Member Info for LOTM-13

Hi seen_it_done_it

It didn't work out for me either with PHNX I could have got out with a tiny profit if I'd set the level at £4.87 but I wanted to make a couple of hundred £ at least so had it at £4.93 so I'll probably be holding it a little while to or will just have to take a loss this time round.

Sadly I didn't buy MNG this time round it would have worked a treat buy around £2.038 say £2.045 including costs etc & out this morning at £2.008 with a 6.5p dividend.

You have a good day to

LOTM

Marc74,

Or they take up enough of there rights so that no money is removed from the investment effectively.

In this case it would mean taking up roughly 3 rights of every 11 you were granted.

That way you're averaging down your purchase price & making the point you break-even lower than taking out the cash & having to wait a heck of a long time for it to recover.

It just depends on your outlook for the company.

LOTM

I will try to explain the process for you .......

They consolidate the shares 1st of all on a 20 for 1 basis so 20 x £0.40 = £8.00 approximately

The new consolidate shares then traded at slightly less than that price until closing yesterday at £7.50 which was the ex-rights price.

So to work out the new share price taking into account the value of the nil paid rights that now belong to you, you do the following equation (the value of the existing share + the cash to be invested in the new rights divided by the total number of share's) so that works out at £7.50 + 6 x £1.97 = £19.32 then divide that by 7 to get £2.76

Hence why the original consolidated share is now trading round about that price.

The 6 rights you have for each share will be trading around £2.76 - the £1.97 still to be paid for them so @ £0.70 per right.

So if you sell some or all of your rights at the moment then that's the amount you'll pocket without having to pay the £1.97 on them. Alternatively you can pay the £1.97 on some or all of them to own them out right. The ones you don't take up, will be covered by the underwriter & you'll get paid the difference, what that difference is depends on the share price performance between now & the pay date.

LOTM

Seen_it_done_it

If you'd be happy to take £2.76 then put in a limit order at that price prior to the open, if it fills 1st thing then your happy :) if it fails then at least you gave it a go.

In the past I've been shocked at some of the prices you can get on open! Sometimes I think the MM has forgotten its gone XD

Good luck

LOTM

RagstoRich

Probably easiest to do this in $ terms rather than £'s

Current value of the company $300M (lets call it $200M after the special dividend is paid)

Cash $300M

( of which $100M is about to be paid as the special dividend & a further $10M is to be used for the share buy-back)

Debt's of $126M

Therefore giving us a starting position after all of the above of $64M in Cash (300-100-10-126).

There is then $121M of working capital tied up in Egypt production.

The current estimated receivables position for the Waldorf assets is put at $75M ( which personally is on the low side & Waldorf have a figure of $100M which I still think will be topped at the end of the payouts, but we'll go with the lowest figure)

They have $40M still to pay to Shell over the next 2 years assuming oil prices are good for the Egypt assets.

So we're now at $210M (64+121+75-40) which is the value of the company come 6th October

That's after having already spent $76M on drilling in Egypt this year alone (up to end of June), with only a few of those wells actually onstream so far.

In addition the book value of the Egypt production assets is currently listed at $267M & will likely be increased when a new reserve report is produced.

Now we haven't even discussed the $50M a year that is going to be saved on G&A costs starting in January. The last board paid themselves & the staff like those of an oil major, not a $1.5B dollar company & didn't concentrate on achieving optimum production from the assets they had.

So Imagine you're looking at the annual accounts for 2024 right now, you'll be seeing that EPS are $0.60 per share better than the old company could achieve & that will be the case for years to come.

So even if you thought the company could only break even currently when producing 14,000 boed (and growing), there would still be an additional $50M ( $0.60 per share) that a significant portion of could be distributed to shareholders annually.

Not to mention when they get near the end of development the only cap-ex will be just to do work-overs when needed & all that extra cash is suddenly available for distribution as well.

LOTM

Seen_it_done_it

I never got back into CSN the spread has been far too big & the price not where I wanted it, so I bought PHNX since its yielding 5% with the XD tomorrow.

I'll probably be trying to sell it around £4.87 on a limit order 1st thing in the morning to bank a couple of hundred £'s in profit, if it opens higher than that.

If I had CSN & your buy position, I'd be trying to sell it 1st thing on open with a limit order in place around £2.76 to bank that profit once the divi is paid (sometimes you get out at an even better price than you think possible if your 1st in the queue) then I'd be waiting on the sidelines with a limit order in place for the next few weeks around the £2.70 mark.

But that's just me & yes it might not be possible to trade out at the price I'd want. Will watch the opening prices with interest.

Good Luck

LOTM

RagstoRich

I have to go out for a couple of hours & will reply to your post later.

