Good write up by Malcy. Even with my little 15 year experience on the market if you find a gem such as SEA, buy and sit tight. Trying to trade it will only end up losing the profits you made here on some dog AIM share.
Have built up a decent holding now close to 900k shares over the last 6 months and for me that's big as it is over a third of my cash invested here.
Good to see JM buying more |
Cor Menzies going all in :). About as bullish as it gets. |
So it was these three buys this afternoon.
52976@.3775
52965@.3775
52865@.3782
There was also a 250k@.3886 it wasn't shown as delayed so at the time of reporting it was under the buy column. |
 'Today’s announcements from Seascape confirm a fantastic farm-out of Block 2A offshore Sarawak, Malaysia to Inpex Corp whilst also landing a useful raise which will take the company through the completion of the deal and take them through to operational activity which in my view will make Seascape a hugely valuable company.
The mechanics of the twin announcements today make a great deal of sense and by releasing a good farm-out along with a raise that includes existing and new shareholders as well as a very decent injection from directors shows their confidence and giving skin in the game.
Seascape has impressed with its first rate relationships in South East Asia which have led to being awarded this very hot acreage when other, larger, more financially powerful companies may have expected to have been chosen. To have now made this strong deal with Inpex rewards the trust shown by the Government and will bring in a powerful partner whilst allowing Seascape to keep a stake in a potentially huge field and thus reward shareholders significantly.
To put this in perspective Seascape has a free carry on a huge well at no cost to them, costs are uncapped so they have no worries about costs going above budget and if the well should come in there is every chance that their 10% of a discovery could be a massive, company game-changer and that could see the company valued at a huge premium, either by the market or by one of the many E&P companies circling in the area. Also with such a good start, more deals or licences in such a good post code might be just the start for Seascape.
Readers will know that when James Menzies announced that the was establishing a long SE Asia/ short Norway policy back in June that I went all in, advising shareholders not to wait for any shilly shallying around and that a ten bagger was the very minimum from the 6p level then.
Now, having raised money at 35p my view will have to be changed as a run to 60p and that ten bagger is looking like too conservative a target. So, if the well was to come in I would expect a very minimum of 600p possibly more and so will set a shorter term target of 350p being a ten bagger from here. ' |
158k Director buy |
We had a mute share price reaction on the day of the Dewa award news and it was on the following day after the presentation that the share price took off.Have added a few about 38p as this is a long term hold for me with my average about 16p.Superb deal imo. |
That £250k pm spend that this twitter user mentions includes the 640k dollar spend on the DEWA |
He doesn’t really provide an opposing argument, rather that he’s not impressed or excited. An objective perspective would be useful, however I’m assuming as he doesn’t really understand the implications, his view is as it is.
If one were to say the value in this deal is not just the farm out, but the cash and hence potential? The potential to move the DEWA cluster forward, which will be cash generative in a relatively short period. The value to buy into a small producing asset to allow for cash flow? The cash, small share issue, DEWA cluster alone creates significant value. |
My buy just showing shows as a a sell at 38.6p |
Interesting post from someone I follow on Twitter providing the opposite side of the case. @riccardino999 |
'Uncapped carry' is also significant and shouldn't be underestimated, as it's easy for costs to exceed expectations. |
Great deal. Love the fact they've got a big chunk of cash to be paid out.I'm sure we'll find out more from the investor Call tomorrow.Cash |
back down to the placing price. looks like the market already priced in this deal, or thinks little of it. |
Most areas have been covered already, just want to add my support to SEA investors and BOD.
Excellent farm out. Great to see the BOD buying in to a minimal raise. Also raise done at the right time IMO to avoid any last minute hiccups.
Looks like we have a knowledgable poster (sircadian)on LSE from a geo perspective, worth a read |
In my view the deal is an excellent one. There remains enormous transformative upside. Trading a portion of that prospective upside so that SEA succeed in building a balanced E&P business with a range of near-term and longer-term opportunities some of which will generate cash in a shorter time-frame is a wise and prudent move.
The £2m placing gives SEA the cash to work on more value accretive deals in SE Asia. The deals done in SE Asia thus far demonstrate that their team can acquire high quality prospective acreage at low-cost and farm it out retaining valuable upside. Two farm-outs now to two high quality E&P companies within a year is great.
My guess is that SEA will have deals lined up to deploy part of the £10.5m effectively as soon as that money lands upon completion of the Block 2A farm-out. SEA don't control the regulatory authorities in Malaysia/Sarawak. The delay in the anticipated DEWA farm-out announcement by intra-government negotiations slowing regulatory consents showed that delays can happen even if the government is in favour of a deal. So it's very sensible of SEA to raise some cash now to fund their burn-rate while they wait for the farm-out cash to further build their business with more value accretive moves to come. |
Pretty smart move of Inpex to give Petros a free carry for its 7.5%.
Cavendish again...
A highly credible partner: Inpex is the largest oil and gas company in Japan, with global exploration,development and production in 20 countries. In 2023, Inpex produced an average of 630kboepd and had 2P reserves of 6.2bn boe.
Inpex has an established presence in Malaysia, with interests in three
PSCs offshore Sarawak, offering the potential for operational synergies with Block 2A. |
Agree nigel, far better for the long term to have the cash, keeps them nice and secure iunto the medium term now, this company isn't going bust and removes a large amount of uncertainty around the business. My hunch is that they have gone for the extra cash because they have more opportunities that will provide additional value add for investors, the presentation is going to be very interesting indeed. |
A lot of upside has been sacrificed for safety which is sensible but I think the deal is probably in line with expectations rather than being superb. |
They need the placing because they were going run out of cash. Simple as that. |
I guess this is why they needed the placing.
The Transaction is subject to partner and regulatory approvals and anticipated to complete at the end of Q1 2025.
Anyway could you imagine if that placing was done at 6p back in June.
Anyway at current share price the market cap. is £25.44m
-with £10m of that in cash.
-13-17mmboe in dewa
-10% in block 2A |
Very sensible way to do business. Gut feeling is that something else will be shortly on the table, probably find out a bit more on the third! |
Will be interesting to see whether those bigger players that took part in the placing, or other IIs, will be now looking to increase their holdings or get onboard following this news that brings more certainty |
Cavendish this morning ..
Seascape has successfully farmed out a 42.5% participating interest in Block 2A to Inpex, in a deal worth up to cUS$38m (c1.4x Seascape’s market cap). The farmout not only secures Seascape’s future, but also creates a platform for future growth, allowing Seascape to retain material exposure to the significant upside associated with drilling the 9Tcf Kertang prospect at nil cost.
We increase our target price to 85.0p, c2.3x the current share price. |
Must have read that rns wrong |
A very impressive result with the farm out. This allows them to continue with the DEWA cluster whilst waiting for the potential of Kertang at zero cost. |
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