Member Info for RagstoRich

Grumpus, are you suggesting I buy BP, a £85 billion company purely for their 50% holding of a 50% stake in a £3.2 billion asset?!

Why would I do that? it makes up less than 1% of their MCAP....

Are you happy with the results and the small dividend which has resulted in a 20% decrease in value over the NewMed deal?

So the money from India took the share price from £1.20 odd to £2…. If you held shares, you have the India money? Getting it as a dividend (which is what this partly is) changes nothing.

What is a tragedy is all those who let their feeling for the old board get in the way of what was a fantastic deal, which would have given us 60p + a share by now. How the new board were allowed to turn that down and destroy shareholder value is tragic. But a lot of people on here were all for it!

A divided just moves money from the SP into your bank, then reduces the SP by the same amount.

Here's an example:

If you own 100 shares today it is worth £219
You will receive a dividend of £115, your 100 shares will then be worth £104 (and the SP will fall to £1.04 since $450mil has been removed from the companies value)

However, to keep the share price stable, the company will consolidate the shares (33 per 70)
You will thus hold 47 shares post dividend and consolidation, with a share price of ~£2.19 (still worth £104).

End result, you have the exact same amount of value overall (£219) but £115 is now in cash from th divi and £104 is in the remaining shares.

One off big dividends aren't much to celebrate, you wont make or lose any money overall!

Yep, I don’t know why people get so excited about a dividend, it doesn’t change the value of the stock you hold overall. It can be better tax wise depending on how you hold your shares.

Kioto, the reason for the price drop is:

- Hedge funds promised value that didn’t exist. They have drummed up the share price promising a larger dividend, and more upside
- Results showed that A) the company doesn’t have the money to give a larger dividend. B) The company is unsure whether it can give even a further $100mil in Q4 (shows how tight things are). C) the companies strategy is to run things on a shoelace, with all eggs in the Egypt basket, an asset which has failed to make any money so far, with a major receivables issue in a country that has one of the worst economic outlooks globally.

Compare this with the newmed deal which the current (new) board turned down: $625million divi ~May and provided 10% holding in leviathan worth over $400mil.

You do the math…

https://www.heraldscotland.com/news/23485794.capricorn-saga-illustrates-clarity-rear-view-mirror/

Happy, have you actually done any research? Tell me how this is good news, it’s a far smaller dividend than was previously earmarked. And a huge reduction on what was offered with NewMed.

Takeaways from today: the companies operations in Egypt are not improving quickly, and receivables are a huge issue. Tie that in with the deteriorating state of Egypt finances, it’s only going to get worse.

Now, once CNE pays back this dividend, it will be short on cash, and run the risk of cash flow issues when Egypt continues not to pay. So how does the company create cash flow and value going forward?

The share price correction is everyone realising this and getting out. I stand by my analysis that the new board and hedge funds have made a massive mistake and destroyed a large amount of value here.

That further buyback is dependent on several things, what does that tell you? It tells you that the business is unsure if it will have that much to give… so tell me where the £3 or even £2.75 (equivalent of newmed deal) will come from?

Is it? The new board are giving a $450mi dividend when a $620mil divi was promised as part of the NewMed merger?

How you can be happy at all with that is beyond me.

They have bought 50% of the business, not the field. And had to pay 72% premium. So, that kind of proves that it’s a good asset? Even more than that, it shows two of the biggest oil and gas companies in the world think it has even more upside….

I'm not defending any of that, but it seems the majority on here are blinded by their hate for the old board.
 
Black and white, plain as day the options were:
 
A) Merge with NewMed (who it turned out were a massively under valued company) and become a small part of the largest % owner of one of the most exciting assets in the world, regular dividend, very low risk, energy transition fit, massive growth from Leviathan and Aphrodites as a bonus if it ever goes anywhere.  
 
B) Focus on Egypt, an under performing non-operated asset  in a high risk country which has a track record of not paying.  poor emissions, not an energy transition fit.  And potentially get a smaller dividend?  or try and find another buyer who actually wants Egypt and not just our listing..... 
 
