Member Info for longtermthinker

I am just being conservative but if you can show the maths that point anything under 35p being "A hell of a buy" then I will happily stand corrected.

Either way even at today's prices it's a great buy if you can wait around until Q1. But as we say in January nothing in these crazy times is nailed on so take care.
Good luck

LTT

With the RNS things seem to be progressing nicely, prospectus due in December and and independent valuation of Chrysaor going on. So it makes sense that anyone doing the numbers will see that a range of 20-30p should be in the cards, therefore we are just adjusting to this price level in preparation for the enlarged group hitting the market.

Maybe the prospectus containing these numbers has leaked, maybe it's the positivity in the market and oil up, most likely as some posters have already put on here, based on size and it's peers, the new group would have a market cap that relates to a share price of XX which the consensus seems to be around 25p give or take.

So for now IMHO anything above 25p is a sell and anything below is a buy, until the prospectus tells us otherwise. Then on the day of listing all bets are off as so many factors will effect the companies value, for a start how the vaccine is going; economy; oil price.

Good luck

LTT

Sorry meant originally PMO IR said Chysoar WOULDN'T have a say.

Morning Much, all,

interesting times indeed, I think I previously mentioned i'd been in touch with PMO IR about the Navitas deal and they said, business as usual and Chrysaor would have a say. Interesting turn of events, now it appears they do have a say which actually makes sense. Chrysaor are reversing in to PMO, they like the assets and want the FTSE listing and they want to grow. So if they like the look of the Falklands and SL which is an amazing opportunity for longer term growth, why would they want Navitas to have a big piece of the pie when as a much larger entity the new PMO will be in a much better position to finance the project.

After Q1 2021 they can continue with the UKEF application and will be in a hugely better position to be looked on favourably for sure.

They have mentioned Zama but still wondering if its sensible to work with Pemex, yes its a big project in a developed basin but the troubles with Gov regs going forward! Hhhhmmmmmhhh. most likely they are moving it along to make it more appetising to a buyer, but who knows. Roll on Q1 2021.

LTT

I think this sort of move on a general slow day, then maybe you are right, something in the offing, but as it stands almost everywhere is blue today! Vaccine news more and more positive; Biden on course; oil price for Brent knocking on the door of $45 with a consensus of $50 by year in and higher in to 2021. Even the most die hard shorter would start to close when the tied has turned and a general positive mood has arrived.

So can't see anything major except a very positive prospectus being published with numbers of a 20-30p valuation of the new group which is knocking on for a 100% gain from here by the end of 1st Q 2021. That's not great for long term holders, but those who bought recently or from now even will make a tasty profit. 50% to 100%+ from here, what is not to like! IMHO

LTT

enzo27,

as it stands, if everything goes ahead, my understanding is we will keep our same amount of shares but there will be a substantial amount issued in the reverse takeover which means we will effectively own about 5% of the new group. It can get a bit complicated thinking of it that way "eh why 5%, so my shares are 5% of what they were!?!?!?". So best way to think about it is the new group will have a market cap and that will be divided by shares in issue.

The feeling is the new group with 250K production and various assets should have a market cap of $5-$6B when compared to it's pears of similar size, this would make the new companies shares worth in a range of 20p-30p. We still need a prospectus and there needs to be a vote, but to all intents it will go ahead, hence many thinking to average down with a plan to get out upon the listing of the new company. With a vaccine in the offing; light at the end of the tunnel and a rising oil price (currently around $44 brent) we could be at the top end of the range so anyone buying today could double their money.

However there is still risk, if it seemed a dead cert this would already be around 25p.

So good luck whatever your plans.

LTT

I’m a newish shareholder maybe 3/4 months, I’m mainly here to sell in to the rise of them getting the $500m and oil rising in 2021 as a vaccine raises its head and positivity in to Spring, so not a long term investor here but not a trader either.

My question is, what of the future for Tullow, with Uganda gone, where are they looking to stem decline and replace/add production? At the minute wildcating is off the cards; purse strings are tight and longer term development projects are on hold. Are we all waiting until 12th Nov for a sense of direction?

I realize the money from Uganda puts the company in a more stable position and most likely it will be used to pay down debt, but what next?

Not meaning to be negative or positive just interested in longer termers thoughts as I am a PMO holder too and they were heading the same route, tied to debt that held them over a barrel and now it’s meant the reverse takeover, with PI’s getting a very small stake in the new entity.

Thanks in advance.

