San Leon Energy Share Discussion Threads

[alaric7] 30/12/2021 07:08

and btw i don't believe for a moment that Midwestern are remotely interested on bidding for the whole company even if they could. and anyway the price Tosca and Oisin would demand would be prohibitive. it will be really fascinating to reevaluate the company's interests in OML18 and the ACOES after the RTO and with our then fully functioning pipeline. when Oisin originally put us into OML18 with Martin Hughes' backing, the oilprice was 27 bucks!

[alaric7] 29/12/2021 16:01

i'm happy with any price Martin Hughes will take or for that matter Oisin for his 9.5m shares. and forget any ideas of a squeeze out (a very old chestnut on this board btw). they'd need a lot more than 50% for that

[cd27idw] 28/12/2021 22:27

Re Midwestern holding more than 50% of the enlarged shareholding; doesn't that then means Midwstern has the right to make a bid for those shares it doesn't hold, i.e. the rest of the company? Assuming Toscafund gets an acceptable return via a combination of the dividend on its preference shares plus any offer for its holding, it would mean the end of SLE as a public listed company.

[alaric7] 27/12/2021 22:37

2 excellent answers from Rimau and Gary. i'm aware i'm repeating myself but shareholders, including dogsbody, should also take comfort from the thought that our major shareholder Tosca would be unlikely to back this deal if it were other than good news for us. they currently hold 72% of the company, so the deal doesn't happen without their approval.

[gary hindsight] 27/12/2021 15:31

Posted before I saw your answer but we have the same view obviously

[gary hindsight] 27/12/2021 15:29

I can't answer all you questions about the structure but for the dividends I think the rationale is as followsThe dividends that were promised to be paid to ordinary shareholders out of the coupon income that is currently on hold will now be paid out to preference shareholders only and not to the holders of the ordinary. So they won't pay a div on the ordinary shares (or maybe a smaller one) Hence any new buyers after the re listing won't be getting the income that's delayed due to suspension of the coupon. Only when that money is paid out and the pref shares become defunct will dividends resume on ordinary shares. The caveat is that of course they could pay out further dividends on the ordinaries If their is sufficient free cash flow. As I said in my previous post it's a way to protect existing shareholders and making sure they get the income they would have for if the coupons hadn't been held back

[rimau1] 27/12/2021 15:20

Hi Canis, I can help based on my understanding. Think of the preference shares as (old sle) and ring fenced from the proposed transaction. The preference shares will be issued to existing shareholders as we the shareholders expected to receive a significant cash return from the loan notes issued to MLPL. So over the next few years SLE will still reward us a return equivalent to what we expected in old sle, its a ring fenced bonus special dividend that you would not receive if you bought sle shares post transaction.
Then the transaction. Its a reverse takeover because we are funding the purchase of Eroton by issuing new shares to Midwestern (less the outstanding loan notes which will be cancelled and form part of our consideration). We don’t know the price that we are paying for effectively an extra 34% of OML18 yet but its likely to be in the range of $500m-$700m given historic valuations and the recent sale of neighbouring OML17 which is of similar size. This price is significantly higher than our marketcap and midwestern already own 10% of SLE so midwestern will likely end up with more than 50% of the enlarged share capital of SLE post transaction. Its excellent news because although we are heavily diluted our marketcap will more than proportionately increase so the value of our shareholding will be greater than today. This is truly transformational, happy to explain why but conscious that my response is very long! Hope this helps.

[caniscorpus] 27/12/2021 13:13

For me the following points arise from the 24th December update:-
1.We are told that eventually San Leon will have an indirect economic interest in Eroton of 98%. Eroton is the operator of OML 18 so somehow(not clear to me) profits hopefully generated by Eroton from OML 18 will eventually find their way to San Leon
2. One would normally expect that once San Leon has received its share of the OML 18 profits these would form part of its corporate funds. San Leon could then distribute these funds as dividends to its shareholders in the normal way. Why do we need preference shares to receive dividends to which we would already be entitled as ordinary shareholders? Who are these other shareholders over whom we would have a preference?
3. We are also told that these preference shares will entitle the holders to any dividends declared and paid by San Leon. If the dividends will have already been paid, how can they be paid over again to the preference shareholders. This is complete nonsense.
4.If a reverse takeover is involved which company is being taken over and by whom? A takeover normally means that a new entity is formed into which the assets taken over are merged. What will be the name of this new entity and will the present shareholdings now owned by the members of San Leon become converted into equivalent shares in the new entity?

