RE: OMG1 Oct 2018 19:31
Thank you wmoc - I will take a closer look later.
My view - which I fully expect to be unpopular with certain posters, but there you go - is that the minnows are selling their stakes. What we are seeing reported are artefacts / ripples from this as the trades won't have been booked conventionally.
The suggestion that the minnows were believers in HH, but wanted their exposure via UKOG has never held water for two reasons:
1. The direct exposure they had was far more accretive than indirect via UKOG. I posted somewhere a calc showing that if HHDL doubled in value, Solo would have 5x the gain holding direct compared to holding via UKOG.
2. To sell, but to want to retain exposure is a bit like jumping and ducking at the same time. They will have made a decision that £30m was an attractive valuation at which to exit HHDL, and that will have been be that.
If they'd wanted to retain an exposure at 20% of their original level, they'd have sold 80% of their holdings...
If they'd wanted exposure to UKOG they could easily have secured this in the open market
UKOG wanted the transactions to be in shares, because they are easier to print than hard cash...
My guess is that the minnows wanted what is known as a vendor placing, where the brokers to the company issuing the shares also arrange their sale so that the transaction is settled for cash. UKOG didn't want this, and knew that the stakes involved were small enough that they could insist on settlement in shares accompanied by some gentle spin, knowing full well that those shares would be sold within days. No different to when UKOG have described the beneficiaries of previous discounted placements as "institutional investors". Pay attention to what they do, not to what they say.
There's a post somewhere saying that if there is value, it will be realised for/by shareholders in the end. This is true. Holders should look through the noise and worry more about whether or not the Kimmeridge layers are flowing...
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