The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Don't forget this is a recovery stock which could easily have been wound up.
So do not expect too much too soon.
At the moment the obvious improvement should not be scoffed at.
We all know what isn't going well It's the share price I think the company needs to ask the LSE why the AIM is not acting like a market Very strange that an increase in the value of RRL's assets has a negative effect on the share price
Trinity has used RRSDL for oilfield services so their success could and should mean more business for Range.
See comments from Malcy's blog today
"Trinity Exploration & Production
Trinity has announced what looks like a smart refinancing with a $20m raise comprising a placing of $11.1m, a subscription of $6.9m and an underwritten Open Offer of $2m, all at 15p, a 28.2% discount. The placing was oversubscribed and brought in welcome new institutions and the Directors and senior management added as did 88.2% of the holders of Loan Notes who have undertaken to convert at the issue price (effectively re-investing rather than cashing out). Total raised from Directors and Senior management was $3.1m giving them 22.7%, still plenty of skin in the game, something that I am, as readers know, particularly keen on, this level is way more than a lot of companies in the sector.
The raise means that both the BIR & MEEI debts alongside loan notes not converting at the issue price will be repaid in full at a cost of $5.5m and the company will be debt free. This funding, with the sorting out of the Loan Notes does take away the invisible overhang at 6p which had been playing on investors minds and obscuring the upside potential. As a reminder, come January 2019 the Loan note holders would have the ability to convert at c.6p/share bringing significant dilution but no new cash into the business. This deal brings in new capital to simultaneously fully cleanse the balance sheet and invest for growth at less dilution than would have occurred should the loan notes have been able to convert come January 2019.
More importantly it means that the TRIN management can accelerate the onshore drilling programme and grow production by >10% y/y in the short term and with many, largely fixed operating costs, can self-fund the drilling programme after 2020. In addition the company will be able to ‘ selectively pursue acquisitions and other value accretive opportunities that become available in the future’. This should include progressing the highly promising East coast Galeota licence I know the management is keen on.
Although at first glance the refinancing looks expensive by way of the discount, the shares have spiked recently and it is by far the best call for the longer term. With some inevitable dilution as a result my previous target price of 36p may come down a touch but certainly by less than 10% still giving a substantial upside for what is one of the best stocks in the energy sector. This fundraising completely clears the decks, acknowledges the past but puts TRIN on a good path for the future."
Trinity has refinanced and is debt free which will lead to increased investment. Hopefully they will use RRDSL for at least some of their drilling programme.
They already have a $20m convertible bond which is the first debt repayable so the first decision on debt that the BOD will have to make is whether to pay or convert to shares.
Thanks Celtic, I hadn't spotted that. Productive and economic sounds good to me. All the best Rex
Celtic Thanks for your comments. My main doubt about the water flood comes from the exit of LandOcean and obviously if Range can clarify matters and provide new targets it will help. Now that Dutch pottery is on the war path I think that I will wait to find out the news from Eva. ATB Rex
Their silence is deafening
Celtic, I have been having a go about the water flood implementation because they are well behind their target which was about 1,500 BOPD just as a result of water flood. They dispensed with LO's services and got good terms for RRDSL and the loans which would indicate that LO failed and did not meet expectations. Hopefully the company will give shareholders a full explanation of what has gone wrong and what they now expect from water flood. Transparency is the key although I realise that negative news on the water flood operations and outcome will hit the value of the company and the share price.
Celtic, I have been having a go about the water flood implementation because they are well behind their target which was about 1,500 BOPD just as a result of water flood. They dispensed with LO's services and got good terms for RRDSL and the loans which would indicate that LO failed and did not meet expectations. Hopefully the company will give shareholders a full explanation of what has gone wrong and what they now expect from water flood. Transparency is the key although I realise that negative news on the water flood operations and outcome will hit the value of the company and the share price.
Third para should read It is getting to a point where you can see that the current share price will improve as production increases which is why investors buying at this price are more likely than not going to be able to make a profit.
More good news and long may it continue. Confidence will gradually return if management can keep increasing production and cashflow. It is getting to a point where you can see that the current share price will improve as production increases which is why investors buying at this are more likely then not going to be able to make a profit. Obviously this is just my view and nothing is certain with Aim and oil investments.
Whilst some may think I am being harsh believe me when I say that is nothing compared to the credit risk management of a bank if Range apply for credit facilities
LandOcean were brought onboard because of enhanced recovery experience and they have been shown the door because they failed. If a company fails to deliver on its production targets and is still scrabbling around to successfully implement its water flood then you are kidding yourself if you think that isn't a failure. All I want to know is whether the company can recover from the setbacks and successfully implement the water flood in the future or do they now consider the water flood will be less successful. The whole point is that they are managing an ever changing situation and are always looking for the best way forward which is why they are reviewing the 2018 drilling plans. Whilst the improvement in production is welcome they need to be looking at the next five or six moves not just one step ahead.
I believe the company's change in strategy and the likely move towards more drilling is a direct result of the water flood not matching the increase in production that LandOcean predicted. They will need to be very careful in their analysis of how best to increase production based on the costs since the enhanced recovery experts seem to have failed. Does anybody have any idea what the problems have been because I do not believe the explanations so far tell the whole story?
It is weird to see LSE showing sales at a higher price than buys, this must be the definition of a dysfunctional market. Can I sell all my shares at 0.26p and buy them back at 0.24p please? Trading like that will help me offset my RRL losses in no time at all.
According to the RRL website the Company Profile for Trinidad states an existing oil production of approximately 750 barrels of oil per day. http://www.rangeresources.co.uk/about-us/company-profile/
So get your calculators out and find out how much RRL is worth if this happens https://www.telegraph.co.uk/business/2018/05/09/funds-bet-150-oil-trump-blunders-mid-east-battlefield/?li_source=LI&li_medium=li-recommendation-widget
WTC has now reached US$70 per bbl.