initial bond sale unlocks a lot more funding than the $500m raised directly, and by the time another bond sale is needed the mine ought to be at or close to first polyhalite - at which point the risk register should be significantly shorter than it is currently.
@Jonathansxx: are you saying the other half of the deal ( the person selling his shares that I just bought) is not shown
Yes. Every trade listed represents a transaction between a buyer and a seller.
However, if a financial institution first buys shares off someone else and then later sells them to you - probably at a different price - then that is two transactions.
@Jonathansxx: There were two trades, one trade was a buy and the other was a sell and should be recorded as such. Simples.
Unfortunately if you do that for every trade then you have merely doubled the length of the list without adding anything to the information content: everything would listed twice, once as a buy and once as a sell.
If you only do it for some types of trade then, in addition to not really helping, you mess up the ability to reliably calculate volumes (because some transactions would be appear once, some twice).
@triton: you quote it is more difficult when not dealing with retail investors , "why " ?
Financial institution A submits a buy order within what was previously the spread. Financial institution B concurrently submits a sell order at the same price. The exchange matches the two orders and they execute. Was the resulting trade a buy or a sell?