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elcapitano66,
A bidding war needs multiple buyers. Prior to FID/sanction there's only one; PMO. Post-FID/sanction, I grant you there may be more, albeit probably none with as deep pockets as Shell.
GS
ralph,
The underlying price upon which any premium would be based clearly has the scope to change significantly up or down.
The general point I was making is that if RKH is trading at 20p, one isn't going to get a takeover at £2, or if RKH is trading at £1 it isn't going to be taken over at £5, etc., regardless of what individual shareholders might say they would only accept. In practice it doesn't happen.
I do agree that many who bought in 2010 may ultimately find themselves unhappy, but as I've said many a time, what one paid for there shares (certainly when we're starting to talk almost about a decade ago) is irrelevant. The market doesn't have feelings. If anyone thought with certainty that PMO would be bailing RKH out at 40p, they should be selling everything they have left any buying more RKH shares today.
GS
The value paid in any hypothetical takeover/merger/farm-in scenario will depend entirely on the situation that exists at the time and be anchored much more to the then market price rather than the expectations (realistic or otherwise) of individual private shareholders.
Setting an upper cap of a 100% to the prevailing price is probably a realistic way to think about it, perhaps in the case of RKH plus a contingent right relating to OM subject to its then status. I'd challenge anyone who thinks otherwise to find many examples of larger premiums. And such premiums nearly always get accepted by the necessary majority, however vocal the minority might be.
An additional issue with RKH is cash. IF the cash position becomes challenged then start forgetting about premiums and start thinking about nil-premium. Think back to circumstances of the disaster (clearly more so with the benefit of hindsight) that was FOGL.
Plenty of "nil-premium" "mergers" appear out of the blue with statements along the lines of the acquiring party providing the capital necessary to continue to invest, etc. Often more commonplace if the BOD of the company being "acquired" get new jobs, or cushy consulting and non-exec roles. Think Tim Bushell...
We don't know what the cash position is with RKH. No guidance has been given (concerning?), so the soonest we'll have some idea is with the H1 results. What we do know however is that the cash pile is decreasing and will continue to do so until sanction.
I for one actually doubt RKH will reach sanction as currently constituted, either because of an acquisition, or a small placing if the timing drags far enough. Either will shuffle the equation once again. OM is now too far off to provide any cash injection (or confidence of) prior to sanction.
GS
I'm a little surprised there hasn't been more of a stir with regard to this announcement.
With fairness to LEEDS5, he actually mentioned it, but show of hands, who wasn't working under the assumption that the 120 (perhaps +60) day clock had been running since March and that a final decision (not some intermediate decision on jurisdiction) was expected some time soon?
GS
I really wish that people would stop using the word "imminent". Sends shivers down my spine every time I hear it nowadays ;-)
It really does continue to make me wonder what planet TD (and others) were on when they maintained the "couple months to FID" message and what has so seismically changed since then.
6 months on so far to prepare an application that hadn't been submitted and so clearly wasn't capable of submission, 3 months to receive some "feedback", and then presumably, in the best case, whatever length of time it actually takes to carry the application forward and a formal decision to be reached.
PMO has been engaging with UKEF for years now and it must clearly very much know now whether objectively it stacks up for UKEF and what hoops they need to jump through, so this whole concept of "feedback" seems fairly strange to me. It's not like this is a cold application. Formal decision = political sign-off.
GS
I think it's unlikely that there would be any sale without positive FID and financing secured (or merely conditional on a third party). Otherwise, it would be a bit of a punt by the third party, the value realised would be correspondingly low, and PMO is in no rush.
GS
BlooBird,
Right click on a webpage on most browsers and most likely you'll be presented with an option along the lines of "View Source". There are other ways.
This will show you the source code of the page, which is what Google, Bing, etc. see.
It's sometimes the case that on pages like rpoodle linked to, where the full content is apparently behind a paywall, that depending on what method or tool they have used to achieve this, the full content is still available within the viewable source code.
The source code can be very large, and much of it won't mean anything to you, but you can do a "Find" to locate the actual displayed text.
It just so happens that this site (for now at least!) has approached it in a fairly sloppy way. Check something like a premium article from the Telegraph article if you are interested, however, and you will see the difference.
I used to actually have a subscription to these guys, but most of it was simply a re-hash of what could be found elsewhere.
GS
A little trick. Inspect the page source and often you can see the full text hidden on such pages.
GS
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Petrobras is aiming to raise between $30 billion and $35 billion from divestments under its business plan after Brazil’s Supreme Court shot down claims that selling off subsidiaries required congressional approval as if the sales were privatisation of the oil company itself, writes Gareth Chetwynd. The judgement opens the way for the company to reduce its presence in the midstream and downstream sectors and focus on its core business of oil and gas, according to chief executive Roberto Castello Branco. Non-core asset sales in the upstream sector have been moving along, but more slowly than Branco would like. Some of these delays relate to procedures put in place in compliance with recommendations made by Brazil’s federal audit tribunal (TCU), as red flags can trigger a mandatory re-bid. The sale of a cluster of shallow-water Campos basin assets called Pampo-Enchova is finally nearing its conclusion after another double re-bid procedure. Trident Energy, a UK-based company backed by private-equity giant Warburg Pincus, and Brazil’s Ouro Preto are in the running for a deal that Petrobras says will be worth more than $1 billion. A similar saga involving 34 onshore fields in the Potiguar basin reached a conclusion with a $384 million acquisition by PetroReconcavo, although the company came third in the original bidding process. In November, the Petrobras board went so far as to approve the sale of these assets to another Brazilian company, 3R Petroleum, for $453 million, but the deal did not close because the bidders could not provide the necessary financial guarantees. Petrobras has endured an even longer wait to get rid of the Bauna field after little-known Portuguese outfit PetroAtlantic emerged as the original low bidder. Brazil’s PetroRio came to the front of the pack, but financing efforts have reportedly faltered and a group consisting of Norway’s DNO, Karoon Gas and Rockhopper Exploration remain interested. “Petrobras wants to avoid the situation where adventurers are coming in for assets and hoping to raise the money afterwards,” a Brazil-based mergers and acquisitions lawyer comments. In another recent case, a Brazilian company called Magma made an approach for the Maromba field, proposing BW Offshore as a partner, but was encouraged to let the more experienced Norwegian company drive the project. There are some signs of deals moving more quickly. Malaysia’s Petronas acquired a 50% stake in the Tartaruga Verde field and Module III of the Espadarte field without triggering a re-bid procedure. French independent Perenco is moving forward with redevelopment plans after completing the $370 million acquisition of the Pargo, Carapeba and Vermelho shallow-water fields from Petrobras in December.
