Member Info for Thunder2040

My prediction is offer at about 2.80, just short of 50% of NAV

Stinks of hoop jumping this...no wonder we still havnt got the money. Probably have to wait for full moon..

Is this some kind of joke - get the money sorted, don't faff about with the bloody name!

Agreed Barny, based on mute reaction, I think this is now a sitting duck for a takeover as other have stated recently.

Cash on way it seems, well done to all holders

Granted I was giving the 'for' case on the North Sea disposal to balance others views, the FCF generation is the counter view - the vast majority of shareholders voted to dispose though, if it was a terrible deal I would have expected a bigger rebellion on the vote tbh. The point on decommissioning - well the figure you quoted is an estimate - Cairn are more about drill and develop than produce and plug from what I see, and I don't have an issue with that.

There was a disagreement re: kraken a few years ago re recoverable barrels and water cut:

https://www.proactiveinvestors.co.uk/companies/news/216286/row-breaks-out-between-north-sea-partners-as-cairn-downgrades-enquest-s-kraken-field-216286.html

Also the FPSOO vessel has been down already in 2021 - so there have been issues.

I think that was a factor, and the fact that Kraken is a heavy oil field, that will have a worse climate footprint than the gas assets that have been acquired. Additionally, heavy oil in UK waters might be hit by a restriction due to this COP26 target. The approach of having exposure to drill sites in UK waters is fine for me, but more than that adds risk IMO.

These are just ideas but still, we retain some upside on the deal, have no capex costs and decommission liability is gone - people on here have a very simplistic view of things. If a new covid variant came out and the world locked down, oil will tank - cairn is now hedged against that risk somewhat given the fixed price gas deal. They are in control of their own destiny.

It is a less risky company now IMO - that just isnt to everyone's taste. But if you want to invest in north sea oil, just sell this and buy Enquest or Harbour shares

Megla, have you not considered that an RNS could be prejudicial to the legal process? If they come out and say something wrong in writing that would be more negligent. You are behaving like this is an AIM company like others have said, where you ring up the CEO and he posts blow by blow accounts of events so that people can trade in and out every day. Pull yourself together. If you don't like it, sell and move on.

34a, I take your point in that SP would move south temporarily if the India deal was pulled, but long term I think extraction of value from the ruling still favours the shareholders..by hook or by crook as Seav alluded to in is rather informative post. I could be mad, but I actually think Egypt is going to be pretty value accretive here, as Shell were just letting it tick over - we will boost it up and reap the rewards...its an asset base with some real opps.

Well we have lower broker targets on an acceptance of settlement figure, the size of the amount accrued now is huge, like $1.8b plus, so I think people would say ok, more difficult to get the money but also talking twice the amount approx which more than offsets the risk, plus all the cash and assets we already have. The ruling is internationally enforceable and India is getting a deal where they only pay half, so they have enough incentive to not renege on the offer, which is why in approx 30 days time this will conclude. Selling now is not logical to me, but what do I know. As someone said sale of North Sea assets has just derisked this even further. Egypt political risk is one of the few remaining.

Right, but why would it not lead to a settlement? There is a full mechanism in law allowing for the money to transfer to us within 60 days from 1 Oct? Share price today is an opportunity to top up, as I have. People still seem convinced of talking themselves out of a very good investment.

Top up for me this morning. Someone said recently this share is akin to a sovereign bond, even if India don't settle, the upside of the arbitration award that they are not paying from this settlement is huge, so its hedged either way IMO, pay up or we have chance to recover $1.8b+ The sale of north sea assets is wise, Cairn disagreed with Enquest board about the water cut of Kraken and IMO still do, hence why they want to derisk.

The main thing here is the daily volume and direction of travel, seems unlikely to be a private investor, although there may be some big private holders I guess. Valhalla has a gift with words, remember from Burford a while back I think

Would suggest looking at l2 during trading so you can see the sell/buyside depth but also watch the final day auction, keeps getting dragged down below the bid/offer spread implying someone has a large sell on the block that is being filled. All in my opinion of course. If you want to look at specifics, get the trade log and check what the execution price was versus the bid/offer at the time, also offers some insight. Spread here is ugly, always has been.

Amers, those buy/sells mean nothing frankly, they are estimates at best of the buys/sells. Look at the direction of travel here and volume - it ain't PIs

Same Canetoad, it could churn a lot lower if an II is selling, given the debt risk and earnings I said earlier this week £200m was a short term ceiling on the mcap, and its still above that. They thing to be careful with on this one, is not looking at the 5 year graph and thinking it will bounce because of the huge drop - it was on a crazy high growth multiple back then because of the moats, its reverting to value now. To add balance they might be able to get rid of the other dive vessel pre y/e which would help - but wtf is tankers underperformance about honestly! Anyway, time to switch off and check back if it turns a bit. GL

'Underlying net borrowings at 30 June 2021 was £178.7m, showing a marginal increase of £3.7m compared to 31 December 2020 (£175.0m). On an IFRS16 basis, including the Group's operating lease liabilities, net debt has increased from £198.1m at 31 December 2020 to £211.0m at 30 June 2021.'

'At 30 June 2021, the Group had headroom against its committed revolving credit facilities of £117.0m (2020: £115.6m). The ratio of net debt (including bonds and guarantees) to Ebitda was 2.9 times (31 December 2020: 2.8 times; 30 June 2020: 2.5 times). The covenant requirement at 30 June 2021 was 3.75 times, which reduces to 3.5 times at 31 December 2021.'

I have looked at the 6 months results RNS from Sept now, they are in danger of breaching covenants here, hence why this will likely go a lot lower - the cash call is likely as others have said. They were on 2.9x Ebit at June, if things are getting worse, will they clear the 3.5 at year end? I believe they also need to refinance in next 12 months, so no way they will get financed at this debt ratio. Net debt at end of June was close to current market cap and margin is deteriorating further.

Its also got a huge spread, its hard to dump this in any quantity when you want out, as I know from experience back in early summer.

'A recent deterioration in the condition of a financially distressed customer has increased bad debt risk by c.£2m.'

I wonder if it was related to volatile gas prices. The last bad debt was in Africa I think but on the last call they did that I was on they said lessons learned and would be reverting to using tier 1 big players to avoid this.

Thing is, I said that last time it took a leg down and the board keep saying the same thing. The market is punishing them for promising a recovery that has not materialised and infact, performance that appears to be getting worse. They wrote off a material debtor recently and now said they have another £2m potentially coming straight off the bottom line for bad debt. They also have declining performance is virtually all core divisions - and this is not the management team that had the vision to build this company up - so far they have proved nothing..have small holdings and yet ask us to trust them to turn it around. I am sorry but the trust is smashed here. No more talk required, either they get the margins firing again and stop this slide or its lights out I am afraid. Little appetite to buy at this level, as I said earlier in the week, see it around or below £200 mc at a max.

Compliance with banking covenants is tested half yearly
for the ratio of net debt: earnings before interest, tax,
depreciation and amortisation (Ebitda) and interest cover. No
breaches in covenants occurred during the year