Member Info for jemand

@snooz,

In order to view some of the blogs, you need to register, then go to the blog page and click on a 'join the club' button.

The most recent extension is to 29 January 2024, but that will not be when the LC&F administration ends.

@scoredagainsteps

Do you mean SailorNL? If so they last posted in January 2023.

Those associating the falling share price with likely leaked upcoming bad news should stand back a little, and they might see that it is not just IOG share price that is falling.

@Wolster69,
I have to agree that IOG holds back information that share holders should be aware of for too long.

According to Article 17 of the Market Abuse Regulation (an EU regulation that was onshored into UK law upon departure from the EU) "the issuer shall ensure that the inside information is made public in a manner which enables fast access and complete, correct and timely assessment of the information by the public".

I believe that the Financial Conduct Authority is the appropriate regulatory body to report this to.

The £11.4M loan notes convertible at £0.19 are worth £21.6M to LOG at the current share price of about £0.36, so they are hardly likely to accept £11.4M and the cancellation of the option to convert (maturity October 2024).

This is a extract from the LOG administrators' latest report (for the period 17 December 2021 to 16 June 2022):

The Joint Administrators understand that there are some concerns from certain IOG stakeholders that the decline in share price is somehow a consequence of a series of disposals by. or otherwise the activities of, LOG. even though other listed North Sea focussed gas producers have seen similar fluctuations in share prices. Creditors should be aware that the administrators of LOG have been taking continuous expert independent advice throughout and are following a strategy consistent with that advice. LOG is not under any obligation or pressure to sell its stake in IOG on any particular timescale and the Joint Administrators confirm that we do not believe that the recent share price is representative of the value of the underlying business and are not currently active sellers of our position in IOG.

@marineclark
It's not 10 million shares. The loan notes convert to 60 million shares (and they have 20 000 000 warrants with an exercise price of £0.3218).

@dunderhead
I am not saying I do know their exact intentions, although I have scanned through their 6 monthly reports.

Even without knowing their intentions, my comment to scoredagainsteps still applies. He suggested LOG were selling shares to raise money to purchase £0.19 share options, so I responded to point out that LOG does not have £0.19 share options, and instead has loan notes that can be converted to shares at £0.19 or repaid in cash if not converted by maturity in October 2024. Hence there is no need for LOG to be raising money by selling shares in order to buy (non-existent) £0.19 options.

raising

@scoredagainsteps,
At this time, there is no need for LOG to be raiinge money by selling in order to buy options. LOG has £11 400 000 in loan notes convertible at £0.1900, repayable in cash if not converted by maturity in October 2024 (as well as 20 000 000 warrants with an exercise price of £0.3218 that mature on 31 August 2023).

Lombard has increased its holding from 16.86% to 17.02%, so current holding is still below the 17.99% prior to the reduction on 15 March.

Adjusted EPS 28.5
Target price 66.0 (based on long-term gas price of 55p/th)

At a rate of 60 mmcfd and the average UK gas price of 195p over March/April, IOG should generate over US$20m of cash flow a month. Sustained high Blythe and Elgood uptime and timely Southwark first gas in Q4 ae required.

@Anjago
The link contains a string of asterisks instead of https://www [dot] research-tree [dot] com. Also, you need to create an account to access it.

@Anjago
The link contains a string of asterisks instead of https://*********************. Also, you need to create an account to access it.

This is from a communication by Smith & Williamson, the administrators of London Capital & Finance and London Oil & Gas on 30 July 2019:

"We have entered into mutually beneficial agreements with IOG which will ensure that any disposal by the joint administrators of shares in IOG will only be carried out in such a way as to support an orderly market in those shares."

@Manofnomeans,
I previously said I would not be commenting further, but have subsequently decided to respond to the particular comments you have made.

"The administrators will be delighted to set the expectation that the administration process could run for years."

They may possibly have been rubbing their hands in glee at the prospect from day one.

"Frankly it is risible to claim that the cost of administration is not linked to the duration of the administration process."

