Faroe Petroleum Share Discussion Threads

[bountyhunter] 24/12/2018 18:56

20 December - FPM:
We are fully funded to deliver our 35,000 boepd production target in the near-to-medium term and are confident in our ability to deliver in excess of 50,000 boepd in the medium term.

[bountyhunter] 24/12/2018 18:04

Yes very good points bomfin. If the takeover doesn't happen and the price drops to £1 (which it won't imo) it would be such a fantastic buying opportunity I would double up straight away (and hold until Brasse comes online or longer). I really cannot see that opportunity arising however.

[bomfin] 24/12/2018 17:25

Pre Iris Hades. Pre Equinor asset swap, even 45T% of Blane will give a 1OO million cash flow going forward. They know where to put the infill well, they developed the field!. Oda will throw off another 5O million cash flow. 2 wells drilling. I dont mind a fall in share price if the takeover does not happen which I hope. I shall be buying more share for certain. I suggest holding for just that opportunity or if you hold and it goes up that works also! lol. Many quality assets. 22% now of Ringhorn East! Vilje low cost producer. Low cost! like a few $ barrel to produce. Ex Paladin management. They know where the oil is and they know a good deal.

[sludgesurfer] 24/12/2018 16:58

Brent at $52. Last time it traded here, FPM was 84p. Of course that was pre-DNO. IMO, the current oil price has all but eliminated the possibility of another bidder and significantly reduced the possibility of a higher offer. Its also increased the chances of the offer being successful. DNO have unfortunately got their timing right.
I'm sitting on a 40% profit. I expect a large portion of that profit to disappear should the bid fail. I'm pretty torn. Tempted to sell a portion and buy back in the open market if the bid fails.

[bostonborn] 24/12/2018 16:24

The management have a solid track record for finding oil, and doing long term deals, which will enhance the companies value over the next two to three years. Don't give the company away cheaply. The oil price may be currently at a low point. Next year I would expect it to slowly recover to the range $60 to $70 a barrel.

This company is worth at least 225p to 250p per share. We may even get a second bidder come in at this sort of level, or a white knight.

[bountyhunter] 24/12/2018 15:47

I agree with jasper, for those prepared to wait for Brasse to come on line when production is anticipated to shoot up to 35,000 boepd (and subsequently to 50,000 boepd) then the price will be way above 152p which is exactly why DNO have tabled this opportunistic bid to buy the company at this time.

[tom111] 24/12/2018 15:43

I agree with oli if the bid lapses the share price will drop like a stone whats the point of holding you either get your 1.53p offer or at best a few extra pence increase.No point in holding and risking a big loss imo that's why I sold.Things have changed dramatically in three weeks unfortunately

[jasper2712] 24/12/2018 10:19

Don't see why they will fall back to £1. If you think this why don't you sell for 152p and when the bid fails buy them back after your predicted drop. Or if they do manage to acquire the company then you are quids in.

I am sticking it out as I don't expect them to win and I don't expect a fall of that amount. If anything I think the market will have now seen the true value of their assets and buy in.

[oli12] 24/12/2018 09:21

I agree FPM is well positioned with a good mix of assets, ultimately the oil price is a huge driver of value here and the ability of Faroe to deliver the producing assets on time and within budget - not an easy feat as these type of projects are complex.
DNO are chancing their luck however they might get lucky based on the wider markets.

Would other holders be happy to see Faroe remain independent BUT with an share price nearer £1 (this is based on the recent fall by other oil stocks), it’s a double edged sword

[bomfin] 24/12/2018 09:08

We have 2 wells drilling Oli12. What value are you giving to IrisHades, The Equinor Asset swap, tax pending, Brasse. 6OO million pounds is not a challenging market cap. Enquest are nearly 2 billion pounds when you add on the debt.

[oli12] 24/12/2018 08:54

Based on the markets and other oil stocks one wonders if DNO would be willing to pay more or would they walk. If they walked this could plummet. The price offered is low however when one looks at the bigger picture this is not a easy decision, since the bid market sentiment has shifted significantly along with the oil price. I would be happy for Faroe to remain independent however if this happened its likely the price would be nearer £1 something I would be less happy about.

[bomfin] 21/12/2018 16:56

Exbroker. You are of course correct. The close date is end of year but it will close later almost certainly with backdated adjustments.

[hashertu] 21/12/2018 16:36

FNTC post 1771.

I stand corrected. I had assumed, incorrectly, that the more stringent threshold (57.5%) could still apply.

[bomfin] 21/12/2018 15:51

Equinor asset exchange deal closes at end of year.

