Capricorn Energy Share Discussion Threads

[silverstone1] 18/3/2022 21:36

ANLEY, YOU CAN'T SPECIFY 250P OR ANY OTHER SPECIFIED PRICE, IT'S THE LEAST GENEROUS, MOST COMPLICATED TENDER OFFER I'VE EVER SEEN AND I'M A RETIRED STOCKBROKER!

[anley] 18/3/2022 16:59

The punters are slowing going and the MM are getting a grip.

What if the largest shareholders and a few others voted YES and then tendered all their shares at say 250p.

That would be just over 30% - of $500m but would they be missing future prospects and dividends.

Lots to think about over the weekend.

[silverstone1] 18/3/2022 14:49

EVERYONE SHOULD VOTE AGAINST RESOLUTION 1 AND FOR RESOLUTION 2!

[zangdook] 18/3/2022 09:13

Everyone would tender if they had set the price at a good premium.

[nigelpm] 18/3/2022 09:07

Possibly - could have put it out to an independent third party to trade in the tender offer period. Although you could see it the other way that it would have increased the tender offer price so for existing holder who aren't going to tender it's probably neither here nor there.

[citytilidie] 18/3/2022 09:05

If the Directors had sense, they should have had the option to start using the 200m to buy back shares from the day they received the money. To me, they have missed a golden opportunity to buy back a large percentage of the company 15% cheaper than they were 2 weeks ago. This equates to an extra 30 million pounds worth of shares (free).
It would have enhanced the NAV to the benefit of the company and shareholders, show they had confidence in their company, and more importantly, show they had some sense and foresight.

[oilinvestoral] 18/3/2022 07:34

"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so. " – Mark Twain

[zangdook] 18/3/2022 01:24

That's a straw man. No-one has said anything has 'negative value'.

[nigelpm] 17/3/2022 20:47

Indeed - there are times when common sense is smacking people in the face but they don't want to listen.

[ammons] 17/3/2022 19:07

Some on here think cash is worth less than cash because of how that cash might be spent and that everything else, including producing assets, has negative value. I disagree.

[nigelpm] 17/3/2022 18:58

Quite. Hard to lose money when the majority of market cap is covered by cash. This is a balance sheet investment first. I don't care how little revenue they are getting out of Egypt.

[mmt1] 17/3/2022 18:52

Rule No. 1 Never lose money.

Cairn covers that base easily imo.. downside is covered..

[nigelpm] 17/3/2022 18:42

Pretty clear to me that once the grown ups get back in the room they'll realise how ridiculously cheap this is and then there's the 200m USD wall of buying on its way.

[xxnjr] 17/3/2022 14:36

I do agree APA have slimmed down a lot, leaving them with basically the Permian, mature UKNS, Egypt plus exploration in Suriname. None of which are in your geographical high margin buckets. But having said that my Apache shares have been flying for the last 18 months or so! with their (admittedly quite high) debt reducing rapidly. Apache's CEO has made many comments in the past year regarding how good their Egyptian assets are, how good the rocks are and where they rate in terms of investment priority, for example 2021 Q4 results

"The improved PSC terms return Egypt to the best long-term investment opportunity in our portfolio."

Given Apache are throwing off impressive cashflow that is good enough for me.

Whether CNE can replicate this remains to be seen but one lives in hope. I do feel CNE will be able to grow EGY production from here for some years to come. Still early days though.

The PSC terms are quite complicated. I kind of feel EGPC pay the tax on behalf of the contractor which partly accounts for the low net entitlement production although may have misunderstood this aspect. Perhaps given your Apache history you could add something about how the tax barrels get deducted within the PSC mechanics?

[xxnjr] 17/3/2022 12:47

The fiscal terms ARE stringent but that is because the rocks are generally quite good in the Western Dessert. My preferred comparator is Apache Corporation who are the largest acreage holder in the WD (CNE being the 2nd largest). Getting to the chase Apache seem to think* their Egyptian rocks are some of the best in their portfolio and currently rate No.1 in terms of their capital allocation priority.

* based on at least 20 yrs operating experience on Egypt assets.

[oilinvestoral] 17/3/2022 12:30

Fair enough XXNJR ! I alluded to that on another thread a few days ago. But the point still stands. For the amount of oil and gas produced (in the time since the deal closed), $56m is an anemic amount! That's mainly due to the egregious PSC arrangements that the Egyptian government likes to impose on foreign companies! It will be interesting to see how much they can squeeze out of the assets. The London market doesn't like to value Egypt oil and gas assets. Look at TGL , PHAR and UOG. All very cheap based on standard valuation metics. There's something rotten about Egypt ! If CNE's strategy was to use the new found rupees to diversify away from Egypt, I may have been mildly interested in buying back. Instead they've concocted this elaborate scheme that investors need to have PHD in corporate finance in order to decipher! For me, if something is too complicated to understand, it gets put in the "too difficult" pile in the in-tray and very often it ends up being a poor investment. As always DYOR etc etc

[xxnjr] 17/3/2022 12:11

Fair enough, but may we critic your comment

"Is it the $56 million in revenues that they generated from nearly 40,000 BOEPD ?"

given actual w/int production numbers and the effective dates of production for Egypt were

"Working interest production across the four main concession areas of Obaiyed (Capricorn 50% WI), Badr El Din (Capricorn 50% WI), North-East Abu Gharadig (Capricorn 26% WI) and Alam El Shawish West (Capricorn 20% WI) averaged ~36,500 boepd during the period from acquisition completion on 23 September to year end 2021, with ~38% of the production mix being oil and condensate. Oil sales averaged US$77.8/bbl and gas sales averaged US$2.9/mcf."

[oilinvestoral] 17/3/2022 10:50

That's the thing about you Yas! You can openly and honestly analyse, evaluate and critique your own holdings and when someone opens a line of questioning you don't particularly like, you don't get defensive change the subject and clamp up.IMHO one of the best qualities an investor can have is critical evaluation. I had to learn that the hard way unfortunately! While CNE has some merits (mainly the strength of the balance sheet). There are a number of hard questions that need to be asked and answered ! All IMHO & DYOR etc etc

[anley] 17/3/2022 10:34

Well put OIL,,,,,but is the quality of the management not up to scratch as the company embarks on new missions such as the JV in the Southern North Sea with Deltic Energy?

I would like to see a Special Dividend and if enough of the larger shareholders vote NO to the Tender Offer then we will get our wish.

[zangdook] 17/3/2022 08:54

"They are about to hand back $700m of it - what more do you want!!"

$200m buyback, but the $20m buyback seemed to stall and go nowhere. Will they be more serious about the larger one?

$500m tender structured so it will fail. If (when) it fails they will "consider" a special dividend. They considered, even promised, a special dividend before and then didn't go ahead. Will they really do it this time?

I'll believe it when I see it. Meanwhile Mr Market values this company well below NAV, notwithstanding the NAV is mostly cash. IMHO Mr Market is neither manic nor depressive here but has taken his meds.

[drsmessguide] 17/3/2022 08:37

20% looks nailed on here but don't like options at this level and CEO pay is ridiculous, now negotiations underway there is a risk of a oil price fall

[drsmessguide] 17/3/2022 08:35

BRK and CNE did a good job preserving capital during the carnage, BRK actually rose so took profits