Perhaps you would like to study .....

https://www.capricornenergy.com/umbraco/surface/media/mediaitem/capricorn-hy-2023-results-presentation-140923_final?path=/media/3650/capricorn-hy-2023-results-presentation-140923_final.pdf

In the meantime slide 23 is the one you want to look at, you'll see there that the current valuation of Capricorn implies no value at all to the Egypt production.

LOTM

I really didn't want to be paying this price for the parcel, as its the highest I've paid for one in a while, but I finally pressed the buy button.

Its not showing up on the LSE trades so it most likely took place elsewhere 4K at £1.767257 at 9:12

PS Barclays seem to have a source of stock that the rest of the market hasn't access to

LOTM

I know it wasn't a lot of volume just over 48K in the closing auction, but it's the first time I can recall the matched price being above that of the last quoted trade in normal hours.

26-Sep-23 16:35:07 176.40 48,184 Buy* 175.40 176.00 85.00k UT

So this maybe the 1st signs that there is a shortage of stock out there & the insto's are starting to scramble to get hold of those shares that are available.

Tick Tock - only 7 days to the consolidation

LOTM

Hi RagstoRich

Ok let me try to explain it again in your terms -:

NM offer:

315M shares in issue, £2.75 per share = £866M value

Pre-dividend value:

315M shares in issue, £2.18 per share = £687M value

Post divi value (now):

Dividend payout: £362M (£1.15 per share)

Share buy-back to date £12M

143M shares in issue, £1.76 per share = £251M

So you have:

Total delivered value to date: £625M (div + buy-back+ current SP)

NewMed deal: £866M

Thus there has been £241M of value destruction. Still a colossal amount!!

--------------------------

And there will be more "value destruction" to come via the share consolidation & the rest of the share buy-back.

--------------------------

The difference is that you call it "value destruction" RagstoRich, I don't.

Have they sold Egypt on the cheap ? given away the future UK contingent payments to anyone else, or the possible Senegal one ? No

What they've done is stop any more expenditure on Mexico, the other UK licences it had & the other exploration stuff.

Were these given any real value in the NewMed offer ? No

So where's the missing £241M of value ?

Well its still in the company, in the form of the 3 assets I listed earlier, plus the £80M of cash that is about to be paid out, the rest of the buy-back cash £8M, the working cash in the Egypt business & the difference between receivables & payables.

Once you get your head around that point, (that it's still there in plain sight) the rest all makes sense.

The Shell Payment $25M & the exploration costs in Egypt would all have been factored into the NewMed offer as they were known about as would most if not all of the development expenditure that's taken place in Egypt.

Now you could argue that some of the "missing money" figure should be reduced a little because of Woodside's delay of getting Senegal up & running & yes it could end up at nil & I have no problem if you want to take that view in getting to the valuation of the parts.

The only difference is the value hidden in plain sight as I call it is now going to be shared out amongst far fewer share's.

On top of which the company's G&A expenses are going to be £40M lower each year going forward & that's something that wouldn't have been factored into the NewMed offer. This is a significant annual bonus that the market is not recognising for now.

So in summary - If NewMed were to make that same offer or a similar one come the 6th of October using the same criteria as before, for the assets still in the company it would be for roughly £400M (£850M less £454M paid out in cash & buyback [£362M, £80M + £12M]) which with 95.2M shares left in issue works out at over £4 per share instead of £2.70 previously.

I hope that clarifies everything for you RagstoRich

LOTM

Seen_it_done_it

Your mistake was only buying back 1/3 at under £2.73 you should have bought it all back at that price, you'd have locked in a profit of around £450 & still be entitled to the dividend.

I sold my 2 parcels 1 at £2.78 & the other at £2.798 for a net profit of just over £540

I tried to buy buy one of the parcels on Friday, was looking at something else when the price dropped & you got your 3K, sadly my limit order never got filled :(

If the price drops before Thursday then I will probably buy some again & hold for the dividend.

In the meantime those free funds have made me a tidy profit elsewhere that I've just banked :)

Patients is the key don't go chasing the price let it come back to you (even when a dividend is due)

Good luck

LOTM

Dai2belts,

Its not the consolidation that's done it, its the price the shares were bought back in for :)

see below from before .......

There were 315M shares in issue back then when they rejected £2.70 or £850M valuation for the company.

They paid out £362M (£1.15 per share) & reduced the shares in issue to 148.5M when the share price was like £2.18 a share. Which meant they effectively added £0.56 to the value of the shares that were left in issue to that previous £2.70 people had been willing to pay to buy/merge with the company.

The buyback has only enhanced that value further with 6M shares bought so far.

Now they are going to payout another £80M or £0.56 per share to reduce the number of shares in issue even further & they are doing it at an even cheaper price than before !

If you add the numbers up we will end up having 95M shares max in issue having paid out a total of £452M (362 + 80 + 10).

