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Igas Energy Share Discussion Threads
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|15 November 2016
IGas Energy plc (AIM: IGAS)
Springs Road Planning Application Approved
IGas Energy plc ("IGas"), one of the leading producers of hydrocarbons onshore Britain, is pleased to announce that Nottinghamshire County Council's Planning and Licensing Committee has granted planning consent for the application to develop a hydrocarbon wellsite and drill up to two exploratory wells in Misson Springs, North Nottinghamshire.
Stephen Bowler, CEO of IGas commented:
"I am pleased that the Committee has made this positive determination following the recommendation by the Planning Officer. It has been a long process and everyone has been extremely thorough.
We have engaged with the community at every step of the process through a local community liaison group. This is important to us given we operate 30 fields across the country and understand how imperative it is to work in co-operation with local residents whilst we work safely and sensitively.
We are at a critical juncture in the future of our energy mix and supply, as we move away from coal towards lower carbon energy sources. We rely significantly on gas in the UK, not just for electricity, but also in heating 8 out of 10 homes and as a raw material in the manufacture of many everyday products, including plastics and clothing. We believe the future of the area is as important as its rich history and, with the demise of coal mining in the area, see an important role for shale development in the creation of future jobs and prosperity.
At this stage we, as well as other onshore operators around the country, are trying to establish if the significant quantities of gas that we have identified exists in the right formations to be commercially prospective and address the issue of security of supply that we face. We now have the consent to develop a hydrocarbon wellsite and drill up to two exploratory hydrocarbon wells (one vertically and one horizontally) to help us better understand the shale gas potential in North Nottinghamshire."|
|Perfect opportunity to increase my short position|
Better keep up to date with Drill or drop.
|RNS - OutSky rockets in flight.|
|Vote12.48pmCllr John Wilkinson reads out the proposal to approve the application with legal agreement and conditions. This to include a liaison group, financial bond and off-site monitoring of water levels.The legal agreement must be signed by january 2017. Vote: 7 in favour; 4 against|
|But of course a positive decision will help the company get a better price for the sale of the asset. And asset sales are the only way out of its debt crisis beside a massive share placing.|
|15 November is the day when Notts Council is supposed to be reviewing its decision on fracking at Misson site. If the BB morons get excited and the shares run up could present perfect opportunity to renew shorts. Company's indebtedness leaves any positive decision as largely irrelevant.|
|Yesterday afternoon AIM-listed and over indebted Igas Energy (IGAS) announced that it had sold some of the secured bonds hitherto held in treasury and that this has now shored up its finances such that it now no longer expects a breach of its daily liquidity covenant in 2016. Good news? Er, no – this simply kicks the can down the road (and not very far at that).
We were previously told that the company expected to breach its daily liquidity covenant this week and in the wake of a bondholder rejection of a standstill proposal by the company, the sale of treasury stock doesn’t change much, other than to push the day of reckoning a little further away. The day of reckoning has simply been put off.
The treasury bonds of $8 million nominal value were sold in the market at 75c in the $, to realise $6 million. One wonders who to – perhaps the KKR-backed Trans European Oil & Gas, which was unmasked by Sky News as the mystery bond buyer via the recent Dutch Auction at the same 75c in the $?
We already know that Trans European had amassed 34% of those secured bonds. If it has picked up another $8 million (nominal) worth then the size of Igas’ problem looks to have just got a bit larger. Trans European, of course, wants Igas to sell off its conventional assets and already had a blocking vote to prevent any deal with the secured bondholders being done that it didn’t like. If it has picked up the extra stock then the good news is that Igas seems to have a willing buyer for the remaining $13.1 million (nominal) of those secured bonds held in treasury. The bad news would, of course, be that the influence of KKR-back Trans European is set to increase.
We are told that the company now forecasts compliance with its liquidity covenant until March 2017, when the next interest payment on the secured bonds falls due (alongside a scheduled buy-back). That is 22 March, and will cost around $7 million in interest payments – on its own more than enough to eat up more than the cash raised from yesterday’s bond sale. That, for a company which is cash consumptive, is not good news.
Igas can continue to play this game for a while yet, but eventually the music (supply of treasury stock) will stop.
Meanwhile the company has also confirmed that it expects to run into problems with its leverage covenants at (calendar) year-end. The timetable there is that compliance (or not) is to be reported by the end of April, and that any cure required must then be undertaken in the following five weeks. I make that 4 June next year.
The company tells us that there is an equity cure mechanism it can utilise – so we might expect, at the latest, some form of placing/rights offer by then. It won’t be at the current price.
We are told that discussions continue between the company and its key stakeholders (for that, read bondholders) concurrent with a number of strategic investors, as it continues to assess options that would result in a capital structure for the group that is sustainable….and enable the Company to capitalise on value accretive opportunities. For that, read asset disposals.
All this means is that Igas is playing for time, hoping for something to come along which might get it out of its predicament.
