Member Info for pickedpeck

Should have added, to get through a 585m overhang you need market volume of 1,170m, assuming all shares are MM traded. The market makers were not likely the ones that underpinned the raise directly.

That also assumes that 100% of raise shares will be sold, some may have gone to stickier hands although it seems likely not.

Robbie, I understand where you're comi g from, but the sells whilst lower in quantity have been higher in volume. I've been watching the trades too, I agree there are an awful lot of buys at 0.066 /0.067, all the 0.08 ones are Market maker self trades to obscure the real data.

I don't see any ii buying, that's the most unfortunate thing. We have not reached the stage where anyone but private punters will buy these on the open market. A nice fat TR1 would make me much happier than the next gold assay results.

Should have added

From the last RNS:

'The Board ... intends to use the Net Cash Proceeds to pay the ... acquisition payment of $4.0 million... ,provide working capital for the North America business and settle outstanding tax provisions while returning cash to shareholders.

.... XLMedia's Board will continue to execute this strategy whilst also evaluating ways to maximise shareholder value.'

So the first para suggests somewhere i.r.o. $20-25m should be returned to shareholders, whilst the last sentence hints that they may be sitting on inbound interest for the US business also.

Seems all the short term spike drama is over, except obviously it isn't. There will be follow on news sooner or later, it is just a waiting game now.

Any bets on when the next major announcement will be? And what?

1. Sale of North American business

2. Cash distribution plans

3. Acquisition made in N America using funds raised

4. Results

5. Office Xmas party date...

The problem with matching numbers up like that is that if you have a seller with 585m then you also need 585m buys. The trades have been obscure because of the tight real spread, but either way we are nowhere near through an overhang of 585m sells. Given some 'real' / other sells in the mix we are maybe 1/3 of the way through , so more or less another month unless someone starts buying heavily.

That's assuming of course all 585m are the overhang, I agree the trading pattern suggests that is (very sadly) the case.

shorts sitting at 5% ish of issued share capital, most likely all short sold well below the current price.

at some point the shorts will either have to capitulate or double down, they can't stay where they are given the price momentum.

the shorts probably attacked dec on several perceived weaknesses

1. unsustainable dividend

2. el niño driven collapse in lng prices

3. biden administration block on export projects

4. congressional enquiry

5. sector wide bloodbath

6. opaque business model

7. downward momentum

in turn...

1. change in strategy eliminates this perception entirely, and the company now has capital for growth.

2. el nino is done for this year and in retreat. next winter will be different

3. 18% forecast increase in exports next year as new export projects come online

4. latest esg report knocks any potential critique into a ****ed hat.

5. sector already showing signs of recovery as futures start to climb again

6. still less clear than it could be, but not as bad as it was perception wise as us investors 'get' the model better than uk ones.

7. now upwards rather than down.

if the shorts fold, and for the reasons above i think it's when not if, they have to buy 5% of the company on the open market. i can't see then doubling down in face of the above, it would carry way too much risk. of course the shorts could be hedges for long positions, in which case they will still get closed sooner rather than later.

we can see from the recent price movement that there may not be that much free floating stock about, and the company has peel hunt also trying to grab what it can. it's likely that if one of the shorters folds the others may quickly follow.

as a result it's easy to see the capitulation of the shorts creating a large gap up back to the 1500 - 1700 range, with a slower recovery beyond.

not the worst time to be invested here.

Trek,

The best source of LNG short term price prediction for the US is the EIA. If you're investing here and haven't read its short term report yet then you should.

https://www.eia.gov/outlooks/steo/report/natgas.php

Their prediction for the average price in 2025 is $2.90 due to the things they can see already, namely a slight fall in production and an 18% rise in exports.

What they do not include in their model is any macro climate effects, so IF (still an if even if it is probable rather than possible) we do go into a prolonged La Nina then the extra demand will put additional pressure on a system where prices have already risen back to more normal levels.

Where you see that climate guess starting to be reflected is in NYMEX 2026 prices, now rapidly trending up and we'll ahead of the EIA forecast.

NYMEX for Nov 2026 is currently $4.10 and rising fast.

https://www.wsj.com/market-data/quotes/futures/NGX26

All good fun, but it does look like we have seen the bottom of the LNG price cycle.

DEC has switched from attracting buyers on a high dividend to trying to deliver a high ROCE.

The basic premise is that instead of paying out the majority of profits in dividends, the company can achieve a higher return for investors by using some of that profit for capital investment instead.

Its obviously a painful switch if you bought in exclusively for dividends as income will have been the sole criteria. Now the company premise is capital growth plus (lower) income.

