Member Info for Plebleens

Basis risk is too high to be covered just by buying oil futures, and they leave themselves too wide open to an equity squeeze, and suspect they are a bit more careful and savvy than that. Call protection ? Or confident or were confident on forcing an equity raise? AHL and Whitebox don’t share their confidence as they reduce. Pure coincidence probably but our original good friend appears when Whitebox look to get out again? But being FCA regulated I doubt it could be true...,?

Also see our 2 debt wire posters only made brief appearances...,nice to see that they take time to read this board and all of our exceptional investment knowledge....good luck to all our Hong Kong readers.

Anybody found any connections between ARCM and Pyrrho?

Oil behaving well so far, only a US truce with Iran stops the Saudis getting back to the 65-70 target range. Temporarily gives the US drilling economy a reprieve, until no doubt election date gets nearer.

At apx 1.4m loss per penny move in the share price, our good friends short is nearly 10m down today. Let’s hope they’re hedged and have an exit strategy....AHL and Whitebox must be kicking themselves they didn’t close quicker, though no doubt they probably long other components of ftse250....

AHL down another 0.09, should be off the radar before Xmas. They definitely don’t want to be here when the whale unwinds. Andrew from Whitebox still procrastinating. .....

Especially with crude draws on the East Coast and a big draw at Cushing, the overall number doesn’t make sense. Have just bought some crude with a tight stop

OPEC now saying that they see a small deficit in 2020 , with the current cuts in place....Saudis really want this in the 65-70 range...

Seems to be a decent buyer for now around the 85 area in PMO. Feels like we may get another short reduction notification tonight...?

Also joined and posted at 9.30 Hong Kong time.....

Biggest surprise for me is the lack of negative posters here. Really understated apart from a bit of cut and paste of the slightly more negative comments from the news articles. Andy would have had a field day but has taken some time off. Members is retired whilst the chuckle brothers bathe in Tullow oil, etc... thought a few of the traders would be on here to try get a cheaper buy in price tomorrow?

Or put it the other way, why suddenly decide to show their hand last week, ahead of the Zama deadline bids and an OPEC meeting?

And again the debt wire article is from Weds , and Share price hasn’t reacted in a negative fashion (mainly because oil price rallied), but current share price is near the recent highs, compared to the likes of BP, Shell, etc which are relatively subdued.

Dayindayout, I know you just joined today, but do you hold pmo stock or are you in the restructuring industry and have restrictions on holding? Thankyou for posting it though, and still find it odd that despite having informal conversations since July (when ACRM stopped position building) , none of Premiers advisors saw this coming....

...without trying to force an equity placing?

Oiluser, I thought their biggest previous reduction was only 6 down to 3 in the early 2018 oil move over a 6 month period? This is a whole new beast to unwind

Think the clue is in the fact the other shorts are getting out and the share price has gone up. ANd it stopped suddenly in July, pre all the debt reduction news.

Would still like a decent explanation on how they are fully hedged. If they have some call protection, then whoever has written those calls needs to cover stock as the share price goes up

So if they bought a call at same time as the debt (again costs eating into the profits) , then they’ve locked in some or all of the call by selling the stock short....why would they not just buy a put and reduce the dealing costs? Also iwhoever sold the call to them (presumably Goldman, MS) would need to go long as the price goes up to delta against their call exposure. And as far as I can tell, their cfd position has been reasonably static on this recent move up....

Or they were certain that there was going to be an equity raise to dilute the pot and give them an easy out? As said previously this stopped suddenly in July ahead of the Zama sale announcement and Sea Lion farmout proposal. And they have previously reduced this position on 2 occasions, but 5 months of inactivity and counting.

Can anybody financially clever out there explain how their position is fully hedged? In my brain it looks like they sold a call, assuming that the company didn’t have a great future. Buy the debt take the premium for the interest in the debt but then selling the outright stock against it has unlimited downside for them? As I can’t see how owning the debt (loaning PMO money) gives them an option to own stock unless the company goes bust? Not my field of expertise and happy to be enlightened

AHL down another 0.12....doubt they’ll hang around too long with the rest if our new friends are forced to cover....wonder how the hedge works...as the downside is surely unlimited for them, and eating into the finance lending profits?

Great 5 minute read, unfortunately not many parallels to PMO but a reminder that nothing is certain in these markets is certain

Type in ‘The day Volkswagen briefly conquered the world’ to find the FT article

I think what’s more interesting about their behaviour is that they stopped abruptly in July of this year, just before the for sale sign went up at Zama, and farm out announcement for Sea Lion. And now it’s all public does it speed up the exit of AHL and Whitebox? Good business for GS and MS writing such a chunk of cfds...

You’d think Baillie Gifford should be able to use this to their advantage being the dominant long...?

Or desperation as if Zamia comes in above expectations, and debt keeps getting paid down at a decent rate, they will get squeezed out the short VW style, as still 18 months til maturity.....?

You’re right oiluser there was a Bloomberg article in September saying lenders wanted an equity raise to Give them fees to make up for the lowerinterest rates being negotiated because there should be less debt to cover. Previous article didn’t mention the size of the short. A rights issue would also allow them to cover back their short at a reduced rate. Shots over the bow for now. Let’s see what the Zama bids bring to the table and as I said earlier good news that white box finally reducing...