Faroe Petroleum Share Discussion Threads

[bountyhunter] 17/8/2018 19:38

that all depends on the level of any (presumably hostile) offer

[yasrub] 17/8/2018 18:57

I might be out of my depth here but I seem to recall Dana some years ago were a well run and successful explorer/producer but when the predator came lurking the institutional holders backed the predator, management had low shareholding like here. Happy to be corrected but this could be more difficult to fight than expected.

[garfield31] 17/8/2018 18:55

Memory of Ithaca take over still hurts

[bountyhunter] 17/8/2018 17:50

Yes I agree with Malcy as well; it's a good summary of the situation relating to DNO. Fortunately this BoD is not such a pushover as the Ithaca BoD was!

[linhur] 17/8/2018 16:43

Agree with Malcy. DNO trying to takeover FPM on the cheap.

With Delek and then DNO taking their stake, it has woken up FPM board and focused the exploration effort to increase production. I hope FPM have not mortgaged their large cash holding in the effort to drill more quickly.

Surprised DNO have paid a dividend in the current circumstances. Perhaps they will want to pay a larger part of any offer in shares.

As Malcy says time to stand up and vote for FPM independence.

Linhur

[bountyhunter] 17/8/2018 13:47

Malcy today:

Faroe announced yesterday that DNO has requested two board positions which is very much akin to putting up a fox for the night in the chicken run. FPM rightly say that these two DNO executives would be conflicted and as I see it as the company (DNO) is trying to make a farce of the idea of independent directors.

As I said when this whole process started I think that DNO, a major competitor of FPM, is trying to take over the company on the cheap. By trying to weasel its way onto the board and become a sort of oily Trojan Horse, DNO has shown its hand even quicker than I thought and hopefully will be repelled at the meeting. Faroe has a very blue chip institutional shareholder register and a good number of retail investors, it is time for them all to stand up and be counted or the industry will see yet another company be sold on the cheap to a foreign company trying to take over possibly the best E&P company in the sector by the back door. YHBW…

[wbodger] 16/8/2018 22:15

They expect an EGM within 6 weeks. Also I think their report might be mistaken that the six month "No Intention" clause takes them to the beginning of November. It depends on the Takeover Code wording of course, but the No Intention statement was RNSed on 4/4/18. That difference is important because the 4th of October is 7 weeks away.

Faroe probably making sure the EGM is scheduled in the NoBid period.

[bountyhunter] 16/8/2018 22:11

We have a new record today for thread visitors and views since setting up the flag counter on 30 June.

[bountyhunter] 16/8/2018 21:58

This bit is interesting...

“As a full takeover of Faroe will reduce the overall cost of capital for DNO ... takeover of Faroe at a cost of 180-200 pence per share may be value accretive for DNO,” Sparebank 1 Markets analyst Teodor Sveen-Nilsen said.

A 40% premium (i.e. ~£2) would probably do it but I get the feeling that DNO are angling for less than that.

[oli12] 16/8/2018 15:08

Will DNO buy more shares taking them to the 29.9% threshold? As someone pointed out any vote on this is a kind of barometer for any potential future hostile offer. How many FPM shareholders will support the BoD and vote against this? Nothing to lose for DNO by doing this.

[bountyhunter] 16/8/2018 14:12

Yes good ridence to Delek, but to me DNO's intentions seem to be to push the BoD for an agreed offer. We don't need a lowball agreed offer when the prospects for FPM are so good anyway (which is why DNO are interested of course) and it seems from today's announcement that that is exactly what the BoD are thinking.

[wbodger] 16/8/2018 14:00

The share price is way ahead of where it was when Delek was holding the original Dana shares (as little as 4 months ago). That is because DNO bid £1.25/share to buy out Delek, and made a general tender offer as well. I did not think Delek ever intended to bid over £1.20/share for FPM, and had been more concerned about a cosy stitch-up like Ithaca.

