Offshore Hydrocarbon Mapping Share Discussion Threads

[mr macgregor] 15/10/2010 00:56

If anyone can make the EGM it might be worth asking how second half losses are expected to widen from £2.8m to £2.8-3.3m when CSEM acquisition revenues improved substantially from £1.6 million to £4.8 million. Also how CSEM remains substantially loss making at the operating level. They say it's due to to the high fixed costs associated with leasing and operating the vessels. The nature of fixed costs is that they are known in advance so why couldn't they price the service to make a profit? Or is that no longer in the Harvard curriculum? Basically their busines model has been, since first listing, to subsidise oil companies for using their service with the liberal use of shareholders' cash.

Even after this spider's web of an agreement we'll still be left with a business that needs investment and can't cover its costs (service rump has been loss making for last three years). Oh, nearly forgot the assets. 98% of what's left is intangible.
Ah well, it's another day already. These OHM documents are always a good read/ laugh.

[mr macgregor] 15/10/2010 00:03

They're not really taking on debt as the company was always largely debt free (except there was the, ahem, stunning off balance sheet charter liability that nearly sunk it, but that was cleared by earlier rescue funding).
What they're taking on is required capex as Version 102 mark III(a)(ii) TDi etc. of their equipment apparently needs replacing.
What worries me is the following:
Pending Completion, in the event of a material adverse change in the business of either of OHM Ltd or OHM Malaysia the parties have reserved the right to terminate all agreements relating to the Proposals whereupon ETS would have the right to call upon OHM Ltd to repay the sums the subject of the Deferral Arrangements, subject to a grace period of 45 days in the event that the termination is at the election of the Buyer. The Company has provided warranties relating to the proper disclosure to the Buyer of any Material Adverse Change (as defined in the Sale Agreement) prior to Admission
which, if not complied with, would provide the Buyer with the right of redress for a period of one year.
Patent infringement proceedings, should they arise, would presumably have a material adverse effect.

[diamondsp] 14/10/2010 20:07

Aren't the concert party also taking on all associated debt though as well? Thereby paying a good deal more than $150,000?

[bookiebuster] 13/10/2010 17:00

Indeed it is actually quite a misleading RNS for the uninitiated

On the surface it says the concert party are subscribing for 20m shares at a 60% premium to the share price (woopy doo)

The reality is the concert party have obtained the bulk of the assets for £0.1m cash, at the same time paying £2m for 20m shares to prop up the parent company, which looks more like a zombie with each passing day

[mr macgregor] 13/10/2010 16:53

5dally, you're watching the bulk of your company being sold for $150,000 and you think it's nice. Are you insane?
Certain directors will be soiling themselves worrying about the shares they hold, pension funds and the smouldering papers that were once promising options. Not the two dodgy characters though. Never mind, they all saw to their pay packets. It's the workers that have been, and will be, made redundant that I feel sorry for.

[bookiebuster] 13/10/2010 16:27

On course for an operating loss of £9.5m

The year before that they lost £9m

This is not a viable business imho

[5dally] 13/10/2010 16:24

Nice RNS let's see us move to 10p now :-)

[deanroberthunt] 22/9/2010 20:03

shareholders done up like kippers yet again....

[mr macgregor] 22/9/2010 14:20

Where's robbo when you need a quick bit of analysis? Must have ditched these.

[mr macgregor] 22/9/2010 14:18

Yeah, wishful thinking.

[bones30] 22/9/2010 11:42

150k more like.

[mr macgregor] 22/9/2010 11:41

Anyone know what percentage of the current business we've sold for $150m. You there robbo?

[bones30] 22/9/2010 10:38

GWR: if you are reading this, what do you make of today's announcement, particularly WGT the patents which I have to admit to not fully understanding.

[gwr7] 15/9/2010 13:45

Excellent, market makers have made my mind up for me. Deleted from watchlist. I appreciated some of your posts; don't forget to turn out the light nicksig.

[gwr7] 14/9/2010 09:12

I've checked out Refs, they offer a free 7 day trial and I think I'll take them up on it when things are less frantic. The reason I think this stuff is out of fashion is that less discernment seems to be required nowadays. There are the most ridiculous positive correlations in price movements between stocks, sectors and asset classes you'd think it was all done by computer. You have to avoid the duds though as they get hammered.

[gwr7] 13/9/2010 15:38

Is Refs the product started by Slater? Used to be a book but I guess it's all online now. What do you think of the service you're getting? Has it led you to any bargains? I was thinking recently that Slater's methods were less fashionable these days but maybe it's time to take another look.

[gwr7] 13/9/2010 13:39

Oh I wouldn't pay for an individual subscription. As you say the expense wouldn't be worth it as its focus isn't on providing investment tips though you do get them indirectly. GKP gets a good write up this week as well. My employer subscribes. Your local city library might hold it. Nice tick up on here today. I have concerns clearly stated but I'm also a contrarian and the share is certainly bombed out and unloved. The froth has completely gone from what was an active board for example. Who knows, they may be able to strike a deal with EMGS to park the patent problem once and for all. I think a way will be found to overcome a temporary cash flow problem. Hmm.

[pugugly] 13/9/2010 07:45

GWR&:> €865 p/a subscription. About what I am currently paying for Refs. OK another reseach overhead but if it can lead me to another Encore probaly worth it but I am only a PI and not an institution nor working in the hydrocarbon E&P industry.