So if you think about it that means £400M (that someone was willing to pay previously at similar or lower oil & gas prices) is in those 95M shares ie the offer would be over £4 per share now.

LOTM

I've just bought 4,250 at £1.737 & I'm just waiting to see if they are stupid enough to lower the price even further before I buy another batch.

Sorry I forgot to mention I bought a parcel back of 1,750 at £1.7093 in the middle of last week.

LOTM

Dai2belts,

I don't know the notification period for short's its not something I study, I just read what's listed, to be honest its actually the 1st time I even went & looked at the short position feature on CNE.

As to how high it can go, well remember the calculation I posted not so long ago ..... what was the £2.70 offer's before would post the consolidation be the equivalent of over £4 per share from 6th October & any shares bought via the buy-back will increase that price.

LOTM

Dia2belts,

The price was certainly manipulated by the institutions between the half year report & the terms of the share consolidation being announced (I posted about it at the time).

The data I just posted gives you a good understanding of why.

If the consolidation had taken the number of shares in issue down to 90.25M or even 88.5M which is where it was headed prior to the ramp instead of 95.4M, Then it would have been even harder for the institutions to rectify there positions cheaply in the scramble for stock, that's going to occur. The free float is going to be very small until they unwind the mess they've got themselves into, not to mention the cost.

LOTM

If your an Institution & you've lent your stock to someone else for a period of time are you going to risk selling it ahead of the share consolidation or even just after that knowing that at least 3 other institutions are long by 19.5% of the company ?

Add in there are 3 small shorts out there for around 2% of the company, so they've borrowed stock to sell as well & may need to buy it back in a hurry as well

And to top it off the company buy-back is about to begin again for another $10M or so which will be competing as well while buying up possibly 4% of the company.

Given the above I've removed the sell orders I had in place around the £1.81 mark which has been the sort of recent cap on the price.

I have a feeling this is going to get squeezed much high in the next few days, its a pity I only got 2.5K of my last sale bought back around £1.71 & I missed out on more early Friday :(

Lets see if I right & how panicky the institutions get this week.

LOTM

There is now a further announcement regarding institutional holdings in Capricorn -

A new name has just emerged Centiva Capital, LP They have acquired the indirect voting rights to just over 3% of the company !

I'm actually beginning to wonder how many voting rights Capricorn has !

Yes I know it can only be 100% but seriously that is 3 company's that have acquired significant indirect voting rights in the company. The latest indirect notifications have

Goldman Sachs - 6.3389% see announcement 19th Sept

Bank of America Merrill Lynch - 10.187% see announcement 5th Sept

Centiva Capital, LP - 3.05% see announcement 22nd Sept

So combined there indirect control is just over 19.5% of the company.

So who has sold them there actual shares ?

Well it has to be at least 3 different institutions !

LOTM

Johnnytaffia,

You've chosen a comparison that most people can relate to. Your 100% right that its a drop down in terms of size & status, so definitely not progress by those measurements.

The only counter comment I can give is that its only the very few elite football clubs in the world that actually make money for there owners over time. All the others lose it. In football clubs its the players & managers who get the money in massive salaries.

People invest in football clubs because of there love / affiliation to the club, not to make money from doing so. Most invest knowing they'll never see that money again & yes I own a few shares in the club I support & no its not in the premier league.

So comparing a football club with something that your investing in to make money from unfortunately is not a good comparison.

LOTM

Seen_it_done_it

CSN looks to be a share you can trade & do well with, sell at just over £3 & buy at under £2.75 & collect dividends along the way.

Only 1 week to hold to qualify for the dividend now (roughly 3% yield)

I get the distinct impression from the results announcement that another acquisition is just around the corner & is a bit bigger in size than the previous ones.

LOTM

GrumpusLOL

Clearly we see the future of Capricorn differently.

Capricorn was a FTSE250 company and as such had a heavy bias towards institutional shareholders owning most of the company. These special dividends are dramatically reducing the market cap of the company. It won't even be a FTSE350 stock after this latest payout, which means a lot of Institutional investors will no longer find the company meeting their size criteria & will have to either reduce there holding further or sell out. Yes the same thing happened after the $450M payout.

Yes in the short-term the same thing is quite likely to re-occur as Capricorn doesn't have many private investors following it.

Yet Goldman Sach's & Bank of America both know what's happening & have both been building up considerable voting rights in the company in the last 6 weeks. So there is a chance things will be different this time round.

If you look beyond the very short term, you'll see in the future an annual G&A saving of $50M per year, which is very significant indeed. It just goes to show how wasteful the previous group of directors were with shareholders money.

If your still here in a years time, we can look back & debate who turned out to be right regarding Capricorn's future.

LOTM