Falk IS. Hldgs Share Discussion Threads

[grgkecer] 27/5/2009 15:53

Before today's rise the company was valued at less than £5M ex FOGL. Now nearer £7M.

[buzzyl] 27/5/2009 15:04

Now, do we know why we are blue today?
Very welcoming

[grgkecer] 20/5/2009 13:01

Now we know.

[whackford] 20/5/2009 11:59

Grgkecer. I shall be interested to hear if FKL took part in the placing.

To keep their % in FOGL that would have cost FKL about 15% of £7.6m = £1.14m. That sounds a bit rich for FKL just now, especially with some of the Momart consideration still to be paid (I think).

[grgkecer] 20/5/2009 08:48

Dilution of FKL holding in FOGL? Or did they participate in placing?

[greekman] 21/4/2009 08:30

What price a barrel of oil.

I have posted this because I am still reading posts on multiple sites, that question if due to the present price of oil it is worth continuing certain developments/fields.

Oil is now around $50 per barrel, which according to an article in The Daily Telegraph is too low to cover cost of undeveloped fields or investing in new fields.
It states that to cover these costs the price would have to be around $70.
It then shows that at a time when the worlds know deposits are dwindling, Asia especially China is still expanding industrially at break neck speed.
China is expected to have 140 million cars on it's roads by 2020, a 7 fold increase (that's a lot of oil needed).
As it takes many years from an initial find of a possible productive field, to the oil finally flowing, this must surely be an excellent example of why oil companies can not just sit on their hands when the oil price is not commercial enough.
They can not sit on the proverbial fence twiddling their thumbs.
Oil is the life blood of the modern world just as much as water was to the old one. Of course we 'can't' live without water, but imagine life without oil.
Wars were/are still being fought over both.
Without oil we would very quickly revert back to the stone age, as most modern products rely on oil for manufacture or/and its transport.
Yes there may be several new ideas for power/propulsion fuels but they are all many years away.
The price of the $180 oil barrel is not yet dead.
Give it another 20 years though, who knows if oil will be worth anything at all. There are always innovations round the corner

[whackford] 17/4/2009 15:37

Yes, FKL will stay at about £2 for the next couple of months (unless FOGL moves dramatically either way) because of the hefty Momart writedown and now this Seafish Chandlery competition. Hope FKL have not starved FIC of funds when they've been dishing it out to Momart.

[granny7] 17/4/2009 11:05

Big squeeze being put on FKL's Supermarket in the Islands, which is their biggest earner.

"STANLEY'S first purpose-built
supermarket officially opened for
business this week.
Boasting the Falklands' first
automatic sliding doors, under
floor heating and a car park that
guarantees your trolley won't run
away from you, customers have
been flocking to the new-look
Seafish Chandlery this week.
Manager, Neville Hayward
reported on Thursday morning
that takings at the four tills had
increased by a massive 200% over
the first two days of trading."

Small extact taken from today's penguin News which also said that the Seafish Chandlery shop ..."The business has seen a
steady growth in sales with average increases of 30% year on year from 2002 – 2006."

[7kiwi] 09/4/2009 16:02

whackford,

After re-reading the OB presentation, I now think you are right.

However, the previous guidance they had given was that they could fund the first two wells, but were looking to increase the size of the programme, and that would need farm-in/fund raising.

I too think 4 wells would be better, and better still if they shared a rig with BOR and.or DES/RKH, although I think the chance of a share with NFB is lower.

[whackford] 09/4/2009 15:44

7Kiwi, - with due respect (truly,not being sarcastic), I don't think they are fully funded. This is apparent from the Oilbarrel presentation (on FOGL website). Taking the most favourable figures from that:
Cash at end 2008 19M$
So suppose cash at end 2009 (guessed time of drilling) without fundraising 17m$.

Cost per well 35m$.
Cost of mob/demob from Brazil 10m$.
Therefore total cost of two wells only , rig from Brazil 80m$.
Cost to BHPB 68%, cost to FOGL 32%. Hence share of this cost to FOGL 25.6m$

Hence shortfall for FOGL 8.6m$
If rig from Gulf of Mexico, FOGL shortfall is 21.4m$.

