Global Energy Development Share Discussion Threads

[rcturner2] 27/3/2013 09:22

Global Energy Development (LON:GED) – Forward Programme Essential: Today's results have highlighted the difficulties that the Company has faced in 2012, given which, it is surprising that the cash flow has been as strong as it is. The overall tone and timbre of today's announcement is one of focus on the development of the substantial resource base, which we believe will accelerate in 2013. This has been underlined by the reorganisation of the balance sheet, which provides additional capital resources to put to work in the field. Tocaz's development continues to vex, but the fact that the issues over the reservoir's friability appears to have been resolved, and sand control is becoming less of an issue, should see the significant progress in the near to medium term. While we accept there will be something in today's results for both bulls and bears, we are greatly encouraged by the Company's focus on valorising its asset, and we believe that any weakness in the share price is a good opportunity to pick up shares.

[eric76] 27/3/2013 09:15

Perhaps, but with less than inspiring results, a nervous market and a couple of gaps below the highest closing at 86.5p its no great surprise there was 8 am selling imo.
Agree H2 outlook sounds much better.

[wooster4] 27/3/2013 08:08

another short sighted reaction from the market!

[lowflow] 27/3/2013 07:49

From the Annual Report:

- Cost saving from water injection well begun in the fourth quarter, will give full impact in 2013. $400k of cost saving per month.

- Bolivar farm-out targeted to be completed in Q2.

- Next Torcaz test to take place in Q2.

Sounds like they are also looking for a partner for the Torcaz field (Bocachico contract) in 2013.

[philo124] 27/3/2013 07:17

2013 outlook much better.

[bwanad] 13/3/2013 01:11

I heard that. LOL

[hyperboreus] 12/3/2013 23:17

For some reason bwana_ loves to keep HKN investors abreast of what is happening on this thread.

Anyone over here interested in what the yanks think of HKN and Global might wish to take a look for what it is worth.

[wooster4] 12/3/2013 14:43

final results should be out in the next couple of months so hopefully an update of farmout progress!

[philo124] 12/3/2013 14:24

Thanks for the comments on the RNS, i've been out of house all morning.

[foreverhoping] 12/3/2013 13:58

Thanks for info Hyperboreus

[hyperboreus] 12/3/2013 13:41

Not really foreverhoping, more or less reiterating what any long-standing Global shareholder already knows to be truthful, the share price will only move sharply upwards as and when details of the farm-out disposal etc is finally announced and that cannot be far away now, it is just over 4 months since Jefferies were appointed and you would have thought that is just about enough time to get a deal signed and sealed, anyhow Mr Thompson's summary is as follows:

Changes in corporate income tax changes in Columbia have muddied the picture and we await an announcement from Global Energy on the implications for the company. The restructuring of $17m of loan notes this week, which have a repayment schedule of $1.5m every quarter until the final payment of $4.5m is made in June 2015, is tempered by the annual interest charge of 12.75 per cent and the 2 per cent refinancing fee. That said, these loan notes are not convertible into shares so there is no dilution to equity shareholders and the cash flow from operations should easily cover these debt payments.

But the key driver to spark a share price rerating to narrow the discount to book value will be a farm-out or disposal to monetise the value of the company's potentially lucrative Bolivar shale gas acreage in the Middle Magdalena Valley in Colombia. Ahead of news on this front, I am comfortable holding the shares at 96p and, if you followed my advice, the shares are still worth holding given the potential for a sharp rerating on any positive announcement.

[foreverhoping] 12/3/2013 12:53

Hyperboreus,

Anything new in update or just re-iterating the points made previously?

[hickersp] 12/3/2013 12:24

Oh, I do like Simon! Also a big fan of Dominic Picarda who tipped shorting the £ against $ a few wks ago. I am now sitting on a lovely open CFD position with a big paper profit :D) AND LOTS MORE TO COME if the chart comes true (£ forecast to drop to around $1.30)

[rcturner2] 12/3/2013 11:25

I see. Thanks again. I was confused by the wording of the rns.

[apatel21] 12/3/2013 11:22

He did not dissent. He is not allowed to vote as he a related party to the transaction due to him being a Director of HKN (the lender).

[hashertu] 12/3/2013 11:21

RCT. Are you referring to Mr Faulkner?
If so, he is a related (HKN) party.

[rcturner2] 12/3/2013 10:02

Thanks guys. Any views on why one director dissented?

[hashertu] 12/3/2013 09:22

RCT.
The interims to Jun 2012, note 8 give some background to the loans.
As to why they prefer, or have, to extend the duration I have no idea.

[lowflow] 12/3/2013 09:18

Today RNS was pretty expected even thou it doesn't really change anything. If you read Not 8 from 2012 Interim report you can see that the maturity date for the $5m note payable was in April 2013 (next month). So GED needed in any case to extend the maturity on this note payable and such event require the company to send out an RNS because its material information. Because both notes is payable to the same company it's not very surprising that they have decided to consolidates the two notes into one note. I guess it's good that they have added an amortizing schedule to reduce the debt level.

It's a bit funny with GED and its shareholders, because when most other E&P companies on AIM has outstanding notes which is getting close to maturity these stocks trades down on fear that the company will not be able to re-finance them. For GED it's the opposite, when they easily manages to refinance and extend the maturity to 2015 and announce it to the market the stock trades down while any other E&P company on AIM would trade up on these news.

So guys let continue to sell your GED shares so I can load up!


From 2012 H1 report

8. Long‑term and short‑term loans payable
On 31 January 2012, the Group closed a Fixed Rate Note Payable with HKN, Inc. ("HKN") for the principal amount of $12 million (the "Note Payable"). The Note Payable is not convertible into shares and allowed for the full principal amount to be available to the Company from the date of closing. The Note Payable is subject to an interest charge of 10.5 per cent per annum, payable quarterly in arrears, with the principal amount being repayable in full on 30 September 2013. The Note Payable is currently unsecured, but HKN can require Global
to provide adequate collateral security in the event of a material adverse effect. The Company also paid to HKN a 1.75 per cent transaction fee of approximately $210,000. The Company used these proceeds to redeem and
extinguish the remaining $9.5 million principal amount (and accrued interest) of its Convertible Notes and to accelerate development activities at its existing properties within Colombia. On 30 August 2012, the Group, as borrower, signed an amendment (the "Loan Amendment") to the Senior Secured Note Payable for $5 million entered into with HKN, as lender, on 14 September 2010. The Loan
Amendment extended the maturity date of the underlying repayment obligation from September 2012 to April 2013. In exchange for this extension, the Company agreed to increase the interest rate from 10.5 per cent per annum to 12.5 per cent per annum and to pay a one‑time 1 per cent transaction fee of $50,000 (see Note 13 – Subsequent events).

[morph7] 12/3/2013 08:49

I was just about to ask the same thing...

[rcturner2] 12/3/2013 08:36

Is anybody able to dissect this rns?

[rcturner2] 27/2/2013 12:47

I just picked up another 5000 to double my holding.

[foreverhoping] 27/2/2013 12:47

thanks for the info lowflow. need some news soon, and hopefully we should get some