Valiant Petroleum Share Discussion Threads

[ed 123] 07/9/2012 09:30

Management would prefer a merger? Would look at new geographical areas?

Take a look at the merger of PCI and MRS (ok, not completed yet) - doubled the individual companies' size and each gets new geographical areas - but then look at the market's response to the 'good' news.

Merger, anyone? Nah, not for me, thanks.

[aleks_atanasov] 07/9/2012 07:43

Valiant for sale after lack of North Sea success



Valiant plans to join North Sea deal rush

[eipgam] 06/9/2012 20:18

Not Brewin Dolphin anymore. Seperate co now.... and getting seperater

[utrecht_00] 06/9/2012 19:21

brewin dolphin- clowns Lol.

[eipgam] 06/9/2012 18:51

N+1 Brewin downgrades Valiant Petroleum from hold to reduce, target price increased from 398p to 414p.

eh??

[utrecht_00] 06/9/2012 14:16

forget a merger Pete, just sell the company to the highest bidder. You've tried to build a bigger company, it hasn't worked.

Valiant For sale 650p ONO.

[aleks_atanasov] 06/9/2012 13:50

--Hopes to conclude review by end of 2012
--Believes Company isn't fairly valued
--Ideally looking for merger to create value
--Has a $271 million tax rebate on U.K. production

(Rewrites throughout. Adds chief executive's comments and updates share price in the last paragraph)

By Iain Packham

LONDON--Valiant Petroleum PLC (VPP.LN), a North Sea-focused oil company, prefers to seek a merger partner as part of a strategic review to grow the company and maximize shareholder value, its chief executive said Thursday.
"We decided to make this a formal process with a specific timeline to evaluate all the options that are open to the company, firstly to find ways of closing what is a substantial gap between our share price and the real intrinsic value of the company and secondly to use the platform that we've built to seek further growth opportunities," Chief Executive Peter Buchanan told Dow Jones Newswires in a telephone interview.
He said the company would like to see the review concluded by the end of the year and hasn't taken any options off the table, including acquisitions, or a sale or partial sale of the business, but would prefer a merger. "By the end of the year, we would like to have had a range of conversations and hopefully an opportunity to realize where we can see that that will further increase and improve the strength of the company and may well mean that we go into another geography," Mr. Buchanan said.
He said the company isn't valued fairly and there are many other companies in the same boat.
"If you were to combine one, two or three of those companies, I think you would end up with a stronger company. Bigger companies tend to trade at a fairer value, as such, so by becoming bigger, you tend to trade at a less of a discount or in fact potentially a premium,"
"Unless we do get a very, very compelling cash offer, our preferred option would be to merge with another company to create a stronger portfolio and there are all sorts of other options, including strategic alliances," he added.
Mr. Buchanan said that often a company starts a formal process like this due to a weak financial position, but noted that Valiant launched a formal process to open the company up to a wider market and potentially to companies and offers it wouldn't otherwise have heard of. He said that due to its strong financial position, Valiant is likely to receive a lot of various offers.
"We have a lot of production, we have a lot of cash flow and we're obviously looking at... maximizing value for shareholders."
"We basically wanted to broaden the net and look at all the options and obviously, hopefully, come out with a transaction that will lead to a company that's in a stronger place," he said.
He also noted that Valiant has $271 million in U.K. North Sea tax losses that puts it in good stead for potential deals, as any potential acquirer or partner could be able to offset the losses against past or future taxes on production. "We have a huge amount of tax losses, which just in terms of the share price, is a significant amount of value per share," he said.
At 1240 GMT, shares were up 18.25 pence, or 4.0% at 478.25 pence, in a slightly higher AIM index--up 0.1%.

[ed 123] 06/9/2012 12:26

FWIW, my own guess is that Enquest will eventually buy Valiant. Guessing there will be a cash offer for those who want a clean break and shares alternative for those who want to continue.

There is a lot of overlap between the two in terms of assets held, so Enquest can increase their percentage of assets they have good knowledge of. Also Enquest will be able to use Valiant's tax losses.

Enquest's own share price is 'low' atm. If it stays around 115p, I'd guess that the cash/shares would value Valiant at around 625p.

Cairn and one or two others may be interested but could they offer as attractive paper for those who want to continue?

[utrecht_00] 06/9/2012 12:20

Kim- alot I expect, they haven't nailed down the exact date to drill it I believe although it sounds like they have secured a rig. they haven't farmed it out because the BOD have been sitting on their hands for some unknown reason.

It hardly matter now as they won;t be independent by year end.

[kim_clay] 06/9/2012 11:15

"VPP's best prospective drill is Handcross due to be drilled in 2013 so anyone buying it gets dibbs on that."

How much to drill Handcross....why haven't they farmed it out?????

