Genel Energy Share Discussion Threads

[phillis] 19/7/2016 11:53

yes indeed but it only adds $25m to the current market cap

[cyan] 19/7/2016 11:44

No, not 7p. As I say, if you buy before the cut off date you get 20 for 9 at 0.82p in the offer. Drastically affects your 'average ' buy price

[phillis] 19/7/2016 11:37

well they wont be worth 7p

[cyan] 19/7/2016 11:25

Phillis ; There will be approximately 23 billion shares after restructuring. Some very rough maths on my part.

[phillis] 19/7/2016 11:10

so where does the $1 billion come from?

[cyan] 19/7/2016 11:03

Good morning Phillis.
Todays GKP adventure is all about those brave enough to buy shares at 7.5p ,or hopefully less, and are committed to acquiring those offer shares at 0.82p.

They are gambling on a healthy bid after restructure.

The story is those 0.82p shares. There's going to be an awful lot about. A fascinating situation. Will they get a bid and make some modest money, or, will they get burnt?

[phillis] 19/7/2016 10:57

?
Todays M/Cap is just over £70m
GKP are issuing another $25m in shares

[cyan] 19/7/2016 10:26

At 7.5p paid for GKP shares, new investors are gambling on a post restructure bid for the company of approximately $1 billion USD to break even.

Its all about how you value the companies assets? What's Shaikan true value?

Back to events that may influence POO. Possible NS strike;

"Date set for first North Sea oil strike in a generation"



Brent now $46.86

[cyan] 19/7/2016 09:48

Good morning Sparky.
Very interesting situation with GKP. Crunching the numbers now at 7.4p.
Buy 9 at 7.4 costs 66.6p. Then buy 20 at 0.82p and add gives total cost 83p.

Divide 29 into 83 gives your averaged cost at 2.86p.

I note there is speculation that the rise is because there may be a bid before restructuring. Imo , no chance. Any interested party will wish to pay the minimum and will wait till after the restructuring and everyone having taken an enormous haircut on the debt.

It appears its all about a bid AFTER the restructuring. Those buying must hope its well North of £500 million. Without a bid....? There's the risk to add to politics, a POO collapse, and more capital requirements to up production; from shareholders?

Brent $46.73

[sparky333] 19/7/2016 08:21

Wow GKP racing head Such a disconnect in valuations.

[cyan] 18/7/2016 21:35

What's your plan zingaro; get out whilest the goings good or invest more in the hope of a modest gain in the medium to long term?.

Looking at the numbers suggests that GKP has got to be close to its high for any logical investment.
Having said that; its where the pi's take the share price at the end of the day.
Imo north of 5p is not very attractive on a risk reward basis.

[cyan] 18/7/2016 21:17

We are on the same page.
Its those who have bought well south of 5p and can invest more cash who could win in the longer term.
Everyone of the LT holders paying double and treble digit pence are going to have giant capital losses.

[cyan] 18/7/2016 21:13

Evening Zingaro.

Our posts crossed. I agree that there is a logic after all IF you have the cash to invest further in a company that has such an astonishingly bad record of delivering shareholder value.

One must hope that a bid comes after the restructuring and that values GKP well North of £500m.
Otherwise the question will be , will the share price collapse as some billions of shares are possibly dumped? Its a long game now to achieve a very modest return.

[cyan] 18/7/2016 21:08

Have applied some thought to what's going on at GKP. My first conclusion is that there's no realistic chance of some out of the blue bib trumping the planned reconstruction.
Best to wait and let the bondholders take any enormous haircut and then consider a bid.

The maths explain the buying imo.
The open offer is that for every 9 shares you hold you can buy 20 at 0.82p.

Lets say we buy just 9 share at 5p (ignoring dealing costs of course). Cost 45p

You the buy 20 shares in the offer at 0.82p ; total 16.4 p

16.4p plus 45p equals 61.4p. 61.4 divide 29 equals 2.1172.

Your shareholding now averages approx. 2.18p per share cost.

There's the logic for those committed to further investment in GKP.

Its appears a no brainer. If you have the capital and really believe in GKP's prospects; you must buy in the offer. At 5p plus for everyone else fed up and looking to move on risk free; this is the moment to sell out.

The risks being political, another POO collapse, and more capital than expected required to up production.

Brent now $46.97

[cyan] 18/7/2016 20:42

Here is link someone provided on the GKP BB.



point 4 gives a possible valuation of the shares post reconstruction. I am not sure if the author has factored in the capital required to up production.

Extract;

"4.A realisation that the restructured company could be worth anywhere from £500m-£800m with a largely debt free balance sheet and production ramped to 55,000 bopd this equates to around 2.13 – 3.5 pence per share post the issue of a circa 23bn new shares."

All suggests to me that GKP share price is far too high.

[zingaro] 18/7/2016 20:11

My understanding is that if an equity holder fully subscribes for the open offer then his/her equity increases by a factor 3: for a small cash injection. Thus the original equity of 5% can for $25m subscription own 15% of the company. I quote "Assuming the Open Offer is fully subscribed, Shareholders will own up to 14.5% of the equity of GKP post-closing"

[newswseller] 18/7/2016 19:46

Zingaro clearly u don't understand the maths.. GKP post consolidation is a market cap over 1billion, equity only holds 5%.. It's going up because there are lot of numpties buying

[zingaro] 18/7/2016 18:58

sparky: the math on GKP is that the equity will be 15%,
So take todays mkt cap of 50m
add the 2:1 (about) "rights" at 1p to produce 20m capital
Then that equity of 70m is 15% of the company.
It makes it about 500M pounds company. OK 100-20 = 80 debt.
Thats not bad !

[cyan] 18/7/2016 16:00

GKP goes up and up. When the insanity stops whose going to be left holding the penny paper?

Even Brent's weakness seems to have eluded the GKP enthusiasts . Brent now $46.54; mark report; "improvement required"

[cyan] 18/7/2016 14:30

I earlier highlighted a GKP post I consider "over optimistic".
The post at the top of this link;

reflects a view closer to mine. Bit long to repost here , but, a credible read if you are interested.
Its posting was not welcome on the BB; no surprise there.

Brent $46.73. GENL holding up well considering.

[stansmith3] 18/7/2016 13:05

cyanthanks

[sparky333] 18/7/2016 11:42

So if currently GKP is £40m which is now 5% The market is say GKP is worth £800m +£100m in debt plus cash Do the maths compared to Genel the world is mad.