[exbroker] 21/12/2018 15:41

First close in 10 days NOT deal close!

[bomfin] 21/12/2018 15:15

btw FPM gave the production profile for Equinor assets for next year at 7 to 8 thousand boeday. This year they are just over 1O,OOO boepd. Deal closes in 1O days time and I expect a further update.

[bomfin] 21/12/2018 15:12

I dont think they necessary want to buy. I think they may be trying to force another buyer to monetise their holding at a good price. Still. They are way too cheap! The equinor deal is a game changer. Cutting capex and giving 96 million cash flow in 2 years. What does it give in 6 years. Say 2OO million pounds after ringhorn east infilss and marulk deep. PE that at 6 and it is worth 5Opshare. They need to bid 2OOpshare. If either well comes in then add on at least 25pshare per well. imho dyor.

[exbroker] 21/12/2018 15:03

152 is an opening shot they have not said it is final yet so have plenty of time to up it. When and if they do, which I expect that is why I have bought stock, that’s then the time to go over 30% and make it a rule 9. Have a look at the recent HVN takeover, text book game from the buyer.

[jasper2712] 21/12/2018 14:47

"So read the offer. They are being advised by people knowledgable enough to tell them to stop buying before they cross a line."

They weren't knowledgeable enough to tell them to start buying before submitting their 152p offer. They had ample time to accumulate after they disclosed their intentions when the bought out some for 125p.
So their advisers have got it wrong - as happens. We all make mistakes Just ask Fred The Shred

[wbodger] 21/12/2018 14:34

Why has no one read the Offer? I recognise the TakeOver code takes precedence but DNO's advisors have taken it into account in the wording of the Offer. So read the offer. They are being advised by people knowledgable enough to tell them to stop buying before they cross a line. You have to download the offer (you have to click to agree the terms). It implies clearly that they have control of the condition.

It is very clear that DNO have set 57.5% plus 1 as their own threshhold for the condition, so they will not put themselves in the position of paying more than £1.52 for shares they may not be able to keep according to takeover rules.

If they get close to 57.5% + 1 they can extend the offer until no later than February 10th, and they would. They might have to add a few pence to the whole offer to tempt speculators and semi-undecided holders, but afaiu it would still be a conditional offer until they had enough to call it unconditional. At that point the escrow positions are exchanged, and they declare their holding.

I agree with FNTC #1771 50% + 1 of the undiluted equity is pretty much irrelevant, they assume the Board's options will be exercised at the Board's timetable, which means not yet (the extra shares would allow DNO to buy more in the market).

[thegreatgeraldo] 21/12/2018 14:26

Bijan Mossavar-Rahmani, DNO's Executive Chairman, commented:

"We resolutely continue to believe that the true value of Faroe is richly reflected in our Offer of 152 pence per share"

.......Guess he has to say something like that. He's not Santa Claus though. They're not offering 152p because they think there's 20p hidden value in the SP

[jasper2712] 21/12/2018 14:16

"Nobody seems to have noticed that the DNO share price has fallen a long way in a short period of time. The DNO management must be on edge as to the merit of this bid."


They are not on edge as to the merits of this bid but they are on edge if this golden goose escapes their greedy clutches.
If they had tabled a decent offer in the first place they will all be asking themselves on the 2nd Jan

[scaff55] 21/12/2018 14:13

Teresa May sounds a lot more confident than this mob when trying to do a deal.
Just looks to me there is a lot doubt in were they think its going.

DNO notes that if its Offer lapses, it cannot make a new offer for another 12 months (subject to the exceptions in the Code) and there can be no assurances as to DNO's long-term ambitions. What it can make assurances about is that DNO will redouble efforts to achieve board representation for the owners of Faroe to ensure improvement of corporate governance practices, to ensure greater shareholder "say on pay", to ensure greater scrutiny and proper oversight of further dilutive actions, including generous options awards to directors, and to ensure implementation of a culture of shareholder value creation.

Bijan Mossavar-Rahmani, DNO's Executive Chairman, commented:

"We resolutely continue to believe that the true value of Faroe is richly reflected in our Offer of 152 pence per share. Moreover, we have outlined clearly to Faroe shareholders where we believe Faroe's value would lie without DNO's embrace in these very volatile and uncertain times. Shareholders will now make their decision."

[fntc] 21/12/2018 13:31

Key phrase: "ii. the acceptance condition is that only 50 per cent. (plus one share) acceptances are required"
The current bid has a condition of 57.5% plus one share, since it is 50% fully diluted. If they would get "only" 50% then the FPM board could dilute them below 50%.