[utrecht_00] 06/9/2012 10:52

lanaken, well its trading on a p/e of around 3.

it pumps around 7500 bopd and gets $115 for each one.

It has spent a lot on exploration but an acquirer would not have to so you could just pump the oil and get your money back on the purchase in about 2.5 years.

There are deferred tax losses which a purchaser can just use to offset future revenue in effect offering a massive discount on the purchase price.

VPP's best prospective drill is Handcross due to be drilled in 2013 so anyone buying it gets dibbs on that.

It generally throws off a lot of cash over the course of a year.

Low debts I believe.

Hope that helps.

[lanaken] 06/9/2012 10:47

I don't hold and haven't followed VPP that closely but can someone explain explain where the unlocked value is?

repo

[utrecht_00] 06/9/2012 10:39

pye- I'd be guessing that if you cut through the words its a sale that Morgan Stanley have been instructed to get. The deferred tax losses should prove attractive for an acquirer.

If it goes for anything above 600p then there still good money to be made from these levels.

[pyemckay] 06/9/2012 10:24

i would support a merger with faroe or someone of similar size as they have a similar profile as valiant but wouldnot support a merger with someone like serica who have no production and only have projects that are non financed. A sale at anything oround 700p would be fine too.

[utrecht_00] 06/9/2012 09:33

Ed- well, finally it happens. The BOD realised they can't unlock the clear value there is and have put it up for sale. Its the right move and I congratulate the BOD for doing it as it probably isn't easy selling your baby that you raised.

Aleks/Phil, I was in Cove, they announced their own strategic review (basically auction to sell the company) in Dec of last year and they got their first bid endish of Feb, 3 months later. There was a bidding war that took the share price to over 125% of its pre strategic review price.

So what could we get here, well, its significantly undervalued. If you didn't spend any more on drilling and just ran it into the ground its worth many multiples of the market cap, but we are in odd times.

I'm going to say its will get taken out at 650p.

[aleks_atanasov] 06/9/2012 09:14

Valiant Petroleum Hires Morgan Stanley to Examine Sale, Breakup

[o1lman] 06/9/2012 08:59

Causeway costs up by $25 million
Posted 06.09.2012 08:41:16 av John Bradbury

Development costs for the UK North Sea Causeway and Fionn projects have been pushed up by at least US $25 million.

Causeway operator Valiant Petroleum says the combined cost of Causeway and the associated Fionn project has increased from a projected $175 million to between $190 and $200 million due to higher rig rates in the region.

"The combined Causeway and Fionn project is now anticipated to be completed at a net cost to Valiant of $190-200 million, compared to the $175 million previously projected," the operator reported today. "The cost growth has come from higher rig rates in 2013 and unusually poor weather impacting across all offshore activities in 2012."

Valiant operates Causeway with 64.5% and the field is still on track to come onstream in the fourth quarter this year. Fionn – which received development consent only in August this year from the UK's Department of Energy and Climate Change - is to follow in mid 2013, using some of the Causeway infrastructure.

Completion and hook up of water injection wells at Causeway has been rescheduled for 2013 but this will not impact plans for first oil later this year, Valiant indicated today.

"The water injection well will now be completed alongside the Fionn offshore work allowing some cost sharing. In the context of a difficult rig market, Valiant is pleased to have secured the necessary slots to complete both of these activities early in the year," the company states.

Valiant agreed to provide bridging finance to partner Antrim Energy to fund Antrim's 35.5% share of Fionn pre-development costs, and Antrim can choose to either pay these costs with interest, or opt out, which would leave Valiant as 100% owner and operator of the Fionn development.

Meanwhile Valiant is also working on the Porter and Crawford field developments in the UK sector of the North Sea. Valiant also operates these fields – with 29% - and with its joint venture partners had decided to abandon the previous development plan set out by Fairfield Energy and instead new screening studies have commenced for these prospects. Joint venture partners are now considering a "broad range" of development option from surface to subsea solutions, and Valiant has signalled that a time frame for a fully supported plan may go into next year.

[churchill2] 06/9/2012 08:56

How about a merger with Faroe.

[aleks_atanasov] 06/9/2012 08:07

PHILO124 - yer , it was a bidding war there for Cove

[frazboy] 06/9/2012 07:48

ignoring the strategic review (possible slight share price premium)..

good news

Don SW rate of 7500 net to VPP in July & Aug (pre shutdown)
Anticipated H2 production levels

bad news

increase in debt (expected given CAPEX, drilling and production fall off)
Causeway water injector delayed till early 2013
Causeway delayed till early Q4 (been here before)

it appears fairly neutral, not sure how the market will react, possibly an share price mark up this morning for the possible sale

[philo124] 06/9/2012 07:47

Or do i have to hide behind a cushion?

[ed 123] 06/9/2012 07:46

Utrecht_00.

Your patience has been rewarded. :-)))

Our takeover expectations have almost been realised.