||EPS - Basic
||Market Cap (m)
|Oil & Gas Producers
Real-Time news about Encore Oil (London Stock Exchange): 0 recent articles
|alexx: I was surprised yesterday that the EO. price remained so far above 70p so close to the deadline of acquiring PMO shares. For the average punter it was already too late to apply for PMO so he would surely sell at 80p. Today it's happening. No more people left trying to buy EO. to get into PMO on the cheap.
PMO equivalent to 82p on EO. as I write this.
|captainnelsonforties: It just goes to show how closely linked we are to PMO now, TR result comes out and EO is up on the day!
You cannot possibly be serious to say that AEY doesnt have the upside of EO. Have you considered that in 18 months time (not long in this business) AEY will have annual cash flow of around $300m pa. Canadian companies trade at a conservative x3-5 cash flow and one Canadian broker put at target of $8.00/share on AEY when Fyne production kicks in. That's just about x8 the current share price. I'm sure you also realise if AEY goes sole risk and hits oil in Carra they could have a possibly higher P2 than IAE! they're sure as heck catchin up with them since Erne came in. Not to mention that Repsol discovered what is thought to be 900m of shale oil close to AEY's argie shale licence. The only way EO had x8 upside was by getting an excellent result from sole risk on Coaster and bringing some of these through to production, not selling reserves at $8-10/bbl. PMO will get the benefits from these developments now though.
Captain Nelson Forties|
|leedskier: c&c ... BLVN sold 77.5m shares a few weeks ago for over £1. It has oil and now lots of cash. That didn't stop its share price being massaged down to 62p this morning. Make no mistake, without the offer from PMO, EO. would be a lot cheaper than it is now.|
|red rook: ONE PI's OPINION ON THE PMO BID
Reading the posts on various BBs over the last month there seems to be a general consensus that this PMO bid is a done deal.
Having been through one takeover bid, namely that of Regal Petroleum (RPT) earlier this year, I can attest to the fact that takeovers are rarely a done deal. There can be many twists and turns before a final outcome is arrived at.
IMO, there is still a possibility that a second bidder may throw their hat in the ring. At least we would get a competitive bidding process going. Something which seems to have been stifled somewhat, referring to the deal between PMO and TAQA.
However, a counter bid is not necessary for PMO to be made to sweeten the pot. I would be surprised if PMO achieve the necessary 75% vote required for takeover on the first round of voting. I suspect that, as with the RPT case, the Institutional Investors will have been building up their positions to block an outright win, certainly on the first ballot. They will want to maximize their returns and have no allegiance to PMO. IMO, PMO will have to come back with an improved offer. Again, it is quite possible that they will fail to achieve the 75% mark even on the second ballot, and will have to improve their offer again.
I will be voting NO on the first ballot and I hope that enough PIs do the same that PMO have to come back with a revised offer. Some have questioned if PMO will walk away from Encore. IMO, I doubt it. They want Encore's North Sea assets. It is strategically too important to their North Sea presence. I suspect that the Institutions currently building up their assets appreciate this.
As with the RPT case, I would not be surprised if having failed to takeover Encore outright, PMO settle for becoming the major shareholder in Encore. This would be my preferred scenario. If for example they manage to acquire around 50% to 65% of the shares in the bidding process, but realize that they cannot achieve the 75% mark, then IMO they will rather settle for majority holding rather than walk away. They would in this case control the BOD, but Encore will still exist as a separate entity. It would be in PMO's advantage to allow it to carry on with its drilling program, and any PI's still holding will be well rewarded, since a success will have a greater impact to its share price than if it was absorbed into PMO.
Some have expressed concern as to what would happen if PMO did walk away. This would be my second best scenario. IMO, the share price would remain at around the current level, since this is the price that another company has been willing to pay for it on the market, and not just a broker's calculation. It would give Encore breathing space, and with asset sales as shown by PMO itself, (namely Cladhan and farm-ins) it can get the finance required to go it alone. This should be possible. If PMO walked away, I do not believe that their contractual arrangement with TAQA will remain valid, so Encore could approach TAQA if not Wintershall.
However, a few things to consider as we approach the voting process:
If the bidding does go to a second vote, and PMO come back with an improved offer, then if the situation is the same as I experienced at RPT, then those who vote YES to the bid offer on the first round will have been deemed to have sold and will not be allowed to participate in the next round.
Further, you need to check with your broker if you do not intend to vote. Some brokers take this to indicate that you are voting NO to the offer, whilst others take this to indicate a YES vote. I remember that this caused some confusion with some PIs at RPT.
