Member Info for ps200306

TheSwan101: "Pageant are just underwriting it but it does not mean that they will take it all, Alan mentioned that shareholders can participate as well (in the Zak interview below)".

Thanks for the link Swan, but on listening to it I think you're misinterpreting it. Linn was encouraging existing warrant holders to dive in and take their shares. That would be the holders of the 130 million 3p warrants still outstanding from last year. Given where the share price is right now, it seems unlikely to me that very many would be taking him up on the offer.

StM: "Gents, isn’t it time to bite the bullet, shake hands and agree to disagree? "

Well, he claims to have filtered me, so I guess that's that. It wasn't so much a disagreement anyway, so much as accusations of "negativity". Turns out I wasn't negative *enough* as Phase 1 + debt turns out to be worth a negative amount. I'm surprised though that more people weren't taken aback by the 6.5p valuation for Phase 2. Have to say, even super-negative me found that truly shocking. Had hoped my sibling would see some worthwhile money back eventually, but never gonna happen now.

(Oh and, it's worse: SP Angel left a quarter of a billion shares and warrants out of their calculation -- 100m warrants for the bondholders and 160m shares for the gas purchaser -- presumably on the basis that those weren't issued/exercised yet. So knock another penny off the price. They also used a higher estimate for Horst gas production than we've seen before: 66 Mmcf/day for Phase 2 on top of 10 Mmcf/day for Phase 1).

It's all the people desperate to sell at 3p before the 7p takeover.

ST123: "Yes it was so blindingly obvious that you concluded a value of 6.5p similar to the SP Angel analysis that you then went and sold out for 1.2p but somehow I am the idiot."

Yes, you are the idiot (or paid ramper) since you refuse to understand the difference between Phase 1 and Phase2. Best of luck waiting for your 6.5p for the next four years ... *IF* SOU manage to go out and borrow $87 million in the next couple of months AS WELL AS find a farm-in partner for a 42% stake. I now know why you bought in at 4p a year ago on the Phase 1 news which we've just been told is worth ZERO --- you can't read.

ST123: "PS you gloat in the fact that the SP angel analysis uses the same variables as as yourself in determining a 6.5 p share price but that cannot be the case as that would have meant that you knew the SP would have achieved 6.5p"

Ok, ST123, now I KNOW you are either a paid ramper or a certifiable idiot. I specifically said that SP Angel used the same variables in calculating the PHASE ONE value of ZERO (indeed, slightly less). 6.5p is the value they attribute to PHASE TWO.

I couldn't possibly have estimated Phase 2 because there was no information in the public domain about the parameters of a deal to raise pipeline funds. In fact, if you look at my posts just from yesterday, you will see me agreeing with daveyboy71 (or at least not disagreeing) on a value of 17p for Phase 2. Boy was THAT wrong.

ST123: "that would have meant that you knew the SP would have achieved 6.5p so would have never have sold out for the 1.2p that you did."

Uh, why? Because if I had hung around for another five years and everything had gone perfectly I would have only lost 60% instead of 90% ? No thanks. If things come good for SOU it will be well advertised and there will be plenty of opportunity to buy back in. Right now I am delighted to be out.

ST123: "Like I said , I’m not predicting a price as there are too many variables here to predict with any accuracy but we know it will be well north of these current levels which is going to be the case."

So you've said. Except now you can't avoid looking like the idiot you are, because the people that SOU paid to promote the company ARE predicting a price, and it is dismal.

This is not to blow my own trumpet, but I do hope the SP Angel analysis will shut Sharetrader123 up for once and for all. Far from a valuation being "simply not possible due to having far too many variables", it includes precisely the same short list of variables as I did. Even my stab in the dark at running costs were pretty close. And the analysis EXACTLY agrees with my valuation of the LNG development -- which is that it's worth bugqer all to SOU apart from covering running costs and paying the bond. Actually it's slightly worse than that. On an NPV10 basis it's worth -1p per share (yes, that's NEGATIVE 1p). So, ST123, are you willing to man up and agree that my valuation was not "horrid negativity" but pretty much EXACTLY RIGHT.

Anyway, as I said, this is not to blow any trumpets. It was all blindingly obvious from the RNS's that have been issued, to anyone willing to read them. More concerning is the value they are putting on the Phase 2 pipeline development. Their NPV10 for that is 7.5p which, added to the LNG value of -1p gives their target of 6.5p/share. That's disappointingly low, in fact I would regretfully say it's pretty savage! Those who were basing estimates on SOU owning 47% of $2.4 bn worth of gas, or on a former SOU exec declaring the share price to be "underpinned at 27p" will be bitterly disappointed.

