REMINDER: Our focusIR Investor Webinar takes place TONIGHT with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Company would have received RBL by now if there was a slight decent chance of these assets being any good. Oil might be there but cost of extraction is way high for it to be economical and that is where "death spiral financing" came into play. Arthur knew about it but decided to fleece as many mug punters as he can. If bondholders and lenders believed that these assets were really god they would not have pulled the plug.
Some bottomfeeders are trying to here.After what transpired over last couple of days I dont think any sensible trader would touch this with bargepole but again that does not reply to mug punters.It can get suspended at any mintue now.
As there is a pattern , buy a worthless asset at highly inflated price through placing and use some "twitter influencers" to lure in some mug punters, throw loads of sh** at market, set a breakeven production target and get into "death spiral financing" arrangement.Milk it for few years and move on to next big thing.There are quite a few companies like vast,upland resources and many more which will cost mug punters hell a lot of money.
Now we know the reason why Arthur was being secretive about production figures, bondholders were happy as long as they could convert debt into shares to dump them onto mug punters but realized that game was up once JV partner pulled out.
In background it has lost more than 50% in a month.
In my opinion price of oil and gas tends to go up in time of uncertainty.In my opinion not all contracts petrofac has been getting were profitable but the way it has going is you win a profitable contract and that will cancel out any losses. Great if you can keep on getting new business but you are in deep trouble if you don't get new contracts fast enough and I think that is what has happened here. As far as shorters are concerned I do think they have spotted a weakness and have decided to exploit it.Bondholders are on top of priority list and when they are willing to take 50% loss that you should know that they have given up on the hope of getting their money back.