Latin Res Share Discussion Threads

[ian.g] 22/2/2005 11:59

fusebox

You don't put money into a share like this based on fundamentals or track record - as you say, they don't have either.
This is a simple gambler's stock: it's like putting money into a cash shell with a share price two or three times NAV.
Logically it's ridiculous, so why would anyone do it?
1) you can afford to lose the money
2) you know that the share price will double or triple if the deals start to flow.
3) you think that the management are good enough to make those deals.

The slight dip in the share price has nothing whatsoever to do with Berkeley Wyatt. It's a direct response to the recent announcement, partially because Medco realised less than outsiders would have expected from the Apache sale, and partly because Lodore management are now exploring a different approach to the Medco North American assets.

Many people viewed these assets as a big heap of cash of unknown size, of which Lodore were entitled to a third of any value over 200m dollars. Medco have put them up for sale, so they were expected to be sold leaving Lodore with a pile of cash quite soon. Lodore's medium term objective is to build an oil/gas company (just as Dr Williams did successfully in Australia with Novus Petroleum), so the cash would be used to buy and develop oil assets primarily in the North American market which is Dr Williams speciality.

One of the four assets has been sold to Apache (I reported it on this board some time ago but Lodore only just announced it). The 'real' news in the announcement was that Apache had the right to buy that particular asset at a discounted rate under a buyback agreement, so the value realised was not very high. So some reaction to that was not surprising.

Secondly it is clear that the Lodore team are now investigating whether they can leverage their rights over the profits from the other sales to acquire some or all of the assets from Medco at a discount. So they would end up with the assets rather than a cash pile. This change in approach may also have helped the tick down as price tends to react badly to uncertainty or change in strategy.

Actually it makes sound sense - Dr Williams bought these properties for Novus some years ago, and knows them and their value and potential as well as anyone. Such a deal could speed up and simplify things for Novus, in that they wouldn't have to wait while other potential buyers did detailed assessments - Novus are known to want to dispose of these assets quickly. And it could save money and time for Lodore in that they wouldn't have to wait for the cash to come through then go looking for suitable investments elsewhere.

This was never going to be a safe easy ride for investors - if you want that, go elsewhere - but it's going to be interesting, and personally I think it will be rewarding - Dr Williams has a good track record, and he's got a lot of his own money in this company. DYOR etc...

regards,
ian

[fusebox] 21/2/2005 15:11

When u have a pump and dump outfit like Berkley Wyatt some time back involved that is one reason for the fall.

The other reason appaling fundamentals and the company may never make a profit cos its high risk and got no track record.

[imbigred] 21/2/2005 14:31

More worrying is today's tick down on the back of their announcement today. Has anyone out there got any idea what is going on in this stock?

[ian.g] 09/2/2005 10:21

hope todays little tick down isn't the response to that road-show ;-)

[imbigred] 07/2/2005 20:26

I beleive your right theboy. Lots of friendly isntos will hopefully be drooling to buy this after meetiing the cuprinol management. They do exactly what it says on the tin.

[theboy69] 07/2/2005 16:05

Excellant spot.hear there is a road show this week

[ian.g] 03/2/2005 13:52

Only spotted this today - a bit slow! but I'm pretty sure it hasn't been posted here before.

The fields referred to are the ones in which we have an interest when the combined sales value gets over $120m. Coastal Bend is also known as Padre Island (that's the name used in the GEM documents relating to the Sunov deal).

PT Medco Sells Novus' US Assets to Apache
AFX News Limited Friday, January 07, 2005

PT Medco Energi Internasional said its wholly-owned unit Novus Oil and Gas LP has sold its 30% stake in the Stratton oil field onshore Texas to US oil and gas firm Apache Corp for US $45.25 million.

The sales and purchase agreement was signed on December 31st and Medco was paid the same day, Medco said in a statement.

It said Apache is the operator of the Stratton oil field, one of several of Novus' assets in the US that Medco had put up for sale.