LTT

have to agree Ovets, even a new PMO with access to cash to progress Zama, in the current climate of nationalisation in Mexico, would it really be prudent to partner with Pemex on such a big project, think how much further along the curve SL is and with Navitas bringing cash and PMO retaining operator-ship with RKH along for the ride, SL must be well up the curve as a project of interest. IMHO

LTT

I contacted PMO IR back in the middle of Oct about this basically they said business as usual whilst the deal was ongoing with Chrysaor, they have mutual obligations on the day to day of business which relate to preserving value of the companies until the deal is done rather than having influence and overt control over each other.

The Navitas deal was ongoing, discussions between FIG about Navitas entry in to the SL licences are progressing and "we continue to target execution of the farm down, which will be subject to creditor approval, as soon as possible".

Not too keen on the creditor approval bit, probably mentioned before, what sort of say can creditors have on this as they will be out of the picture end of Q1 apart from a smallish equity stake once they take it up and have got their cash.

I was concerned up to the RNS that things had gone from bad to worse with PMO and something was afoot to either wipe out shareholder equity completely; PMO instead back tracked and got creditor support to go it alone without the BP assets kicking the can out to 2024. That actually would be the worse case scenario as they would have been in the same boat pre this reverse takeover, just servicing debt and no money to grow and no chance to move with SL.

Now with the deal still on track for PMO to become a beefier company with aspirations and less debt (well same debt but more than twice the production and assets), things are looking bright. It's still too early but can't help thinking Zama will just be sold for what they can get and SL will be full steam ahead next year. Where else on a 3/4 year timescale can you bring in another 100k+ barrels a day for under $1.5B with new province potential on the doorstep with great fiscal regime. It's been a long time coming but IF it does, game changer will be too weak a word to use to describe it. Just hope RKH can survive to that point so shareholders can reap some of the rewards rather than our board sell us down the river early to just get out!

LTT

Similar amount of debt but more than double the production with good hedges in place and enough unhedged production to take advantage of a rising oil price. Oil has hovered around $40 dollars for some time now, once we are the other side of this pandemic consumption is only heading one way, oil price too. Lack of investment in production is going to come home to roost for sure.

It's just the uncertainty all around that is holding this back, pandemic, US election, lock down, vaccine not to mention Christmas coming and the thought of a lockdown extention. It is all weighing on PMO but at anything above $35 a barrel PMO is cashflow positive, they are not going bust and the reverse takeover is about unlocking value and moving forward. Chrysoar even talk about a DIV in the future, just think about that! Where would the share price be with $55 oil and a dividend, even a very small one? It wouldn't be 11p or even 20p that's for sure.

IMHO LTT

Brent above $40 too, talks a vaccines, speedier testing rolling out in Liverpool, the suns shining and I just saw a dog and cat outside playing together! Things are looking up.

Joking aside, this a great news, the creditors were a worry for me, could they just cause problems and almost let PMO fail to wipe our 5% stake, but no, full steam ahead. All we need is further good covid news in to Spring and a rising oil price and PMO 2.0 could come out gates flying.......... well maybe in the 25p+ mark.

Lets not forget, the new company will still have $3b debt or there about, but with 250k bpd into a rising oil price, cashflow should be pretty good to pay down debt and look at actually growth rather than always being on the back foot to the creditors.

Good luck to us all.
LTT

When I contacted PMO about this they said Chrysoar had no influence over this, PMO were still working towards Navitas sign off and FIG signing off on the deal too, my only slight concern was PMO said creditor approval was needed which doesn’t seem right as they are having a say in a future they will be less involved in once Chrysoar reverse in to PMO.

In theory ARCM whom seem to have been a big part of PMO’S downfall still have over 6% short going on, at what point do they scupper PMO’S plans because they will make more from thier short! Doesn’t seem right to me, how is it not insider dealing if you hold a huge short and are privy to goings on that share holders are not, worse still having a big say in said goings on.

Anyway hopefully the deal goes through for Navitas and PMO as this could be a huge step change for us. IMHO

LTT

Not sure how accurate LSE site is for trades but £50k in value for the day is nothing, if we were looking at trades worth £10k + at a time and a few millions shares exchanging hands then I might perk up a bit, but for now and possibly some time going forward, not much to see here. Just hope PMO deal goes through, if it fails and the creditors allow the can being kicked down the road for another 4 years, it will be the end for RKH as the PMO board will be beholden to the creditors again with no say in their own future.

The reverse takeover is a reset and could be the making of an enlarged and muscle flexing PMO mark II with an appetite, production and backers to enable aggressive growth into a rising oil price market 2021 onwards. IMHO

LTT

I don’t see any reason why Chrysoar/Harbour once they are the NEW PMO would want to go it along. At this moment it is still PMO who call the shots, the Navitas farmin is progressing to be signed. The reverse takeover won’t be happening until 1st Q 2021 so should be done before then.

