Nautical Petroleum Share Discussion Threads

[r4282] 13/6/2012 13:22

Cairn Bids $645M for Nautical Petroleum

[scalpface] 13/6/2012 13:13

Where next?

This begs the question of 'where next?' in the sector, and specifically in the North Sea heavy oil business. There's an excellent debate going on right now on this very subject on the Fool's Oil & Gas – Companies discussion board.

The big pull for Cairn seems to be the Catcher licence and the prospects of further reserves, which could be good news for Premier Oil (LSE: PMO), which bought another Foolish favourite Encore Oil at the end of last year.

Meanwhile, Sterling Resources (YSX: SLG) is popular with many Fools, particularly due to its interest in the Cladhan North Sea prospect.

Shares in my own favourite, Serica Energy (LSE: SQZ), continue to languish at 24.6p, but I remain hopeful that a larger predator may see value in the ring-fenced tax losses, cash and assets that include licences in the North Sea.

Xcite Energy (LSE: XEL), whose Bentley field is one of the largest undeveloped fields in the North Sea, is also a potential target.

Looking further afield, Lansdowne Oil & Gas (LSE: LOGP) has already been flagged up by my Foolish colleague Roland Head, though he felt that an investment in SeaEnergy (LSE: SEA) might be the way to go as it is cash-rich and owns 24% of Lansdowne.

And elsewhere, Northern Petroleum (LSE: NOP), Petroceltic International (LSE: PCI), Aurelian Oil & Gas (LSE: AUL) and Bowleven (LSE: BLVN) have all been suggested as potentially tasty sprats for bigger fish. Place your bets please!

[lanaken] 13/6/2012 13:10

PMO have got to be on some oil companies buy list with their growing production profile and overpaid management;-)Catcher seems to feature a lot on the comments about Cairn taking over NPE and PMO have 50%, not 15&.

SIA is just a question of when and I suspect the premium will be greter than 50%, maybe a fair bit greater.

I just swapped a little bit of NPE and dumped some QED at a loss to buy a chunk of PMO.

repo

[scalpface] 13/6/2012 13:06

Imo xel, lowest this year 75p and you get more shares for your money, simples. I have both and feel I got shafted by the EO. takeover as I'm floating near break even..

[bugsmoney] 13/6/2012 12:13

I am probably the only one unhappy here.

Had to sell 60% of mine in the last few weeks to fund a house purchase...thinking that there was unlikely to be a material update for several months.


Still overall it's been my best investment back from the days of 20-30p

Looks like Cairn picked them up on the cheap - nothing like having cash when others are selling.

Where to put the profits though - XEL, PMO, SIA?

Bugs

[westmoreland lad] 13/6/2012 11:44

Fox Davies ----------------

Cairn Energy (CNE LN, 266p, ▲ 1.4%) - Nautical Petroleum accepts Cairn buyout offer: Flush with the cash generated from the part sale of its Indian assets and limited drilling success at Greenland raising questions over the cash deployment strategy, Cairn has hit the nail on the right head with the acquisition of Nautical Petroleum. Nautical's portfolio of oil and gas blocks perfectly blends with Cairn's strategy of balancing its transformational exploration portfolio with appraisal and development assets. The latest acquisition complements recent acquisition of Agora and will help Cairn in building a strong portfolio in North West Europe. Amongst all the Nautical assets we are particularity excited about the Catcher, Burgman, Kraken. In this news:

Under the terms of the Offer, Nautical Shareholders will be entitled to receive 450 pence in cash for each Nautical Share held.
The Offer Price represents a premium of approximately: 51.1% to the closing price of 297.8 pence per Nautical Share on 12 June 2012, the Business Day immediately prior to the date of this announcement; and
45.3% to the average closing price of 309.8 pence per Nautical Share over the three month period ended 12 June 2012.
The Offer values the issued and to be issued share capital of Nautical at approximately £414 million.

The full story can be accessed here.


North Sea Oil in Play? What the recent acquisition of DEO and Nautical prove is that there is a growing gulf between the markets and trade buyers of assets. Taking a handful of North Sea players, and looking at their current reserves, and adding contingent resources (those recoverable resources post appraisal but before development sanction or commercial terms have been agreed), we have provided a brief ready reckoner for potential take out prices for a selected number of companies, all of which show an interesting gap between current price, and potential take out value, particularly Antrim, Ithaca and Premier Oil, which are currently trading at undemanding levels.

Company Current price Reserves + Offer price

Appraised Resources $5/boe $8/boe $10/boe $12/boe
Antrim Energy 43p 23mm boe 39p 63p 78p 94p
Ithaca Energy 110p 91mm boe 110p 176p 220p 264p
Lochard Energy 10p 49mm boe 62p 100p 125p 150p
Premier Oil 359p 357mm boe 212p 340p 424p 509p
Tullow Oil 1,477p 1,943mm boe 676p 1081p 1351p 1622p
Valiant Petroleum 420p 25mm boe 190p 304p 380p 456p

[cashandcard] 13/6/2012 11:25

Well done to all holders. Its getting closer to project development decision on Catcher, clearly all the main players getting their stakes sorted.

