Gran Tierra Energy Share Discussion Threads

[gdasinv2] 30/12/2010 07:51

25p traget in short term. Very niche business p/e is very good, it was unnessary down when AXA sold 4.5million holding at a throw away price, it was rediculous.

[bozzy_s] 30/12/2010 07:33

Disagree that it was a desperate sale 6Kenny. Trading for Q3 shows a tiny loss of $0.2m (H1 net loss $3m, 9m net loss $3.2m as per announcements).

Also if it were a desperate sell-off, the company wouldn't have got 3 times it's market-cap for a tiny non-core underperforming subsidiary.

I am still very pleased to have found these yesterday, and very bullish having read, re-read and re-re-read the recent announcements. Especially the forced AXA sale which caused the share price depression in Oct 10.

[6kenny] 29/12/2010 22:40

I suggest you read tonights posts, it is pretty apparent that they need cash immediately!

[tomoslewis] 29/12/2010 22:33

Rally pleased with how trading went today. I am sure that the decision to sell this division will give the company a greatly needed period of stability where there is no challenge on funding. This will allow the market to recognise the true value here.

[6kenny] 29/12/2010 22:22

The lack of response to what I think are valid points picked out from todays RNS is quite telling and suggests that most 'recent' posters are only here for a few pence or so.

jwe, that cash burn is quite telling...why the hell so much, I wonder how much goes towards paying all of those middle/senior managers? (see 34 of them in the link below)



The cash burn rate also explains why they WANT TO KEEP the proceeds of todays sale because if they paid off the loan notes they would soon need funds.

A strangely run company IMHO.....BUT I think the end result will be a takeover at circa 25-40p by a much larger player who knows how to run a business.

[jwe] 29/12/2010 20:11

They also seem to have run through $7.8m of cash between 30.6 and 30.9(see interims)
Any bullish replies?

[6kenny] 29/12/2010 20:06

because....THEY NEED THE CASH

[knowing] 29/12/2010 20:05

Use of proceeds

Under the terms of the Loan Notes GTE is required to apply the proceeds from the Asset Sale in repayment of the Loan Notes. GTE, however, is in discussions with Loan Notes Holders about retaining the proceeds from the sale of the Assets.

[6kenny] 29/12/2010 19:59

I am the first to admit that I do not have a good grasp on GTE but I know empirestate and others do so I would appreciate their comments...

I am not being negative but those later comments in the RNS stuck out like a sore thumb to me...

Worse case scenario I guess could be the sale of the whole company which ain't a bad thing for us share holders and also intrguing that it was mentioned as an option!

net debt will be key, it must be substantial as they are finally looking to reduce costs which IMHO is a long time coming as usually it is the first thing you do...not the last!

No more jobs for the boys here...

[jwe] 29/12/2010 19:54

Kenny-I`ve just been looking over this and those are my thoughts.Why after receiving $14m plus just over $2m from the old agreement with P&W in January are they not paying off the loan notes(paying 15% interest in some cases!)and are STILL looking for more debt financing.This does not seem to make sense.I fear net debt @ 31st Dec is going to be a lot more than some might expect here.
Any thoughts?

[6kenny] 29/12/2010 19:48

I said this before and I will say it again. It does seem to be a very badly run company, remember I posted a link ages ago with a list of mug shots of all the senior managers/directors....WAY TOO MANY IMHO...way too many!!

A cynic would say that this was a necessary fire sale and that GTE is not yet 'out of the woods'.

This is evidenced IMHO by the fact that reference is made to a 'sale of the company'.

Why else would they consider selling the company (NOT FOR GROWTH!!)....or perhaps they have had a few 'unofficial' approaches and are just covering their asses for when they RNS an official approach?

Quite an intriguing RNS when you pick it apart and I would appreciate the views of the longterm holders please?

so 3 options

1) equity investment (for growth...makes sense)

2) further debt financing (for growth makes sense)

3) a sale of the Company. (a random option to say the least!!)

