Member Info for pickedpeck

Dear lord. Genius insight like that should be shared more widely. If only we had all had that insight before. Jeez.

Looks like Grey George is right about IQ levels on this board.

Https://finance.yahoo.com/video/diversified-energy-blazing-trail-energy-230132259.html

Interesting that in both the NYSE video and this the implication is more M&A

LNG up about 10% in the US over the last week defying all predictions for doom and gloom. Futures all up also, with near $3.70 for December 24 now.

The one sensible thing you have said is "I won’t post again till project finance is achieved or admin". Ideal and a wise choice.

However I bet you can't resist at least one more message repeating the same thing. 'No one knows the deal but (I do and) I reckon it will be 5-10p'. You're pulling that from thin air just as much as the guys saying it will be 100p next month. Yes we have all heard you. How you combine telling everyone that "no one knows the deal" yet you knowing what will happen is beyond me. How the eff does a bloke running a pub in Middlesborough know the intricacies of a Brazililan mine finance deal when the rest of the entire stockmarket and mining industry is clueless? Does it even occur to you that you may actually have no idea what's going on either, and only your ego keeps you posting the same bad guess over and over?

The facts are no private investors posting on here have any more clue what the deal will be than what Friday's lottery numbers will be. However what we can say is it is less likely to be administration as the cornerstones need not have baled out with £20m if that's what they wanted, why delay it? No administration means no longer pricing for administration. Before the company announced it might run out of money the price was 20p ish, falling to below 10p on the news of impending cash crunch. Seems only fair the price returns to that 20p area now the cash crunch has gone away, at least for now.

Just so we are all on the same page, it is entirely possible to do this whole deal with no equity element. I know that's everyone's assumption, but there are other ways and means to get there. CLNs, asset backed SPV, Royalties, Production Advances and more. Just because the company used the markets to raise when the price was a lot higher doesn't mean they have no other choices when equity is in the sewer. The cornerstones just leant the company a sum equivalent to the mkt cap at the time FFS, and did it like it was pocket change. That's because it is pocket change to them.

Should be an interesting few weeks. And no, I am not going to make a prediction, because like everyone else I don't actually know what will happen.

Here is the original Bloomberg article

https://www.bloomberg.com/news/articles/2024-01-02/us-becomes-world-s-top-lng-supplier-after-exports-eclipse-australia-and-qatar

So, lots of opinions here on where and what this will or should do.

How about a traditional game of predict the price plus income for 31st December 2024. Will this double or halve? How much dividend will be paid in 2024? What do you expect the total return to be if you invested in this now?

My wild stab in the dark is for the share price to recover to 1800p, with 280p of total dividend payments on top for a total return of 2080p in 2024. I am basing that on a recovery in LNG prices going into winter 2024, maintained dividend levels, plus an end to the democrat led enquiry and associated court case.

Any other guesses?

Fair points Mumbles.

The only thing I would add is that this is effectively putting money into the plc, either the banks or cornerstones could have held off until administration and then loaned money for continuation with more protection on that money. The only reason to put money in now is to keep the plc operating, the mine construction could have been continued in administration.

The recent RNS changed a few things about the short to medium term outlook. There are two key points in it.

1. The 20m put up by the cornerstones.

2. The banking syndicate foregoing interest due.

Both parts have implications beyond surviving Q1.

Firstly the market has been pricing this as a bust and heading into administration. For many the assumption was that the big three investors would let this happen and buy up the assets from administration leaving the other equity holders with nothing. That is now obviously not the case, why throw another $20m in if you WANT the company to go into admin? This relatively small amount signals that the cornerstones want the current entity to survive, if they didn't they could have just let the cash run out ASAP. That is new news.

Secondly the banks passing up their interest payment. The banks could also have pushed this towards administration, insisted on their payments being made, and grabbed the assets when the cash ran out. Passing up (deferring) on their interest payment also clearly shows they want the entity to survive too. Also new news.

So in one RNS there is a signal that those that could force this out of existence are putting skin in the game to do the opposite.

Obviously no one has a clue what this means in terms of a full refinancing, but it does mean the plc is extremely likely to be the basis of that finance package rather than not as would have been assumed by many until yesterday morning. That makes the current 'priced to go under' mkt cap incongruous.

I am a former very large holder, and now have a very small position in HZM.

That's also nonsense. The lender will assess the balance sheet, profitability, and assets against which loans can be secured. The market cap is subject the vagaries of the market, repaying a loan is not. The only effect a poor share price performance has is to limit the opportunty to issue stock for cash should the need arise. Profitability, FCF, existing leverage, and NAV are far more important when raising a loan. You can argue that those factors affect the share price in a rational market, but we are not in a rational market. The democrat letter dropped the price more than 20%, but was the company's ability to repay its loans affected in the slightest by it? Was the NAV changed in any way?

It seems your explanation may explain something you didn't intend, your level of misunderstanding. If this is how much you know about business operations I suggest either giving up direct investing or doing a business 101 course ASAP.

Loans are not secured against the company stock, they are secured against assets. In DEC case that's against wells and production facilities. Those assets have agreed valuations placed on them by the lenders, and are completely independent of the company share price.

Aww thanks George, I knew you had it in you despite what everyone else says.

If you really are travelling don't be an Uncle Buck.

