I don't think companies should use cash for buy-backs,if there is debt - why not pay off as much debt as possible?
In this link,I was amazed at how much BP has used for buying shares this century($61 billion),and yet borrowed to pay the dividend - not something that is easy to figure out.
hxxps://www.ajbell.co.uk/articles/investmentarticles/122442/share-buybacks-pros-and-cons |
controllemadness,
If you look at the half year accounts, you'll see the CAPEX & G&A costs in there.
Yes there is a further increase in the net receivables number because of overdue payments from EPGC, which is not great.
However there was still enough cash filtering through from Egypt to roughly match the expenditure's (to within $5M over 6 month's) that occurred in the 1st half & that includes several significant one-off sums.
There is absolutely no need for them to increase debt, they are paying it down when its due from the cash set-a-side to do so.
Hence no need to include it in my last post.
LOTM |
LOTM
I am not sure of your logic.
I do not see the outgoings side of the cash you are considering.
There is still capital expenditure and admin expenses to take into account and any financial and tax costs which will eat up the cash if there is no release of what is owed.
If no release then debt will increase. |
 So that's another step of the transformation process complete. while another starts back up (the share buy-back).
Market cap is now under £172M or $212.5M & net cash at 20th October (assuming the cash position hasn't changed since 30th June other than for the special dividend & share buy-back)will be ($176 - $100 - $3.4 [on buy-back to 4th August]) $72.6M - (current buy-back amount - lets say they spend $1.6M by then) so $71M in cash.
There is still another approximately $8.4M to go on the buy-back after that leaving a cash balance of roughly $62.5M when all said & done.
Shares in issue should have fallen to a fraction under 91M when the current buy-back finishes assuming the share price averages £1.90 during it ( around 90.76M if average is £1.80).
At £1.80 the market cap would then be £164M or $205M, or at £1.90 it is £172.9M or $216.1M
So current net cash ($62.5M) will still account for 28.9% or 30.5% of CNE's market value.
Note net receivables (receivables - payables) for Egypt at the end of June were $108M ($144M - $36M) as well.
LOTM |
Silverstone1
Congrats, you've obviously done very well out of CNE with that very well timed initial purchase & tendering the shares at the right price in April 2022.
Why are you not using the Capricorn Energy thread rather than the Cairn one for postings?
Originally you used to hold 0.1707% of the company (1M out of 585.667M) now its 0.0884% (84,160 out of 95.224M) although that will start to increase as the buyback starts back up.
Hope to see you post on the other thread ! :)
LOTM |
MY CNE SHAREHOLDING EXAMPLE:
999,990 BOUGHT AT 125P IN AUGUST 2021
(732,180) ACCEPTED TENDER AT 223P IN APRIL 2022
267,810 NEW SHAREHOLDING IN APRIL 2022
267,810 SPECIAL DIVIDEND AT 115P IN MAY 2023
(141,570) 33 FOR 70 CONSOLIDATION IN MAY 2023
126,240 NEW SHAREHOLDING IN MAY 2023
126,240 SPECIAL DIVIDEND AT 56P IN OCTOBER 2023
(42,080) 2 FOR 3 CONSOLIDATION IN OCTOBER 2023
84,160 NEW SHAREHOLDING IN OCTOBER 2023 |
Hi aspect100
They closed at roughly £1.80 yesterday, so 3 x that is £5.40 less the £1.68 (3 x£0.56 in dividend) = £3.72 divide by the 2 new shares = £1.86 which is where it should trade to have the same market cap as yesterday less the £80M ( $100M ) that the dividend cost.
The buy-back should now start up again.
The turnaround has started, the company is being transformed, but it might take a little time to show up in the numbers.
LOTM |
Is anyone considering putting their dividend - on receipt - back into cne?
Suet |
I think these ex dividend shares will go up to 246p. |
Ok I spent the evening re-doing all my old trades & working out my net position ahead of the new shares trading.
Total banked profit so far £5786.88
With 25,000 shares still held at an average cost price of £1.7205.
This will become 16,666 shares at a new average cost price of £1.7408.
The old trading range that has been working from £1.73 to £1.80 recently will no doubt change following the consolidation & the return of the share buy-back program.
So I'll have to find a new trading range / strategy going forward as I try to increase my overall long-term share holding further. First immediate target is to increase the 16,666 to 20,000 by the end of 2023 solely funded from trading profits.