A large proportion of the fees accumulate from actual man hours charged to the particular administration process rather than just to the passage of time alone, so no man hours are charged for any time during which there is no activity on the administration, but there will be some continuous costs such as for data storage, retainer fees, etc. The costs of man hours charged far outweigh the continuous costs.

"you may wish to reflect on the reality of corporate overheads and the possibility that an organisation owning 27% of IOG will have personel monitoring the progress of IOG on a dailly basis"

Overheads are factored into the hourly rates charged. The costs associated with holding the shares are a small fraction of the total costs.

"after all it is only a matter of days since you were proclaiming your 'certainty' that the administrators were not selling down their shareholding."

Contrary to your view that the administrators have started the process of selling off the shares to raise the 25% recoveries, I am still of the opinion that is not the case. It was surprise to me that the administrators sold shares at this time having recently drawn down £10 million from a loan facility. That amount would cover costs for many months ahead, so it does not fit with the idea that they will be selling off the shares in the upcoming months either.

"Another naive response."

We will find out in time whose view more closely reflects the administrators' actions regarding the selling of the IOG shares.

@Manofnomeans,
These are quotes from the LOG administrators:

"The principle duty of the Joint Administrators is to maximise the recoveries in the estate for the benefit of all creditors of the Company and ultimately for the benefit of the Bondholders of the secured lender, LCF."

"The Joint Administrators have commenced legal proceedings, jointly with the LCF Joint Administrators, against various parties with the intention of recovering funds for the benefit of the LOG creditors."

You have said "the administrators job is to crystallise assets and distribute the pot to creditors without undue delays". In the first instance it is the administrators who decide whether delay is warranted or not. LC&F is the only secured creditor of LOG, and both LOG and LC&F have the same joint administrators, so the FSCS (the LC&F creditor holding the majority of voting rights) is ultimately the interested party challenging the administrators' decisions. If the FSCS and the administrators are in disagreement, then ultimately it may be a judge who decides.

The administrators have already set the expectation that the administration period will run on for many years yet. Currently, LC&F administration has been extended to 29 January 2024. LOG administration has been extended to 16 December 2022, and whether it is extended further will come down to the case that the administrators put forward to a judge.

The administrators will have made a judgement based on expert advice with regard to the possibility of increased value in the IOG share holding over coming months (to the end of 2022, or possibly beyond). I am of the opinion they will not be selling the shares yet based on the expectation of increased value, and my guess is that the FSCS would accept that position.

You refer to the court case as a "side issue". It would be irresponsible of the administrators to spend millions on a "side issue" that has no benefit to creditors. In their reports the administrators say they will pursue actions that have a good prospect of success. It seems that the administrators do not see this as the "side issue" that you do.

With regard to your conclusion in saying "I'm sorry to say that I find your contention that administrators fees are not correlated to the duration of the admin process to be somewhat naive", I am saying the fees correlate to the hours worked not simply to the passage of time. The administrators are not working solely on the administration of LC&F, LOG and the other associated companies for which they are administrators, but on other unrelated insolvency cases too, i.e. the hours charged fluctuate according to activities at the time.

You are of the opinion that the LOG administrators should be selling off the shares now. Only time will tell whether the LOG administrators are of the same opinion.

I shall not be commenting on this any further because I do not feel I can add any more to what I have already said.

@Manofnomeans,
It is not simply a case of the administrators of LOG and London Capital & Finance holding out for a higher share price. They still have a lot of other work in progress. As I have previously mentioned there is a court case at some time in 2023.

The administrators fees do not simply accumulate with the passage of time, i.e. if they do very little for a period, then their fees would be low during that period.

The increase in the value of LOG's IOG share holding over the next year is very likely to far exceed the administrators' costs over the same period, so holding the shares is justified on that basis alone.

I am surprised to see that the LOG administrators have sold a few million IOG shares even though they said they were taking out a loan. Maybe there will be some explanation in their next report.

This is certainly to cover some of their costs, and not for any repayment to London Capital & Finnace and ultimately its creditors. They shouldn't be selling all of their 26.99% holding any time soon (hopefully).