As will be apparent to many this re-organisation is too complex for simpletons like me to understand. I would appreciate an explanation anyone can give as to where I am going wrong.

[1kempton] 26/12/2021 17:50

Fantastic post alaric,as its proves we are nearly there, ie having a larger part of a working,producing world class oil field, sle will also be in control of a larger part of the economics of oml18 through eroton and the pipeline which whoever uses it pays in advance for each and every barrel that runs through it..well done sle management.

[alaric7] 26/12/2021 12:04

people should remember that if the rto doesn't happen for any reason (i very much hope and expect it will now) then we will relist and Jite will then in short order have to repay the £99m plus interest for the delay, failing which we will enforce our security on OML18. moreover we will still have our 10.5% interest in OML18 and our interest in the ACOES. whatever outcome it is clear that OML18 and the ACOES will soon become massively more valuable, as Eroton is now fully funded to develop the field, following Jite's smart $750m refinancing with Afreximbank.

[1kempton] 26/12/2021 08:54

Can defo agree there Alaric regarding blueril, exellent poster

[alaric7] 25/12/2021 19:48

Red5 - i reposted the entirety of bluerill's post? what else can i add? he's on the other board and over time has been one of the most insightful and informed posters there

[red5] 25/12/2021 11:24

Thanks you too

[plasybryn] 25/12/2021 07:21

I think that poster might be on LSE. I'm not sure myself if that poster is significant. But anyway I'm pleased to read that progress is being made. Being suspended goes against the ethics and purpose of the stock market imo. The sooner this libo is concluded the better. Have a good one in the meantime. See you on the other side.

[red5] 25/12/2021 01:41

Not sure it needed to be that rude. I bought on the back of ic recommendation this one has been off for six months first time in 40years investing that has happened to me so kinda of nervous. Just trying to see what peoples opinions are but I tried to find the poster you referred to but could not fined him/her.

[gary hindsight] 24/12/2021 19:08

Red. I don't think there should be a significant negative price impact on the ordinary shares as such. However there could be some lag / discount applied by the market as they would now not be getting the dividend which was probably priced in to be received. You would of course get the dividend now on the pref share instead if you are an existing holderBut this is just my perception as now

[red5] 24/12/2021 18:16

So am I right in thinking that once re-instated that the shares being issued may drive the San Leon price down?

[red5] 24/12/2021 17:18

Where is blue till would you able to let me know in synopsis what he said

[alaric7] 24/12/2021 11:46

Red5, i think bluerill (on the other board) has answered your question as well as possible until we get to see the admission document itself in Feb: 'Oisin is using pref shares, as I suspected he would, to effectively return around half the cash that SLE2.0 shareholders were expecting. With the other half, he is of course creating SLE3.0 by buying assets, in the massive increases in its ownership of OML18 (and in the process making that ownership direct rather than indirect) and the ACEOS infrastructure, that by even the most poisonously cynical viewpoint, are worth many a multiple of $50/60m. Deal is shaping up nicely indeed.'
the other thing to remember is that this deal only happens with the approval of our major shareholder Tosca (72%). they are unlikely to approve if this deal would reduce the value of their holding.

[plasybryn] 24/12/2021 11:24

Thanks Gary.
Happy Christmas everyone

[dogwalker] 24/12/2021 10:45

Your moniker should be 'Insight' rather than 'Hindsight', Gary. Thumbs up from me!

[gary hindsight] 24/12/2021 10:31

Red5 These are new pref shares allotted to you that cannot be traded and will become worthless after the referred dividends are paid out. They cannot be traded and in theory should have no impact on the ordinary shares you already hold. The purpose as I read it is to reward existing shareholders as of suspension so they get the promised / expected dividends in preference to ordinary shares.

[brian1944] 24/12/2021 10:14

its starting to look good ? back in febuary 22

[1kempton] 24/12/2021 09:36

More interest in oml18 and new pipeline etc, great business