The next focusIR Investor Webinar takes places on 14th May with guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Eurofil, several things happened, a brief summary: I had a conversation with the IR that wasn't comforting, gas price fell below 50p, H2 wasn't a success at first, the company realised they are screwed and cannot pay the coupons or principal, and, now, they cancelled the 2 appraisal wells, puting the final nail in the coffin.
Maybe you bought below 4p and are making a nice profit, but I'd rather see your arguments to justify the company isn't a bad position, instead of just contempt.
Aligator, I spoke to a bondholder that sold to someone from UK (the broker was based in London) that was buying as much as possible of the bond at a discount, I don't know if the same person is also trying to get a position in the equity.
Thanks for the balanced reply, KYC. I'm not deramping anything, I have never in my life shorted a company (is it even possible to short an AIM stock?), just sharing a not so positive view if it is useful for others. I should have heard others that warned me about IOG's troubles back in summer 2022, I didn't and lost a lot of money here.
This guy quotes parts of the article, anyone has access to it?
https://twitter.com/oilgastourist/status/1674023467967029249?s=20
Just food for thought. You should not expect only rainbows and unicorns in IOG, it has been more of a nightmare in the last 12 months.
I sold and moved on. It's a matter of simple math: by using the current production and strip price, you can project the revenue and net income for the next 15 months. Then, add the payment of the coupons and principal. You can deny it as much as you want, nobody thought this situation could happen, but it did. IOG is at the mercy of bondholders, who will need to decide whether to refinance the bond or convert it into equity. Therefore, a very likely scenario is that they force a change of control similar to what Kistos did with Mime Petroleum. Those two appraisal wells were crucial in increasing the value of Kelham and Goddard licenses, making a farm-out agreement more favorable than the current terms.
They don't have any growth opportunities right now after the disaster of Southwark. They can only count on Blythe's income to pay a €100 million bond next year and all the quarterly coupons at an annual rate of 13.5%, it is gonna be impossible because IOG receives less than 50% of the production and the current gas prices are nor enough. They may have to liquidate the company by selling all assets to repay the bond at a discount.
Plan C. Convert part of the note into equity and give the control to the bondholders with a massive dilution to shareholders
Someone is aggressively buying the bond at huge discount, watch out!
This article summarises the situation, I don't still understand why they went for this placing and facility. I have a lot of doubts on the board's intentions, it seems that some piece of information is missing to complete the puzzle.
https://moram.eu/jadestone-financing/
This is a clown show of epic scale! It seems they were fine overpaying for the NWS and Thai assets and buying shares, while Montara was shut down. Now, they realised just after signing the RBL that they are short of money, so they have to dilute the company and get a working capital facility with the terms offered to any distressed company. It seems nobody thought that it could be a good idea to run some stress tests before committing $30m plus additional capex commitments for a declining gas play in Thailand, on top of all the ARO payments for the NWS and the contingent payments.
This company seems to be run by amateurs, and they have waiting until the very end before getting this insulting conditions from Tyrus Capital. They offer the carrot by saying there is a small deal coming that will bring an additional 2,000+ boe/d, like that's enough. I only expect CEO, chairman and IR head to resign immediately for not being able to run the company properly. The CFO, Bert-Jaap Dijkstra, must be sacked immediately.
Https://twitter.com/deitaone/status/1666129041710100482?s=46&t=XEvIPNYNbJjer670_nz0Qw
How did you get to that NAV?
Some have been saying for a long time that this company needs more expertise in US oil and gas operations, as it is now relying on external consultants, not people in the board or management. It was ridiulous that the names that Colin gave in the team responding to the incident don't have any public link to Zephyr. However, the major issue here is that they committed to spen $8.9m in CAPEX this year under the assumption that the oil price will remain high, they hedged part of the production but not enough, and they run out of money due to the State 36-2 well.
PS - it is funny they say Zephyr is "the Rocky Mountain oil and gas company" and also describe the Paradox Basin as "the Company's flagship project"
Blythe is already connected to the subsea pipeline, it will use the same connection it had for Blythe H1 and Elgood, just minor work to connect H2 to it.
Remember that perforation requires explosives, and these cannot be stored at the rig, they require special transportation and safety measures