Cove Energy Share Discussion Threads

[peter anthony] 23/2/2012 07:18

Am I reading this RNS correctly - Alpine Associates Advisors have just opened their position in Cove by buying about 5.25M shares in the 193s?? Interesting

[peter anthony] 22/2/2012 22:15

Utrecht - I take it that you have sold out at this stage

[monts12] 22/2/2012 21:17

Now is not the time to sell! Who's to say other potential bidders weren't hoovering up shares today or that a better bid will not come? Cove is playing a blinder here, establishing a minimum price they'll accept. IMO Shell are hoping to get assets on the cheap at £1.95 and there may be a feeding frenzy in the next few days/weeks with speculation pushing the share price over £2. Shell may have to offer more! Even if you don't think a better bid will come why accept less than £1.95 now AND pay brokers fees?
Edit Each to their own and this is just my own opinion, no offence is intended toward anyone.

[benny62] 22/2/2012 20:58

Utrecht...Apologies for being so negative about your 1.80
but as you can see the game is not over yet.If Shell have
been buying that does not say they are aware that they will
have closed out the Overall Bid but that they will not be paying so much extra to match or leapfrog over another bidder.I still think that it is Game On.
I do not blame you for selling now. You can put it to good use elsewhere.
Fortunately I can wait some time to test the situation and in my opinion it will be tested ..Good Fun from hereon in.

[randommunkey] 22/2/2012 20:12

Point me to where I can see this fact?

We should see an RNS tomorrow if you are right.

[utrecht_00] 22/2/2012 19:48

randonmunkey- they have. fact. look at the volume and the lack of 8.3's and work out the buy volume, but what does it matter now. if you think that a higher bid is coming then buy some more champ.

[randommunkey] 22/2/2012 18:51

utrecht, shell's brokers wont have bought a single share today

[bump3r] 22/2/2012 18:02

I got to agree with CE and Steeple.

I've been buying PVR of lates as its a couple of game changers this year with Barryroe (South East coast of Ireland) and Dalkey (6km off Dublin targetting 850mbo).
Then theres next year with Rathlin (Northern Ireland), Dunquin (West coast with Exxon) and Spanish point(West coast)

It backtested temporary resistance at £2 after coming off a double bottom and long term looks pretty bullish given the right news.

[utrecht_00] 22/2/2012 17:28

itsonlyme2- yes you have, those shares have been bought by shell brokers. After consideration I have sold out now. The BOD has recommended this bid and shell will soon have enough shares to acquire the company despite any other bid. face it they probably acquired 15% of the company today alone. Never mind the II's that will sell to them independently. 195p is more than i thought. I got shouted down for suggesting 180p to 200p was the right bid. Benny- maybe an apology from you now, you have been awful quiet?

[cashandcard] 22/2/2012 16:22

mattoil,

With the Chinese backers, I can see AEX pushing ahead with developments, especially if they have a discovery on their hands. The pipeline still needs financing agreements, things could change down the line. AEX's Ruvuma block is very large indeed.

Cash

[itsonlyme2] 22/2/2012 16:19

Have I missed something, the share price has stayed around the £1.93 ish all day and 58 million shares have been bought, are the people buying these shares at that price just gambling that a higher offer will be forth coming????

[mattoil] 22/2/2012 16:18

Cashandcard

Agreed, without a doubt. Any oil discovery in the Rovuma region will immediately boost the other companies in the region's prospects. I was just pointing out that AEX is a bit late to the pipeline party, but there are plenty of other options. BG will build a LNG terminal in Mtwara, several power plants will be built and a petrochemical plant by Wentworth.

[cashandcard] 22/2/2012 16:10

mattoil,

If AEX announce a discovery on their onshore Ruvuma turf, this will be very good for WRL and COV as the geology is almost entirely identical.

Cash

[jac1104] 22/2/2012 16:05

thanks monts12 - concur with michael walters - re my opinion on the Indians - if they put in a higher bid and cov accepts - i will be the first to sell- indian govt bureaucracy and red tape is infamous for anyone with imperial energy experience - lacks integrity - and i am sure cove knows that...

[mattoil] 22/2/2012 16:04

Wentworth is my bet and they had quite a good day today. Also see that Ophir has been rising quite a bit. With Aminex, I would wait to see what they actually find and if it is commercial. The Onshore block that both Wentworth and Cove has had in Mozambique I think will be very interesting in the long run. 13.500 sq km would make it almost impossible NOT to find something. Especially as quite a few of the prospects identified shows leads onshore.

[monts12] 22/2/2012 15:26

Reproduced with permission from Mike Walters (well worth the subscription):


Onwards and Upwards - Cove Energy (COV)
21/2/2012 (119264)

Onwards and Upwards


Cove Energy (COV) is doing so well that it is becoming a touch disturbing. How can chief executive John Craven and his board be contemplating selling this baby when it such a bundle of joy for shareholders?

Comforting as it might be for subscribers who have bought in at any stage when Cove was recommended here (time and again from the teens and twenties and all of the way up), the prospect of being taken out of this stock at a premium looks disappointing. Every piece of news simply gets better and better, adding to the bounce in baby.

Now the management is understandably delighted to report that the Lagosta-3 appraisal well hit 577 net feet of natural gas pay – not the biggest find so far, but still pretty chunky and the eighth hydrocarbon find in eight attempts. The gas sands were not well imaged by seismic but confirm that there is gas to the western limits of the area, and suggest that there is a massive gas reservoir extending through Lagosta 3 to Lagosta 1 and 2 and to the Windjammer and Camarao wells. It also links up with the enormous find to the west by ENI, the Italian giant, which recently announced success with a second well in the area.