The old board made very bad decisions, but the merger was a new board (bar 2 people and the CFO).  A new CEO and a new majority owner.  So tell me where Senegal and the North Sea decision tie in with the above?

That's fine. Unless its an option that the board have assessed and dismissed.

The target is set: ~£2.70 odd or so. If they dont beat this questions should be asked.

Can’t help but think we really missed out on something. BP and Adnoc offer to buy a 50% stake in NewMed at a 72% premium.

This would have valued CNE (in the original merger) miles north of where we currently are. Instead CNE seem to be stuck in limo and will be left with a poor asset in Egypt (the second most indebted nation to the IMF in the world) at a time when countries will be struggling to pay their debts…..

The terms are so poor in Mexico, 200million bbls in place probably doesn’t cut it commercially.

Everyone has fallen because of the state of the banking sector. So it makes sense.

As I said they will be just getting up to speed, so I doubt they will have really started looking forward in much depth! I doubt they know where they want to go yet, and certainly won’t come out publicly with anything until they are certain that is the route they will take. This isn’t the AIM….

Grumpus, the new board have been in for 5 weeks. I imagine they are completely cold. I dont know what you expect to happen so soon? They will need a good chunk of time to just get up to speed before they make a decision on how to proceed forwards. I wouldn't expect much before April

Loch - the problem is that Capricorn will need money to keep Egypt going. It is very capital intensive. Egypt also has a long history of not paying up money, so there will need to be a buffer.

It will be interesting to see what dividend comes out, but I will be amazed if it is anywhere near the $620million that was earmarked for the NewMed deal.

30%+ of the stock is held by the hedge funds, once they decide to sell then it will be volatile.......!

I dont see how that's relevant. Tullow are not the same company now, I think you'll struggle to find anyone who works there in a senior position who did when they were based in Dublin.... The Tullow deal was not a good deal IMO, the idea was very good (I think Jubilee is one of the best Africa assets out there, and someone with cash could transform it) but the deal terms were very poor for CNE.

I completely understand that the board lost confidence, but my point has been and still is that the merger is a new board, and most importantly of all (and this is mainly why I exited), not doing it puts the dividend of $620million into doubt, that dividend may now be smaller (maybe not but it 100% has more risk now).

I'm not attempting to stir, I'm merely stating my views based on my research, my personal situation and trying to make sure you see the who picture and not just "the current (or old now) board vs investors".

NewMed is still a good deal IMO, it does depend on your risk / reward appetite though. In these difficult economic times I prefer less risk. As stated I'm an observer now, but i've done a lot of research and modelling on CNE, so I'm very interested to see how this pans out.

Simon doesn't have a non-executive role in the new company? He has no role at all!

Grumpus - I'm worried your dislike for the board is skewing your judgement.

Yes new shares will be issued for the new company and the board will be given money, but in return shareholders get a $620million dividend and 10%+ of a fantastic new company (run by a (mostly) different board).

The alternative:

- We are stuck with what we have (which pre-merger announcement was valued ~£2)
- We will possibly (likeley?) receive a smaller dividend (tell me where the new board will get the $120 million from? Will they also sell the contingent rights for SNE and the North Sea? If do then our income and survival will be entirely linked to Egypt (RISKY!).
- CNE will become a small cap Egypt only player and fall out the FTSE 250.

The above in my opinion is NOT something I would want to be invested in. I'm no longer in here, because of the risk that the hedge funds get their way. Keep in mind the hedge funds probably care less about individual investors that normal long term holders. They have already made a tonne of money here (they got in at £2) and now they are probably just after something to plaster on their website (we took over a FTSE 250 company). They will exit ASAP on the back of this and anyone wanting to hold long term will be exposed to a very risky and small company.

All my opinion. But dont let hatred cloud your financial risk reward judgement. I made quite a bit of cash here (held from ~£1.40) so I'm not emotionally involved here. But if you are a long term holder - look at how the other independents have done - Tullow for example. They have massively destroyed value. CNE over the same period hasn't made any value but if you back calculate the share price and account for dividend pay outs, they havent destroyed any value either. The adjusted value has remained pretty flat.