|Trap Oil Grp
||EPS - Basic
||Market Cap (m)
|Oil & Gas Producers
Real-Time news about Trap Oil Grp (London Stock Exchange): 0 recent articles
|cottoner: Slight mistake in today's Times Trap article !!
Trap Oil makes funding call as cash tap runs dry
Shares in Trap Oil slumped yesterday after the North Sea oil and gas explorer warned that it could run out of cash within four weeks unless it can come up with a new funding solution.
The admission was triggered by a strong surge in the share price over the past few days after a positive statement on Monday that drilling was about to start under Trap’s Niobe licence. That tripled the shares in four days.
However, yesterday’s dampener sent them sinking by 24.3 per cent to 70p.
The company said it was “continuing to urgently assess a number of potential funding sources, including the potential disposal of certain of the group’s licence interests, and are in discussions with the group’s principal creditors, shareholders and potential investors.
“However, no firm decisions or conclusions have yet been reached and there can be no certainty that a viable funding solution will be forthcoming.”
It added that, in the absence of such a solution, the directors believed the company only had enough working capital to support its activities until early July.
Trap is advised by Strand Hanson and FirstEnergy Capital. In April, it reported a post-tax loss of £44.4 million for 2014, compared with a £10.3 million deficit in 2013. North Sea producers have been battered by the near halving of the crude oil price over the past year.|
|bad robot: Hahaha
I knew it was coming.
Trap Oil Group plc Stmnt re Share Price Movement
RNS Number : 0246Q
Trap Oil Group plc
12 June 2015
Trap Oil Group plc
("Trapoil" or the "Company")
Statement re:share price movement
Trapoil (AIM: TRAP), the independent oil and gas exploration, appraisal and production company focused on the UK Continental Shelf region of the North Sea, notes the recent rise in the Company's share price.
Further to the Company's final results announcement of 23 April 2015, the Company's directors, in conjunction with the Company's advisers, are continuing to urgently assess a number of potential funding sources, including the potential disposal of certain of the group's licence interests, and are in discussions with the group's principal creditors, shareholders and potential investors, however no firm decisions or conclusions have yet been reached and there can be no certainty that a viable funding solution will be forthcoming. The Directors continue to believe that, absent a viable funding solution, the Company currently only has adequate working capital to support its activities until early July 2015.
A further announcement will be made in due course as appropriate.|
|bomfin: I do think that Pmg or Fpm will bid for Trap sooner rather than later. Anyone holding here could do an arb with pmg at it's inflated share price imho. Won't do this myself because I believe current trap share price is well supported by cash and assets and that a buy price has to be substantially above current share price. imho dyor|
Just a few you can pick and chose from as you wish , hope they help
What is the current total wage bill for trap
What is the cost of renting the office in London
Given Athena is producing 1m a month and cash burn is supposedly 2-3m pa , how is it we have only increased our bank balance 2.9m in six months .
Why is it talking so long to get the fraccing project up and running ? Given the recent surge in Igas and the sector should we not be trying to get in on this ASAP
What is the bod doing to prevent a cheap takeover given the low share price
Has the company been approached in the last 12 months with enquiries for being taken over ?
Given the poor sector and sentiment would it not be better to try new areas ?
When can we expect to hear about Romeo as it was a tight hole , details were vague so some clarity on just what happened would benefit the
What is the current water cut on Athena ?
Given the lack of activity and high costs why are trap employing so many people and paying such high wages for poor performance . Shareholders would welcome a scheme which aligns our interests with managements and the share price . Reduce salaries drastically and award shares this would align the need to get the share price rising for all concerned. .
Why have finance costs increased so dramatically to 2.5m and exactly what are the costs related to.
Why is the company not buying shares back given the undervalued share price and cash sat in the bank plus revenues still coming in .
In light of the share price performance how do you justify giving yourselves options at such a low target of 15p. , this looks to be rewarding yourselves for failing at shareholders expense .
That's just a few off the top of my head , no doubt there are a lot more that I'd like to ask but they usually limit questions when under pressure .|
|darcon: So could TRAP share price falls and IGAS share price rise indicate that something is afoot regarding completion of the Caithness transaction?|
|cyan: Good morning Nick. If PMG are to move they will not have a better time. Premature share price inflation in PMG share price and depressed TRAP share price are the "perfect storm". Those 15p options were very questionable imo and showed a lack of ambition at the very least ,if not , what possibly could be considered, cynical positioning ahead of a bid.