It earlier said that other US assets on offer include the East Cameron/Main Pass Gulf of Mexico fields located offshore of Louisiana, the Sorrento Dome field onshore of Louisiana, and the Coastal Bend field located onshore and offshore of Texas.

Medco acquired the US assets after it bought Australian oil and gas company Novus Petroleum Ltd for approximately A$350 million last year.

(1 usd = 1.31 aud)

Copyright 2005 AFX News Limited. All Rights Reserved.

[theboy69] 02/2/2005 15:13

Where's that prat fusebox gone?

[imbigred] 02/2/2005 13:18

15 bid. Long time since I seen you my friend. I'd like to think you will introduce me to your other friends 16 and 17 bid soon

[imbigred] 01/2/2005 08:15

Looks like the Sunov deal went through. See announcements. Sounds like good news

[imbigred] 31/1/2005 09:33

Don't know if it's of any use but it's the only news that has mentioned Lodore. Anyway here goes. Its from 27/01/05

"On Aim, corporate boutique Crosby Capital gained 1¼ to 23½p on chatter it will make about £10m from the sale of shares in Lodore Resources."

Link:

As the the great Sydney Youngblood once said. "All we can do, is sit and wait"

[ian.g] 28/1/2005 12:31

RNS Number:9324H
Lodore Resources Inc
28 January 2005


28 January 2005

Lodore Resources Inc. ("Lodore" or the "Company")

Proposed acquisition of Sunov Petroleum Limited approved by shareholders

The Board of Lodore is pleased to announce that at the Extraordinary General
Meeting held earlier today all the resolutions to approve, inter alia, the
acquisition of Sunov Petroleum Limited ("Sunov") were duly passed.

Pursuant to the Commitment, the Company is issuing 9,066,666 new Ordinary Shares
at 15 pence per share raising approximately #1.36 million which will be used to
meet the costs associated with the acquisition of Sunov and to provide general
working capital for the Enlarged Group.

As set out in the circular to shareholders dated 12 January 2005 (the
"Circular") and subject to admission of the Enlarged Share Capital to trading on
AIM, Dr Robert Williams, Martin Angus and Nasir Bukhari have been appointed to
the Board and John Leat has stepped down as a director of the Company. The
information required by paragraph (f) of schedule 2 of the AIM Rules concerning
the new directors is set out in the Circular.

The acquisition of Sunov is expected to be completed on 31 January 2005 upon
admission of the Enlarged Share Capital to trading on AIM.

Terms defined in this statement have the same meaning as set out in the
Circular.

End

Enquiries:
Lodore Resources Inc
Peter Kirkham
[phone]

Strand Partners Limited
(Nominated Adviser to Lodore)
Simon Raggett/ James Harris
[phone]

Fishburn Hedges
(PR Adviser to Lodore)
Andrew Marshall / Andrew Reid
[phone]




This information is provided by RNS
The company news service from the London Stock Exchange

END

[ian.g] 28/1/2005 12:20

bigred... 6 kods... 7 siblings...
you aren't a fellow scouser are you?
if so we can just go out and rob some food ;-)

[pomp circumstance] 28/1/2005 12:10

and i thought you were just Inbred!!!

[rambutan2] 28/1/2005 11:37

thanks for that ian.g.
i would tend to agree.

[ian.g] 28/1/2005 11:31

rambutan2

In the short term you've done better being in Crosby than Lodore. There's no doubt that it's a safer place to be, with Crosby taking some (approx £10m?) of their profit now by selling down part of their holding, in return for a reduction in the possible future profits of Lodore... a bird in the hand?

As I've said previously Lodore is very much a gamble, albeit a gamble based on a lot of expertise in the form of the directors.

fyi, here is the rough breakdown I've done of the figures - I know they aren't precisely accurate, but given the speculative nature of the numbers there's no point in calculating to a high degree of precision.

Lodore at 14p (before the deal was announced) was valued at £18m as a cash shell with £6.4m of funds - in other words the market was prepared to give a 200% premium to the share price based on their belief in the dealmaking ability of the directors. This looks somewhat overcooked, but is indicative of enormous confidence in the management team.

