San Leon Energy Share Discussion Threads

[hpcg] 09/7/2022 13:40

Carcosa - a lot has changed since they were suspended. As others have said the oil price is up, but in addition Nigeria is massively under-producing on its OPEC quota, and OML18 has a reasonable export path. Secondly the deal, which did not exist at the time of suspension, unravels a horribly complex crossholding structure. This makes understanding the company much easier. Thirdly we become a fully trading company rather than a lending company.
The deal is entirely in the hands of Martin Hughes, and I don't imagine he will act out of his own best interest. There is risk in that for us minority holders because his interests and our interests are not identical. If it falls apart then presumably we foreclose on the loan and take assets. Possibly not easy in Nigeria.

My own analysis is still ongoing.

[red5] 09/7/2022 11:50

Just Wondering if san leon could reach £10

[red5] 09/7/2022 11:37

IC had good article on african crude - titled Renewed focus on Africa in global oil and gas rush

[red5] 09/7/2022 11:35

Alaric 7 i do believe more in line with that synopsis - no way was hike in oil prices factored in.

[alaric7] 09/7/2022 11:05

chances of the RTO completing? carcosa says 'I would say close to zero.'
i might have some sympathy with that view if San Leon were viewed simply as an Irish/ British company but the RTO, into which our Nigerian partners have also put much blood and sweat over the last year, will change all that. we become a majority Nigerian owned vehicle with highly influential Nigerians involved. Jite Okoloko is hugely respected in his home country and rightly so. Harvard educated and a former Ernst and Young young businessman of the year, he now becomes a really important figure in the Nigerian economy. the Nigerian government is desperate to get the onshore marginal licences operating efficiently again, so they can at least reach the Opec quota. it goes without saying that hydrocarbons are the most valuable parts of the Nigerian economy. i don't know yet if the Admission Doc states whether Mutiu Sunmonu will stay on as Chairman. i do hope so. as a former head of Shell Nigeria, he is of course a big figure in the regional market with connections both political and financial. personally i think this thing has now got way too much momentum to falter. and that would be particularly embarrassing for President Buhari, who has put much personal and political skin into seeing investment come into the marginal licences (and all the betterif that has a foreign element). such things matter a lot in Nigeria. carcosa may be right that the share price could come off on Monday, as investors and traders like him go for the exit, after this extended period of suspension, but long term value holders have not waited this long for the great news yesterday to pack up now. and i believe we will see new funds moving in to pick up bargains from those leaving. much has changed, not least the price of oil, and i gather the barges they are likely to be using typically each hold 10000 barrels. moreover it is simply absurd to suggest that the previous share price already reflected some upside potential it barely covered cash and secured debt. even at 10.5% of this world class license, we were barely valued as an explorer and we certainly aren't that. there are many things to happen in the remaining months of 2022 but they are all very positive things and there is simply no business reason in the present context to suspect they won't

[carcosa] 09/7/2022 06:15

What has actually happened to the company since last year?

Nothing. It's effectively the same company today as it was last year and to a certain extent the share price already reflected potential upside prior to the shares being suspended (they were never cancelled).

What is being suggested is a highly complex deal requiring an awful lot of items not under the control of SLE to fall into place in a timely manner scheduled to be completed some months into the future. Realistically what is the chance of that happening? I would say close to zero.

Lets say, for sake of argument, Malcy's thoughts are correct about valuation i.e. x4 current share price. That is the belief of of the valuation post RTO. How much would an investor be prepared to pay today for those shares knowing full well that the deal could be scuppered for any one of a 100 reasons and the almost running certainty that the deal, if it goes ahead, is likely to be delayed? Notwithstanding that operational risks remain sky high post deal.

If current shareholders really believe in the story then they would be fools to sell for only a 200% gain on Monday when they could double their money again before the end of the year. They sell because they know the risk going forward means that of the deal collapses their shares are likely worth very little.

In reality it's all about risk premium. On that basis I would be extremely happy for Monday's closing price to be +20%

When the 'Supplementary' prospectus is published later this year then potentially a 100%+ increase in the share price could be warranted; but not before then IMO.

Of course I hope I am wrong and Monday's share price action is considerably better than I expect because I would definitely want to sell most or all of my current holding.

