Member Info for TheTrotsky

Given GB's record at DVRG, you've got to wonder whether MSYS's sales to DVRG are just another one of his fabrications.

Me thinks you rather exaggerate. It was only in April, over 6 months after GB left that DVRG notified shareholders that there might actually be a problem with the revenues it had previously reported to the markets. annd it was only the beginning of June that DVRG announced that STC/Labskin were a bust. When the warnings did finally come it was too late. Sure there were some posters who'd been suggesting for a while that DVRG wasn't what it seemed but, these boards being what they are, they were written off as cranks.

Cash flow problems can be managed if they are addressed in time but non-existant revenues/businesses are quite another matter. It's now clear abundantly clear to all ex-DVRG shareholders that GB is/was a fraudster.

Deepjoy, The difference between senior debt and subordinated debt is where the debt ranks for repayment if everything should go"tits up". Senior debt always ranks above subordinated debt and is always repaid before subordinated debt (the latter is subordinate to the former, hence the name). The quid pro quo is that the interest rate charged on senior debt is generally lower than the rate charged on subordinated debt (to reflect the lower deemed "risk"). Subordinated debt ranks above trade creditors and shareholders.

CaneToad, It's been my recent experience that markets are increasingly reading the headlines e.g. profits down 75%! and ignoring underlying factors (whereas in the past markets were quite happy to ignore upwards revaluations they now jump on any downwards revaluations). Inflation is undoubtedly gnawing away at returns (given that most of GCP's loans aren't inflation-linked) but discount factors can be very fickle.

I'm not a great fan of IFRS; it seems to more often confuse matters rather than clarify them. IFRS was supposed to make accounts more understandable for the layperson! The IASB are having a larf! They couldn't explain themselves out of a brown paper bag!

For the upteenth time, electricity prices affect the discount factor applied to the debts. If the discount factor rises, the net present value (NPV) falls and vice versa. E.g. if the discount factor rises from (say) 5% to 10% then the NPV of £100 receipt due in one year's time drops from £95.24 to £90.91. You still receive the £100 (assuming the debt doesn't go bad) and, for accounting purposes, the discount factor is reverses over the term of the loan.

The discount factor doesn't make it a "hybrid instrument"; think of it more like "personal" inflation. E.g. headline inflation in the UK is currently 8.7% but that doesn't mean each individual is suffering the same rate of inflation (it depends on their own "personal bag" of goods and services; some will be experiencing a higher rate and some will be experiencing a lower rate). The discount factor on GCP's loans is being correlated to the electricity price because that's where the majority of its loans are made.

Simply because some people aren't financially artiuclate does not make them "mongs". The fact is most people aren't very good at making long-term budgets; either because they don't have the necessary skills or aren't inane enough (like some of us) to want to count every penny.

A lot of people have been fixing for 2-3 years when they probably should have been looking to fix for 5-10 years or more. An inability to look beyond the next (say) 12-24 months and FOMO (interest rates might be lower tomorrow!) play a big part in people's decision making whereas, when it comes to mortgages, they'd often be better off fixing for longer and, perhaps, varying the mortgage term. They may miss out financially if interest rates do eventually start to drop (early redemption and arrangement fees are likely to outweigh the benefit of changing to a lower rate udring the fix period) but at least they have some certainty that they won't be caught out by rate hikes when they can least afford it.

Cane Toad, There hasn't been a fall in the interest received. As you state, there has, instead, been a fall in the fair value of the bonds. The exact dynamics are unclear but, given that the returns on the bonds are generally fixed (some are inflation linked) and that the fair value of the bonds can both rise and fall, then I'd suspect that the fair valuation of the underlying bonds is affected by electricity prices in one of two ways:

Firstly, the risk of borrowers defaulting. That risk seems fairly self-evident to all.

Secondly, the expected timing of future bond repayments. If the bonds have flexible payment terms then lower electricity prices could result in longer payback periods and vice versa. Likewise, longer payback periods will result in the fair market value of the bonds being lower and vice versa.

