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I'm a little conflicted about next week. On one hand we have a steadily rising oil price as demand recovers, positive sentiment and the potential of some excellent Q2 guidance which is likely to push the share price higher. On the other hand we have options expiry on Friday and the potential (I think perhaps it will be a few weeks if not months away) of some Iran oil coming back to market causing hesitancy in buying. Best guess is 319 Friday finish after touching 330 on Wednesday, followed by a swift recovery the following week.
I disagree, US oil majors are blue despite US markets correcting. Tech has been overbought for a while, despite general cynicism we are seeing more funds buy into the oil sector. Assuming oil remains strong I believe we will finish up tomorrow.
I suspect some of the hedge funds are keeping the price range bound, it very much feels like the vwap period from a few years ago. I'm not sure why other than perhaps if they own bonds and a short, they will be issued with shares to cover the bonds during merger and use these to cover the short. The lower the price the more money they will make on the short when closing during the merge. But if that's the case I don't understand why they don't try to pull the price down even further. It's a bit confusing. I mean it looks like Goldman just reduced by 1% which would explain the price not rising over the last couple of days, I just don't really understand what they intend to do.
I'm pretty sure the outcome of the Brexit negotiations will determine which way this share moves this week, with some noise following the oil price. I think if a deal if agreed most UK stocks will receive a significant boost, if it's a no deal then I suspect a lot of shares will suffer from a knee jerk reaction regardless of their sector.
I think it's hard to decide whether it is good or bad for the oil price.
Biden coming in will likely result in a curtailment of US shale oil production but this should be considered against the fact he is likely to ease or lift the sanctions on Iran. How much oil Iran is currently smuggling out is debatable but it is surely far less than there full capacity. I think it is unlikely that OPEC would seek to restrict Iran's output in the case that sanctions are lifted.
He'll also possibly introduce legislation to begin a transition to greener policies in the US with a view to reducing it's reliance on gasoline although the effect of these on demand won't be felt for at least a decade.
What we really need is this virus to end..
I agree. If they win they have choices in how to proceed. It doesn't mean that a rights issue will follow. One of the choices relates to the debt maturity which is a biggy as otherwise refinancing next year in this oil price climate would be expensive. As a shareholder I would much rather they win than lose this hearing.
The RNS on the 7th Jan outlined the original plan. They were going to have an equity raise post court date including a placing and rights issue however that is now unlikely in my opinion given the share price. I suspect they will use a bridging loan to finance one of the three acquisitions until the Zama sale completes to allow them to extend the debt maturity date into 2023.
Thanks for that nugget. I'll take a punt - in my opinion PMO will use the bridging loan facility to buy the extra stake in Tolmount and drop the BP acquisitions resulting in the debt being pushed back to 2023. The Zama sale will cover the loan and then some. No wonder ARCM were trying to sink the deal - they seem desperate to avoid the debt maturity being pushed back.
I agree that it is unlikely PMO would choose to issue equity at this share price. I am interested to find out if the proposed extension of the debt facilities to 2023, which is part of the scheme agreement (as opposed to the current May 2021) is dependant on them following through with the BP acquisition. I would very much like an agreement to the debt extension whilst finding an alternative method to fund the acquisition. I've tried to look for a copy of the scheme agreement but it seems only available for creditors to view :/
The drilled wells will continue to pump even if the shale company goes bust however future drilling by that company will obviously cease. New companies wanting to enter the industry will find it much harder to acquire funding given how badly existing shale investors have been burnt.