Lochard Energy Share Discussion Threads

[falklands] 30/5/2013 18:03

You have always talked nonsense full stop. If I am so wrong why the heck have I stopped this offer dead ? I have a room full of accountants I do not a need an Internet one.

Corn hill respect my views and agree with them as do the other members.

Lhd is worth 9p if lhd can get to Dec 2013 producing oil re cash on balance sheet by then.

[7kiwi] 30/5/2013 18:01

Your talking nonsense on what you said you thought it was worth, and you know it.

I've worked out the 2013 numbers, based on their accounts. The calcs they came up with were based on the forward oil price curve. The actual numbers will of course depend on the actual oil price achieved.

I know Cornhill will have done some sums. But, at the moment, it is PMG putting their hands in their pockets for the the money (or the shares they are offering). It seems no-one else is prepared to dig deeper into their pockets at the moment. If Cornhill are so convinced that it is worth much more, and they can still might make money by buying LHD at a higher price; why don't they put their money where their mouths are and put together their own bid?

[falklands] 30/5/2013 17:53

Well it depends on cash levels and getting to December 2013 9p target always said shorter term lower the offer.

Calculations depend on oil price cost cutting so not sure how you have worked out 2013 six forward months ? Or last six months in 2013 not published yet ?

However 5p 5.5p offer is undervalued Cash only or shares Do you think corn hill capital has not done the sums it's not just myself ?

Come back in Dec or if an offer is agreed meantime.

[7kiwi] 30/5/2013 17:53

The accounts are as of end Dec 2012. So, the money due in 1 year (i.e. 2013) is as I've described, and the money due after one year (i.e. after 2013) will be c. $13.3m; so you were wrong to assert that the debt outstanding at end 2013 will be $7m.

Yes, I've assumed a bit more in admin costs than the run rate in the 2H 2012 results, but the advisors on this deal won't have been cheap so will add to the run rate.

[7kiwi] 30/5/2013 17:47

Falklands,

I don't need to know what's going on behind the scenes. All I said was if the bid fails, I would expect the share price to fall in the short term, but then probably rise in the medium term.

I certainly think my valuation of 4-6p has been closer to the mark than your 9p musings.

We'll see what transpires.

My prediction fwiw, is that if the bid fails the share price will fall in the short term to 4p or so, maybe a bit below. Might get back to 5-6p by Xmas, assuming all continues to go well with Athena.

[falklands] 30/5/2013 17:41

Kiwi you don't know whats going on behind the scenes I do and you could if you phoned Adam it's not in my interests or action group to show our cards.

But I tell you this offer is dead and unless Tom comes up in cash with a reasonable offer it will not be voted through

[falklands] 30/5/2013 17:41

Those accounts are 6 months behind you do know Clive cut costs mind you how long he will be there if he goes on upsetting holders is questionable.

[7kiwi] 30/5/2013 17:37

Falkands,

Exactly, if I value it at 4-6p, why would I invest unless it was trading somewhere in the 3p range?

On the debt, according to their own accounts, they expect to have about $13.3m of debt still to repay at the end of this year:

US$ 000's
Within 1 year.....11,715 Paid in 2013
Year 1 to 2........7,636
Beyond year 2......5,655
................----------
..................25,006
................----------

(Note 8)

Valuation at end year. Let's say they get £1m/month (less say £3m full year admin ex's) all year. That would add a net £9m to the balance sheet. But if the asset keeps producing at 10,000 bopd, then they will have produced 3.65m barrels, leaving ~1.13mmbo net to LHD (again reduced in value by the ongoing 20% gross revenue charge to Gemini). Might give a total value of £20m or so. But there's a time value of money element to take into account.

[falklands] 30/5/2013 17:27

If I recall you said you would not invest in lhd unless 3p.

I can make or break deals on lhd as I have proven all you need to do is phone Adam and he will tell you the target share price and forthcoming events.

However when the cash is worth the cap year end 2013 debt reduced to $7m do you think lhd will be worth 5p ? No

If I recall you told me on the desire thread that oilies are your hobby, keep it that way and let non bent holders in the city sort this out not Internet chat rooms. I am interested in lhd holders interests not hendersons bent interests or connected families.

[7kiwi] 30/5/2013 17:25

Finally, the LHD board probably wouldn't have recommended the offer from PMG if they thought there was an alternative, higher bid waiting in the wings. Of course, it doesn't mean won't transpire, but it makes it unlikely in my view, given the formal sale process has been going on since September last year.

And remember Henderson also sit on the board, and have pledged their shares to this.