Now with a second rig in operation, the Anadarko-led team (where Cove has an 8.5% interest) is proceeding to drill-stem test the Barquentine-2 well and preparing to drill the Barquentine-4 appraisal well. Craven says the latest result adds confirmation to the 15 to 30-plus Trillion Cubic Feet (TCF) recoverable gas resource for the Rovuma area, while the project continues to provide significant upside potential.

Wow! Is that all there is? There are so many (was it 50) prospects identified in the area, and offshore Mozambique is clearly becoming one of the world's most significant gas areas, situated nicely for eventual sale to India or the Far East, where demand is scheduled to soar.

And Cove has put this lot up for sale? No wonder there were reports from a chap at Standard Chartered Bank, advisers to Cove, that there is 'a lot of serious interest' with the world's biggest listed oil companies and national oil producers sniffing around. There has been press speculation about all sorts of names, including ONGC of India – a name which will generate a shudder among subscribers who are holding Vialogy (VIY) and appear condemned to enduring Indian government indecision for all eternity.

It has been suggested here several times that Cove is worth 200p a share or more – indeed, that the Mozambique assets (Rovuma) could be worth at least 200p, ignoring Cove's other assets. Irish broker Dolmen, the sort of firm with an ear attuned to the gossip in the Dublin pubs (Cove is Dublin based) has also been resolute in suggesting that any bid ought to come in at not less than 200p.

Week by week, this looks more concrete. And suggesting it brings nothing new to the table, despite the fact that many highly-paid oil analysts continue to pitch their target price for Cove at less. The well-informed Cenkos, for example, is sticking today at 180p, though news like that released now can only add to the potential value.

The 200p, though, has been quietly indicated by the company itself for months, and formed the basis for many comments here. Simply go to the December presentation on the Cove website (www.cove-energy.com) , and page 17 suggests that Mozambique alone could be worth 200p a share in certain circumstances. The way drilling is going, there seems little need for caution on that one.

Go, too, to page 36 and look at the chart. That suggests there could be a sharp uplift in value between February and October as exploration and appraisal wells de-risked the project. We are not there yet, but everything is going that way. Obviously the chart is not precise, but it appears to envisage an increase in value to around $1.8bn by October. That would be equivalent to more than 200p a share – by then, of course, only the Mozambique assets would really be in play.

This, too, does not appear to make any mention of striking oil. There has already been a show of oil in one well to the south of the area. A real strike would boost values beyond the goodies from gas alone.

Though there has been no formal confirmation, the Cove directors are well aware that they could have a Rovuma mark two in the shape of the licences off Kenya. While the market is assuming a bid for all of Cove, it is still possible that the Mozambique assets could be sold, and the Kenyan licences retained.
There is no exploration in that area yet, but seismic is coming in. There are reasons to hope – only hope, mind, no guarantees – that the Kenyan structures could prove rewarding. The fun is spreading north, up the coast of East Africa. Already BG Group is excited about blocks offshore Tanzania, and today announced it planned to spend $500m there this year, with three gas discoveries. Statoil also has a Tanzanian gas strike. Cove has a greater share in the Kenyan licences than in those offshore Mozambique.

If the whole company should be sold, the Cove directors will want decent potential value for Kenya. And, of course, full value for the Mozambique possibilities.

All of which suggests that subscribers should ignore various broker estimates of a Cove take-out at under 200p. It could be wrong, of course, but the chances look increasingly like something better than 200p (or a big chunk for Mozambique and a continuing play offshore Kenya financed by Mozambique money).

If the oil price should slump, there will be a hiccup in the price, even though it is geared mainly to strong potential future Far East gas demand. And if no-one should meet the Cove price, the shares might fall. Any setback from the current 155p, though, should be short-lived as more wells are drilled and the true potential grows clear and Cove has cash enough for this year at least.

Have fun.

I have a holding in Cove Energy.

Ends

[verymaryhinge] 22/2/2012 15:19

maybe I'm being a bit simple here, but the likelyhood of the deal failing is pretty slim, and the chance of a better bid cannot be discounted. As far as I'm concerned, I'll wait it out - downside is a penny and a half UP from here (with no dealing costs, just a bit of a wait), UPSIDE is a better bid.

[jac1104] 22/2/2012 15:00

cashandcard
i concur - at this stage of the game - the only players who would pay in excess of 195p will be the sovereign funds be it chinese or indian in my opinion - it is the pre-emption rights that is the prized asset that cove holds - otherwise cove is pretty fairly valued at 200p on CUrrent mozambique find.
In excess of 200p - we r in the realm of paying for further/future finds which by all estimates is not unreasonable;>

though anadarko could well prove to be the dark horse.... depends if they want the pre -emption rights...

[cashandcard] 22/2/2012 14:40

jac1104,

I can't see them letting this go so easily if there are other interested parties prowling around. The Indians have been mentioned in the past.

Cash

[randommunkey] 22/2/2012 14:35

nowhere in the RNS does it say the II's have agreed a thing.... the process is still ongoing (albeit the board will speak to the government of Moz re shell deal)

[jac1104] 22/2/2012 13:49

cashandcard - cove is very much dominated by hedge funds and institutional holders - so no i do not forsee a hostile bid as u outlined above

[cashandcard] 22/2/2012 13:43

thecynical1,

How is one to stop another company buying up free-float and then going hostile?

The Shell deal still needs approval. Game is not over until shareholders approve it.

Cash

[thecynical1] 22/2/2012 13:39

jac...are you suggesting that there is now going to be a round of bidding???? I thought that the point of this type of sale process was to remove this as an option...?