Please note that this is all IMHO. As always please DYOR.|
|buffythebuffoon: Overall, I'm slightly disappointed AB couldn't get 85p or more but I suspect he is as well given difficult market circumstances.
He may well get that if TR, or PMO's explo does well.
I sold mine at over 72p which, if I'm being honest, I now regret.
I have taken up EO. price watching as punishment.
My rationale was that I had the certainty of getting 2p over the agreed price, and I would have free cash should there be armageddon in the markets before Xmas.
If the market keeps going up and/or EO. receive a higher bid, I will regret it even more.
|leedskier: 1. It puts a floor under the share price.
2. It ensures the share price rises in line with PMO.
3. It leaves the door open for a counter bid.
4. It avoids any question of dilution to raise cash for drilling.|
|mikalan: Thanks Leedskier, but now I'm confused.
The offer is for a fixed 0.2067 PMO shares per EO Share, is it not?
Therefore if the markets crash and PMO share price drops to £1 then EO at 70p would be the better bet, but if PMO share price rises to say £10 ( I wish) then we would still get 0.2067 PMO shares for each EO share we have but they would be worth a lot more.|
Well I'd prefer to see all available cash going into GCA too and leave TR and Merrow well alone. But unfortunately that's not the case at present with Sedco 704 to be used at TR and plans moving forward to drill merrow before y/e too. If those are successful, rather than put any more cash into those assets I would rather see those sold at enough return to drill GCA. Cladhan is a much much safer and straight forward development than TR or Merrow, you wont get a TR or Merrow well with a production index of 15000bopd like the deve wells planned for Cladhan. When they go ahead and drill these heavy oil prospects and if they are commercial sell them asap and get enough cash in for GCA drilling. I dont care if they sell off TR at a knock off rate as its not in the share price anyways. In fact neither is most of the GCA discoveries now either! :) It'll change eventually. Selling Cladhan to use the money on TR and Merrow is a higher risk strategy now that they've firm drilling plans. Perhaps prove up TR and Merrow, get some value to those and the rest of the discoveries back into the share price and get a small placing off for GCA phase III. AB should be doing a tour of the insti's once the market calms a bit and get our price back to reflect our assets. We're barely valued at 10-15mmbbls, laughable considering Cladhan, Catcher, Burgman and Varadero let alone the expo potential of the rest (Carnaby Coaster et al).
Captain Nelson Forties|
|kenobi: I'm just wondering, what is the point in eo. holding shares in xeo ?
why don't they just give us the shares directly rather than holding them in eo. ?
like bt did when o2 was seperated ?
Now I know it's not the same as there is a fund raising too, but I thought the logical thing to do was to give eo. holders one xeo share for each of their shares, (or whatever proportion) then dilute those shares as appropriate to the issue, still allow current holders to buy at the placing price, and anything left over goes to the instu's. This would mean if I fancy eo. as a takeover but am not interested in xeo, I can sell my xeo, and buy more eo. for example.
I see no advantage to the shares being held by eo. directly, though I suppose it's an assset they might want to borrow against in the future ? or sell if they need money to progress the assets, or at least to leave options open potentially ?
I appreciate that we still have some exposure this way, but I'd like to have the choice to be honest, I guess in theory when there is a listed price on xeo shares they should bolster the share price by that amount, allowing a market value to be easily established, like for cash on the balance sheet,
interested in hearing other thoughts,
|gary1966: Been out all morning and having read all the posts re this mornings news I think I must be missing something. I cannot see how we are being diluted or giving assets away.
We set up a new company that EO owns 100% of. They put some of the exploration assets in the new company. EO still owns 100% of those licences and we still own our share of EO. The current share price is valuing these assets at zero. To know whether it has been dilutive or not we will need to see the share prices of both companies after they are split.
The new company will then need to raise funds to finance the exploration program which it would have done even when they were directly owned by EO. Cannot see in itself that leads to any further dilution.
Hopefully the existing EO company will be valued at more than it's current value as the market will well and truly know the assets are up for sale and will start valuing them accordingly. In addition to this we will have the value that the market puts on the new company as well. As they are currently valued at zero within the EO share price I can't see the market value being any lower than this.
This kind of split worked very well with Polo Resources, URU and Emerging Metals and so I am convinced that this will unlock value.
Feel free to point out my mistakes as I am nowhere near as intelligent as some (probably most) on here.|
Encore Oil share price data is direct from the London Stock Exchange