Member Info for JenniferE

I think Aker BP market Cap high for the year was around £10bn which is where I got the 50p from.

Devonplay, Interesting you mention pmo1, I think that is the better pay rather than buying pmo. I make the current deal with the share option worth 79p compared to a but price of 72p. You also get the bond interest whilst you wait for the deal and a certain level of protection if the deal fails.

Rookie1, what you say is correct and is the basis of my expectation of a 25p price and upto 50p when the oil price improves.
They also pay vey high Norwegian tax whilst we will be paying very little tax for a while using tax losses.

Their minor advantages are their cost per barrel of 8.9c and the fact they pay a dividend.

If you're trading shares there is no point just looking at todays price, you have to take a view on where you see it going in the future. Using Aker BP was an interesting example of a similar company and using their valuation we could see a 25p share price under current depressed conditions and 50p if oil makes a significant recovery. This makes me believe the risk is strongly weighted to the upside and explains why bondholders are supporting the deal.

There is no no vote option! If this were to happen the creditors would put PMO into administration, do a debt for equity swap and then continue with the chrysaor deal, except this time shareholders would have a lot less than 5%!

Devonplay, that statement you quote isn't attempting to find the true value of the merged group but is just giving a value based of the share price at the time. As investors we need to look forward to what the price may be in the future not what it was when someone spoke of Sky yesterday!

To be honest I doubt IR have made any attempt to value the company and their price range is probably just the range they say the shares trading after the announcement!

I think there is solid reason to believe that the bondholders are not taking a voluntary 25% hair cut and that they expect the shares to reach their break even price of 24.8p. Further comparing the combined group to Aker BP which has lower production, higher taxes and higher debt gives as expected share price above 24.3p.

For what it's worth, I've just done a little research on Aler BP. In the last quarter their production was 210k boepd and they have a market capitalisation of £4.5bn. We will have greater oil production, and lower taxes and if achieve a similar capitalisation it would be a share price of 24.3p. If anything it would be expected that we would have a significantly higher capitalisation.

Devonplay, do the debtholders in your chat room realise they will only get back 68.5p in the £ and not the 75p that was hinted at?

Since they are currently now trying to sell this deal to bondholders it may be fair to assume the deal works for them.
It is suggested that they are getting 18% of shares for $1.07bn so that values the whole company at $5.4bn or £4.59bn. There will be 18.52bn shares in issue so that would be a value of 24.8p per share.

This seems to me to be a reasonable and realistic target which I've seen suggestions although no actual numbers that this is comparable to similar companies in Norway!

They expect to publish a full prospectus before the end of the year, the you will have all the information you need to vote!

You will have the same number of shares you have today! PMO will issue billions of new shares to Chrysaor shareholders and to bondholders. PMO shareholders will remain the same.

Well done to ARCM, they shorted us from over £1 into oblivion, blocked every deal that could save shareholders and threw us under a bus to consolidate their shorting gain. Oddly though they seem to have also thrown the senior creditors under the same bus, they were being offered 8.4% to extend maturities for 4 years but instead are being offered about 68.5c in the $. No wonder they were trying to sell the debt at 72c and there were no takers.
Well done ARCM, you blead us dry, you did great but you are vile human beings, I hope you lose your shirt on you next deal and end up as a spat at the base of the largest tower block!

I would agree things look very grim at the moment but it just shows it's in no ones interest to have a fire sale of assets at current prices. Debtholders and shareholders have to look longer term and I'm pretty sure the oil price will recover although probably not until the latter half of next year. The deal they are currently trying to push looks to me like the best chance of debt holders getting their money back and shareholders saving their investment. We were in an even worse mess at the start of 2016 and after that there was a great recovery. I'm just hoping ARCM don't throw us all under the bus because they have turned chicken!

The latest item on the news tab almost confirms worst fears! ARCM $200m auction failed and they simply want their money back! The court case earlier in the year was because they didn't want the BP purchase to go ahead and instead wanted assets to be sold to pay off debt. I suspect history is repeating itself! It appears ARCM would be happy with 72p in the £, if debtholders take that level of a haircut there will be nothing for shareholders!

They are looking to refinance around $2.4bn not $510m!
Clearly some creditors are not happy with the current proposal and want more!

Eh! Wasn't my comment supporting your post? Are you not saying they have another 45 days? I'm confused now.

If they have another 45 days it explains why the share price isn't reflecting impending doom

They're cutting it fine, maybe they have EU trained negotiators

Enquest PIK is currently 7% but they are subordinate debt so didn't have the same clout as Premier senior. I think there is only $400m of Enquest senior debt to be repaid so PIK holders will have a lot more power in the next round of negotiations!