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Real-Time news about Dragon Oil (London Stock Exchange): 0 recent articles
|prophets and losses: If the share price falls by the divi amount when the share goes ex div, as usually happens, then you could buy the share cheaper then anyway. I would think it depends on how long you propose to keep the shares, how significant the dividend is in relation to day to day share price volatility or whether you expect the price to rise anyway regardless of the dividend.|
The IIs need to be prepared with a PLAN 'B' if £7.80 or £8.50 is all thats on offer (realistically it should be way north of 10 pounds).
This was an opportunistic, unrealistically low bid from ENOC.
Financially ENOC is very weak; its previous bid was a pathetic failure and this new bid is even lower in real terms.
If, ENOC are unable to come back with a serious 'knock out offer' then hopefully IIs can guide it to think along the lines of a placing of all, or the majority, of its shares. This would be in the interests of ENOC and all other shareholders as it would enable DGO (and its share price) to realise its true potential, which is far greater than could ever be achieved with ENOC in control.|
I must say you do have courage of your convictions to buy 10000 shares at the current price.
I do have a few more shares than that and I think that's plenty for now and so won't be buying more anytime soon.
DGO works great as a dividend vehicle.
And if the dividend is cancelled then guess what, the share price will go up, so a NO vote from me.|
|blakieboy7: The DGO share price is disgusting considering we breached 600p a few days ago!!|
|kenmitch: Yes, it is a matter of opinion. So there is no right or wrong about it.
But as has already happened with a reply here, some state opinions as FACTS. And some totally ignore FACTS used to back up an opinion.
e.g "buybacks result in fewer shares and therefor a higher share price."
What note if any has that poster taken of the evidence to the contrary in my two previous posts. Has he even noticed that the Dragon and BP buy backs have been followed by a LOWER share price?
In my experience those with mixed feelings about, or like me, strongly against buybacks can see the case for them (e.g increased eps which in THEORY supports the share price) and also they are very good for Director bonuses. But those against just trot out the same (sometimes inaccurate) plus points and won't even consider the fact that as with any opinion there are two sides to the argument.
Here's a simple question for any here strongly in favour of buybacks.
What did BP buybacks achieve and what have the earlier Dragon buybacks around £1 higher than the present share price achieved?|
|scammonden: In my opinion buybacks are beneficial if purchased at low prices in a falling market for long term shareholders.
If in 5 years DGO share price were to reach fido's magical £12.68 shares bought back now between 460 and 600 would be beneficial to long term shareholders both in capital gain and dividend payment with the smaller number of shares.
That's my opinion, right or wrong.|
Nobody can know that, but it's quite likely it would be about the same as it is now. Detailed research by Morgan Stanley has shown that shares in companies that buyback quite often go on to do worse than others in the same sector that have not bought back shares.
My point is that when, as now, shares in a sector are in freefall, no consideration is given as to whether or not a company in that sector has bought back shares. i.e oil shares are now reacting to the falling oil price. The same applies in reverse of course. BP shares prior to the Gulf of Mexico disaster did not go up any faster than others DESPITE their already having spent £20 billion on buybacks at that stage. Nor did those buybacks and another £10 billion on top provide any support for the share price subsequently.
Yes, buybacks increase eps (so very good for Director bonus payments if based on eps) and in THEORY that must mean a higher share price. But, not least because the PE ratio of any share can vary enormously as markets and sectors go up and down, in reality.
The benefits of buybacks are stated by so many "experts" who unfortunately don't do the obvious and check out what they do end up achieving. Hence my preference for dividends ahead of buybacks. I would MUCH rather (if a BP shareholder) to have received that £30 billion spent on buybacks in REAL CASH than to see £30 billion disappear in to thin air while the share price halved!
That £30 billion would almost have covered the (many dubious) compensation claims that BP have had to pay out too. And it could have paid for the London Olympics 3 times over.
OR just look at the oil explorers (including FTSE100 share Tullow) that BP could buy now with just a bit of that £30 billion. It is totally beyond me how so many fail to see these obvious minus points about share buybacks. Hence my hope that Dragon won't waste any more of the cash pile on them even at lower prices than now. The Dragon share price will go up again when the sector recovers but it will not go up any faster imo than others who did not buy back, of if does, the reason is more likely to be newsflow than thanks to earlier buybacks.|
With hindsight the last buyback at an average 568p was not beneficial. The Dragon share price would likely be just where it is now buyback or no buyback.
