Member Info for MajorThomas1

Oilriches, DELT certainly don't need IOG. in IMO fact it is the other way around. The last licensing round was a master stroke.

5 licences secured in the SNS covering 11 blocks.

Blocks 41/05b and 42/01b, you mentioned are contiguous with and thought to contain extensions of DELTS Pensacola Reef prospect.

Blocks 43/11 and 43/12b, previously owned by DELT containing the potential TCF scale Cadence structure.

The other 7 blocks all local to the Cupertino structure and the INEOS Breagh platform which IMO all have a high chance of INEOS farm in with any commercial discoveries being tied back to Breagh Alpha.

What a portfolio of exploration assets

Mole, from the article,

"A lot of our gas from the core project assets is produced in the first half of the 2020s, and our business development aim to keep production at similar levels thereafter."

Where is the gas coming from to "keep production at similar levels"

Have you seen the production profile for the project. These extract reserves need to come from somewhere.

IOG have net 2P reserves of 156 Bcfe and net 2C resources of 55 Bcfe.

They own the Thames pipeline and Thames Reception Facilities at Bacton Gas terminal.

They are progressing phase 1 of their core project. 2 topsides are under fabrication at the moment, contract for SURF, pipelay, EPC and HU etc. are all in place.

They are fully funded to production having farmed out to CalE / Berkshire Hathaway Energy and they have secured a €100m.

So it's fair to say that they do bring their own assets to the party.

Fairdealer, if we hold onto the IOG shares we will still have exposure to the DELT assets and realize their value at a later dates.

There is no way we will realize 7.6p for an all share offer. I wish we could but it won't happen. I honestly think 3 - 3.5p is the sweet spot to any deal. Any higher IOG won't be able to sell it to their shareholders any lower DELT won't be able to sell it to there's.

Been looking at HZD for a long time now. I know it seems range bound at the moment but can't see any reason why it doesn't recover its Pre COVID valuation over the next couple of years.

Just re-watched the CEOs proactive investors from July. Can't see any reason not to invest.

Fairdealer, I'm sure MS will be happy to the downaide risk reduced so long as he retains most of the upside risk he obviously invested for in the first place. For me it's all about the conversion rate of DELT to IOG share. For me that is somewhere between 1 for 5 and 1 for 4. Equivalent to 3 to 3.5p.

Greenwolf, I'm fairly sure the leak has now been plugged. Too obvious now it it leaks again. I think the offer will be maed unexpectedly for that reason.

In the mean time DELT may as well release any positive news they can. Firm well comitment on Pensicola or Sellene, farm out on Dewar, farm out on Cadence. They're in the ship window now.

IOG announced they were considering a possible bid. I reckon someone leaked it, the price started to spike and they had to put out a possible all share bid RNS.

Assume they they are working out, possibly in conjunction with CalE what there bid will be.

Jack, I theres nothing to respond to. IOG haven't bid yet.

I think we will see much more than deposit account returns here over the next 12-18 months and I think that is why there has been 2 bids in recent weeks.

Just posted this on IOG BB. Just my view on why IOG need DELT. Thought I would add it here incase it is interest.

Mole, I hold IOG and DELT. IMO both are very good but very different companies

IOG are production driven and seem to have a good project delivery team. DELT are Exploration driven, seem to have a good geological team with a good understanding of the SNS but no interest in production.

The only failing I see with IOG is their failure to increase reserves / resources and the failure to secure additional licecnes.

Followong the disappointment of the Harvey well IOG only have 156 Bcf of net 2P reserves and 54bcf of net 2C resources. Total 210bcf reserves and resources.

When you look at the production profile for the core project production drops of drastically from 2028 onwards. This needs to be addressed and IMO is the main reason the IOG MCAP has not grown as well as it should have.

That's were DELT come in. With the OGA pausing licencing rounds the only way for IOG to increase their resources in the short term is through acquisitions. Theres not currently many options around the SNS and IMO certainly none better than DELT.

DELT have amassed an extensive, strategic and highly prospective portfolio of gas assets in the SNS.

