Member Info for Megla

SK, let’s sort the terms out properly. What was the market cap before the announcement? Assume we’re using closing price of the day the new shares are admitted to trading?

My type? For ensuring the terms are clear? Let’s get it sorted. I’m happy to put my money where my mouth is.

Need to be clearer on the terms, what was the market cap on the day behind the announcement? Comparison market cap needs to be on the day the shares are admitting to trading, closing price on that day.

Is this something we can put on betfair? Keep it all above board and ensure other person will pay out.

Would you put a wager on your first point? I’ll take the other side of the bet.

That isn’t a debate SK. It’s just another one liner.

The market cap in completion of the refinancing/equity raise will be considerably higher than it is now.

In theory, it should be current market cap plus the amount of new equity raised.

If the market cap ends up lower, then some, like me, might see that as a buying opportunity.

Dreadful analogy. Premier are raising new equity not taking on debt.

Market cap, in theory, should rise by the anoint of new equity raised. Whether it does or not is a different question.

Pretty poor when you need someone else to explain your points. I suppose that’s the problem with posting one liners all day.

SK, what are you on about? What value?

I’ve said the value of the company will more than the current market cap once the refinancing/equity raise is completed. Which is a fair assumption given the £400m in new equity, extended maturities, covenant waivers, reduced debt and the additional producing assets.

Not sure I can be any clearer. If you don’t agree, cool, but debate the point rather than a one liner.

SK, and where did I say value would magically pop out of the woodwork. You really are talking rubbish. Maybe challenge my points rather than talking in riddles.

SK, not sure what you’re on about?

I never said a the value of the company would go up by “floating a rights issue and an equity raise”.

You challenged my assumption that following completion of the rights issue/equity raise that the market cap would be higher than it is now.

Current retail shareholders have been screwed, but that doesn’t mean there isn’t value lurking somewhere.

If you feel strongly the other way, I.e. the market cap won’t increase once the new shares are admitted to trading then let’s have a friendly wager. I’ll give you up to a value of £300m, I’ll take anything over £300m, closing market cap on the day the new shares are tradable.

Likely another acquisition late next year, tax losses too good to miss if oil gets back into the 60’s.

Agree sham, not disputing that. What I’m disputing is that the company won’t be worth more once this debacle is completed.

Market cap*

So let me get this straight, SK. So what you’re saying is the market will be no higher, even though the company will have raised £400m, cut debt and some tax free producing barrels?

If that’s what you believe, I’m happy to take the other side of a bet.

SK, surely that’s a joke? Of course the company is going to worth more than the current market cap.

Covenant concerns addressed
Debt reduced
Additional tax free barrels
Increase in NAV

Disagree with everyone on the rights issue lol.

1. It’s only dilution if you don’t take up your rights.

2. Share price would likely be higher than the TERP so would be instance win if you take up your rights.

3. Balance sheet is a mess and needs resolving.

Pointless debate anyway, IR have confirmed it doesn’t form part of current strategy. Well, not until the creditors demand it anyway.

Kenni, I think you’re in the right track with the company being worth much more following the refinancing/equity raise, particularly next year once there’s a vaccine for COVID.

Personally, I think a £1bln market cap towards the end of next year is more realistic, but would be interested to know where you get the £4bln from.

Kinda hoping there’s not much left to kitchen sink from an operational perspective. The big concern for investors before COVID was the poor production guidance for 2021 onwards, next weeks update might give us more of an idea if that was realistic or if it was a case of under-promise over-deliver.

From a balance sheet perspective, I’d like to see a rights issue to raise $300m. Unlikely though, I’ve spoken to IR about this multiple times and it isn’t currently a favoured option. Obviously they have less concerns about the balance sheet than myself.

Happy, as per the post from AK. The assumption was based on oil prices averaging $59 as per the note from Goldman.

Tony, I didn’t disagree that oil prices remaining suppressed was a bad thing. What I would challenge is that having a shale company go bankrupt is good thing. Look at $WLL as an example, they will exit chapter 11 this week with much of its debt turned into equity and in a place where it could invest if it chose to. Obviously there’s a big question about whether they’ve learned their lessons, but the point is they could rapidly invest when oil prices do rise.

As I say, better to have them on life support rather than just wipe out the current equity holders.