The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Yanis that hedge conversation is exactly the same as someone saying: I bought shares at 8p when GL and new management took over and now at 0.8p two years later I'd like my money back and cancel the trade...
Credit risk for whoever did the hedge is a very valid issue, for the other side of our hedge, is ANGS good for the settlement sum?
IF ANGS had used a put purchase then IF they produce gas they would enjoy much of the recent huge price increase. We don't know much about the hedge mechanics. All hedges are a compromise, doing no hedging is always either the best or worst outcome, any insurance outcome will fall between these. Clearly if ANGS could have not hedged that would have been best here, but lenders had a big say in this. Big worry is does the hedge give enough protection if gas flow is too low or too delayed, or both. Payments may be due from 43p all the way up even if no gas is produced...
"Sold out 0.95, just bought back in at 0.85. This share is great for swing traders like myself….one of my most profitable stocks"
Combine the big daily volume, share value, with a 0.01 move and you must be funded to buy a whole pint at the pub this evening, well done!
With a billion shares outstanding and 0.4% of that trading on an average day, anyone trading £5k or £10k has an impact on the price, as we have seen from the yo yo moves recently.
With a billion long shares potentially selling into any sustained rise, ANGS is going to need decent confirmed gas flows earning a net profit to pull in big new buyers, the only thing that will move this way higher.
AIM can give that on a wiff of decent news, but the heard of bulls can also get bored and move on to better grazing elsewhere on no news.
Having been in and out here many times myself find this an entertaining small oiler case study, happy to watch for now, good luck to all those are in at present, Poundland on new drill or bust in my view, rest is just PR noise.
Angus need to get to first gas after a good sidetrack, and show investors that the volume and revenues generated can both service the £12m and provide a return to shareholders.
Until that time buy dips and sell small rallies is the only plan here. Also the only way I have made anything here, buy and hold always cost me in ANGS.
Meanwhile, the lobster pot appears to have trapped a whole new group of crustaceans recently!
Gotta be a frustrating Friday for the negative moan team what with both here and even ANGS trading higher.
No doubt we will get negative posting all weekend, while most of us are watching football or enjoying family time. Free will and all that, but WTF kinda life is that.
Stu there are several dozen 'investors' here that post nothing but negative comments that are clearly either green fanatics or NIMBYs or often both. Many of them haunt other AIM oiler shares with the same constant comments, sometimes even with the same user name.
Many of the real investors here are very unhappy with much of what SS has done, however we realise that there is still potential here, and instead of posting day and night negative comments I would sell up and move on.
So no, it is not at all baffling, just a lot of anti oil and gas exploration activists on here. Too bad they hold no sway in Turkey, which must be very frustrating. You can almost feel some of their desperation that profits might be generated from Turkey and at some point help to develop assets here in the UK.
floors are super expensive, so to pay for say a series of 30p puts, ANGS will need to sell a series of say 70p calls, to create a 'zero' cost or low cost hedge.
Good in that locks in revenue, bad in that is caps your upside. No free lunch when it comes to hedging, doing nothing is always best here if prices go up, doing nothing is worst if it goes down. Lenders understandably want some floor or protection to production revenues.
What a week, last three days up 50%, up 70%, and down 30% ending up with a gain of 110% for the week. This and the great volume for AIM will get even more speculators trading here in the run up to next drill and news.
Such excesses of ramping and deramping, plus now the derampers can go on all weekend about how right they are, despite the value of a long positions more than doubling this week.
More fireworks soon, don't miss it.