Also why would they want to take on more of SL, nobody takes the whole risk in particular in a new oil province, the fact they have access to the other potential in the Falklands will be more than enough, why take on even more debt and risk when it can be shared with an eager partner like Navitas. IMHO.

LTT

My main concern now is PMO creditors, it really will be down to them as to whether they allow the Navitas deal or not as long as FIG are happy.

I contacted PMO and heard from them that PMO was business as usual until the reverse takeover is done, of course SL and the loan application had been put on hold until their financial situation improved but the Navitas deal was moving forward so once done and their own situation was more stable then the UKEF process would be resumed.

If Navitas can get the deal done and reverse takeover sorted, the UKEF application should be restarted and go through without issue as the new PMO will be more financially stable.

LTT

Hi Crack,

afraid I don't have any specifics am sure someone will assist, however PMO are in a lot better position on that score than Chrysoar, from what I have read in various places, the reverse takeover is for more than just the $4B tax losses, apparently Chrysoars North Sea assets are in decline and you cannot keep on picking up end of life producing assets for ever, hence the costs savings and synergies with PMO along with their toes in other parts of the world.

Of course another reason will no doubt be for the original investors behind Chrysoar to have an opportunity to sell their stakes and get their money out of the company. My feeling though is the bigger shareholders won't just jump ship as soon as. If this deal is done in 1st Q 2021 into a Covid Vaccine, reducing numbers of infected and a rising oil price, I imagine the big share holders will hold on at least for a little while to get the share price up with it's peers. Let's face it, oil companies have really cut down on capex and become very lean stripped down businesses to survive. Once oil gets into the high $40's/$50's the profits will be impressive for sure.

The NEW PMO has aspirations to be more international and pay a DIV, this again is a great way to get money out of the company. Sale of ZAMA will reduce debt (I feel it will be sold, Mexico and its nationalistic vibes of late would make it not worth the risk, and partnering with an indebted national oil company would have it's own problems), then possibly move forward with Sea Lion in the Falklands as lets face it, in the next few years, who would invest in wild cat exploration when there is a project worth 100k+ barrels a day that could be churning out $$$$$$$ in a stable lucrative fiscal regime. IMHO

But who knows, the web cast had them all talking the talk about the future, but once the contract is signed who knows.

LTT

I still don’t understand how ARCM and other such companies can be allowed to loan money and then short the stock of the company with the loan. I understand the reasoning, but the ethics, how is it not insider trading. The fiasco earlier this year when AMCR took us to court over the BP deal holding it up, causing concern and ultimately effecting the share price. (Hindsight yes it wasn’t a great deal and the hold up allowed a renegotiation, but they also got a pay off of 9% of PMO issuing shares to close their short). My point is, at what point when the likes of AMCR have a foot in both camps to benefit from success and failure do they swing one way or the other, the worst thing being they are in the know with information as a creditor, not known to us shareholders. They still have a hefty short so they may make a decision on allowing the reverse takeover, taking a 25% hair cut on the debt repayment but happy as they more than make up the shortfall through their short position. Just seems highly suspect to me. It shouldn’t be allowed as conflict of interests and they have access to inside information. IMHO.

LTT

I’m surprised to hear that, I have contacted PMO on a couple of occasions and they have always replied, mind you I have always been polite and courteous.

Maybe they just missed your emails. You could always telephone. Good luck.

LTT

I think it’s their plan is to expand further in the North Sea, this is because they have $2.2B in tax credits so no doubt need to expand production to take advantage of it, but would they really need another $4B in tax credits? They would need some hefty production to eat through $6B! Still would be nice to have another player sniffing about, it might get us a better deal!

One thing we seem to forget here is we are not getting 5% of the enlarged group we are actually getting 23% it’s the debt that needs repaying in cash and shares to our creditors that have pulled our share down to 5%.

I’m still wondering what will happen going forward, we are currently making money at anything above $35 a barrel, where does that go? The 9% sweetener we let ARMC purchase at around 26p a share to close half there short, what was that about? Dilution for what?

Anyway let’s see what will be, seems we are being taken down, might be a buying op for the brave to average down as the new group in a rising oil environment is not going to be 14p, there are too many vested interests for that to happen. IMHO.

LTT

It’s possibly Zama that has meant PMO had to throw in the towel. The new terms they were negotiating to kick the can down the road for 4.5 years was because they imagined in a rising oil environment over the next few years they could pay down debt quicker and then a Zama sale could help with a hefty $300m or $400m but in the past 3/4month everyone has seen how Mexico Gov and Pemex (in trouble themselves) are shifting the goal posts, making things more and more difficult!

Still if all pans out my meager returns on PMO when the deal is done will be dwarfed by those I will get if the new company even hints SL work is starting up again!

LTT