They give some details of the project economics. SOU would take on $87m of debt and give away an additional 42% of its equity. I'm guessing it's pretty speculative as we haven't been told about any advanced Phase 2 negotiations, but it's not a good look. It's also looks quite aggressive as it assumes LNG will be flowing next year and -- judging from the projected revenue for 2023 -- that the pipeline will be not only completed but earning substantial revenue by that year.

Any higher future potential value that SP Angel attribute to SOU is therefore all down to exploration prospects. They give some details, but here is not the place to delve into that.

... on the other hand, you say takeover @ 7p but two weeks ago you said that you'd shorted PVR and would close out at 2p. And less than a week before that you said takeover @ 8p. Looks like you're one of the trolls that has been infesting here and advfn. (And of course, the trolls over there -- who are probably your alter-egos -- are already reporting your prediction here).

SpotOn are supposed to be raising $166m in financing. You think they are now going to turn around and buy the whole company for less than $100m? That's about 3 months of the profit from Phase 1 development alone. a) Nobody in their right mind would accept it, b) the consortium is already getting 50%; if they want more they could fund the proposed bond instead of going to market; c) if SpotOn are not working on the bond then Linn has misled the market.

Complete nonsense I'm afraid.

"I simply can't believe that Barryroe hasn't been farmed out already". Didn't Linn say that in interview last year? Yeah, the rest of us feel that way too. We're also gobsmacked that the new management could have been taken in by chancers exactly the same as the old. Let's hope it's not true. Could be a lot of egg on face at the end of next week.

I believe "real longwait" on advfn is the LONGWAIT from lse, a consistently fair and reasonable poster.

daveyboy71: "From my fag packet calculations, with the new additional shares the horst has a value of 17p ps."

I don't disagree with you. The question is: value to whom? Unlikely that SOU will retain a 47% interest, as the chances of a conventional loan to develop it seem slim (as Graham himself appeared to allude to in the interview). The horst has no value until it is developed, which is why the share price has been bumping along the bottom for the last two years as management success in monetising it has been lacking.

ST123: "Keep, like I tell others on here such as PS, there is little point in trying to be a smart arse by trying to guess the share price as its simply not possible due to having far too many variables ... Most of us can have a fair degree of confidence that the share price will continue to go north of here ... How high the price will go is pure spuculation but it will hopefully achieve enough for a fair few of us to break even ... hoping to see less of the horriid negativity"

Translation: I'm looking into the chicken entrails and seeing the share price soar, but I refuse to discuss any actual details because that would be "horriid negativity". Anyway, who needs hard figures when you have chicken entrails?

ST123: "Ps cant agree with your argument of the LNG having zero net benefit as there are too many ifs and not enough detail to make that assumption with any degree of certainty."

And there you go again, pleading ignorance. The price and quantity of the LNG is in an RNS. The size of the debt is in an RNS. The debt repayment terms are in an RNS (one each for bond and gas purchaser loan). The rest is junior school arithmetic. If the details in the RNS are wrong then Graham has broken the law. But I seriously doubt that, as he pretty much acknowledged in the most recent interview that there was a slim margin between income and outgoings based on the current deal. If I was you I wouldn't be depending on SOU finding a large wodge down the back of the sofa.

I concede one thing to you -- my "no net revenue until 2030" contention obviously ignores the fact that SOU will emerge debt free at the end of that ... a very good thing. Graham is getting his house in order, given the mess he was handed. A pipeline deal would add real value to SOU (depending on how much of the farm it has to give away, which is probably a lot). In the meantime, my guess is you are just going to see AIM traders cashing in on news flow, with the SP drifting around similar levels bar the occasional spike. In spite of your protestations, other people DO know how to value this thing a lot better than me.

ST123: "Doesn’t explain why ps sold out at 1.2p though?"

I believe I explained that at length many times already. But if you insist on being a masochist, I'll do it again. I believe that the current LNG project -- even if successful -- results in exactly ZERO net revenue to SOU for the rest of this decade. No shareholder dividends and no new drilling. What it DOES do is buy SOU time to do a pipeline financing deal. That's unlikely to be by way of a conventional loan, so will involve giving away some (perhaps most) of SOU's share. When that deal is done and its parameters are known, I'll quite possibly buy back in. Until then, I am more than happy to have sold 95% of my holding.

