Member Info for LOTM-13

We will find out in the morning ........

They were previously projecting net cash to have risen from 108M to 149M at 30th June. So lets see how close they got to that number.

I'm guessing the dividend will be raise to 8.3x per share.

Given the yield is already near enough 8.6% It might be time for them to consider doing a small share buy-back, as this will be there dearest source of funds. They can payout the same amount of dividend in £ terms which will result in a slight increase in the dividend per share, just depending on how many share are bought back.

I know they want to make more acquisitions which is why there keeping the solvency ratio much higher than before, but there comes a point when it becomes inefficient to do so.

Will be an interesting read. Especially for me as I've bet on them exceeding market expectations, so fingers crossed.

LOTM

I've explained this before

Not all share-buybacks or share consolidations are good.

Shell & BP are prime examples of company's that have wasted 10's of billions of share holders money doing buy-backs at the wrong time of the oil price cycle. How they've got away with it is a mystery in itself.

Lloyd's I'd say are doing the right thing, as are the rest of the banks etc. They are buying in the shares at a price that is less than the value of the assets it owns. This slowly but surely increases the underlying value of the remaining shares. It doesn't dilute them.

As for Capricorn, the 2 consolidations & share buy-back are going to be transformational for the company & its shareholders going forward.

Remember the offer of £2.70 a share from 2 sources well that was worth £850M, since then the company will have paid out £452M after this special dividend & completed the share buy back.

Leaving £398M which if you then divide it by the number of shares in issue (95.2M less another approximately 4M for the buy-back) gives those previous offers a value of over £4.00 per share that is left.

If you look at the $50 M that there going to cut from our annual G&A spend, well that's a saving of over $0.54 per share going forward. In 4 years they'll have saved the current value of the company (post consolidation).

If there were still 315M shares in issue the saving is only $0.158 per share & it would take 13.6 years of savings to match that $2.16 per share of saving achieved in just 4 years now!

Earning per share are going to be over triple what they were before & most importantly for everyone any dividend per share is going to be over triple what it otherwise would have been.

So if they pay an annual dividend of $25M & why not since our G&A costs are going to fall by double that amount next year, then you'll get $0.27 per share in dividend instead of just $0.079

The benefit's are just around the corner, its just a case of holding on to receive them.

LOTM

Just bought a 2nd parcel of 5,000 shares at just under £2.72

LOTM

Bought some of this, this morning as I've noticed it tends to perform very well when it releases its results.

I've been watching for the right time to get in, when the spread was nice & tight.

Lets see what happens on Thursday & the run-up to the ex-dividend date.

LOTM

I thought I'd write this for anyone new here or for anyone who wasn't paying attention back in May when the company distributed $450M via a £1.15 special dividend & 70 old shares for 33 new share consolidation.

When I first looked at it the share price was around £2.25 - £2.30 a share & the share buy-back was active, which I found really strange because they were in effect over paying for the shares they were buying back!

I think someone in the company eventually picked up on that & the buy-back stopped until the share consolidation was done.

In actual fact they should have stopped it until the share price was below £2.177 & then continued again, why ?

Well the inflection point with a dividend of £1.15 & consolidation ratio of 70 to 33 works out to be £2.177.

I think examples are the best way of demonstrating it to you.

So 70 shares priced at £2.177 give a total value of &152.40 You then receive a dividend of £80.50 (£1.15*70), the ex-d price of the shares should then be £1.027 (£2.177- £1.15) multiple it by 70 & you have an equity value of £71.89. You then divide that equity value (£71.89) by 33 (new shares) & you get a price of £2.178 per share.

The consolidation ratio (70/33) means there are now only 47.14% of the shares in issue compare to before. So you have a large multiplier effect if the closing share price isn't £2.177.

If it was £2.24 instead, then the dividend is the same but the closing equity value is not £71.89 its £76.30 & when you divide that by 33 it works out at £2.312 after the consolidation. In other words the original £0.063 difference turns into one of £0.134 Which means you really wanted to still own the shares at the ex-d date because you were better off.