We also have to factor in the effect of inflation on the discount factors being applied. Under IFRS, it's my understanding that the fair market value of the bonds is based on the net present value of expected future cash flows i.e. the discounted value of those future cash flows. The higher the discount factor the lower fair market valuation of the bonds and vice versa. This doesn't, of itself, affect the amount of money paid back on the bonds and, as such, the discount is therefore unwound over the remaining term of the bonds.

No its not. Read notes 3 and 11 again. Their revenue aren't linked to electricity prices. The fund lends money (fixed-income debt instruments, in some cases with elements of inflation protection, or other investments with a similar economic effect) to businesses primarily operating in the energy sector and, as such, the risk of default on those loans is linked to electricity prices.

Only time will tell if this is oversold. Production is down and the jury is still out on whether CASP can deliver its deep well prospects. I think if the dividend is now suspended, the sp will definitely drop through 4p. Given all of the apparent recent drilling delays and setbacks, and the lack of any update from Clive in the last RNS, I think the chances that the dividend might be suspended has to be greater than 50%.

I'm also very dubious about the need to sell a half share in the CE and, for all we know, the Seychelles company could be a connected party (the RNS made no reference one way or the other and Seychelles companies are convenient for hiding ownership). Why now, just when drilling prospects are supposedly on the cusp of changing for the better? Is it a fair market price for a 50% share? Based on the one charter that has been signed, perhaps so, but what if there are more charters in the offing that the purchaser, unlike the PIs, is privvy to?

I'm sure all of the long term holders will only see the positives but the short term prospects for the sp, at least, don't look very promising just now.

Anybody who thinks that the current iteration of EVs is the final say in the matter is blinkered. EVs in 5-10 years time will be completely different from the current offerings; new materials, new batteries, new motors etc. The re-sale value of current EVs will likely go thru the floor (unfortunately). Alternatives, in development, to lithium-based batteries will be critical to the next leap forward.

Hydrogen isn't suitable for mass produced private cars; it uses 3x the amount of electricity per mile compared to an EV. We will struggle to produce enough electricity to power EVs let alone generate hydrogen. The electricity transmission network does need to be upgraded but that should not be an insurmountable problem (if this government ever gets off its backside and comes up with a cohesive energy policy).

Fast charging at service stations should be the priority not home charging points.

Mulder, We've had some questions about DEC's net current liabilities before. Under IFRS, DEC is required to account for the non-cash effect of its derivative instruments (hedging contracts) and, consequently, its current liabilities include non-cash derivative liabilities i.e. the opportunity cost of selling its gas/oil production at hedged prices rather than the spot price as at the balance sheet date in the forthcoming year (look at the deribative instrument note to the accounts).

The intention of IFRS was (supposedly) to make accounts more understandable to the layperson but instead it means you have a balance sheet where you can't tell the difference, at a glance, between cash and non-cash debts/liabilities

"Buying under 2p then adding as it rose and holding them isn't being slippery is it?"

No, it's being evasive. You've lost money on your investments since 30 January regardless of what price you bought at. Sure you may have bought and sold in between at a profit but the sp this week has dropped below the price at 30 January. It may only be a "notional" paper loss for the time being. I could have added more money to cover my spreadbet but chose not to; you've chosen to hold that's your perogative.

Whether it was right to sell out or hold only time will tell. You are willing to ignore Clive's shortcomings, I'm not, but have the backbone to "man up" and admit that your CASP investment, has on paper, lost money since 30 January (just like my spreadbets). The only difference is that I've chosen to crystallise my losses.

I wish you well and hope for your sake that "gloating" about buying sub-2p doesn't come back to bite you in the bum ;-)

Personally, I think CASP may have further to fall IF it now cancels the dividend. Without the dividend, I think it's debatable whether there's been any material change in the company's drilling prospects since last November; they still seem to have the same problems that they ever did. I appreciate there is new income from CE but given that it now looks like the income is going to be ploughed back into operations, one could make the argument that it's just helped avoid a capital raise (not a bad thing but does not necessarily enhance the position that existed at the end of November).

Did I say slippery? I meant evasive. Bit like Clive.

You're still on a wing and parayer here re: new wells, like any other exploration company. Indicators are positive but they are still grappling with extraction.