I didn't have you down as a plane spotter George. Sat in an airport all day? You've posted every few minutes since first thing. Flight cancelled, turned up 12 hours early, or Walter Mitty moment?

You also protest a bit much about others reading skills and IQ, bit of a sore point is it?

Seems like the US understands how little a Congressional Investigation actually matters. Looks like it may even close up on yesterday's NYSE opening price. Makes you wonder what London will do in the morning.

Got any more rabbits in that hat George? This one seems to have arrived a bit lame.

George, has it occurred to you that your level of interest, maybe even glee with regard to this is indicative that you may need professional help? I don't mean an IFA either. How much time and how many posts today? Why? You must have spent hours on this today, don't you have anything else to do? It does look a more than a tad unhealthy.

By the way, more than 60% of congressional investigations lead to not much or nothing at all. Hardly 'The end is neigh' news despite your reaction, especially with the election coming up. It does smack of playing to the crowd a bit. Tough on Oil&Gas, tough on ESG, but only when it's about short term votes in key swing states.

Unlike you I've had stuff to do today so didn't even attempt a trade, although it was always going to bounce, and no, not in a deceased feline kind of way.

Anyway, do try and get a grip George, 'tis the season to be jolly after all and you're definitely in the Scrooge camp right now.

Merry Christmas and I hope you can find something a bit more positive to be just as happy about

You have deliberately misread what I said about El Nino. It's a threat to the LNG sector as a whole as it in the past has always led to a collapse in US gas prices for exactly the reasons that are playing out now. It's not a positive. It's an additional reason for DEC and other LNG producer prices to fall off the back of weaker US prices.

Actually, you're right. Thinking about it there is no point posting things here to be ridiculed rather than discussed.

Meh,

'A 2016 study by Brookings Institution senior fellow Paul C. Light found that of 100 (Congressional) investigations undertaken between 1945 and 2012, only 16 produced a great deal of impact on a problem, while 24 produced a fair amount, 31 had some impact and 29 had little or no effect.'

60% chance of not a lot happening then.

That's 60% chance of not much happening if they manage to finish the investigation inside this electoral cycle, which given the timing there is a slim to zero chance of.

Why are you celebrating this like a dog that's just grown an extra dick George? I've always assumed you are still hanging around because you're trapped sitting on a big loss and are as bitter as cheap vinegar about it, but it could just be a dose of schadenfreude I suppose.

Either way, meh.

Leon,

Just to be clear, you want me to read past news to predict a macroeconomic future influence? I mean not to point out the entirely obvious too vehemently, but we are all trying to predict the future rather than review and pontificate on the past right? You can't make money on past share price movements unless I have missed something.

For example, when the El Nino conditions started to form in September / October it would have been reasonable to predict a problem by December with the Panama Canal, and also a milder than normal Northern US winter. In October there was no news articles about the problem, because there wasn't one to report on then.

Its also normal in an El Nino year for Northern Europe to be colder than normal and have significantly higher gas consumption. That isn't in the news yet, but give it until late January or so. Possible a good year for skiing :)

You could also have predicted a month ago that Iranian backed Houthis would expand their attacks on shipping as it got them in the headlines. Could you have predicted that the expanded attacks would close the Red Sea to large ships? Let's see what happens if they successfully sink one.

Asia buys a lot of its gas from the US. Can you predict what will happen if the two obvious canal based routes from the US east coast to Asia for LNG tankers are restricted? The routes via the Capes are long and expensive, reducing effective tanker capacity available and raising transport costs.

Can you also predict what happens in Europe if LNG tankers from Qatar can no longer use the Red Sea and Suez? The Cape route is a very long extra distance.

The US LNG sector moves with the HH LNG price. DEC are part of that sector regardless of their hedging position. US LNG prices respond to storage levels weather, and macro economic factors influencing supply.

Oh forgot to add, if the US exporters are impacted by the Panama canal being restricted surely that implies the Asian export terminals are on the East coast, and big enough to normally supply the Asian market. It's doesn't take much of a leap to use those same terminals to export to Europe instead.

Worya,

Its not Suez that's closed to shipping, it's the Yemen end of the Red Sea. Around 8% of world LNG shipping would normally pass through that choke point. I'm not sure I'd fancy driving an LNG tanker past Yemen just now.

https://www.hellenicshippingnews.com/red-sea-chokepoints-are-critical-for-international-oil-and-natural-gas-flows/

All it takes now is the Iranians to get snotty again about the Straights of Hormuz and there will be a shock to the price. A cynic might even suggest they would be encouraged to do this by the countries most likely to benefit (US, Russia).

I know I have been rattling on about El Nino for weeks but the Panama Canal water level things happens every time there is a strong El Nino, and yes in past years that has impacted the LNG price. This year there is a European export market which in the past was supplied from Russia, so the impact is not as bad a sit would be otherwise.

With regards to Sue, no US LNG goes West - East via Suez, Qatari and Australian gas would normally come the other way to Europe. Actually Qatar, UAE and Saudi gas exports to Asia will most likely be impacted, so Asia is up LNG sh*t creek with Panama canal restricted and Red Sea a no go for the big shipping companies. Australia will not be able to supply all Asian demand.

How this will all play out is very different than previous El Nino years, so many different factors. Russian gas, Suez, US Export to EU, the new abundance of LNG tankers,

Worth keeping an eye here:

https://oilprice.com/futures/natural-gas/