Capricorn Energy Share Discussion Threads

[fizzmiss] 02/6/2022 21:52

Out of interest; why the massive spike in the share price end of July 2021???

[dunderheed] 02/6/2022 13:45

loglorry1 - I was just going to say similar - it merely means that the bond holders can get (part) their money back - which in itself can mean it is a better (slightly stronger) equity investment - but the two are not 100% linked, but of course there is some synergy, lol!!

[nigelpm] 02/6/2022 13:38

Lol. You implying there's no Value to equity holders in a huge lump of cash flowing into the business?? I don't really understand your point.

[loglorry1] 02/6/2022 13:35

"The increase in the tullow bond price tells you it's certainly a great deal for tlw shareholders and immediately proved."

No it doesn't. It means the cash that the combined group will have protects the TLW bondholders. The injection of cash means the value now breaks higher in the capital heirachy. The TLW bonds still trade sub-par. One interpretatin of that is that the new group equity is worthless!

[nigelpm] 02/6/2022 13:15

Exactly ammons. Great to see that really. The increase in the tullow bond price tells you it's certainly a great deal for tlw shareholders and immediately proved. I was dubious it was good for cne but when I reflected and looked at the quality of tullow's assets and the relatively decent price capricorn have paid for them the deal makes sense to me. I can certainly see a fair case for the combined entity to be worth c.£2bn which would be a decent uplift for both sets of shareholders from here.

[ammons] 02/6/2022 12:35

Really amusing how, on ADVFN and LSE, both sets of CNE and TLW shareholders furiously claim that they have been robbed of value!!! Probably means that the deal is reasonable for both sides, as per the boards of directors. LOL!!!

[silverstone1] 02/6/2022 11:22

THE BOARD OF DIRECTORS HAVE SQUANDERED $1.06BN AND CNE SHAREHOLDERS HAVEN'T RECEIVED A PENNY, BUT TLW SHAREHOLDERS ARE LAUGHING ALL THE WAY TO THE BANK, AT LEAST CNE ARE NOW IN PLAY!

[tron22] 02/6/2022 11:14

Does this merger mean that the new management will declare a dividend soon? When can
we expect our cne shares to be converted intoTLW shares?

[loglorry1] 02/6/2022 10:47

"I think both sets of shareholders should be pleased in equal measure."

You strike me as the sort of guy that the school bully would kick in the nuts at play time and you'd reply thank you!

There is no reason why a CNE shareholder would like this deal. It's just a way for TLW to do a back door rights issue and prop up their weak balance sheet and a way for over paid CNE execs to keep their jobs.

I'm very happy as a TLW bond holder seeing my bonds up 16c from about 75 to 91c and I have sold them now though and moved on.

[hsfinch] 02/6/2022 09:35

I like it. Capricorn have been serial money wasters for years. I've described them before on here as your typical lifestyle oilie operation. Staff did not care a jot so long as their cozy Edinburgh nest wasn't under threat. Big investors knew it and have been working with the CFO on a deal like this for a while. Tullow were the same on steroids until Dhir came along. And thank heavens he's in charge of the newco. If Capricorn's Edinburgh gents had ended up in charge it would have been a disaster.

[controlledmadness] 02/6/2022 08:56

Dividend calculation is not on combined market. It is on number of shares so given 2700 shares (tullow share/0.53) then we will get about 2.2p per share annually as a base. At Tullow current price of 53 to 54p is around 4 percent

[frazboy] 01/6/2022 23:08

Agreed.Cairns cash pile was doing nothing. Tullow's debt has been an anchor around its neck for what seems an eternity. Any cost savings on top are a bonus.

[nigelpm] 01/6/2022 22:57

I think both sets of shareholders should be pleased in equal measure.

For Tullow - reduces cost of capital and provides ability to throw more money at wells generally.

For Capricorn - should be seen as a way of getting large chunk of African assets at a good price.

I don't really understand the upset.

[nigelpm] 01/6/2022 22:53

Watching the Q&A from this morning - on balance analysts very much like the deal even if most of social media on both sides dislike it - Rahul comes across exceptionally well - under promise seems to be his mantra. Had Capricorn not received the Indian money this would never have been on the cards.

[nigelpm] 01/6/2022 22:33

Sounds about right - I had $1.9bn combined market cap - overlaying the $60m dividend in that gives c. 3.2%

[retiringtype] 01/6/2022 14:32

"Establishes the basis for a sustainable shareholder returns programme, with a base annual dividend of $60 million."

Is that around 3.5% yield - is my arithmetic right?

[geckotheglorious] 01/6/2022 11:54

Booty

I'm not invested in either Tullow or Capricorn so cant be asked askign myself why larger shareholders keen to go ahead...

Merely makingg an observation.

Hope that helps.

I have followed both for years and was looking at a cheaper entry point Capricorn side, but that's now very unlikely. Might have to buy some more Pharos!

[suetballs] 01/6/2022 11:40

Wonder how long the merger talks have been going on!?
Surely not during return of capital or what ever it was stuff?
If I had known that tlw had been in the background my decision making would have been quite different as it was always ultimately my plan to sell my cne and put more dosh into bp and shel.
Suet

[bootycall] 01/6/2022 11:35

@Geckotheglorious I understand why you have your opinion… The big plus from Tullow’s point of view is an improved balance sheet and diversification …but in terms of production profile, ask yourself why your larger shareholders, who have almost certainly been consulted prior to this announcement (if normal practice has been followed) have been keen to go ahead ? Personally, i would only want this deal to go ahead once Tullow has had the ability to rerate on short term developments.I can’t see how you guys can lose. If Kenya does not complete you can come back and ask for more. Alternatively if Kenya goes ahead in the next few months,you get a steal. Furthermore the CEO of Tullow has IMO, not briefed the analysts properly about the impact of a second rig to drill out the Ten field. The existing FPSO can cope with production above its nameplate of 80kbpd … I think Tullow has had an over cautious board (particularly the old non execs) fretting over doing a pre emption deal that had less than a years payback at current oil prices…just to put into context their wish to deleverage. The best way to get a view on the quality of the portfolio is to watch Africa Oil and Kosmos who partner some of our important acreage.
I wish Capricorn shareholders the very best. Your shares are very undervalued but Rahul has consummated this deal too early and your advisors might be congratulated for leveraging the main weapon in negotiations…the vanity of the person charged with becoming the CEO of the combined entity . If all else fails ….look on the bright side … you have been effectively put in play … enjoy the ride ! Booty

[tron22] 01/6/2022 11:07

Capricorn has suspended its previously announced $200m share buyback programme - other than in respect of the $25m tranche announced on 7 April, which is being conducted by JP Morgan Securities on a non-discretionary basis and will end no later than 6 July 2022.

[geckotheglorious] 01/6/2022 10:57

Great deal for TLW - Debt halved more or less.
Less good for Capricorn but a merged entity looks an interesting investment prospect.

More M&A to come imv.

[tron22] 01/6/2022 10:56

The deal, aimed at creating “a leading African energy company, listed in London”, will see Simon Thomson stand down as chief executive of Capricorn.

He will step down from this post and will chair the “integration steering committee” being established to help with the integration of the two companies.

Let’s hope the new management believes in dividends. CNE will be ran very differently now… this ride with CNE just got interesting.

[silverstone1] 01/6/2022 10:40

THE BOARD OF DIRECTORS COULDN'T RUN A BATH!