There is

Selene, drill ready, 314BCF P50 resources net to DELT.

And

Pensacola, drill ready, 93 BCF P50 resources net to DELT.

Now

Cadence, drill ready, 597BCF P50 resources net to DELT.

Not to mention the many leads on their licences.

Cupertino 820BCF P50 net to DELT
Cortez South 331BCF P50 net to DELT
Cortez 107BCF P50 net to DELT
Bunter 200BCF P50 net to DELT
Cordova 124BCF P50 net to DELT
Bathurst 275BCF P50 net to DELT
Bassett 128BCF net to DELT

And that's not them all.

I am happy for IOG to aquire DELT. I am in something of a no loose situation. However I want to see my DELT shares transfered into IOG shares at a fair value. IMO IOG need DELT more than DELT need IOG so fair value must be paid. I am sure the more substantial share holders of DELT feel the exact same way.

Mole, I hold IOG and DELT. IMO both are very good but very different companies

IOG are production driven and seem to have a good project delivery team. DELT are Exploration driven, seem to have a good geological team with a good understanding of the SNS but no interest in production.

The only failing I see with IOG is their failure to increase reserves / resources and the failure to secure additional licecnes.

Followong the disappointment of the Harvey well IOG only have 156 Bcf of net 2P reserves and 54bcf of net 2C resources. Total 210bcf reserves and resources.

When you look at the production profile for the core project production drops of drastically from 2028 onwards. This needs to be addressed and IMO is the main reason the IOG MCAP has not grown as well as it should have.

That's were DELT come in. With the OGA pausing licencing rounds the only way for IOG to increase their resources in the short term is through acquisitions. Theres not currently many options around the SNS and IMO certainly none better than DELT.

DELT have amassed an extensive, strategic and highly prospective portfolio of gas assets in the SNS.

There is

Selene, drill ready, 314BCF P50 resources net to DELT.

And

Pensacola, drill ready, 93 BCF P50 resources net to DELT.

Now

Cadence, drill ready, 597BCF P50 resources net to DELT.

Not to mention the many leads on their licences.

Cupertino 820BCF P50 net to DELT
Cortez South 331BCF P50 net to DELT
Cortez 107BCF P50 net to DELT
Bunter 200BCF P50 net to DELT
Cordova 124BCF P50 net to DELT
Bathurst 275BCF P50 net to DELT
Bassett 128BCF net to DELT

And that's not them all.

I am happy for IOG to aquire DELT. I am in something of a no loose situation. However I want to see my DELT shares transfered into IOG shares at a fair value. IMO IOG need DELT more than DELT need IOG so fair value must be paid. I am sure the more substantial share holders of DELT feel the exact same way.

Draft, you are missing the point here. With the OGA pausing future licencing rounds licences are exactly what are required.

Draft, I don't think IOG have put anything on the table yet.

DELT are just emphasising to the market exactly how well they did in the last licencing round.

IOG didn't have much success in the 32nd licencing round and don't have a lot of propsective reaources. DELT did and do.

DELT are just emphasising how strong and strategic their SNS portfolio is.

Took the plunge into Shanta today. Been considering it since the news on the Kenya. I like the fact they have diversified and the historic drilling looks good.

Looked like a break out today and gold was looking strong so thought it's now or never.

Medium term Gold and Shanta should do well. So hopefully swim.

Mike, BadA, I actually agree with both your last remarks.

Both DELT and IOG are undervalued and DELT don't want or need the deal. Thats what makes it difficult to work out the sweet spot for a deal both parties will be happy with.

DELT have around 1,406m shares in issue. IOG have around 480m. So there are around 3 x more DELT shares in issue than IOG.

DELT have a risked NAV of 7.6p per share which is around £107m the last NAV I saw for IOG was 41p per share which is around £197m.

The combined NAV of the combined assets would be around £304m. With IOG contributing around 65% of the combined NAV and DELT contributing around 35%.

To maintain these values post takeover around 260m new IOG shares would need to be issued to purchase DELT resulting in a total of 740m shares in issue.

