Rheochem Share Discussion Threads

[rivaldo] 16/9/2010 13:42

Many thx for the L2 updates longshanks - most encouraging.

Please keep them coming when they look interesting as at present.

[longshanks] 16/9/2010 13:29

Offer RTP now at 8.475 - another 20K and we will see seismic movement I feel....

In theory LR2, because we have 7 MMs on the offer - it should be technically possible to fill an offer at 8.5p for their combined MMS (135K). The reason why that number isn't available online is because the RTP is given by the number made available to the market by ALL of the market makers at the "best" price possible within the quoted offer for online purchasing.

To prevent hundreds of orchestrated buys, when MMs are short of stock they deliberately restrict the amount available at the RTP. Hence, here we are getting limited to small amounts of just 10K at a time until someone takes the plunge and raises the bid.

[lr2] 16/9/2010 13:26

Just picked up the 10k for you, Longshanks.

Unfortunately, there's still 10k available but at a slightly higher price.

[longshanks] 16/9/2010 13:25

I hate getting excited by a stock - but 6 MMs (+1 on PLUS) on the offer at 8.5p and now just 10K shares available to buy online!!!

[longshanks] 16/9/2010 13:18

For those who are interested, it is worth noting that the 200d m.a. has restarted its upward trajectory...the 30d m.a. has crossed the 200d m.a. and the 50d m.a. is not far behind. Golden cross fast approaching....

[ducatiman] 16/9/2010 11:44

longshanks, you are putting a value of £50m on the muds business!! Surely not, with current market cap at £17.63m

[ducatiman] 16/9/2010 11:37

LR2, my thoughts too, while an e&p company may not want the muds business they could, as you say, sell it off and get a free ride on the other assets. Of course the company with its current valuation is certainly open to an opportunistic bid by an asset stripper.

[lr2] 16/9/2010 11:31

Thanks for your thoughts Longshanks.

It had crossed my mind that an acquisitive oil E&P company, with their eye on Zeus etc., might put in a bid for the whole company and then sell off the muds business to recoup the outlay required to obtain the whole of RHEP.

Reselling the muds business may very well give them the exploration side of the business for next to nothing with Athena income arriving in 12 months or so.

Would also provide the bidding company with an ASX quote too if they wanted one.

[longshanks] 16/9/2010 11:24

A takeover is always possible - but I doubt there are many oil E&P that would want the mud as well as Zeus or oil services companies that would want Zeus.

My instinct is that they have had an offer for the mud business that is very attractive and they are negotiating a deal. Australia is a burgeoning market for CSG (and Geothermal over the mid/longer term) and I think there is a scramble for market share by the oil service majors that could work to our advantage. Their foray into Indonesia and India will also be attractive I feel - especially the Indian JV that can source cheaper mud materials for them.

If they get £50m for the mud business - they can either look to sell the Zeus business too and return all cash to shareholders...or (and I think this more likely) they can develop the short term interest in Athena themselves and get all that cash flow to fund Metis and further North Sea opportunities.

Company could easily be worth £60-£100m in a years time (30-50p/share) and that is why we have such heavyweight institutional support IMO.

[lr2] 16/9/2010 11:05

Things change quickly around here. Similar to you now.

Now getting bid 350k, offer 35k. 8.098p - 8.25p.

[ducatiman] 16/9/2010 11:02

bid 350k offer 25k with my boys LR2, big difference.

[lr2] 16/9/2010 10:51

Buy 150k, sell 500k. Looks like much of the 440k sale had a home to go to.

Longshanks, would you expect a takeover bid to surface here?

[longshanks] 16/9/2010 10:42

440K sale and the market doesn't even blink!

[ducatiman] 16/9/2010 10:39

someone is certainly mopping up any stock that comes to market. Very interesting.

[lr2] 16/9/2010 09:25

Current on line limits are: Buy 35k at 8.193p, sell 250k at 8.09p.

[ducatiman] 16/9/2010 09:23

what are limits please longshanks? L2 better at 2v2.

[longshanks] 16/9/2010 09:21

Online limits back to being very tight on the offer. Looks to me like we have a sustained interest in RHEP that cannot be satisfied by the selling we have had over the last few days.

That 8p resistance looks like it may be about to go.

[rivaldo] 16/9/2010 07:40

Excellent long piece about RHEP on this investment blog from just a few days ago:



Extract:

"Conclusion

To conclude, Rheochem's oil services business has had a poor year thanks to issues outside of its control. But Rheochem has been around for quite a while, and has built up good relationships with its customers, which is why they expect to see these major contracts renewed over the next year, thus underpinning future revenue. Thus with the expansion of their oil services business into new countries and areas of business, and the likely return to normality in their current main country of operation, Australia, meaning revenue should be back up to normal this year (barring any other freak events like the floods of last year in Queensland). Assuming that Rheochem is just an oil services business, then on a current market cap of £17m, which would put Rheochem's oil services business on a P/E ratio of 9, they look good value, especially considering the fact that current assets cover all liabilities by A$5m. But if you take into account Zeus, which has been causing Rheochem to suffer a cash outflow of A$5m a year over the last two years, then things change.

But not for the worse as you would think, because Rheochem is unlikely to suffer any cash loss if they did lose the court case, with management stating in the notes that if they lose the case, it should not have any material effect on the oil and services business (though it would hurt the balance sheet, and cause them to likely suffer a large loss via the write off mentioned). Hence considering that the oil and services business is decent value at Rheochem's current market cap, Athena and the other Zeus assets are basically being thrown in near free. Hence with the Athena stake worth so much, if they can realise value for it, either via taking it to production, or selling it, the reward could be substantial. Hence for this reason, they still warrant a place in the potential company changing news section of 'Grays Stocks to Watch' (you can view 'Grays Stocks to Watch' anytime via clicking the link at the top of the page)."

[longshanks] 15/9/2010 15:07

looking at that 2 yr trend - we should be expecting some resistance at 8p. Looks to me like there is some opportunistic selling with an expectation that shares can be bought back at around 7p.


If we break 8.5p though, there is little to stop it flying north of 10p.

I am tempted to take profits myself - but I am only on 60% - and I want so much more......

[ducatiman] 15/9/2010 14:58

stock now offered though rivaldo at bid 50k offer 150k.

[rivaldo] 15/9/2010 14:48

500k sold at 8p, and not a flicker from the share price. Most encouraging.

[ducatiman] 15/9/2010 09:30

limits still strong at bid 250k offer 100k.

[ducatiman] 15/9/2010 08:43

very much under the radar still which is strange given the potential here. Someone could take these out, get their money back by selling the muds and have Athena and other assets for free.