Member Info for spike501

Bosh

I think the appointment of new CEO is key - if it is someone that has a reputation in the space that can be the catalyst.

Not surprised to see it spike and fall back today - it’s a decent deal, but a long time before any cashflow will actually be seen.

BigDave - just for info AISC does not include initial mine development CAPEX. I’d assume that will be around $200-300 per ounce.

No way is extraction cost $500 - only a tiny number of high grade open pit mines achieve that level of extraction cost.

Barrick has extraction costs of 1,255 an oz. Batanga requires mine development and is relatively small scale, if they can achieve all in extraction costs of 1500 per oz, inclusive of CAPEX that is a good result and tax will also come on top of that before BMVs dividend payout.

“So it’s ATLEAST $154M”

It’s a 10% profit share, not revenue share - until you hear any different I’d assume $1000 an ounce post tax profit, so around $44million profit share plus the potential additional $22million.

Norm, why not just read the companies own announcements - they tell you the number of shares

1,248,740,307 currently in issue, about to increase to 2,364,124,923 with another 230,769,230 to follow.

So market cap is approaching £4million once the new shares are issued.

Sold out this morning, outlook for oil is not good with OPEC+ reversing production cuts and US tariffs likely resulting reduced demand. Can’t see any catalysts here and more downside risk short term.

Hopefully for holders I’m wrong but first and foremost protect capital.

"It's the net debt figure that has killed this, how the hell has a company that is supposedly being frugal with its finances counting every bean allowed itself to go from a net debt of 4.2m to 104m, just beyond me."

Net debt has increased through 2024 due to the payments required for the CWLH acquisition and the development of Akatara. I notice at half year net debt was $69million, but additionally there was $53million in accruals. I believe this will mostly be related to development of Akatara which was the invoiced to Jadestone once Akatara was handed over (several months late) and I would hope paid by year end.

What would have been nice would be some information about liftings as that can make cashflow volatile and also some more detailed guidance on cashflow and net debt for the outlook for 2025. Based upon current open and Capex plans, midpoint production forecast and forecast oil prices what is the anticipated net debt position at year. It doesn't do much for credibility with the vague financial forecasts they have given.

Market reaction fairly muted, probably some hot money leaving. I’d say net debt was a little higher than expected and production guidance for this year was fairly wide and the bottom end quite low relative to expectations.

I’d not pay much attention on its own to 2P NPV valuations, however the metrics in the presentation show how undervalued JSE is on a wide range of measures.

They need to continue to demonstrate operational resilience and translate that into cash generation and reduction in net debt and the SP will catch up.

“ I'd rather lose the lot than willingly give these total opportunists the lot for next to nothing.”

Always an investment strategy Warren Buffet recommends- emotion and anger driving investment decisions.

Crossthetea - it’s quite clear you haven’t got the slightest clue on director responsibility, or what terms like unsecured mean in respect to insolvency.

For others reading, ignore Crosstheteas false assertions that an unsecured loan cannot trigger administration, its dangerously wrong.

Crossthetea is absolutely wrong - if Coris decide to no longer provide the waivers and insist on interest payment which HUM cannot make then HUM will default on the loan which will become immediately due.

HUM directors will then have no choice but to put the company into administration otherwise they will be trading while insolvent.

"They are not going to release any sensitive information on production they cannot as per takeover rules , only scheduled news releases."

Which part of the takeover code says this? Companies are still obliged to release price sensitive information at all times so shareholders continue to be informed.

There is no chance of an RBL, it needs to be secured by production and the funding is for pre-production development - Deltic have no cashflows to make interest payments in the time before production starts.

“ How could Shell sell out to Viaro, if what they owned was not legally defined with crystal clarity! What would they be selling.”

Shell own 50% of the licence - it’s not rocket science, there are dozens of North Sea licences split between different partners.

"That said, while in a previous post I accused Deltic of Hubris trying to carry Pensecola through to appraisal, there’s no certainty it will ever be developed so the value loss may still be nil."

I'm not sure they were trying to take Pensacola through to appraisal, they were clearly trying to monetize and/or farm down to again ensure free carry. They just unfortunately got caught out by the political environment and I also believe that potential parties interested in Pensacola could not get the necessary assurances from Shell that Shell as the operator were prepared to take next steps in any decent timeline.

I don't really have a massive amount of criticism for management here - the strategy of the business was clear, which is what investors signed up to, simply the rug has been pulled from under them and the strategy is dead. Simply the writing is on the wall here.

"A small company should avoid CAPEX heavy locations."

But Deltic was never about CAPEX - the strategy was always clear, take early stages licenses do the leg work and then farm down in stages to get free carry. They did a pretty good job on that front with Pensacola and Selene to the point of discovery but the North Sea has been killed in recent years, which resulted in no one around to take Pensacola to the take next stage and Capricorn bailing out leaving them with effectively only Selene so they are a distressed seller.

"Q1, why indeed. Have consistently argued Execs should be payed pro rata the SP performance. Here that would mean significant pay cuts."

Not really pay cuts - they'd be paying the company to do their jobs :)

"I would assume the JV could raise project finance to a great extent, but not in full."

No DrPatience, the JV cannot raise project finance as there is no JV of any substance here - it's simply three companies cooperating on a license. There is no JV in the form of a shared legal entity that the parties are committed to, but has its own capital raising capability.

Its marketing speak - sounds impressive calling it a JV when one of the partners is a supermajor like Shell, but there is absolutely no substance to it all.

I'm not really as critical of the company as David - they built a nice portfolio of assets, they were simply unfortunately it was in a mature basin the Government activity is prematurely killing. I just don't see any prospective upside from here - there will either be a highly dilutive raise to look at other speculative activity, or otherwise this just goes into shutdown mode to try and preserve cash and survive in which case the share will just drift down, but even then I don't know if the lights can be kept on long without tapping the market.

No one will be in any great hurry to take Deltic's share in this - Shell/Viara and Dana can afford to wait, and external partners will most likely wait until Viara take the asset over and be sure that development is going to go ahead.