Sovereign Oilfield Share Discussion Threads

[tsmith2] 21/2/2008 16:04

L2 anyone?

[tsmith2] 21/2/2008 11:48

I heard that someone was desperate to get out the other day and was happy to take 25% below the then price. MMs took full advantage and have been keen to make u pay for the shares ever since, so I suspect they are expecting news too.

[pbracken] 21/2/2008 10:47

SOGP has intimated that a sale of DDS is an option. MBO apparently is not on the cards, though the possibility remains.

Anyway, the company will need some pretty robust news on trading if the road back to 100p is not going to be long and hard. The present forecast p/e is around 10, but falls to 5 in 2009 and 3 in 2010. Given the bull market in oil services, I'd be surprised if the profit expectations were not achieved or exceeded.

[tsmith2] 21/2/2008 10:24

fraid thats all of the rumour that I have heard. It wouldnt at all surprise me if we got news and also the restart of the share buyback.

Its only the DDS operation that have proven to be trading disappointingly the others are doing well (esp Middle east) - so if anything we may have a disposal of DDS (DDS disosal - pure speculation on my behalf) but either way news is expected.

Given the ownership of shares by management - an MBO would be a distinct possibility

[pbracken] 21/2/2008 09:06

Can you elaborate, tsmith - on the 'news', that is; you're right about mms being short of stock - WINS bidding up for 10K.

[tsmith2] 21/2/2008 08:45

MMs seem short of stock and rumour has it positive news very shortly..

[tsmith2] 20/2/2008 07:55

maybe they may even flogg off DDS and we would have a leaner more profitable biz.

There I suspect must be another reason why the co is buying back shares - funds aren't reading the last statement an issue.

[pbracken] 19/2/2008 16:27

Interest on the debt is reasonable, especially in the light of subsequent credit restrictions. SOGP would like to raise more cash for acquisitions, but can't get it.

This business is making a decent EBIT on its fabrication division, with a turnover £70m. Its drilling division, turnover £25m, is at breakeven. So, a market cap of £6.7m is miserly in the extreme. I notice the buy-back auhtority has not resulted in any repurchases save a c250k tranche back in October. I can only presume the banks are calling the shots and refusing the expenditure. What we need is an update on current trading and an indication of how the company plans to improve the performance of DDS.

Good opportunity at these levels.

[tsmith2] 19/2/2008 15:47

someone must be pretty confident paying 2p above the asking price to get 8500 shares, not a huge amount but shows mm want a decent premium for a reasonable no. of shares..must be confident of being able to get more for them shortly especially when they don't like to hold many in SOGP..

[wassapper] 13/2/2008 11:19

the interest on the debt is very high if I recall correctly from Oil Barrel presentation last year - in excess of 10%??? Very poor cashflow this one is sinking fast.

[tsmith2] 12/2/2008 13:35

PUGUGLY - I think they have, its not the amount its whether there is sufficient interest cover that should concern you.

Management holds 60% so if I was them I would take the thing out via an MBO. The company no commenting can only mean no reason for the share price fall apart from someone trying to sell out and MMs making them pay a heavy price.

usually such selling is mistimed..

[pugugly] 12/2/2008 13:21

TSMITH2:- Not sure if they have sufficient cash left given the very high level of gearing - They have already appear to have had to renegotiate the loan if I have read the interims correctly. The MOS heritate is interesting.

[tsmith2] 12/2/2008 12:45

I suspect if there was any reason the brokers would have forced the co to put out a RNS, probably just a distressed seller. Now would be a good time to continue the share buy back..

[pugugly] 12/2/2008 11:51

Just come to have a look as one of the top loosers on the day - From the thread general view appears to be that has over expanded too fast and possilby some black holes on the accounts of coys taken over also some worries over heritage.

Could anyone who has followed closely please add any futher details thye may feel usefull - Gearing from refs looks very high at 125%pretax looks very poor, but broker (Stanley) had a buy rec in september.

edit: See from the interims debt has significantly increased

Net debt at 30 September 2007 was £29.9m. This is an increase of £13.7m, during
the six month period from 31 March 2007 (September 2006: £6.1m). The Group's
gearing ratio increased from 129% to 241%.

Anyone able to supply a view of or commercial history of the management?

[willz] 02/11/2007 12:37

The spread on this share has always been big (not being that big into shares i'm guessing this is because of the liquidity of them??) I think this doesnt help people want to trade in this stock because you need big gains to even recoup your money never mind make a profit.

[pbracken] 02/11/2007 12:07

The CEO as good as said he would dump DDS if he couldn't make it work, and the strategic review may recommend its sale. The two main shareholders want to offload stock in order to improve liquidity, but they won't sell at these prices - hence the effort (through the buy-back, and other initiatives yet to be disclosed) to get the share price higher.

[willz] 02/11/2007 11:40

Luchan, i agree, i cant believe how close this is to its NAV. I think a possible takeover and offload the loss making units like DDS and concentrate on core business of fabrication/survey would be the route to take.

I think they tried to run before they could walk and over-expanded not doing enough background checks on what they were buying into.

[luchan] 02/11/2007 09:15

Chaps,

surely a takeover target at these levels.

luchan.

[pbracken] 24/8/2007 15:11

Well, the market seems to have woken up (finally) to today's news.

[pbracken] 24/8/2007 08:33

Today's news is mildly positive.

Charles Stanley has upgraded its recommendation on the stock from ADD to BUY.

[pbracken] 23/8/2007 10:03

If SOGP can return the drilling division to growth, and management believes it can, then on this rating it is cheap.

The market reaction to what was an incidental change at the pretax level was well-overcooked. Forecasts for the current year have not been revised - that is, around £93m turnover and c£4m pretax profit.

The level debt remains a risk (currently at around £23m) and may increase if SOGP continues its expansion through acquisition (which seems likely).
The AGM will be interesting. The company will no doubt update the market on trading, and if it's any good the stock should rise nicely.

Keeping a close eye on this one.

[legallf] 17/8/2007 16:41

tmbling even more!!! It was a bad call to keep them a few month ago...

[willz] 13/7/2007 10:47

Nice write up and broker comment

[willz] 19/6/2007 12:37

Anyone any thoughts on how the results might turn out, good recent announcement regarding contract although i guess that will figure in next accounts