With DELT having around 1,406m shares in issue an all share offer around 0.2 IOG shares for every DELT share, 1 for 5, would maintain the NAV of each company. Equivalent to around 3p per share.

However, as DELT have not solicitated this deal, they don't need this deal and would be perfectly happy if it all fell through IOG will need to pay a buyers premium. That is why, in my opinion the deal will be more likely be an all share offer of 0.25 IOG shares for every DELT share, 1 for 4. Equivalent to around 3.5p per share.

IMO IOG cannot justifiably offer less than the equivalent to 3p per share. More like 3.5p per share. If they do it will kicked into touch.

I think that sweet spot is somewhere between 3 and 3.5p equivalent in IOG shares.

GLA
MT1

3.5p sounds about right to me from an IOG point of view.

Not sure how the DELT BOD would react at that level. I personally think that it still undervalue DELTs assets.

In any event whatever they offer it will give an idea what the industry values the assets at in thier current state of development and will hopefully provide a new base valuation to progress from.

If IOG make a bid that gains support from the DELT BOD its a win situation. Because for the DELT BOD to support the bid its going to have to be a good one. The DELT BOD have given shareholders a detailed figure for fully risked NAV of 7. 6p advising DELT were at that time "trading at over 80% discount to fully risked NAV". Obviously exposure to IOGs assets and the synergies in the companies have a value but I feel the DELT BOD would struggle to recommend an offer much below their risked NAV.

Will IOG pay that much? I personally don't think so. But if they do then it presents an opportunity for investors at this level to almost 4 bag, cash out or hold in IOG for further gains.

If IOG decide not to bid or bid low and don't win support from the DELT BOD IMO it's still a win situation. I didn't invest in DELT for a takeover I invested in them for exposure to the UK gas market, their good prospects and their partnership with Shell which means they will be drilled and developed. I fully believe that DELT will realise their risked NAV of 7.6p over the next 2 years and if the drilling of Pensacola and Selene are successful then IMO DELT will realise the success case NAV of 13.2p. Either a 4 bag or 7 bag over the next 2 years.

So bid from IOG or not I believe DELT and its shareholders are in a win win situation. That's why I am holding them.

GLA

MT1

Cannot believe IOG didn't make their move this morning. Can only assume they were not ready to bid but hand to make the possible bid announcement as they suspected a leak last week.

This could get messy.

Good summary exploration. Exactly why I am invested in IOG and now also DELT. CalE are pulling all the strings here.

j1osf, I didn't invest here for a takeover. I invested for the assets, the DELT teams experience and Shells interest and support. If IOG don't make an offer who cares. All of them are still relevent to my investment.

fairdealer20, like me I assume Michael Spencer invested in DELT for the exposure to the UK gas market, their assets, the DELT teams experience and Shells interest and support. If the takeover goes through at the right level and under the right terms he will still have exposure to all of the above just under the IOG banner. IOG are a good company with their own good assets, team and support from CalEnergy and Berkshire Hathaway. I think the takeover makes a lot of sense and IMO Michael Spencer may also at the right price. The resultant company would be a major player in the UK Gas market in years to come.

Hi Desoc, I was in AMER too. IMO the AMER BOD played along with the lowball offer.

Regarding DELT, Reabolds offer of £12.3m this was laughed out of town by the DELT board. IOG know that they won't entertain anything which drastically undervalues the assets so wouldnt waste their time trying to do so.

However, IOG do need a deal which is obviously value accretive to protect their SP upon dilution and appealing enough to their shareholders so they approve the dillution.

Given the DELT boards NAV of 7.6p or £107m I think IOG will offer around the £50m mark highlighting the synergies in the buisnesses and the value they can bring to the assets. Blah, blah blah.

IMO. This all points to a 4 to 1 all share offer. 1 IOG share for ever 4 DELT share, equating to around 3.5p per share equivalent.

Not sure if the BOD will entertain that sort of price. But there are definate synergies and IOG have some good assets themselves.

Anyway, that's my stab at the takeover price. I don't think we will need to wait long to find out if I'm correct. I think they will make their offer Monday morinig to prevent the SP spiralling on speculation.