pauldrayton,
You can find a useful summary and reference to the primary source at https://icsid.worldbank.org/en/Pages/process/Award-Convention-Arbitration.aspx.
GS
Anyone notice that the announcement of LTIP awards seems quite late this year?
GS
Given some of Mogger's prior posts on the subject, I suspect he will be as surprised as others, regardless of whether it ends up being positive or negative for the share price.
GS
There are those on here that are unrealistically positive and those that are unrealistically negative.
But I think you, carroteater, are the only one who manages to rationalise buying shares at ~20p while at the same time professing, with apparent certainty, that the shares are about to crash well below such level.
GS
elcapitano66,
I can believe that in most instances, but that's not what a number of sources have indicated with regards to Sea Lion. It's such a political hot potato, which implications for things like post-brexit trade agreements, etc., that it will require sign-off from ministers; express of otherwise.
If it didn't it would have been sorted long ago and TD's predictions for 2018 year-end might have been proved true.
GS
As each day goes by, I'm increasingly thinking that this is going to end with PMO bailing us out at around current levels. If we get to a point where additional cash becomes required for RKH to continue independently as a going concern, I'm not convinced how realistically obtainable that will be considering it would be by inference at a point when FID/sanction would still be uncertain and outside the companies control.
And, putting aside the recent oil price slide, one can easily see how the current Tory party leadership contest could cause further delay contributing ultimately to the above outcome. UKEF signoff is a political football, and the movers and shakers (PM, cabinet, etc.) are now in flux. Note the Q2 comment came prior to May's resignation.
I've trimmed my position here slightly. Hopefully that will mark the bottom for the remainder of my holding. Not selling all because I still think there is a good, if decreasing, chance of a very nice return and see the downside as being bailed out by PMO, rather than zero.
GS
The discussion related to whether any formal EC application would be specifically announced via RNS.
It will almost certainly not, nor will any announcement be made if the application has not been made by the end of Q2.
What one might personally deem as "material" as a shareholder of RKH and what various listing and corporate governance rules might determine as deserving of an RNS are very different things.
Not to mention, we know that UKEF specifically does not like publicity, so any big RNS announcement that an application has been lodged is unlikely to be very self-serving.
The first formal indication of the application (or not) will almost certainly not be until the next round of trading updates.
That being said, if you actually ask the companies via email or phone they may will tell you or at least give you a strong indication one way or the other. Always so much unnecessary speculation when the actual answers are so easily obtainable.
GS
It won't be RNS'd, but if you ask PMO or RKH directly they will tell you.
GS
carroteater,
Don't forget RKH burns cash. Perhaps it was 5 years ago having been cashed up by PMO, but it's no longer an option you can put in the back pocket and come back to in 5-10 years time expecting the fundamentals, share count, etc. to be the same, in the circumstances you describe.
If those events which you have a strong personal belief in come to pass the shares will be worth a fraction of today's price.
GS
Your apparent positioning confuses me greatly.
You have changed your posted opinion at various times (which is fair enough), but seem to be more negative coming out of the AGM and now consistently seek to highlight the importance of the political angle, unlikeliness of funding, unlikeliness of OM settlement payment, etc, as reasons for being so. Again, nothing wrong with this in principle and I think there are some very genuine questions around cashflow upon which the AGM offered no comentary.
But, at the same time you apparently hold a large number of shares (which may or not be in whole or part hedged), and state that you're looking to purchase lots more at prices ~10% below.
RKH is on the cusp, and in my opinion plays out in 1 of 3 ways for current shareholders.
1) Fortune finally shines on RKH. Everything (or enough) comes together, and FID/Sanction finally happens in sufficient time for RKH to avoid any dilution at an unattractive valuation (whether that be through shares or its asset share), potentially helped by a favourable OM settlement. You don't seem to expect this.
2) Shareholders wake up one morning to an RNS saying RKH has been incorporated/merged into PMO at a price not too dissimilar to today. It will happen suddenly; out of the blue and justified on the basis of funding shortfall. You haven't mentioned this either.
3) OM is thrown out on jurisdictional or merit issues and the UKEF application is either deferred indefinitely or rejected. The share price isn't going to be anything like today's value. Your posts seem to point to this as your expected outcome.
Please help me square the circle and explain how despite all the doom and gloom in the short-to-medium term you're going to make a profit on ~20p shares.
GS
Note that if the the question of jurisdiction hasn't been decided yet, it's possible that the 120 day counter hasn't begun yet.
GS
Thanks,
Any estimate given then of a possible EC funding decision point? Clearly the parties have been in discussion for months (if not years) so one would anticipate there can't be too much from a factual standpoint to iron out. Also, presumably why it's taking so much time to get the PIM submitted in the first place.
Off topic, but also was anything said either way yesterday about cash burn this year, or year-end balance for RKH?
GS