ST123: "PS still putting the boot in to our chances of future prosperity"

You sound increasingly unhinged. What exactly is your objection to discussing the facts advertised by RNS by the company you (and I) are invested in? More than happy to entertain your view of those facts, if only you would stop parading your ignorance as a virtue by claiming nobody outside SOU's inner circle can know anything.

ST123: "failing to leave out some of the major significant costs such as how clean is the gas and the need for removal of carbon dioxide and hydrogen sulphide"

Are you serious? AudibleEnergy asked why SOU doesn't just build more LNG plants. The answer is that the marginal profits are less for LNG than the pipeline option and SOU would be throwing away value. WTF would an essay on sulfur removal add to that? Touch of hypocrisy here perhaps? ... you want more detail on hydrogen sulfide but throw a hissy fit when SOU's finances are mentioned? There's more than a whiff of hydrogen sulfide about you already ;-)

ST123: "ps spouting more facts and figures giving the impression that she has her finger on the pulse of everything SOU."

Nope, just the same facts and figures as before. All advertised via RNS. You should read them sometime.

ST123: "Its all bluster and speculation as the only one really knows what's going on is Graham and the board."

You plead ignorance as if it's a virtue. There's no doubt the RNS info does not contain the complete detail, but if you are saying it's actually wrong or misleading then Graham is a criminal. Where does that leave your "in Graham we trust" mantra? I know you can't let it go, but this self-contradictory position is transparent nonsense.

ST123: "ps remember was previously extremley critical of Graham and was one of the posters predicting the company demise."

Not critical of Graham so much as of SOU. Still am. They've managed to turn a silk purse into a sow's ear. The two year delay (so far) in monetising Tendrara has cost shareholders much dilution. And no, I never predicted the company's demise, just pointed out that it would be a logical consequence of failing to secure funding. That's still true. If the current LNG proposals come to fruition, it will still leave SOU on life support for the rest of the decade. All there in the RNS's and confirmed by Graham. You REALLY should read them sometime.

Audible: "What to stop more than one LPG plant? Lack of infrastructure, road, rail, lack of pipeline."

LNG is a great way to get early revenue from the gas at a reasonable cost. But the cost per unit energy is high compared to the pipeline option because of the inefficiencies in compressing, trucking and regasifying it. Those costs can be several dollars per mcf for LNG, but a fraction of that for pipeline transport.

https://gaillelaw.com/2018/05/16/lng-vs-pipeline-economics-gaille-energy-blog-issue-66/

LONGWAIT, I don't disagree with Graham. I trust he has done his numbers. But no matter what way you look at it, the revenue versus debt repayment numbers are a fine balance. Assuming the LNG flows on schedule the revenue side is easy -- it's $8m per year. He has about $2.2m in debt interest and bond coupon for the first year or two. Add in some figure for SOU wages and running costs. Then he has to start paying an additional $3m of bond amortisation per year for four years. At the end of that there is the remainder of the bond to pay off plus deferred interest, amounting to $20m. Basically, every remaining cent of revenue from the start of LNG would have to be saved up to meet that bill. Post 2027 he has to start saving to pay off the debt from the gas purchaser, due in the early 2030s. But that's easier because the LNG plant lease is up soon after, and SOU revenue will increase by around $6m/year. SOU is effectively debt free by 2030.

So I believe Graham when he says that SOU "can accumulate sufficient funds to repay the bond". But it means he doesn't have a brass farthing for anything else this side of 2030. No dividends for shareholders, and no drilling. That means that getting pipeline funding is the sine qua non for SOU value.

Actually, if you listened to the interview the deals AREN'T done. But the LNG deal is certainly a step closer. If Graham pulls it off AND eventually gets pipeline financing he will have worked a miracle, given he was handed a company on the ropes. Long hard road ahead though.

soundreason: "ps200306 Posted in: PVR ... Deal full finance: 100p in three years"

Idiot. Read the posts prior to that for context. If PVR get fully financed with a free carry to own 40% of production from 355,000,000 barrels of oil, you can bet your a$$ they will be worth 100p and more. Chances of them getting that financing are looking pretty slim, in which case they will be worth zilch. In other words, 100p is a highly contingent VALUATION, not a PREDICTION. Just like if SOU got a $160m loan on good terms they would be worth 25p in 3 years. How many time do you need it explained? If you don't own a dictionary, you can probably Google the distinction.