But with bond covenant breaches still set to occupy the minds of the board, a dwindling supply of cash and realisable cash, and an aggressive mover in its midst in the form of KKR-backed Trans European which seems set on the break-up of the company the situation looks bleak.
Oh, and those secured bonds – over £100 million worth (as against the market capitalisation on AIM of just £36 million) – are due in March 2018.
The bondholders hold all the aces here, and with the secured stock trading at just 75% of par, and the unsecured stock trading at 54% of par the writing is on the wall for the equity, which falls a long way behind both sets of bonds in the queue. The bond market says the equity is worthless and the company is fast running out of cards to play.
It is just a matter of time.
Still a sell.
- See more at: http://www.shareprophets.com/views/25050/igas-kicks-the-can-but-not-very-far#sthash.8N2pQEi3.dpuf|
|Well they have applied some sticking plaster:doesn't leave shareholders any the less dependent on a value destroying financial reconstruction.|
|I find it quite amazing that some people are still buying. What are they expecting to happen, magic or something?|
|Time waits for no man. We are approaching the crunch in a week.|
|The November oil stock challenge is now on...
|What was going on in the heads of the people who've been buying these last few days? They announced they would breach their covenants and now surprise surprise the bondholders don't want to let them off! The shares are pretty much worthless. One of the easiest shorts I've ever had.|
|Xcite Energy – shares suspended as Bondholders to petition for liquidation: Another one bites the dust. Next up, Igas?
By Nigel Somerville, the Deputy Sheriff of AIM | Tuesday 25 October 2016
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
This is getting to be the most used phrase on ShareProphets: you can’t say you were not warned…..And so today it is the turn of AIM-listed Xcite Energy (XEL) to get the told-you-so treatment, for this afternoon the shares were suspended and the company announced that its bondholders have walked on restructuring discussions with the company and are to instruct the bond trustee to petition for the appointment of a liquidator. In other words, short of a last-ditch effort to patch up a new deal it looks to be light out time. Shareholders are set to lose everything.
Given that this fine website warned repeatedly of impending doom – the most recent piece being just nine days ago from Lucian Miers (HERE) who will, no doubt, now be enjoying a bit of a bumper Christmas this year – it is hardly a shock in these parts that in the end a deal acceptable to the bondholders could not (thus far) be achieved.
Xcite has, at least, had the decency to guide its shareholders as to how bad its predicament was, recently issuing a warning to its overexhuberant retail punters that its shares were close to worthless – as the Bard of Boleyn poetically opined.
Today we are told that the directors believe that liquidation is unlikely to result in the return of any value to the Company’s existing shareholders. In other words the shares are toast.
Thus another over-indebted oiler looks set to bite the dust. The question is which domino will be next to topple into an equity-destroying restructuring or just a meek hand-over of assets to bondholders?
With a bondholder meeting set for tomorrow, the middle of the very week in which the company had previously ‘fessed up that it expects to breach bond covenants, Igas Energy (IGAS) looks to be in pole position.|
|Looking good I hear the Govt not to keen on wind farms anymore soon be chopping investing there.. GLA|
|SharesMagazine UK fracking makes comeback
13th October 2016
|IG not accepting any more shorts|
|Who is so foolish as to buy this stock? Only those eager to part with their money it would seem.
It is worth bearing in mind the following:
For all the positive news of late regarding permits for the fracking industry (even if its own application for planning permission from Notts County Council saw the decision deferred to next month), AIM-listed drowning-in-debt Igas (IGAS) still has the pressing problem of staying within its bond covenants. The company stated in its interims to June 2016, released on deadline day of 30 Sept, that it was expecting to breach its daily liquidity covenant in the second half of October – that could be as early as next Monday.
The board has not hidden the fact that it is in a bit of a hole in this regard, although the consequences could be made rather clearer: the bonds are secured on the company’s assets so perhaps as soon as next Monday the board could find itself working not for its shareholders, but for its bondholders – one of which is believed to have amassed 34% of the secured bonds and therefore a blocking holding. We still don’t know who owns this holding, the bulk of which was acquired in the recent Dutch Auction conducted by Pareto Securities, nor the intention – but a back-door takeover remains a possibility.
Meanwhile those secured bonds have suffered a small spot of slippage on the Oslo Bourse in the last few days, dropping from around 81c in the $ to 75.25c in the $. Granted, not a calamitous collapse, but hardly a comfort.
At risk of sounding like a broken record, if the bond markets are pricing in a 25% haircut for the secured bonds then – given that the equity ranks firmly at the rear – the implication is that the equity is toast. We might also note that the unsecured bonds are sitting at 54.25c in the $ and these too rank ahead of equity.
If a breach is called and the secured bondholders want their cash back, Igas has a big problem – one, (with the shares sitting at 13.75p in the middle) about twice the size of its market capitalisation. And with the bonds due for repayment in less than 18 months, cash draining from the balance sheet and admissions from the company that it is looking to extend bond maturity, defer interest payments and that there have been discussions involving equity finance (ie a big fund-raise) this is just an accident waiting to happen.
That accident could come soon. Very soon.
Still a sell.|