Member Info for Lemarc

As a counter to those saying to sell now and I'm not saying it'll definitely happen but the jump for a takeover bid will be quick. The suppression at 70p is not for nothing.

I would have thought the oil sector with the commodity being priced in USD would be the least affected by Brexit in the short term.

Yes definitely possible. Take it private (100-120p/share) and then repackage for another IPO after 2021.

Givingthelowdown 60p
Smut 68p
SadAct 73.65p
TarthDrader 75.4p
outofideas 76p
krakenoil 81p
Hawkey 85p
loofer 88p
Ohmetoe 77.8
Lemarc 100p (hopefully incoming good news)

Lemarc 70p
outofideas 71p
MrEMC2 74.4p
Yanbu-arabia 76.2p
Hawkey 83p

I initially sold with the RI news but bought back in later. Why?

1. Zama - Initially I thought from some of the pictures they show, the appraisal well location looked risky with Penrose compartmentalisation, etc but instead owc was confirmed, and very good net pay sand thickness too. If you look at the pressure plot on Talos energy's website, the whole 300m is on the same trend so you pretty much can develop it with slanted/vertical wells and not complicated horizontal wells.

2. INEOS pulling out of Conoco deal and they are still eyeing the Chevron deal which makes more sense to me as they already have interests in West of Shetlands with the Dong deal + there's significant overlap of the partnerships in the Central North Sea between Conoco and Chevron i.e. Britannia and it's satellites that feeds into INEOS owned FPS pipeline. As Chevron's share in Elgin Franklin is quite small (3.9%) I don't think they'll mind giving that up for Premier but that small percentage is still around 5kboepd! Rumors of joint bid with Apollo further adds to my suspicion that Premier is only eyeing Elgin Franklin.

3. Sea lion sanction by end of this year. Longest pre-FEED ever in the history of oil and gas but hopefully third time is the charm (if you consider the first attempt as the initial plan, the second the reduced sized phased development).

4. Convertible & synthetic warrants. The way it's structured is the reason why this share price is so low but because of this it'll be open to a hostile takeover. I think it'll stay around 70p for another 3 months before we get a 50% premium bid but it could be as early as tomorrow.

Lemarc 70p
Yanbu-arabia 76.1p.
outofideas 81p
SadAct 82p
Bobbliciuous 83
olderman 85p
Rookie1 86p
Hawkey 88p

Yes, Auson, if you look at other metrics like P/FCF between those 2, the difference is even more ridiculous!

And there's still the 4B tax credit, Zama, etc

Deals done at the bottom of the market:
Chrysaor - Shell 350mmboe 2p reserves (mostly mature assets) - $3B. $8.6/bbl
Neptune - Engie 672mmboe 2p reserves (mostly gas) - $3.9B $5.8/bbl

Recent deals:
DNO - Faroe 100mmboe 2p reserves - £600M + £170M debt £7.7/bbl ($9.9/bbl)
Ophir - Medco 70mmboe 2p reserves - £390M+£100M debt £7/bbl ($8.96/bbl)

Not cheap?
PMO - XXX 350mmboe 2p reserves - $3B $8.6/bbl

So that's why I think PMO will get taken over since the share price is incredibly cheap. Where else can you get 75kboepd, 800-1000 MMboe 2P + 2C reserves/resources for 800-900M?

This is my understanding but please correct if I'm wrong.

There are 71M equity warrants and 21.4M synthetic warrants initially.
The equity warrants have an exercise price of 42.5p that can be done on a cash basis or cashless basis. If everything is done by a cash basis, then there'll be 71M ordinary shares but let's say everyone converts on cashless basis at 70p, this means you'll need to give up 1.5454 warrants to convert 1 warrant into 1 share, so you'll end up with 71M/2.5454=27.8M New shares.

So now your can see why it's difficult to estimate very accurately the amount of shares that'll be issued but say based on the last RNS, 65% of warrants are exercised on cashless basis and we assume average price of 70p, there'll be a total of 43m shares that'll be issued and that's around 5+% dilution.

For the synthetic warrants, there are a few criteria for when the payout will happen but one of them is when the gross leverage ratio falls below 3:1. If this happens, the payout will be around 3.4% of the market cap - 218M. So e.g. 70p * 800M shares - 218M = 11.6M and each synthetic warrant holder gets around 55p.

IMHO it's actually to the benefit of the company to keep the share price low enough to minimise dilution of shares and minimise synthetic warrant payout.

70p

The problem with DEA is the LetterOne connection... It's not long ago that they were forced by the UK to offload the RWE UK assets, which went over to INEOS.

For me it makes more sense for INEOS/Chrysaor that has more UK based production to benefit from the 4B tax credit. Still, I think PMO is incredibly cheap and there's a very short window before we start seeing the collapse of shale oil once the masses realised the limits of zipper fracs/child wells/whatever name they call it now and the overly optimistic EUR type curves some companies are using.

No evidence but say 105p is achieved, that'll only be around 800M+. Assuming you clear out the 2B debt at the same time., the total package costs around 3B for 75kboeod production, around 350mmboe 2P reserves + another 200-600mmboe 2C. I don't think this could even be matched by that chrysaor/Neptune deal.

I'm going to go crazy with a potential hostile takeover scenario. So it's 105p for me. :)

They'll be really smart to let PMO win the Chevron deal and wait for the rights issue and simply offer a 50% premium to the share price then

They inherited ~$2B tax credit from the 2009 oilexco and 2012 encore acquisitions and haven't made much money until the
Eon assets and catcher came along.

To the more experienced long term holders: if you put in a very high price for the sell order for all your Holdings do you actually stop the shorts from "borrowing" your shares?