Once of course I'm actually able to trade the shares again !!!!
LOTM |
I think these ex dividend shares should go up to 246p. |
CNE HAVE BEEN A GREAT INVESTMENT FOR ME BECAUSE I BOUGHT A 7 FIGURE SUM AT 125P IN AUGUST 2021, SO AFTER THE TENDER OFFER, I WAS ALREADY IN PROFIT, PLUS A SPECIAL DIVIDEND ALREADY PAID AND ANOTHER SPECIAL DIVIDEND PENDING! |
I'm glad to see all the resolutions were passed today.
So now we can look forward to a very interesting afternoon by the looks of it !
Try putting in some dummy orders & then you'll know what I mean.
They are wanting way over the offer price, if you put in a decent sized order, something I've not really seen with Capricorn before.
Prime Examples
177.314 4000 O 175.0 176.8 12:41:58
176.97 3500 O 175.0 176.4 13:02:44
176.69 3936 O 175.2 176.4 13:32:10
So either they are already short of stock or they don't want to be short of stock ahead of the share consolidation - effectively overnight (but officially 8am in the morning)
LOTM |
Just a reminder for everyone.......
The meeting to approve the Special Dividend of £0.56 per share, followed by the share consolidation of 2 new shares for every 3 existing ones is tomorrow Thursday 5th Oct.
The shares will then effectively go EX dividend at the close of business on Thursday 5th Oct. The share consolidation occurs ahead of the market opening on Friday 6th Oct.
Only this time round unlike in May ahead of the previous special dividend & share consolidation. The share price is above the balancing point. That means the gearing is in our favour this time round not against us.
The balancing point is 3 x £1.68 = £5.04 less the 3 x £0.56 dividend (£1.68) leaves you with £3.36 which when dividend by the 2 new shares would equate to a price of £1.68 each.
If the current price of £1.80 turns out to be the closing price on the 5th Oct, then the new shares should return to trading around £1.86 (£5.40-£1.68 = £3.72 / 2) to have the same market value as before.
If the share price goes higher then the gap will grow out from that £0.06 difference, if it falls it will shrink in size.
Tick Tock, Tick Tock especially for those institutions that have sold/lend for cash there voting rights to other's (all 19% of them) , which might be the reason behind the scramble for shares that looks to be occurring.
LOTM |
Some interesting trading today, there appeared to be a number of trades going through at well above the market price at the time!
177.478 17000 O 176.2 177.0 12:46:17 17,000
179.98 20000 O 178.0 178.6 12:55:45 20,000
179.42 91648 O 176.2 177.0 16:25:29 91,648
It will be interesting to see what tomorrow brings with the clock ticking & only 3 trading days left until XD of the special dividend & share consolidation.
I think we may see some more "Holding announcements" before then
Tick Tock
LOTM |
Hi hsfinch
If you look at the previous wage bills they were very high indeed (eye wateringly so) for a company with 180 staff. Somewhere in the region of £2M+ a month plus pension & other perks.
I doubt they are paying out any more than the minimum entitlements in the contracts of employment for the 80% of staff leaving. You have to give 3 month's notice & then probably x weeks per year of service etc
The size of the ESOP & SIP Trusts are frightening for so few staff as well.
The previous board lived in a world of grandeur & spent share holder money like confetti.
Paid themselves very handsomely - after all they were with the big boys in the FTSE-100 at one time !
You should be glad the gravy train has all come to an end & shareholders are the ones who are finally going to get rewarded instead.
As I posted previously if I see any ex-CNE director's on any company I'm looking to invest in I'll be running a mile in the opposite direction & avoiding them like a plague.
LOTM |
Why do oilies like this pay out so much in redundancy to folks they're never gonna see again and way above legal obligations. Its shareholder money they're giving themselves. I don't get it. |
Hi churchill2,
I think there are one or two places where they forgot to change the date :( but we know what it was meant to be :)
Yes the progress to date has been breath taking.
Randy got 538,502 awards at that price & Nathan P got 107,700 depending on performance over 3 years.
The other cost saving that will also be in the 1st half numbers & drop dramatically going forward is those around the ESOP & SIP Trusts.
So too the possible future dilution for staff awards etc as 80% of UK staff will have left by the end of the year.
With so many changes happening its hard to know which are fully accounted for already & which have still to occur.
It will probably only start to reveal itself fully when we get to next years half -year & full year accounts.