The Sunov deal values Sunov at £65m ($120m), and Sunov's only tangible asset is the North American rights - 35% of any sales income over $120m from the proposed disposal of the North American assets by Medco/Novus.

To decide whether the deal is a good one (and what the Lodore share price should be) there are 2 key variables: the reasonable share price premium over actual cash in the shell, and the value of the North American assets.

The notional benchmark price of the Medco/Novus assets is $120m, the early 2004 valuation was $155-200m, and the directors believe the current valuation is higher again.

Based on a share price of 15p, if you were looking for Lodore/Sunov to have actual assets/cash equal to its market valuation (no share price premium), the North American assets would have to be sold for $460m - in other words their value would have to have risen by over 100% in the last year.

If the value has increased by 50% in the last year, giving a value of $300m, Sunov's interest is $63m, giving a share price premium of approximately 100%.

If the value has not increased above $200m, Sunov's interest is $28m, giving a share price premium of 300%.

Based on these scenarios you can take your own view on the likely share price premium and value of the assets, and come up with a likely direction for the share price

My own view, based on
1) the amount of investment by Dr Williams and Crosby
2) the previous rise in the valuation of these assets
3) the cautious but confident tone of the statements which have been made
is that the valuation will be around or above the $300m mark, leaving Lodore at a 15p share price with a valuation of twice its assets: only half the pre-deal premium, and with room for a share price rise.

But we're in the land of ifs and maybes - on the one hand I suspect the directors are hoping for even better than that, and on the other Medco/Novus might not sell at all...

dyor, not for widows and orphans... all the usual cautions apply here in triplicate... but it's fun isn't it? :-)

regards,
ian

[ian.g] 27/1/2005 14:30

EGM tomorrow, followed (assuming all goes to plan) by trading commencing Monday in the enlarged share cap.

I spoke this morning with a representative of Lodore's advisors to clarify my understanding of the deal. He was very helpful, though obviously unable to provide any additional information on valuations beyond what has already been published. I did, however, get a strong impression that the various major shareholders in Lodore, and the shareholders in the enlarged company (including Dr Williams), believe the potential income arising from their interest in any sale of the North American assets could be significantly higher than the benchmark valuation and the early 2004 valuation mentioned in the documents.

as always, dyor.

regards
ian

[imbigred] 27/1/2005 11:00

All gone very quiet. No volume. The calm before the storm?

[ian.g] 21/1/2005 15:54

strange trading/price movement so far today - lots of sells, very few buys and rising price... T trade(s) to come later?

Maybe some people are starting to establish positions now ahead of the EGM and resumption of trading in the enlarged company (due 31 Jan).

Noticed earlier when checking RNSs again that while the original placing obliged participants to buy a further 1 share for every three original shares when Lodore did its first deal, that commitment is not necessarily binding with regard to this placing because this deal is slightly different to those outlined in the prospectus. Nevertheless, two director shareholders in Lodore have already agreed to participate in the 15p placing:
"Of the Directors, Richard Saltiel and Peter Kirkham have an obligation under the Commitment. Both Directors have confirmed that they wish to satisfy their obligation at this stage."
In other words the Lodore directors are happy to buy at this price...

[ian.g] 20/1/2005 14:49

rambutan2
Considered going into Crosby myself. It gives some exposure to the potential in Lodore/Sunov, but also they're doing a pretty good job of expanding their core financial business in the couple of years since Techpacific took it over and relaunched it.
However, decided that this is better for me. The fact that Crosby will still have at least 35% interest after the deal makes me confident that it's a good deal for all concerned, and that the share price will end up going a lot higher than the 15p placement price (though obviously that's more or less a cap at present).

[ian.g] 20/1/2005 14:16

deleted - duplicate post

[rambutan2] 20/1/2005 14:05

hi guys, im a holder of crosby. was attracted to it by all those names that ian.g mentioned. they no fools. of course, they might come unstuck, or get too clever for shareholders own good, but that unlikely imho. they are proven winners and im betting that they will take me along for the ride.