Bwanabanana 7946#, 30 well development on Catcher? Sounds quite a chunky development.

Cash

[steelwatch] 13/6/2012 11:14

Will focus minds for sure.

[westmoreland lad] 13/6/2012 11:07

a much needed stroke of luck Steel. Unfortunately one of my smaller holdings.

FPM next ?

[gwr7] 13/6/2012 11:04

Patience paid off. Thanks for your helpful posts steel. Whoever gets our Catcher and Kraken assets will not be disappointed. The guys have read them like a book.

"You plant your seed and wait for it to grow. Could be quite a long wait but the result will be good."
Some seed you've got bomfin. You only planted it yesterday morning!!!

[steelwatch] 13/6/2012 10:54

westie - yo da man ;->

[westmoreland lad] 13/6/2012 10:47

Imp -- Westhouse Research [mailto:[e-mail]]

[impvesta] 13/6/2012 10:41

Good stuff westmoreland lad. Which broker is that quote from please?

[leedskier] 13/6/2012 10:35

steel, brilliant BB ... always spot on with your many contributions too ... good luck with your hold for a higher bid ...;

[westmoreland lad] 13/6/2012 10:23

NAUTICAL PETROLEUM
Strong Buy

Cairn announced this morning that it was making a recommended cash offer of 450p per share for Nautical Petroleum. The offer values Nautical at £414 million. The parties intend the offer to be effected by was of a Court sanctioned scheme of arrangement. The offer price is at a 51.1% premium to yesterday's closing price of 297.8 pence.

We consider the offer of 450p somewhat undervalues Nautical. Nautical has a 25% partially carried interest in the large Kraken field, a 6% partially carried interest at the Mariner field plus a 15% interest in the discoveries in the Catcher area and an attractive exploration portfolio plus £70 million balance sheet cash. We value Nautical on a commercially risked basis at 762p per share and have a target price of 550p per share. We consider the offer values the company at Kraken, plus Catcher plus cash but excludes value for Mariner and the risked exploration portfolio.

Nautical is an attractive "off the shelf" portfolio of pre development assets poised for Field Development Plan coupled with material exploration upside. It would be attractive to established North Sea companies looking to consolidate their reserves position and we would highlight Statoil, Maersk, TAQA, Canadian independents and Kuwaiti National Oil Company as amongst potential counter bidders.

Cairn's offer for Nautical comes hot on the heels of the acquisition of Agora Oil and Gas. This signals a shift in Cairn's strategy from high risk high impact exploration to a more balanced and derisked portfolio of development and exploration assets.

Given the exit of EnCore Oil, Agora oil & Gas and Deo Petroleum as part of the North Sea consolidation story we see a potential read across for other established North Sea independents such as Ithaca, Antrim and Valiant as acquisition.

We maintain our STRONG BUY recommendation on Nautical with a Target Price of 550p.

[impvesta] 13/6/2012 09:45

"Its good its an all cash bid"

Not so good if it triggers a CGT liability. A shares in Cairn option would have been good.

[silverbackalpha] 13/6/2012 09:43

It should be trumped I would say. Its good its an all cash bid.

Catcher licence.

[steelwatch] 13/6/2012 09:38

Nick Copeman of Oriel Securities said:


Cairn is clearly attracted to the Catcher licence and the prospective of further reserves and resource increases post further exploration and appraisal. It also gives Cairn a 25% stake in the Kraken development project, 6% in the Mariner oil field and a 100% (Enquest 50% option) in the Ketos prospect.

We had a risked net asset value for Nautical of 435p a share, so we don't see Cairn as overpaying and, if anything, the price may leave the door open for a counter offer.


However Andrew Whittock at Liberum Capital said that Cairn would have to back up its reasons for paying the price it has come up with:


This is a surprise move and Cairn will need to justify premium paid for what looks like a package of developments, rather than exploration. It shows industry sees value in North Sea players – should be good news for Enquest and (less so) Premier Oil.

[p o n a] 13/6/2012 09:27

CNE have paid £4/barrel ($6.4/b) (exc the cash) for NPE's 2C resource

[glyn10] 13/6/2012 08:58

Steel, do you think that is realistic? Can't be many potential buyers?

[lanaken] 13/6/2012 08:44

525p?

Would that be enough? Anything under six quid is a bargain longer term, but cash is king at the moment, so longer term goes out the window for all but the deepest pockets.

repo

[steelwatch] 13/6/2012 08:33

Disappointed if this isn't trumped.