I read that PMG report again. So much there is centred on PERTH. Sorry for digressing for a bit but after my second reading I think the different discounts to Brent in Perth's oil and Athena can be explained. It appears likely that the oil price achieved is after the H2S is removed in field by amine treatment. The cost per barrel on phase 1 being a high $36 per barrel. The report mentions that to break even oil price needs to be $65. That's significantly higher than Athena. One can see why economy of scale by establishing higher reserves is necessary to encourage others investment. Its now clear that PERTH's development was held back by the lack of capable infrastructure and consequent high expense. Will TC get the half a billion dollars for phase 1 is the question.
Athena, for all its recent pump issues, has a much better economic case for near term further investments. Can not fault TC for his ambition and the shareholders have very rose tinted spectacles on at the moment. Sorry for repeating the following point; but what happened all those months ago to those interested parties who TC stated visited his offices. Where are the deals?; where is the beef? Who knows; maybe about to get news on that front soon.
The other thing I picked up on in the report was the one in three chance Pharos will be a success. I was a tad shocked. I thought it had better COS.
A bid under 20p for TRAP does not appeal to me especially if its all PMG paper but I suspect a lot of the small PI's would accept.|
|nick2412: Morning cyan, yes I understand where you are coming from. I don't mind PMG paper as the stock is reasonably liquid and doesn't have to be retained but it depends on the amount offered. I managed to get a few at 9.79p and 9.8p. Frankly I'd rather get a circa 20p paper offer and move on than wait for 20p cash accumulation. If the market is never going to factor in Athena and discount Trap to sub cash / liquid assets level because management are not popular in the City then that's my favoured outcome.
If I was overly cynical I'd suggest a but of pre-takeover manipulation given the rise in PMG and the increasing sub cash / share assets Trap share price. I suspect just plain sentiment and a justifiable lack of enthusiasm for Trap's management / pr is more likely.|
|nick2412: Interesting to look at the positives and negatives since Dec 2012 to date given the share price has fallen 40% despite a £15m increase in cash /liquid assets :-
Dec 2012: Cash £9.3m share price 17p Sept 2013 cash/ liquid assets £25m share price 10.375p. Liabilities 3m but more than covered by profit from inventory sales recorded in accounts at cost.
POSITIVES since Dec 2012
Cash and liquid assets circa £25m more than covering market cap.
Acquisition of Surprise 100% and 60% Orchid with operator status
Acquired 33% in Trent East operator status pending with commitment to secure a drilling rig within six months of Feb 2013.
Operator (or status pending) for Surprise, Orchid and Trent East
Consistently bullish on Romeo discovery.
Conservative on Athena resource with scope for upgrade to partners much higher estimate when water cut is greater. Prospect of a drill and increased resource.
PMG acquiring 10% of Athena that implied in may 2013 a valuation of more than 10p a share for Trap's 15% stake that would equate to 20p a share on Athena and cash/liquid value for Trap.
Three majors signed with Trap for 28th licensing round with Trap to receive carry free from what. Unlikely to be same partner lag issues. Perhaps possibility of partners farming into Surprise or Orchid or, even better, taking a stake in Romeo.
Moving forward with non-traditional fracking play with prospect of a carry free stake in a major project.
Achieved $17m borrowing facility.
Hedge on oil sales
NEGATIVES since Dec 2012
Scotney & Magnolia were both non-discoveries but were free carry drills.
Partner lag and absence of further drilling activity and absence of farm-ins to move forward Trap's prospects. This is balanced by TRAP being able to accumulate cash from Athena cash flow and exit fees /compensation for Furse etc
Athena needs about £3m spent for P4 repair to bring revenues back up to £2m per month but Trap still accumulating £1.2m from Athena per month. So cash until year end will pay for Athena due to be back up to £2m per month by Jan '14
So, in summary, Trap has made potentially valuable acquisitions leading to operatorship, increased cash / liquid assets by £15m, signed up three world class partners, pushed forward with a potentially transformational free carry fracking play and the market has knocked 40% of the market cap.