Force Clive to write an RNS? I'm sorry if Clive feels that it's unfair to be asked to fulfill his fiduciary duties! If it's too much for him to handle then perhaps he should resign - there are plenty of other oil exploration executives out there who understand their reporting duties and are able to fulfill their role without so much "drama".

"I'm still in good profits at this level, been adding as it slides"

Yeah, yeah. Slippery as ever I see! On 30 January, following the Deep Well Update, the closing mid-price was 5.7p and the current mid-price is 4.6p. So, any shares you held at 30 January are currently worth c20% less than they were. I don't really care if you've been averaging down since, it doesn't change the underlying profit/loss on your individual share purchases and, even if you are still "in the blue", you are a lot less "in the blue" than you once were, however much you like to butter it up. Facts are facts.

As regards attainable information, we know that these can be open to misinterpretation e.g. the debentures. All we know for certain is that CASP has encountered some problems (from the RNS) and committed resources (from your alternative sources). But, despite, all the resources they've committed please show us the evidence that they've successfully drilled their deep wells and that they are imminently going into production? I appreciate that some of the information is more indicative of a longer term commitment (e.g. the planning for new accommodation and offices) but history is littered with examples of good intentions being curtailed and not coming to fruition.

CC, We will tell who the "pratts" (sic) are in due course. Personally, I've historically done well out of spread betting and when I opened by initial spread bet following the deep well update at the end of January I didn't think that it was unreasonable to assume that we'd get a further update within 4-6 weeks and, indeed, I could have sold out at a modest profit on several occasions. I've not complained about losing c£4k. When I placed the spreadbet I was fully aware that I could lose the whole amount. Indeed, the amount I lost is more or less exactly the same as the amount I would have lost if I'd been able to afford to buy the equivalent number of shares in the market at that time and sold out yesterday! Do the maths!

I will choose to ignore you're implied criticism because of your clear, biased ignorance. You speak without actually thinking; the risks for spreadbetters buying AIM shares are much the same as someone buying AIM shares (the spreads, which can be the real downfall are the same). Sure, if you buy shares, you don't face the same margin calls and you can last out short-medium term price collapses more easily but, at the end of the day, you are still poorer now than you were three months ago and are still reliant on CASP pulling a rabbit out of a hat (something they've consistently failed to do).

What I have complained about is how this BoD has managed the information process. I'd held on based on the mistaken belief that they would been obliged to notify such price sensitive information sooner. I was wrong; this BoD do not think that the listing rules apply to them.

Please justify today's sp based on a comparison with the information in hand prior to the dividend RNS last November. Not a lot really has changed (assuming the repair works at MJF are successful). The cashflow from the boat now looks likely to be used to finane drilling operations whereas, only a few months ago, many on this board thought that it would be surplus income available for distribution. Essentially, you've got exactly the same ifs and maybes. It's really not clear from the last RNS whether CASP is actually any closer to delivering its deep wells - we don't know what problems they encountered and whether those problems were just unfortunate or whether we are now in the last chance saloon i.e. whether the deep water drilling problems will prove to be insurmountable. Has your risk of success or failure materially changed since November? It's all speculation. What is clear is that CASP is fully committed to trying to bring in the deep wells but that's no guarantee of success.

Why on earth would you think Stepping Stone Investments Ltd, an offshore Seychelles company, is going to bring in further contracts (or improve CASP's chances of winning new contracts)? You're just blowin' out yer hole. There is nothing in the RNS to suggest that this is a strategic tie up. It's about generating additional cash flow now rather than (say) 12 months time.

Botbot, This is not a complete joke. Before the announcement of monthly dividends in November last year, the CASP sp was languishing at 2.3p. Since then daily production has fallen (from 2,400 bopd to 2,000 bopd), oil/gas prices have fallen, their new deep water drilling operations still remain unproven, some of their pre-existing production is off-line under repair and they've just (effectively) sold 50% of any future revenues from CE. Yes, they look set to realise $22.5m from the sale of a half share in CE (effectively trading c$15m of contracted future revenues for an upfront payment of $22.5m now; the Seychelles company has essentially acquired 50% of any new contracts for c$7.5m - it may only take one more new contract for them to be "in the money") but that looks to be already earmarked to fund existing shallow water operations and new deep well drilling. Yes, the deep wells look very promising but thus far CASP has had zero success bringing any deep wells online.