Under these circumstances, without any comeback against you, would you subscribe?
(I am assuming that you read thorugh a corporate subscription)

Thanks in advance.

PS I will certainly have another look at Electromagnetic Geoservices ASA as apart from anything else it could help with Sector and Geographic diversification

[gwr7] 12/9/2010 23:47

Yeah, I don't invest in OHM, mainly because I suspect they are infringing the patent owned by EMGS. Also their strategic thinking has been duff, their chairman (former CEO) talks a good game to hide what he hasn't got and I don't like companies casually dropping in the fact that they had a huge off-balance sheet liability which explained the need for rescue money before going bust. If their accountant is reading, us honest investors like a little clearer visibility on such things.
If you're interested, I recommend you take a closer look at EMGS which I think is an excellent recovery play. The $150m contract with PEMEX is huge by CSEM standards and this week's Upstream (first class read imo) remarks on them remaining optimistic of achieving profitability this year. Don't underestimate the alliance with the world's best seismic company either. EMGS have the inventors, first mover advantage, superior scale, more customers, extremely strong backers (Warburg) and a bigger order book. In light of that I can't think of a compelling reason to divert hard earned money to OHM but congratulations and thanks are due to the team involved in the excellent work over Kraken.

[pugugly] 12/9/2010 15:51

GWR7 Just popped over from the Nautical tread to have a look because of a comment there on OHM - However have read the whole thread especially your comments on the patent case reversal and the off balance sheet debt I have decided to avoid -

Many thanks for your incisive input.You have potentailly saved me a packet

As a matter of interest no one in this space appears to be making money for although Electromagnetic Geoservices ASA are up some 50% this year they are down over 90% over 3 years down from over 136 kr to 6kr

[gwr7] 09/9/2010 19:04

As I'm talking to myself again just thought I'd take a trip down memory lane with some posts from 5 years ago. Funny how a lot of it is still relevant today and what about the innocent reference to Rockhopper just after the little penguin had hatched.


emptyend - 14 Feb'05 - 22:29 - 86 of 1155


I've been taking a passing interest in this company and its competitors. Would anybody be in a position to summarise for a non-techie what the core of the patent dispute hearing is about? In particular, how solid is OHM's case compared to its two competitors?

And when is some result expected from that hearing?

TIA

ee

bomfin - 14 Feb'05 - 22:37 - 87 of 1155


I notice Dr Jungels has another company farmed in to Desire's Falklands blocks today. Wonder if he'll recruit OHM's services?. If not why not?



GWR7 - 15 Feb'05 - 20:29 - 88 of 1155


Yes, I noticed Pierre Jungels is chairman of a recently created company called Rockhopper Exploration. They're unlisted and I've no idea about the state of their finances but they're funding 30% of the drilling costs of three wells in blocks licenced to Desire, who seem keen to press ahead with drilling in locations already chosen on the basis of 3D surveys. I can't see them using CSEMI as they're too far forward. It would have been interesting if they'd combined CSEMI with 3D but I suspect it's too late.
As for the patent dispute it's over entitlement to two patents that OHM benefit from. I've heard it's a complex case and could be months before a decision is made.

emptyend - 15 Feb'05 - 20:39 - 89 of 1155


Which two patents, may I ask? And who is contesting them? Is it Schlumberger or the Warburg Pincus -owned outfit?

CaptGuns - 17 Feb'05 - 17:56 - 90 of 1155


GWR7 or anybody else for that matter.
Could this CSEMI technology be used for a site survey or adapted to do one??
Hi resolution and side scan type survey??

GWR7 - 18 Feb'05 - 18:58 - 91 of 1155


ee the key patent number is GB2382875. There is also WO 03/04 8812, effectively the same patent but administered by the World Intellectual Property Organisation. Statoil the Norwegian State oil company are disputing entitlement. Well done with SOCO by the way.
cg the technology is proven in deep water, more research being undertaken for shallow water application. Site survey usually done in association with seismic. Try www.ohmsurveys.com for information on source/receiver alignment. The technology is good and I wouldn't mind betting Exxon benefitted from it with their Angola discoveries recently announced. Too many risks surrounding this company for my liking though and they will have to run very hard to justify their current rating, which will be difficult on the back of two profit warnings.

emptyend - 19 Feb'05 - 09:35 - 92 of 1155


GWR7,

Many thanks for the info. Interesting that Statoil are disputing - because they sold their operation [EMGS] to Warburg Pincus [the private equity group] early last year. Did they retain the patent? I doubt it, unless they licensed EMGS in perpetuity. There is a good article I found on the web but have lost the URL which mentions that Exxon's Angola run is at least partly attributable to OHM's work for them [about which they have to be contractually silent].

My own view is that the technology is a very interesting one but, partly in view of the patent issues, it is far from clear that OHM can be the ones to clean up. Nevertheless, I'll be keeping half an eye on it.

Thanks re SIA - so far so good :-)

By the way, does anyone know where the ships are at present, please?

rgds
ee

[gwr7] 09/9/2010 08:08

You still here bones? I reckon I scared everyone away.

[gwr7] 09/9/2010 08:07

At least the Nautical Petroleum successful Kraken appraisal well is positive.

[gwr7] 03/9/2010 13:25

Small rise, perhaps on the back of EMGS news.