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It's a start to enable agreement on sanction where you can then add it to reserves. At the moment zama's worth is heavily discounted with this uncertainty.
So pemex will have to stump up more cash for the initial capex (again they have a bad reputation for paying on time) and initiate cost recovery later from the partnership if redetermination terms are included.
thanks, more rumours in the article:
"The company hinted recently that it was well placed to expand but some market watchers said that Harbour was itself likely to attract bid interest, with some claiming suitors were already running the numbers."
Thanks soder, please continue to share your valuations with us.
kenniGT, what else are you shorting? I need to be in those shares.
I think we'll have to wait for the navitas deal to fully complete. I think they've extended the deadline to sep-21.
Looking at navitas, it's very likely they'll need to sell their best asset Shenandoah to finance Sea Lion unless the previously talked about UK export loan became a reality.
Horsers, I had an old post with my calculations but it seems to have disappeared. But that was based on a conservative market cap of £4.5B and 5% PMO shareholder ownership (925.53M shares in circulation) which results in 24.31p/share.
If we were to compare to AkerBP (mostly condensate production) which has around 200kboepd, no tax advantages and a government that wants to triple carbon tax, no cheap future development options like Zama/sea lion or even international growth in exploration hotspots, these guys were instead valued at around £6.6B.
Interesting part about the international growth, I guess they will be developing Zama in Mexico/sea lion? So another 150*0.6*0.25 + 80*0.4=54.5kbopd?
It's already priced in.
How do you get 8B from 200Mx20?
Looks like a pump and dump scheme. Quite a few questionable characters supporting mtro now and it's already gone up by 133% since October.
Wiz, let me try and explain this.
Currently all the PMO shares combined are worth £200M. So for it to keep the same value in future newco at 5%, newco needs to be valued at a minimum of £4B. We will know soon what the reverse split will be i.e what is the conversion rate of current shares to new shares.
Now the new question is: what are other companies similar to the newco valued at currently? Let's look at the market cap of:
AkerBP: NOK79B (£6.8B)
Lundin: SEK64.25B (£5.7B)
Looks good?
Is it still too late for another suitor willing to give shareholders 10% of newco?
There is a big uncertainty as to how much the current shareholders will be diluted. In the announcement, it is said that current shareholders will own up to 5.45% of the newco.
Naysayers expect less but shareholders' permission is needed to vote this in so I won't expect any less.
There's also a chance that some of the creditors might not agree to a new deal and cause this merger to fail. In that case, I guess we should return to previous valuation without any RI as the BP deal is no longer available, we would still be within the clauses of the debt covenant as we are far above the $35/bbl breakeven at $50/bbl oil currently.
Finally, as this share has been manipulated by a hedge fund that has netted them huge profits with massive % of undeclared shorts and only slapped on the finger tip with a small fine, some people have lost all confidence in this share. Not to mention lots of leaks, paid articles on Telegraph to undermine this company, etc.
They need to talk it to book it as reserves. That 3B cash reserves they have is entirely RBL!
Check out the hedge by chrysaor in the last paragraph of the trading update.
Tax credit + >60/bbl & 42p/therm hedge in 2021, it's going to be the cashflow king in North Sea!