So, bottom line, IMHO it's only the prospect of continuing dividends that's currently keeping the sp above 4p (until they are able to successfully deliver at least one deep well) and the prospects aren't looking good. Given the shift from monthly to quarterly dividends and the expectation of an announcement last month, the quarterly dividends seem to have slipped at least one month. Plus, given that there was no reference to the quarterly dividend in the last RNS, the, as yet, unexplained problems they encountered in their deep well exploration, the repairs needed in their shallow water wells, the falling oil/gas prices etc. - it looks like the dividend is going to be shelved, at least for the short-medium term. I'm sure many of the long-term holders would approve this course of action (conserving cash whilst doubling down on their deep well explorations) but, don't kid yourself, it will have an inevitable impact on the sp until, at least, one deep well is proven. Also, as it stands there's no guarantee that any CE income will prove surplus to operational requirements and be available for distribution i.e. until they bring a deep well into production it's likely that any income from CE will be ploughed back into exploration.

Adrianz, Each to their own but when BoD's can't be bothered to keep shareholders advised of potentially price sensitive information then that's a red light to me. The other red light would be the significant holding held by Oraziman and his associates. You only need to look what happened to iEnergizer recently to see the impact a large shareholder can have on the actions of a BoD. I've been investing for over 30 years and have come across more rogues than I would care to mention. Through trial and error I've learnt to go with my gut; too often I've given BoD's like CASP's the benefit of the doubt and come off worse. Carver is not acting in the best interests of all shareholders; if he was he'd be more forthcoming in what he discloses. He's acting for the main offshore shareholders and they can stitch you up in a trice without a blink.

It's the lack of hedging that makes me think that the loans GCP makes are floating rather than fixed.

As far as I am aware, GCP is paying 2% over SONIA (unhedged) but I think people are overlooking the fact that around 90% of GCP's investments are senior/subordinated loans and, although the accounts don't spell it out, I rather suspect that any rate rises are passed on thru to their lendees (the accounts have a lot of general IT waffle that they are required to include but are light on certain salient information that actually might help investors)

Kheldar, They are acquiring 50% of the shares in the CE operating company (not the CE). As such, 50% of any profits/(losses) arising from charters after the sale has completed will attributed to the Seychelles company. Simples ;-)

I'm out. I've closed the last of my spreadbets this morning at a circa £4k overall net loss.

I didn't think that yesteday's RNS was as bad as it might have been BUT I have some reservations about the Carver and the BoD. He treats PIs with disparage and yesterday's RNS made no attempt to explain what the problems have been or why the market hadn't been updated before now. It's price sensitive information and I have no doubt that the majority shareholders have been kept in the loop whilst the rest of us have been left in the dark!

I also have some reservations about the sale of the 50% interest in the CE to an offshore Seychelles company. For all we know this could be a connected party transaction and, if so, it brings into question whether or not the proosed price being paid is fair open market value. I thought it strange that Carver was at pains to point out the fact that the boat had had no charters in 2022 but made absolutely no reference to the charters negotiated since.

As regards whether or not a further dividend will be paid this year is in the lap of the gods. Clearly CASP is now spending a lot of money drilling but, given its past drilling record and the illacrity with which it informs the markets, there still has to be some doubt that they can successfully bring any of their deepwater prospects into production. Coupled with the sale of the 50% interest in CE, it rather suggests that CASP is now short of cash and cannot maintain the dividend without the sale and, even with sale, will struggle to maintain the dividend if it doesn't get some drilling success (it may simply be pouring good money after bad). Without a regular dividend this share could easily be back below 2p because without the dividend you are essentially back to where you were before, further along the road maybe but still no closer to proving the deep wells.

All in all, I decided to sell because I don't think that Carver and the BoD can be trusted to act in the best interests of PIs (I've suspected it for a few months but yesterday's RNS was the final straw). I may be persuaded to come back but I suspect not (having trust in the BoD is fundamental to all my investmemts).