Conversely if the share price was £2.12 at the ex-d date, the consolidated shares should only return to market at £2.058 which makes you worse off holding them at the ex-d date you'd be better off selling out before hand & then buying them back afterwards.

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This time round the dividend is £0.56 & the consolidation ratio is 3 old into 2 new ones. So the inflection point is £1.68

This time the compression ratio is 66.66% so there is a lot less gearing than the last time round. So the effect isn't as dramatic as before, but it will still make a difference to your bottom line.

At an ex-d close of £1.74 the shares should return to trading at £1.77 & if its £1.62 then they should return at £1.59

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In May I expected the share price to rise ahead of the ex-d date that didn't happen & the share price was very weak on its return to trading.

LOTM

Company website has just been updated with the largest 10 shareholders as at 8th Sept.

Plenty of movement during the 2 week period between the 25th of August & 8th Sept.

Goldman's & BofA's holding's both increased.

4 holdings didn't change at all.

Dimensional's holding decreased by a tiny 4,518 shares.

Vanguard had sold 84,058 shares 0.06%

Irenic Capital had sold 196,878 shares 0.14%

Blackrock had sold a whopping 3,317,175 shares or 2.32% taking there holding down to 3.13%

LOTM

Mr.Kioto

If I research another company & I find any of the old Capricorn directors on the board - I won't be touching it - that will be a complete RED FLAG to me.

LOTM

I should also add in case anyone thinks that I'm full of myself, I'm not.

Yes on paper I've made a profit of around £6,300 so far, but on trading performance I wouldn't give myself a C nevermind a B or an A. That number should really be over £12,500

There is a lot of room for improvement, I've made about 4 or 5 poor decisions in the last 2 weeks alone.

Need to be far more decisive in my actions going forward. Go with what you see/feel & take a loss if need be, if you think its headed lower.

All I've shown so far is that it is better to trade than to sit passively with your shareholding.

Good luck to all

LOTM

I had to go out mid-afternoon & wasn't sure what was going to happen during that time or when I'd get back.

I did have a sell order in place from earlier today at £1.72 but thankfully I removed it just in time when I saw what was happening trading wise.

So I ended-up selling 9,500 shares at just over £1.75, which banked another profit of just over £1,300 on those one thus taking my banked profit so far to £3,800.

I currently have 2 different bundles left 21,000 shares which are roughly £1,000 in profit on paper & 7,500 shares that are £1,500 in profit on paper.

So at the moment I should be starting out with at least 12,500 shares post consolidation, but I aim to improve upon this as soon as I can.

And yes I'm not happy about the consolidation only being 2 new for 3 old but there's nothing I can do about it. I would have much preferred even 19 for 30 as that would have meant 4M less shares in issue following the consolidation.

LOTM

Hi Tren,

There will be a lot of old Cairn shareholders out there who are disappointed with the past performance of the company.

I think things will be difficult for Capricorn in the short term looking at the share register. They were a FTSE-250 company before & have a lot of institutional investors on the register & therefore not many PI's. With the further downsizing of the company more institutions will want to depart the scene as it will become to small for them.

It's also clear that there are very few PI's following the share currently & I don't think they will be attracted to it until they see the dividend stream start up next year.

So that open's up opportunities in the mean time for those that do know about it to make hay knowing what is going to happen further down the track.

$50M of G&A savings is a real game changer in itself.

LOTM

I didn't actual post this yesterday but I actually made 2 other purchases yesterday around the 155p mark in the morning one for 1,250 & the other 2,250

I am now multiple times where I want to be.

I could sell out right now & be in overall profit, but I'm not going to.