[knowing] 29/12/2010 19:36

Growth Kenny

Strategy update

-- Following the sale of the assets of the aviation business, GTE will continue to focus on investments and resources for the development and commercialisation of performance enhancing solutions for gas turbines in the power generation and oil & gas sectors

-- GTE's cost structure will be re-focused on sustainable profitable growth of these core product lines; an extensive cost reduction programme is underway to lower the cost base and eventually generate free cash flow

-- GTE will also continue to build its aftermarket service capability in the repairs and combustion tuning areas, where it has leveraged its technical depth - resulting in two major longer term service agreements with leading power generation companies

-- The outage service team which joined GTE in mid-2009 will leave GTE and return to its previous employer, where the core business focus is on-site labour/outage services as opposed to technology solutions at GTE. In 2010, this team generated approximately US$6.3 million in revenue and US$1.5 million in gross margin. GTE will continue to evaluate the most appropriate mix of aftermarket services and alliances in 2011, consistent with its focus on core growth

-- Effective 4 February 2011, Thomas Wagner, GTE's Chief Technology Officer will be retiring and will be offered the role as technology advisor to GTE's Board of Directors. We would like to thank Tom for his past contributions to the GTE team

-- GTE continues to explore options for new long term investment from existing or appropriate strategic investors, or through strategic partnerships

[6kenny] 29/12/2010 18:38

empirestate,

What is your take on this little bit?

"The Company also intends to seek further funding and in this regard will explore all available options including, without limitation, equity investment, further debt financing or a sale of the Company. There can be no certainty that any further financing or a sale will be achieved."

[6kenny] 29/12/2010 18:21

It would appear we have some way to go.

[jakleeds] 29/12/2010 18:17

Yep bozzy it's the most common investment mistake - holding onto losers forever and taking a quick profit on shares that go up, done it myself many times.

Out of interest Simon I take it you are still a holder in these?

[bozzy_s] 29/12/2010 18:01

Thanks Simon! I have put a plea on the AGL BB, where more than 1 person suggested AXA were selling off a fund, to provide evidence. That would, I'm sure, explain the share price collapse from 9p to 4p in GTE.

I'm delighted to have bought these with a 6-month view. They remind me of OCZ 2 years ago, a technology I deal in through my business - memory upgrades. I bought at 5p, sold at 9p a week later. They delisted from AIM, went to NASDAQ and are now over $4 a share. Would have made me a 1/4 millionnaire from a tiny investment!

[twozuluzulu] 29/12/2010 17:54

well i am in good profit now ,have held on and its paid off.
has been well oversold, perhaps we can get back to sensible levels. gla

[simon cawkwell] 29/12/2010 17:53

bozzy_s,

Know a lot more than you? I wish.

I am very uncertain as to what gives now. However, I intend to telephone the GTE powers that be and see what gives.

Simon Cawkwell

[bozzy_s] 29/12/2010 17:45

Another snippet of info just found. AXA were forced sellers of 4.5 million shares in October, forcing the price down from 9p to 3.5/4p.

It would appear this was due to the liquidation of one of their portfolios. I have another stock holding (AGL) which also slumped as AXA sold. I will try to get citation that it was indeed a liquidation of one of their funds. A few reliable sources on the AGL BB said as such.

So it would appear that GTE's share price came under huge pressure as a consequence of 4.5m shares being dumped onto the market at 'best' price.


If anyone else can help to confirm this, it would be much appreciated. I'm sure the author of this thread knows a lot more than me!

[bozzy_s] 29/12/2010 16:37

Very happy with that performance. And quite fairly it doubled in price on the news.

Hopefully this evening and tonight people can take a breather and digest the implications of today's announcement. I have only just noticed, at the 4th or 5th time of reading that the disposal was of -

'GTE'S technology and intellectual property' for non-core business


Thus, further to my earlier suggestion that the balance sheet value of $6.5m could be split $4m intangible assets / $2.5m tangible, the implication for the above sentance suggests the vast majority of that $6.5m would be capitalised R&D intangible assets.

Which is great news going forwards. It means the $10.6m profit on sale will almost all be added to the balance sheet at tangible assets.

[jakleeds] 29/12/2010 16:34

Interesting article on The Fool about GIM, the major shareholder:

[jakleeds] 29/12/2010 16:26

End of day profit-taking only to be expected given the rise, but this will be tipped in the next few days/weeks and those selling at 8p will kick themselves.

Some good changes at board level, several delayed contracts will start to come through, extensive cost cutting which will result in a leaner meaner growth company.

Fillyaboots on any dips would be my advice, the chart looks great.