LOTM |
Hi LOTM
Thanks for the interesting information you have provided.I did notice a mistake on section 2.1. The comparison on the top line should be $228.9m year end 2022 and not 2023 as stated.On current trend I anticipate the number will not be far short.
The numbers you have provided just confirm the encouraging progress that has been so far.
If I remember correctly Randy was given a substantial incentive at 187.5p so your purchases look good value. |
I see they want to play games today, perhaps trying to trigger some stop losses etc. to get hold of some stock !
Got to love a tree shake
Well I've just done 2 topup's with another 5,000 shares at £1.7374 & 500 shares at a similar price neither is showing up on the LSE.
LOTM |
Hi churchill2
I'm glad someone else see's the true value here as well ! :)
I think there will be some upgrades to the Egypt reserves by the end of November but nothing spectacular.
The G&A savings going forward are the game changer.
I've just been through the half year accounts looking at them & a lot of the $70M expected in G&A this year has already been paid.
"Administrative expenses of $34.4m include $13.0m of redundancy costs. $6.9m in other expenses relate to expenses incurred on proposed merger which did not complete."
For comparison the figure was $21.2M to June 2022 & $40.8M for the year to Dec 2022 so $34.4M is an ouch but expected. The $6.9M is a one-off type of expense.
There is also "The total additions of $16.8m in right-of-use assets include $16.0m addition in connection to additional office lease contracts in the UK."
Which was the posh new office in Edinburgh no longer going to be used & so I presume now leased to others.
The previous board spent money like confetti
----------------
this was the bit I was looking for yesterday ...... in the half year accounts in notes section 2.1
Oil and gas revenue in Egypt for H1 2023, was $98.3m (H1 2022: $137.4m; YE 2023: $228.9m), from net entitlement volumes of 2.4 mmboe (H1 2022: 2.6 mmboe; YE 2022: 4.7 mmboe). Oil sales price realised averaged $78.56/boe (H1 2022: $110.9/boe; YE 2022: $98.8/boe) (excluding expected credit loss adjustments) and gas sales prices remained at $2.9/mscf (H1 2022: $2.9/mscf; YE 2022; $2.9/mscf). Other income represents additional entitlement to cover tax due which is paid on Capricorn's behalf by EGPC; see section 5.
Cost of sales over the period were $27.5m (H1 2022: $32.8m; YE 2022: $71.2m), or $4.8/boe (H1 2022: $5.1/boe; YE 2022: $5.7/boe) (on a WI basis).
LOTM |
Hi LOTm
I suspect we are both in agreement to the potential future value in this Company.
Revenue in excess of $200 million for this year from Egypt plus enough cash to see us through short term.
Longer term a strong management team to deal with the difficulties in Egypt to the benefit of shareholders
Hopefully at the end of November the planned update will be more rewarding than some in the past. |
churchill2,
Still really struggling to get my head around a few things :( anyway I'm going with this for now ...............
Depreciation of $21 per barrel
OPEX costs of $13 per barrel
If we go on G&A being $2 per boe starting in January 2024 (which in reality works out at close to $6 on a WI basis) then the current number is around $21 per barrel
So our all in costs are around $54 per barrel currently dropping to $39 per barrel in January.
If we go with current net oil production (net of Egypt tax) of 5,500 bopd then at $95 -$2 for grade differentials (ie $93) then the margin is $39 per barrel & that's being very conservative.
So the company is banking a net $215,000 per day from oil alone now (its actually a lot more because depreciation is not a current cash figure its historic expenditure)
That's over $6.5M per month net being on a ultra conservative side more likely north of $10M
But I'm going to make more enquires to try & get a much more accurate read of what's going on.
LOTM |
I really didn't want to be paying this price for the parcel, as its the highest I've paid for one in a while, but I finally pressed the buy button.
Its not showing up on the LSE trades so it most likely took place elsewhere 4K at £1.767257 at 9:12
PS Barclays seem to have a source of stock that the rest of the market hasn't access to
LOTM |
I know it wasn't a lot of volume just over 48K in the closing auction, but it's the first time I can recall the matched price being above that of the last quoted trade in normal hours.
26-Sep-23 16:35:07 176.40 48,184 Buy* 175.40 176.00 85.00k UT
So this maybe the 1st signs that there is a shortage of stock out there & the insto's are starting to scramble to get hold of those shares that are available.
Tick Tock - only 7 days to the consolidation
LOTM |
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