[leopoldalcox] 08/7/2022 22:50

Don't forget when the shares suspended, the price of oil was much lower. Taking that into account, I am hoping for higher than 60p

[pastyman3851] 08/7/2022 21:11

My guess is 60p, quadruple the holding in oml18 but double the number of shares in play, take off that we've used the loan/interest to cover some of the payment. But in good old SLE fashion, it'll shoot up but then start to come back down slowly to the 40p. My only concern is that we had about 10% and haven't received any payments from oil sales, will that be the same at 44% as as far as I can remember, no payments will be made until some old government fees are paid up and we've been waiting years for that to happen with no end in sight. At the moment we seem to have swapped a good steady income stream for a hopefully excellent one but with the possibility that we'll have to wait until the old government debt is cleared.I do hope for great things from the lion but I've been here over 10yrs and I've seen so many of these transformational deals done and my initial 13p in old money (£13 per share) now worth only 40p (hopefully more on Monday) that I'll live and hope :)Good luck to all the other SLE shareholders and bad luck to CT and every other deramper

[gary hindsight] 08/7/2022 21:01

Wish these people spamming boards with trading strategies on bit coin and the like would sod off.

[red5] 08/7/2022 20:50

so anyone hazard a guess on what the price might be monday yes i know the market will tell us but would be good to hear some predictions.

[gary hindsight] 08/7/2022 20:42

Agree it was poorly written and no punctuation so the quote from Oisin flowed straight into comment about quadrupling the value so can't tell if that was part of the quote or not

[hpcg] 08/7/2022 19:49

I'd take Malcy's views with a pinch of lard. He gets one thing wrong anyway, the onshore part of the pipeline is used for the barging operation so there is either no wastage or the same wastage when the full pipeline is in use. Do your own analysis, which thankfully we have the weekend for.

[gary hindsight] 08/7/2022 19:26

Will see Monday morning if market agees and how much is discounted due to outstanding risks of non completion

[gary hindsight] 08/7/2022 18:14

Is the comment about quadrupling the value part of the quote of Oisin or Macy's view?

[red5] 08/7/2022 18:09

God willing should say

[red5] 08/7/2022 18:09

God willing should say

[red5] 08/7/2022 18:06

Good willing make 300k on top of of the invest of 100k

[pejaten] 08/7/2022 16:52

Great that the listing will be restored on Monday

[pastyman3851] 08/7/2022 16:46

Monday we'll all find out by the looks of things

[philby1] 08/7/2022 13:04

Macy's comments,

After a long wait this truly is a transformational move for SLE and will indeed ‘consolidate and simplify the Group’ who will now be exposed to a 44.1% initial indirect economic interest and will own 50% of ELI.The CPR gives them 2P 323m barrels, an NPV of $1.1bn.

As CEO Oisin Fanning said to me this morning, ‘now the real work begins’ on SLE which has massively increased its assets and with current economics, in my view quadrupled the value of the company. I would suggest that this serious rerating will put the new combined group up there with the best in the industry.

On an operating basis the company are going to physically gain much more crude oil in two ways, the pipeline is very important and scheduled to be ready maybe by the year end thus almost totally minimising the ‘leakages̵7; which presently add up to some 40%. In the meantime the company has started barging operations which will also significantly remove the leakage.

Perhaps more importantly for shareholders, who have been waiting patiently during the long suspension, they are going to get a right to the substantial cash flows inherent in this deal via an issue of Preference shares. As I see it this ensures that it does as it says on the tin by giving these shareholders a preferential right to the first $40m of any future dividends paid by San Leon.

Inevitably there will still be a number of questions that need to be answered such as when the shares will return from suspension, I would expect pretty soon, when Government approval will come through, hopefully by September/October.

I have been a strong supporter of San Leon in recent years as I believe that when they stated that they would return 50% of free cash to shareholders that amount of money could mean that the company will yield over 20% on an ongoing basis. There are still things to clear up such as free float and timings of some parts of the deal but as the shares return and the markets gets it the share price should rise significantly.

[red5] 08/7/2022 10:57

So what facts do we agree on has there been a time set to come back from very rough reading i could not see any?

[hpcg] 08/7/2022 10:44

Gary - the pointer to the going concern statement is clear in indicating that the situation is improved post transaction.

Included within the basis of preparation note of the financial statements and Independent Auditor's report are details regarding material uncertainty related to going concern. This is uncertainty is mitigated by the transactions announced today. Cash and cash equivalents as at 31 December 2021 were US$7.6 million (includes US$6.8 million restricted and held in escrow for the Oza transaction) (31 December 2020: US$18.5 million including US$6.8 million restricted and held in escrow for the Oza transaction).

So most likely we are dependent on production and the barging operation. It would be good if the pipeline opened at the end of this year too of course.

[a0469514] 08/7/2022 10:39

I think that the scary sounding risk statement to the effect that the viability of the company could be at risk if the deal does not go through is in there to make sure that our shareholders vote the deal through when the time comes. It is pretty obvious which way the vote will go but they will be required to state the risks just in case.Xylos