If 'the market' was logical and Trap announced a drill with similar upside to Scotia (Romeo would do) then the share price should be 17p plus 7.5p for the increase in cash /liquid assets of £15m less say £3m or 1.5p per for Trap's cost contribution. Although arguably the increase in stakes in Surprise/ Trent East and Orchid should more than cover that 1.5p as should the progress with the non-traditional play and the signing of three partners etc etc.
In reality the board should be highly embarrassed that none of the assets above cash/shares are factored into the share price. That, of course, includes Athena that the institutions favourite son, Tom Cross, paid a level that equates to over 10p a share for.|
|mount teide: The North Sea junior O&G industry very much reminds me of the global shipping industry - in that both are characterised by periods of extreme boom and bust, as a result of the low barriers to entry - driven by the easy availability of huge amounts of credit during the later stages of the boom part of the business cycle.
In today's bombed out junior oil & gas sector, where many valuations are at historic lows but still relatively expensive, i believe TRAP has become something of a rare beast - a strong value play at the present share price, offering investors good risk / reward for those with an 18 month outlook, and an understanding of the quality of it's balance sheet and company changing potential within it's portfolio of assets.
The O&G sector like the shipping sector has seen before and will see again, that when market sentiment turns, for good or bad, it often turns quickly and can skew the perception of value enormously. It was barely 5 years ago when large Institutional Investors irrationally drove up the market valuation of North Sea O&G operator Oilexco's 40 million barrels of P2 to a staggering $62 per barrel, despite appalling fundamentals, which included an operating cost of more than $60 per barrel of production, massive debt, poor cash flow, and little cash!
Following Oilexco's demise just after the last market peak, and the subsequent severe market downturn that followed, the reality probably is, that compared to the majority of O&G market juniors, the TRAP management has not done much wrong that has been within their control, other than perhaps launching an IPO while the sector was in the early stages of a playing out what has turned into a large and long downturn.
If you take the view as i do, that much of the O&G sector downturn is now largely played out - with improving general market conditions and a generally risk averse management, the current TRAP share price would strongly suggest the downside risk is now modest and largely underpinned by the forward Athena cash flow, leaving the company in the somewhat enviable position of having near market cap and growing levels of cash and an inexpensive debt facility, to develop relatively low risk high return assets like TRENT, and take advantage of the asset purchase opportunities currently being thrown up by much of the cash strapped, bombed out junior sector.
For me, the major difference between the O&G and shipping sector downturns, each now it its 6th year, is that while both have been forced to absorb significant cost increases, the price of the underlying commodity each uses to generate revenue has fallen in real terms, but spectacularly so in respect to ship charter/freight rates.
Whereas the O&G sector has seen the price of hydrocarbons continue to trade mainly in a still elevated but fairly tight range, bulk shipping and tanker charter rates have literally fallen off a cliff, last year trading at a record low average 93% discount to the previous market peak. The shipping industry requires an estimated 30% average increase in rates for most operators just to break even - over the last 2/3 years most companies have been using what cash they have left to help meet their operating costs - with many making no payments towards the finance costs of their vessels, a situation only made possible by friendly but very nervous banks providing payment holidays - regardless, this situation has still not prevented widespread bankruptcy across the industry, and the quoted shipping sector experiencing average falls in market cap exceeding 95%!
Yes, times are still tough for investors in the junior O&G sector, but they largely pale into insignificance compared to the challenges shipping industry investors continue to face - and with little sign of any sustainable improvement for years due to chronic vessel overcapacity issues and slowly growing demand.|
|bomfin: What lhd said on 31st May.
A variety of operational issues during March, April and May 2013, including some short-term interruptions to ESP output, temporarily reduced output from the field below 10,000 bopd. These interruptions highlight the uncertainties to Lochard of being dependent on cash flow from a single asset such as Athena
Well, April was one of Athena's strongest production months. I wonder what the operational issue was in April? March wasn't bad with the only month with production under 9,000 bopd being May. Considering they were recommending the Parkmead offer on 23rd May they're lucky Athena has had problems since then. They did though put the dampners on Trap share price performance also because I for one had been believing them and thinking that perhaps March,April and May production was off. Put the spanner into their own company and others. All imho dyor|
Trap Oil Grp share price data is direct from the London Stock Exchange