[7kiwi] 30/5/2013 17:18

Chrisoil,

Look at it another way.

On TRAP analysis, there's ~15mmbo total 2P recoverable in Athena (less recent production). To get to the IAE declared number of ~25mmbo, they need to drill (from memory) 1 more producer and two more WI wells. Let's say that's $100m of capex as a guess.

So, now LHD have 1.5mmbo (less 20% of gross revenues). If the sale price of the oil is at $100/bbl, and the opex is say $25/bbl; then instead of receiving $75/bbl, LHD only receive $55/bbl because they have to pay Gemini the rest of the loan. So, the value of each barrel is less than it would be to say TRAP, IAE or Dyas. Let's say that the reduction in value might give say $16/bbl for these developed producing reserves instead of $20/bbl (which is about what TRAP ended up paying Dyas for their 15% share). That would give a value of the 1.5mmbo of say $24m or £16m (or not far off the current mkt cap) or c. 5.3p. Typically companies trade at a discount to the take out price.


If you take the 2.5mmbo gross 2P, you might get $40m. But from that you'd have to subtract LHDs share of the development costs, or $10m, giving $30m or £20m (or 6.5p/share), and of course the TRAP buy-in price took this into account too. I would think this is a very top end valuation because of the risks and uncertainties around the new development.

I seem to remember putting a value on this of 4-6p a few months ago,and I don't see any reason to move from that, unless and until cash on the balance sheet starts to outstrip the sp; then it would be appropriate to value it at cash plus remaining reserves. 9p is pie in the sky at present.



addict, of course PMG have confidence in the future cashflows; and they've valued those future cashflows at their bid price, to reflect risk, the time value of money and the desire to make money out of the deal.

[addict] 30/5/2013 16:46

Parkmead must have confidence in the future cashflows from Athena otherwise how can they justify a bid.That being the case,makes sense to hold out for more since as others have said,the cashflows will likely dwarf the share price in a matter of months.

[falklands] 30/5/2013 14:11

So kiwi with the cash being produced by year end will be worth more than cap at PE under 1

Secondly phone Adam if you did he would tell you the plan I am keeping mum at this point but 5.5p is too low

[7kiwi] 30/5/2013 13:58

ut,

I would suggest it was at 5.5p on bid speculation.

If the bid fails and no other buyer is around, then I would think any bid speculation would evaporate and hence the price would fall. It was sub-4p in Feb/March.

[utrecht_00] 30/5/2013 13:48

Kiwi, the share price was 5.5p before PMG's offer last week. Why would it not go back there? 1 million pounds every month coming into the bank. Its worth more as an independent organisation.

[7kiwi] 30/5/2013 13:45

Interesting position.

However, I would caution holders to be careful what they wish for.

It doesn't look like Cornhill are going to make their own offer. Moreover, it appears that in the past months since the company put itself up for sale, no-one else has made a better offer than PMG. If an alternative buyer was in the wings, they would most likely have come out of the woodwork by now.

So, if Cornhill block the t/o, in the short term at least, I would think the share price would fall on the basis that no other buyer believes it is worth more to them than PMG think it's worth.

In the medium term, the price could rise, as the oil flow turns into cash. But also think about the extra development effort required to access the additional reserves in the field.

[au24] 30/5/2013 13:32

Keep the faith lads watchful for the trap.

[wbodger] 30/5/2013 13:28

Thanks, good old chris. Seriously.

Still watching and holding, and will certainly reject. I'm willing to bet TC is already looking at Plan B. But who cares anyway, get real TC if you want the company. (This not going to enhance his reputation, it is a very different situation from DEO.)

We could have sold for 4.99 cash in the market at any time in the last two months!

[utrecht_00] 30/5/2013 13:03

Yep past 24%. Soon past 25%.

[falklands] 30/5/2013 12:40

I think thank good old chris is in order !

[falklands] 30/5/2013 12:25

guys its way past that phoned adam cornhill its 24% plus

[utrecht_00] 30/5/2013 12:07

GS- time for PMG to up the bid, someone else to come in, or let LHD just keep piling in the cash. With cash at bank and current revenues, there will be the equivalent of current market cap in the bank by the end of the year.

[giant steps] 30/5/2013 12:03

Seems clear PMG may not get lochard on current basis
given 20.37% against (25% to block)

Cornhill Capital Limited Group To Reject Parkmead Offer For Lochard Energy

RNS 30th May 2013

[utrecht_00] 30/5/2013 12:03

Falklands- the number should be past 25% now I would think.