Remember the company is still generating the same total income that is now only partly going directly to shareholders. The remainder is going to attempt to grow the company capital and / or pay down debt. That bottom line on the accounts, Shareholder Equity, should increase, and also increase per share as the number of shares in issue is reduced. Its not like profit has been switched off, its just been switched in format of delivery.

Given the share price movement before and since the change it would seem at least in the short term to be the right decision for everyone, no matter how painful.

Back last year I posted about El Nino historically collapsing prices for natural gas. The 2023-24 El Nino is one of the strongest on record, we are seeing the reports of the warmest March on record as a direct result. Northern Europe was colder than the recent average but Biden shutting down gas exports scuppered any plans US gas producers may have had to build on that market opportunity.

The El Nino has as expected created a situation where gas production in parts of the US is uneconomic, some producers effectively giving their gas away as a by product. That means over the next few months we can expect to see some gas producers who aren't hedged going to the wall, and their assets becoming either orphaned or available for purchase.

However, historically a very strong El Nino has often been followed by two years of La Nina, the opposite effect where temperatures for the next two years are significantly cooler than average. NOAA has just declared that this winter's El Nino is (as of the end of March) now in full retreat.

This year's El Nino is most like the ones that happened in 97-98 and 72-73 where the very sharp spike in temperature was followed by nearly three years of La Nina.

Gas market analysts employ climatologists that are very thoroughly aware of this data, and it is pretty safe to assume that they will be calculating gas futures on the basis of winter 24-25 and 25-26 having higher than normal demand due to the probable occurrence of a prolonged La Nina.

Meanwhile back at the ranch, DEC are almost through El Nino unscathed due to hedging, and are now in possession of the means to buy up some of the assets of those less forward looking companies just in time for gas prices to start to recover going into next winter.

Yes I know its all crystal ball stuff. But climate has a fairly significant effect on gas demand and prices, and a lot of it whilst not exactly predictable can be reasonably guessed at planet level. Of course climate change could muck it all up and do something random we haven't seen before.

Today and yesterday the MM has stopped doing those daft 0.08 self trades pretending to be buys. I wonder why the change in behaviour? I mean its lovely that they want to keep the mid price up a bit, but its fairly clear the buy price is 0.0665-0.067 and the sell 0.065-0.0655 .

We are still seeing a lot more buys than sells, but at least one of the placing destinations has obviously created a stock overhang by making their shares available from the day of the announcement, even before they were actually admitted, at any price higher than a profit of 0.01 per share.

It may be worth a question to GF, why are you placing shares with such loose hands if the news is so positive?

Its always possible that the special dividend could be at or around the current share price given the cash raised. That could be quite entertaining.

Potential for all the shorters to check out. Must be above their levels now and has momentum.

Why don't you check?

maybe you suggested the buybacks so far have happened at twice the actual price, maybe its because you're an idiot, or maybe you just have a negative agenda, or maybe you just like being a negative smart ****.

David, you wrote earlier 'the shares already purchased would be substantially more than todays price, maybe £20-25 equivalent.'

That's just wrong. What have I misunderstood? The average price so far is £12.19.

Yes, the company has changed from giving Stifel periodic instructions to telling Peel Hunt to get on with it regardless of what else is going on without further instruction from the company. The total program will buy back up to 10% of the issued capital (from last year's numbers, about 8% to go) at a total average of up to £20 a share. Which is I think what I said. The lower prices achieved so far mean they can pay up to £22 a share for the balance of the buy back program.

Interestingly not one share was bought for more than £20 so far in the buy back program, despite what you posted earlier.

David, happy as ever I see.

Since the buy back was announced last year the company has bought back (the equivalent of) about 990,000 shares at an average price of 1219p for a total spend so far of about £12.2m.

That gives Peel Hunt the ability to spend another £85.2m buying 3.8m more shares at an average of up to around £22 a share.

That's up to10% of shares in circulation they have just told Peel Hunt to buy, but did anyone notice the maximum value? Not to exceed £97.4m.

For those hard of calculating that's buy10% of the shares for an average price of up to £20 a share. AVERAGE price. Given they are going to buy the first lot for under £10 a share that gives plenty of room upwards for the buybacks to execute.

Also instructing a third party to do it without company control means no closed periods or share black outs. Its in Peel Hunt's interests to buy every one of those shares.

Below 600 again, ready for the 10% wash cycle.

So here we are, sitting at the value the company has sold just the European business for.

There are only two possible outcomes here:

1. The European business sale goes through and the company continues to trade and focus on growth in the US, the market value for that business should be more than the current mkt cap given the removal of any perceived liabilities.

2. The European sale goes through, and the company follows up with a sale of the US business maximising short term value for shareholders and ceasing to exist. The US company would sell for a multiple of the European Business given the growth and revenue, and also the fact a US buyer would pay a higher multiple.

Either way, a moderate level of patience here should be well rewarded for holders.