Market not moving at all, although this news is pretty seismic. Perhaps it explains recent share price decline? And there I was thinking it was general oilie weakness ;-)

[bountyhunter] 16/8/2018 12:53

A hostile bid? They don't need to be on the BoD to do that but it would no doubt cost them more than any agreed bid (which is looking more and more unlikely right now).

[vikingbhoy] 16/8/2018 12:39

If they were appointed and DNO launched a bid, wouldnt they have to recuse themselves? Not familiar with UK rules on this

[bountyhunter] 16/8/2018 12:37

I can't see why would anyone would vote for DNO to join the BoD apart from DNO themselves. Their intentions are far too transparent imho.

[thedudie] 16/8/2018 12:31

Trying to install an executive chairman and managing director onto a board does look unusual!

I hope this does not provoke a period of instability for the company while they should be focussing on successfully implementing their 3/4-year plan for significantly increased production.

Agitating shareholders can be good at reminding the board that shareholder returns are paramount --- if they achieve them here they are more likely to keep their jobs!

td

[vikingbhoy] 16/8/2018 12:27

I cant see DNO proposing this unless they are reasonably confident of being successful

[bountyhunter] 16/8/2018 12:10

I agree with the Board, DNO are just trying to engineer a cheap agreed bid.

[wbodger] 16/8/2018 11:45

"...a significant number of Faroe's major institutional shareholders have provided clear guidance that they do not wish DNO to be represented on the Board.

"The Board believes that the Proposed Resolutions are wholly self-serving and are part of an undisclosed strategy on DNO and Mr. Mossavar-Rahmani's part to try and gain control of Faroe's business without making an offer to all shareholders at an appropriate premium."

[thedudie] 16/8/2018 11:35

EGM now requested - RNS issued!

td

[wbodger] 16/8/2018 11:33

My reaction to vikingbhoy's post was, DNO must have asked for a seat and were told 'no'. But that is a pretty hostile act, to go over the Board's head and demand an EGM. I think we can safely rule out a bid 'with approval'!

Since most instis are sitting tight (no Holdings RNSs) it is a question of what the bid would be to get over 50%. (Or more to get a Scheme approved by a Court.)

[harry rags] 16/8/2018 11:21

Faroe Gross and net cash increased to GBP158 million and GBP84 million (unaudited) at 30 June 2018$100 million unsecured Norwegian bond whilst the reserve base lending credit facility of $250 million ( plus $100 million accordion) remains indrawn. The revolving Norwegian Exploration Financing Facility (which in turn is funded by Norwegian tax rebate system) is utilised for E & A expenditure in NorwayDNO would also get the above plus the increase in production that is forecast. IMHO an offer is still on the cards for later this year. Interestingly no word from Faroe on any proposed EGM Perhaps they are caught between a rock and a hard place. If they resist and DNO take over there may be little mater of reducing the board or worse. If they agree to the EGM they might find the shareholders vote against themYes interesting timesHarry

[bountyhunter] 16/8/2018 11:12

Welcome to the Scandinavian visitors from Norway and Denmark over the last few days

[thedudie] 16/8/2018 10:07

From rogerlin's link above ...."DNO exited the second quarter with a cash balance of USD 584 million in addition to USD 288 million in marketable securities and treasury shares. The Company's outstanding bond debt stands at USD 600 million"

Yes they are gearing up and more cash will be coming in but their drilling costs are going to be higher in the short term and 50m USD is going out for a divi (whats one of those!).

DNO's actions will be determined by the oilprice curve. What is DNO's current view of oilprice -- maybe more negative than it was 6 months ago....Trump/trade wars/US production etc etc have all got worse for oil price.

Taking Faroe at £1.75-£2.00 would be getting on for a billion USD and would commit DNO to additional debt (how much ...300m USD ???) to fund the current forward expansion plans/operations of FPM over the next few years.

Is trying / taking FPM in the next few months still a step too far. Maybe another year is needed even if they end up paying more.

td