Member Info for icemax

No, it's very usual and very predictable for all spuds, though I was surprised that there wasn't a mini spike.

If you have shares and want to take a chance (not meant pejoratively) then stay in.

If you have shares at a higher average than the current SP and don't want to wait on the result, then look for a spike on rumours - can easily happen without substance. Don't average down.

If a spud rns, could touch 2.9p, with a 2.60-2.65 close, 2.45-2.50 by Friday , everything being equal.

themuir001 - what an odd thing to say - I didn't see anything in OMJ commentary to suggest you do that

Bahamas Petroleum Company (BPC) announced belatedly, and perhaps not wholly voluntarily, the details of a remarkable funding agreement with the Cayman Islands based 1798 Volantis Fund Ltd, which is managed on a discretionary basis by Lombard Odier Asset Management. It’s an agreement of a type which all looking for guaranteed profit should aspire to be entering. 1798 has bought shares at 2p, a good discount to market value, and if the Perseverance #1 comes in, they could well be selling those shares for several times the price they paid. If it doesn’t and the price collapses, BPC has to reimburse them for any loss. It’s actually even better than that for 1798, since Bahamas has to pay them for any shortfall under 2.3p, ensuring they make a minimum 15% profit, even in the event of failure. It’s a guaranteed reward for an investor without any risk with the benefit of unlimited upside and it turns out this is not the first time BPC has entered into such an agreement. It will be fascinating to see the subsequent litigation when/if this goes wrong. If you’re puzzled as to why institutions invest in some of these low-quality, high-risk companies and why some companies’ cash appears to be consumed so quickly, perhaps you now start to see the answer. It’s another reason why some of these companies are such appalling investments: guaranteed profits for one preferred shareholder results in massively geared up losses for all the others.

laallee - keeping LTHs sane for the past 10 years with his level-headedness, sanguinity and wit.

A Merry Christmas to you Sir!

“The real fundamental issue at play here is: Do we have oil? That is the $1bn question everyone wants answered. We have to drill a well to make a final determination.”

I rather it be the answer, rather than the question. I'd rather Potter didn't spend another dollar in drilling the damn thing.

Mike56 - the value of the business hasn't dropped. Market Cap was around 115m before the additional dilution, and it's 112 now. What has changed is the SP, due to the dilution and the knowledge that the remaining overhang will be sold into. It's this fact, not the opposition to the drill, that has killed the chances for any meaningful rise in this share (and I don't include the flurry of excitement over a day for two that may or may not accompany the spud rns).

As for selling now, it's always the case that as a spud approaches, traders drop out, or at least have played their hand to ensure that they have a free ride. For a trader, there is little incentive to buy at this time, as we move into a fallow news period with only the prospect of other left-field events occurring.

The reality is that money is made on AIM much more often by trading than holding on for the yellow brick road. That's not to say that people should sell; those that fancy the gamble will stay in.

Usually, Sp falls on a spud rns but I think in this case the SP will continue to be worked within the current range (after an initial flurry of excitement).

Investinvalue - I think we tried that metaphor last week, along with "about to catapult". They didn't quite work.

Got any others?

Please note "it's about to rocket" has already been trade-marked by trp-bpc

As Sol has said, unless you are part of the MM gang, or are very closely running some analysis, it's not going to be possible to say how far through they are with this. If I recall correctly (admit to being too lazy to check), in cash terms this placing is half the size of the last one, for which I predicted would hold the SP steady for 5 weeks, and I was very close in calling that one. But the volumes being traded were higher over that period.

In some ways, I'm not sure that it will matter. The SP for drills tend to rise up until spud then fall away from a little as some of the traders get separated out.

The next part of the game, 6 weeks away, is the rumour game - "they've found a ****-hat of oil/water" (deleted as your trade / short requires).

The dilution began on the day the rns was released (forward selling)

Hi low, hi low, we’ll dilute as we go!
Walk them up,
Then sell ‘em low
Hi low, hi low!

Today's menu sir, would you prefer some crackers to hold onto or would you like today the 25% proof Christmas cake?

I think I'll have my cake and eat it, please

Who else do you think is selling the millions of shares day after day?

Don't want to get into a BB squabble, but politely you are very wrong on this.

ShareScare, it's the initial 375m that's being sold - very understandably, as it's at a very tidy guaranteed profit. Politely, I'm not sure how you can think otherwise - you just have to look at the trades over this week.

Ibiza28 - a computer could do lots of things, but how trades are reported as buys or sells on trading systems is determined simply by whether the price at which the trade takes place sits above or below the mid price of the share. For heavily traded shares with a very small spread, this is likely to be accurate. But when the spread is wide, it is not.

The spread at the moment is 2.55 - 2.75, so the mid-price is 2.65. Any trade that falls below 2.65 will be reported as a sell, even if in fact it is a buy.

The more interesting question is why are most buys and sells occurring below mid-price, but some small trades (buys) occurring above mid-price. The MMs have many millions of shares that they need to place in the market, so need to encourage buying / avoid scaring off buyers. So they send out the occasional signal of a top-end price (by either placing a trade themselves or ripping off a very small PI) whilst, in fact, the real business is done on a really tight spread below the mid-price, as they look to place the shares as quickly as possible on very small margins, often selling for just fractions of a penny profit.

The best way to interpret GS notes is to figure whether they are merely pumping (and so, when to get out) or simply pumping to sell, and act accordingly.

One that's been more diluted than a Desire Petroleum water find.

the majority, yes.

johnsonmfc - the MMs will look to keep the price as high as they can by drip-feeding the additional shares onto the market. They'll want to move them on before the results, so they have a few weeks to do this. Where the price settles ultimately depends on buying strength - obviously the lower SP the more that PIs will fancy their chances on the results and so prop up the SP. Once spud has been confirmed in the absence of a judicial review this will bring in more buyers to help support the price.