Also there is no evidence that "buybacks would give support to the share price."
BP have now spent around £30 BILLION.. yes that is BILLION ... on buybacks from as high as £6.50. Those provided no support for the share price at the depths of the Gulf of Mexico crisis, and nor have further buybacks supported the share price currently.
Dragon shareholders should be hoping that next time they spend some of the cash pile wisely on one or more quality acquisitions, and not waste any more on buybacks. And hopefully better choices than Petroceltic and the dodgy Bowleven!
At the rate shares in the sector are falling there are already several for them to be monitoring closely now.|
|undervaluedassets: my point exactly.
With growth companies the yield often stays the same (or goes down): as the share price moves up the price improvement discounts the growth of the dividend.
The DGO share price has yet to do this even though by the end of 2016 we clearly will have arrived at 100K bopd.
Dividend here is extremely well covered by earnings and by cash.
Given cash mountain A special dividend does not look an impossibility either.|
The £12.68 was pricing Dragon as a normal oil company which even now would not be expensive IF normal fundamentals applied. However this is Dragon oil and for reasons that are well versed on this thread Dragon has never been priced on fundamentals and has always been discounted because of its single asset and ENOC`s 54% holding with the discount to NAV currently being about 32%.
The one thing I did not envisage when I evaluated Dragon at £12.68 was the way in which ENOC would seek to control Dragons share price and Dragon itself for the purpose of buying them on the cheap. That tussle for control went on for a few years and I am very resentful about what I consider to be the lost years when Dragon should have expanded,
For whatever reason ENOC have now adopted a policy of trying to maximize the return on what is now just an investment having surely given up hope of taking Dragon over. As such we are now seeing the diversification and growth that we should have seen years ago which over the course of time will reduce the discount formed with Dragon in the past only having one asset.
The other reason for a discount is ENOC`s 54% holding. I differ here from many who say that ENOC will never reduce that holding but my logic is why maximze a return if you are not going to utalise that return. If ENOC`s only intent was Dragons ownership then Dragons share price would not matter. It only matters IF ENOC intend to make use of a higher Dragon share price for whatever reason. I have never thought that ENOC would go for an outright sale of their Dragon stake (unless someone made them an offer they could not refuse) but a reduction of their holding is possible as ENOC know as well as anyone that a reduction of their stake would put Dragon in play with a takeover battle almost certain. Don`t forget that it is not just ENOC who have tried to take over Dragon but also the Chinese and the Russians in years past. Therefore I consider a swap for assets to be very possible especially as ENOC no longer have access to Dragons oil now that the Iranian oil swaps have ended and ENOC have to buy their oil on the worlds markets.
Therefore as I said before, we are seeing the reduction in the discount of Dragon being a single asset company as they diversify and the increase in the share price is chipping away at this discount.
Forget whether ENOC would reduce their stake for the time being as that would only happen at near full valuation and we are quite a way short of that yet but when Dragons share price goes over £8.50 approx then I think that it starts to become a factor which will itself increase the share price
So in brief we are seeing an increase in the share price as a result of the lower discount and greater emphasis on growth. This momentum is due to pick up in March with a number of big news releases and the start of drilling in Tunisia.
However as I said before Dragons intent has been to invest in a multitude of early stage projects that could be big in a couple of years but have not involved much outlay up front and that process is on going. The result of all this investment is that Dragons share price will increase over time as their prospects via diversification become more substantial.
Then we have the possible Argentine deal. What is different about this deal is that it is far more substantial than anything previous both in outlay and in possible return. The 927 million barrels is only from a very small part of the Repsol license area and they are equally excited about the rest of the license area so it is potentially huge. It is extreamly positive for Dragon that they are the prefered partner for the Argentine and it should not be underestimated what this deal could do for Dragons share price. In my opinion Dragons share price could easily double in a very short space of time as a result of an Argie deal.
So in answer to your question, I will keep the £12.68 for the moment based on the early stage growth we are now starting to see with the proviso that if the Argie deal comes off then we are into a whole new ball game.|
Dragon Oil share price data is direct from the London Stock Exchange