Member Info for ocelot

There's nothing magical about 1p, apart from PIs' love of round figures.

Personally, I think 1.175p may be the new 1p.

(more than one PI, so corrected originally post!)

There's nothing magical about 1p, apart from PI's love of round figures.

Personally, I think 1.175p may be the new 1p.

I've been involved with UKOG for longer than I care to admit.

All through that time has hung a big question mark over Tellurian's 35% stake in HH.

This has now been resolved and what was originally a mixed bag of many different participants in HH has been reduced to 3, with UKOG's share of 85.635% the dominant one.

Tellurain's share does have to be paid for, but nobody was expecting them to give it away for free.

Personally, I am delighted that HH's ownership structure has now been simplified in this way.

Genel believes that the current share price significantly undervalues the
Company's assets, and that utilising its balance sheet to repurchase shares
represents a value accretive use of its cash resources.

Hear, hear!

Oil clawed back some losses after Saudi Arabia contacted fellow crude producers to discuss ways to halt the slide in prices.

Futures in New York rose 2.4% in after-hours trading from Wednesday’s settlement. Bloomberg News reported the Saudis have decided the market slump is intolerable and all options are on the table, according to a kingdom official who asked to not be identified...

https://www.bloomberg.com/news/articles/2019-08-06/oil-extends-slide-as-heightened-trade-tensions-feed-demand-woe?srnd=premium

JayKay1,

That's your question!

Personally, I'm far more interested in the value of the 35%-share they have acquired and, above all, its value over time.

Suspect £12m may well prove to be a bargain.

Not all companies growth via internal growth, there is absolutely nothing wrong per se with external growth.

Usually, when UKOG commits itself to issuing new shares, the cry goes up from the de-rampers: "Dilution! Dilution!".

There have been so such cries this time.

So it looks as if everybody has understood what UKOG is acquiring in exchange for its new shares and that, indeed, the deal may well prove accretive to UKOG's valuation.

The news flow from HH is likely to be more positive than that from BB.

being 69% more than their current entitlement.

"completion in a couple of weeks"

That's true, but it shouldn't mean the assets are valued at zero, it simply means account should be taken of likely outlays in bringing them to fruition.

As a consequence of this transaction, drilling of the much-anticipated HH-2/2z Portland horizontal well will follow very shortly after completion of the SPA.

Is there an implication that lack of "full control over the forward Horse Hill drilling programme and production schedule" until the transaction has contributed to delays in the drilling of the horizontal well?

Upon completion of a share purchase agreement ("SPA"), this key acquisition will see UKOG's Horse Hill net oil sales revenues, net reserves and recoverable resources increase by over 69% from our current 50.635% interest to a material 85.635% net share. Crucially, the acquisition will also give the Company full control over the forward Horse Hill drilling programme and production schedule, together with sole ownership of the Horse Hill oil field site lease.

You'd expect a highly-leveraged oil company with relatively high operating costs to suffer disproportionately when the oil price takes a tumble, but Genel is the exact opposite, with net cash and very low operating costs.
Oh well!

Penguins,
Why?
Because the ownership structure of HH has been simplified.
Who?
Somebody who might wish to increase their exposure to onshore UK oil and have cash to invest.

The simplification of HH's ownership structure is going to make UKOG a much more attractive takeover target.

A bidder with cash could pay off the structured loan provider straight off.

They are going to need to get their share price up!

Alba's licence area has serious potential to host one or more new gold deposits that could rival the historic Clogau-St David's Mine in importance. The fact that the Cerys-Gwyneth anomaly trend is four times the size of the anomaly over the Clogau Mine should need no further explanation."

This "serious potential" is valued at £2.2m by the market, which attributes a net zero to all other assets apart from HH.

Sorry to go on, but the valuation anomaly is flagrant.

On the positive side, it may well have sorted out financing until their operations enable them to establish a facility with a bank on commercial terms.

£12m for 35% of HH as per UKOG's RNS of this morning, values Alba's 11.765% at about £4m.

Market cap currently £6.2m.

So all the rest of its assets are valued at a net £2.2m.

Doesn't look over-generous to me!

Market report on p41, last paragraph:

Among smaller companies, Alba Mineral Resources, an Aim-listed goldminer, said it had identified a new strike area four times bigger than the Clogau St David's mine in north Wales, where it has a 90% stake. Clogau St David's provided the gold for the Queen's wedding ring in 1947, her mother's in 1923 and that of Diana, Pricess of Wales, in 1981. It produces (sic: wrong tense) the largest quantity of gold from any region in Britain and such is the scarcity of Welsh gold it can be valued at up to 30 times more than standard gold. George Frangeskides, 49, executive chairman, said Alba's licence area has "serious potential" to rival the historic mine. The shares closed flat at 1/4p.