So fundraising needed unless further farmout.

I agree with you that it must be desirable to increase number of wells drilled. So again more cash likely to be required. Personally, I would like to see a 4 well campaign. I'm no expert, but with only 2 wells I can't see that they have much chance of finding commercial oil even if its there.

[7kiwi] 09/4/2009 13:07

whackford,

This is a bit pedantic, but my belief is FOGL are funded for the two well commitment, but they want to increase the size of the campaign, and will need to raise funds for the extra wells (either by placing or farm-in or combination)

[whackford] 09/4/2009 10:28

Of course the other thing that's keeping FKL around £2 is the prospective fund raising from FOGL. FOGL are committed for a minimum of two wells but haven't the cash to pay for this, so a fundraising and/or farmin is required. If they go for more wells, more cash will be required. All is made plain on recent presentation given at Oilbarrel (now on FOGL website).

I hope we see BOR join the campaign - the more wells the better in the SFB, regardless of who drills 'em.

[whackford] 06/4/2009 09:11

Glenn - ' fraid so. This talk of being in the "logistics" sector, as is Ferry, is all very well. But the logistics industry is extremely diverse, embracing a vast number of completely different business activities. Thus, there is no carry over to art logistics from Ferry to art or from FIC to art.

I think we were all surprised by Momart. It's already absorbed quite a bit of capital. Let's hope the remaining part of Momart generates cash.

[glennborthwick] 05/4/2009 18:21

it also questions the judgment of the management. They bought at top dollar a company in a sector they knew nothing about. Barmy decision.

[whackford] 05/4/2009 09:28

Just tried to guestimate what the FKL results will be like for 2009, based on the Trading Update released on 5 March.
I get Operating Profit of £m2.16, that's 90% of 2008 figure (Update's says market expectation was £m2.4 and I have taken 90%).

Take net financing costs and tax both same as last year.This leads me to Profit attributable of Equity shareholders of £m1.544 a rise from £m1.378 of last year and hence an increase in underlying eps as stated in the Update. (eps goes rom 16.3p last year to est of 18.2p this year).

Then take off all the one-offs (Momart restructuring, Massive Momart impaiment of £m2, interest rate hedge, amortisation) wich total £m2.9 according to the Update.

The result is an actual eps of minus 16.6p, a dramatic downturn.

Well done to the Board for taking swift action on Momart. But the continuing gloomy forecast (as per Update) for Momart is a worry.

On the whole I don't see these changing much from about £2 unless FOGL does something spectacular.

[greekman] 20/3/2009 08:11

This is 'not' a ramp for Shell.

Shell reported yesterday that although the price of oil is lower than it has been for some time, they will not allow the price to effect their exploration programme. They are looking to maintain their dividend and will if required increase their gearing in order to do so.
Not posting this to ramp Shell (I don't hold Shell shares or at present intend to buy), but just to show that although oil prices are on a recent low, oil companies need to plan many years ahead in order to have availability when required.
Obviously the majors have the cash to invest in the future almost at will, but smaller minnows such as Fogl, Des etc can not afford to step back whilst demand slackens.
They can not afford to slow down in the race for oil.

[glennborthwick] 08/3/2009 22:50

yea reap what you sow -mr h.

i have an interest in a wide range of stocks.

pot black kettle

[mr hangman] 08/3/2009 17:56

Glen seems to have a big interest in FKL, strange as he is not even a holder

[imperial3] 07/3/2009 00:16

Depressing

[glennborthwick] 06/3/2009 19:04

Theyve just had to pay 1.5 million and theyve still got to pay 1.62 million to go next year. Thats a massive chunk out of their reserves. Thats terrible news for the cash pile if that part of the business is no longer profitable. I see this halving now ive taken a closer look.

[glennborthwick] 06/3/2009 18:59

i see momart egnerated half of the revenues at interim stage. mmm

[glennborthwick] 06/3/2009 18:56

but why buy at such a high PE was the daft thing. If you can buy a decnt company at pe of 6ish why pay double figures

[glennborthwick] 06/3/2009 18:54

hindsight is always wonderful mind you