The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
What are your expectations for this?
I stick with the view that at a minimum, we should get $3.10 / bbl as per the Oilsearch deal. That would be around 675p / sh. Arguably you could say we should get the $9 /bbl NPV.
I find it fascinating that we haven't had a disclosure from them in ages, despite the huge increase in the share price. Obviously happy holders (aren't we all?!). Kind of proves that the selling was only ever about monetising the collateral to repay the loan.
Brilliant news today! Can you imagine working in -55C?!?
I can see why you say that and I’m not saying you’re wrong. But realistically our current mkt cap is ~$1.3bn. If you put $3.10 on 2.2bn bbl that is already $6.6bn I.e an almost five fold increase. I suppose it could happen but I’d be surprised!
So you’d argue even more than $3.10?
In my view if Theta West is successful (Inshallah!), in that it proves the existence of moveable oil and flows at a decent rate, it will be hard for the market to value the 2.2bn bbl of recoverable oil at less than the $3.10 that Oilsearch paid. Thoughts?
Suspect it has as much to do with Brent being above $93 as anything else.
FFS people./ If you are complaining that the stock is ONLY up 5% the day after it was up 40%, you need to give your head a wobble. Share prices oscillate in an unpredictable manner. This is a volatile stock so the moves are bigger. You will give yourself a mental health problem if you are trying to explain / predict every last tick, or what the stock will do in the next minute / hour / day / week. These things are random and cannot be predicated. An explanation is not required or possible. The Theta West results will drop shortly, and hopefully we will get the news we want. But we might not.
Fascinating to see again today such strong volumes. 9:40am and 8.9m shares traded already. Also this move will force the early conversion of the CB which is helpful. Success at Talitha does not guarantee success at Theta West of course, but it's certainly helpful!
Two other things I would add about today: 1. Volume was an excellent 19m shares. 2. This will almost certainly lead to early conversion of the CB.
We'll have the first answers by mid-late Feb. As the co said last week, if they come into possession of any price sensitive information, they will have to say so immediately.
OK, that's fair. If you're interested, Scot and I debated the possible actions / strategies of the CB holder, and possible consequential effects on the stock a couple of days ago. It's in an earlier thread entitled "78p cap".
The killer fact I realised is that when you pull off the short dislosures required by the FCA, there are none for Pantheon. So whether the CB holder should or might be hedging some or all of his delta on the CB, the fact is that he isn't (yet!).
Like I said to Scott in that thread, if you imagine a hypothetical case where (inshallah!), the price doubled to 156p, and so at that point, the CB holder was long $110m of stock at 156p, which he had "bought" at 78p, I find it hard to imagine he wouldn't sell / hedge some or all of his holding.
But so far at least, FCA disclosures show no shorting.
Christ I know! I do chortle about this 78p "cap" JohnSwan keeps banging on about. A contradiction in its own terms, since if it existed, then the price could not trade above 78p, which it is. Now he might reasonable hypothesise something along the lines of "I believe gamma hedging by the CB holder will lead to technical selling at and above 78p, and this will make it likely that the share price struggles to advance materially beyond 78p absent any further news". That would be a reasonable hypothesis (although it isn't true either IMHO). But stating categorically that there is a 78p cap just makes him look foolish.
Can I please ask everyone, for the love of god, to stop obsessing about every tick in the share price!
1. You are going to do yourself mental harm. Share prices move up and down. You know that.
2. Markets are NOT predictable in the short term ( and arguably not in the long term either).
3. This is a highly volatile speculative E&P name. It is not a widows and orphans stock. It will be volatile, and there will be big daily moves up and down, without the need for any news or explanation.
4. If you do not understand that, and are not able to live with the stress of those daily moves, you shouldn't be in the stock.
5. Nothing material (other than possibly moves in the oil price itself) is going to happen between now and the drilling results. You are just going to have to be patient.
Can't for the life of me understand why johnswan is still bleating about the 78p "cap".
Even if he might once have had a technical point, which he could have if the CB holder were behaving like a hedge fund, surely the whole thesis is now comprehensively debunked by the fact that the stock is now at 83p and climbing??
Notwithstand that, as Scot and I proved in our earlier remarks, there never was a cap in any event!
Well as I think Scott and I pretty much proved together in the end yesterday, there never was a "cap" at 78p. And here we are!
Yes, exactly, it's part of driving a hard bargain that the potential buyer / farm out partner knows that you do not necessarily need to do a deal.
Cheers buddy. I have rarely been this excited about an investment. We have to accept of course it remains possible the drilling could disappoint. But I think the odds are massively in our favour, and as you point out on the other board, the fact a third party was prepared to make this investment speaks volumes given the DD they must have undertaken.
Hey Scott, thanks for taking the time to write the precise wording of Justin's 10 digit comments on the other board. Some of the potential implications are mindboggling indeed! And I agree the market has somehow more or less ignored this incredibly significant disclosure.
Can I respectfully point out though, that I think you have made a mistake in your numbers? For example in your first case where you state that if the $1bn was for 40%, it would imply a value for the asset of $2.5bn. THat of course is true, but the number that would matter to us, is what value it would imply for the remaining 60% owned by Pantheon shareholders. $2.5bn would be the TOTAL value, but then $1bn of that would belong to the farm out partner, and $1.5bn to us. Now of course, that is still a huge uplift to the current market cap of circa $750m, but it isn't $2.5bn. Ditto the adjustment I think needed for your other calculations.
Well yes, quite! Tells you a lot about the true conviction level of the management.