I will be reducing my holding, but this is going to be a core holding of mine going forward. I'm aiming to hold 10,000 shares after the consolidation & continue to trade it & try to build that number up slowly but surely with all the profits to 20,000 or more if I can. As I've already banked just over £2,500 of profits you could say I'll currently be starting out close to 12,000 post consolidation.

LOTM

Hi formerlyeasyp,

I've only been around CNE since the beginning of May, so I don't have the same baggage to carry that others do.

Yes the consolidation will take the share price back to roughly where it was previous to the xd date.

I'm in for the longer term value that is being generated going forward. After the special dividend payment & share consolidation is done (& the buy-back) there will be under 100M shares left in issue.

Next year & thereafter there going to be cutting admin costs by $50M a year from $70M currently to just $20M. So that's a saving of $0.50 a share going forward. So in 4 years the G&A saving will be worth the current market value of the company. Which is something people need to get there head around.

LOTM

Gruyere,

Going by what happened in May it will be in the circular that is about to be issued probably tomorrow or Monday.

I'm hoping for a ratio of 37 new shares for every 60 currently which would mean that there would be just 88M shares in issue post consolidation or 19 new shares for every 30 currently which would mean 90.5M shares in issue.

If it turns out to be 2 new ones for every 3 currently I'll be a disappointed as that will leave 95.25M new shares in issue.

LOTM

Mr.kioto,

They announced the amount as £0.56 per share in the announcement.

If you receive dividends in another currency like $'s then they will probably announce the exchange rate that is going to apply at a later date.

Given the exchange rate is close to $1.25 to the £ currently then if it were today the rate would be approximately $0.70 per share.

LOTM

Formerlyeasyp,

Well you bought back-in at a price for cash & net receivables only & you'll shortly get £0.56 a share of that cash back very soon.

The Egypt business and all the possible contingent payments are for free.

Personally I regard this as a massive cash-cow going forward, the dividends are going to be significant.

LOTM

Yes there's meant to be a special dividend of $100M coming.

Most likely in the 4th Quarter of this year. I'm sure they'll be more information on it in the half-year announcement tomorrow.

LOTM

Sorry I've made an error in the cost calculations I need to re-do the calculation later as I've assigned all costs to oil & some need to go to the nat gas side of things :( :( :(

LOTM

Just topped up another 5,250 shares at 155.17p but deal is not showing on the LSE unlike the last one, so either its being held back or it occurred on one of the other platforms.

LOTM

Even with the health profit margin we're currently enjoying of rough $40 a barrel ($89+ for Egypt oil - $49.83 of OPEX, deferred payment & G&A) & gradually increasing production, that level of income will no-where near cover the amount of money being invested in the ground this year in Egypt ($120M).

2024 will be the inflection point.

If production starts the year at roughly 7,000 bopd & the oil price maintains its current level. Then we should be seeing a healthy margin of over $50 a barrel ( $88 - ($13.00 + $9.60 +$13.45) )

That equates to over $350,000 net per day.

If development capital is set around $80M for 2024, that equates to $6.66M a month or roughly $220,000 per day. Even if they went as high as $120M again that still comes in at roughly $330,000 per day.

So we would be doing better than break-even from day 1 & as production continues to increase gradually during the rest of the year, we would be able to bank more & more cash daily (assuming the oil price was constant which it won't be).

Even taking the daily margin at $20,000 that works out at $7.3M for the year, then add in the nat gas for another $3.5M & you're looking at over $10M that can be distributed in dividends. By then we should be down to under 110M shares in issue so close to a dividend of $0.10 per share, plus the distribution from the Waldorf assets in late March which is likely to be in the region of $50M. Lets say they use $20M for additional share buy-backs & pay out the other $30M. That would mean a total dividend for 2024 of close to $0.40 a share !!!

LOTM

Mr.kioto

That depends on whether the big institutions want it to trade freely or are still building there positions in the company.

What the company has said about production levels for the rest of 2023 & beyond.

As well as the news on the $100M dividend & when the share buy-back is going to re-start.

LOTM