Valiant Petroleum Share Discussion Threads

[pyemckay] 08/1/2013 15:30

more institutional selling over the last week or so but it amounts to very litte indeed. there is a lid on the price now.

can see a bid of 480p max now but will the institutions buy it.

[ed 123] 08/1/2013 11:53

frazboy.

Agree Valiant is nothing like - in fact is a stark contast to Excite. Valiant has very strong cash flow for its market cap. I make reference to the neds because of course the chairman is a ned and the chief executive is absent, so the neds will decide. Their motivation should be the best interest of the shareholders as a whole. Effectively this means the large share holders, since they will be listened to. I could not imagine any recommendation being made by the board without sounding out the major shareholders. So, how keen are the major shareholders to sell out? What would they accept at this moment in time for Valiant's assets? If the offers are not high enough, then there's no deal.

utrecht_00.

There's nothing special about Valiant's tax losses (other than ring fencing).



Tax losses are worthless if there's no profit to set them off against. In Valiant's case there is a lot of profit coming through, so the tax losses are being used and have value in any takeover discussions.

Tax losses will not count as cash and should have a risk factor applied. There is no absolute certainty that Valiant's production will continue (although I've no reason to doubt it will!) Also, governments change taxation rules from time to time. Again I've no reason to expect any change here, but some small risk must exist. Also planned future use of tax losses needs to be discounted to give a present value. So, for these reasons a bidder won't allow the full value of the tax losses.

I threw in the full value of the tax losses above as a rough calculation, but omitted the value of 'other Valiant prospects', as a balance. Yes, very rough, but it gives a ball park figure. I think a bidder could offer £6.00 and make a good turn out of it. Small AIM oil stocks are out of favour and the company is inviting offers, so a discount should be expected. I'm back to that figure of £5.40 again. But, will this be enough? We'll see.

Edit:- I should add DYOR for anyone reading this. I'm not giving any advice.

[utrecht_00] 08/1/2013 09:46

Ed, are tax losses considered almost like cash at the bank and do companies actually consider them in the aquisition price? Thanks UT.

[frazboy] 08/1/2013 09:37

i have similar reservations to you Ed

on the surface this seems cheap, by any reasonable valuation metric

so how much sway do the NEDs hold (should be one vote per person)?

i am somewhat reassured by the institutional shareholding. this is not Excite energy

[ed 123] 07/1/2013 17:57

Yes, once again it was held down at the end of trading, and that after showing signs of strength today.

It took about £40,000 worth of trades in the last six minutes to bring the price down to an uncrossing loss of 3.25p on the day.

As can be seen, the weekend did nothing to molify my paranoia.

I'm still unsure which way this will go.

Had another think about Valiant's value ...

For a rough comparison, Trap paid about £13 per producing barrel 2P at Athena. Valiant had about 18 mmbo producing one year ago, if Causeway/Fionn were included. Subtract 2012 production of about 2.5 million barrels leaves about 15.5 mmbo. Multiply 15.5 by £13 per barrel equals about £200 million, plus 6.6 mmbo 2p at Crawford/Porter (say £30m? undeveloped), plus tax losses valued at $271 m last year (ie. £168 m).

Total around £400 million? (and that excludes other Valiant prospects) Divide by 41 million shares = £9.75 per share.

It makes no sense to me, for someone to be selling at around £4 per share.

I may yet be in for a bad surprise but, based on what I see, I must hold onto these in the hope/expectation that that the NEDs will get us something nearer £6.

[utrecht_00] 07/1/2013 10:40

looking at the share price this am, a few buys around the 408p mark all o trades and then an at trade of 26 shares at 400p to put a lid on things. Now there are two more o trades around the 409p mark but no movement in the share price Lets see if there is a small at trade to keep it down.

[ed 123] 07/1/2013 10:06

Well yes, I am guilty of low expectations here.

Maybe Trap and Valiant('s successor) will have another go at Orchid?

Trap to buy Summit's part of the Orchid licence.



Too small to affect the result of the Review, though.

[utrecht_00] 05/1/2013 00:48

of course they couldn't RNS us could they. Whats wrong with them?

I guess this is another step towards the bulking up route and pi$$ing funds down the toilet. No wonder its at 400p. A sale looking less likely.

[rolo7] 04/1/2013 23:05

hasnt vpp won iceland artic drilling licences along with fpm on teletext page 201.

[pyemckay] 03/1/2013 21:33

doubled my holding today, Valiant Petroleum is not worth £163m as off todays market cap although the market is valuing valiant at that today unfortuately. wild imo.

[utrecht_00] 03/1/2013 17:05

held back again today, when it looked like it was rising.

[ed 123] 02/1/2013 23:04

If the non-execs think the offers are inadequate they may go for the bulking up option.

Valiant (m.cap £165m) could afford to buy Antrim Energy (m.cap £60m). Then use the Dons/Causeway cashflow to fund the development of Antrim's 100% Fyne, Crinan and Dandy fields (2P 13.8 million barrels). Antrim has some good assets but not enough cash to pursue them all.

In 2011 Valiant lost $76m on failed exploration. Two years or so of losses like that would have been enough to have bought Antrim Energy.

As I said before, the decision may be close. PB was quoted in the FT as saying they were hoping to get the review complete by the end of 2012.

[utrecht_00] 02/1/2013 21:31

5 pounds would be a private equity rip off. You can't claim at 450p the company is undervalued and then try and buy it for less, or not pay a premium on that figure. I think 550p would do it.

[bbluesky] 02/1/2013 19:21

Directors bought at 360p or so over the summer, so I would be surprised to see the share beneath that ahead. Sadly, I too suspect, private equity rip off. Should it be called Strategic Review (Personal)?

[philo124] 02/1/2013 18:48

I think we are being stitched.

[ed 123] 02/1/2013 18:38

They've probably been infomally batting prices back and forth. I do think the US deal may crystallise an acceptable offer.

I think PB and party could do very nicely out of buying Valiant at 600p. It's a case of how quickly the major shareholders in Valiant want to get value out. If they can wait three years, then why take less than 600p? On the other hand, if they want to get out of Valiant without delay, then they might have to accept nearer to 500p?

A while back I guessed at 540p. That would be about 35% above today's close. It would be a good uplift for existing holders and a good price for the offeror.

If there's no recommended offer, then the share price is likely to fall in my opinion; the opposite of what the strategic review aimed for. That, combined with the downward pressure on the share price since the announcement, should (I think) conspire to produce a 'low' recommended offer - guessing 540p.

(As an aside, I'd like to know who's been doing the selling since the announcement of the review - but I very much doubt we'll ever be told.)

[utrecht_00] 02/1/2013 17:54

Ed, sounds plausible. Given the current share price though what level do you think PB will pitch at - as low as 5 pounds?

[ed 123] 02/1/2013 17:47

FWIW, some of my musings ....

The strategic review was announced on 6 September - enough time to have completed it?

PB has been involved in a bid for 6 weeks that we know of. I'm guessing the bidding party will be a private equity bid vehicle, who have approached PB to head up and share in the equity of the new business.

Normally I'd expect the funding to be part debt and part equity (say 50:50), but the banks are not in good shape atm.

Perhaps a contemplated bid has been on hold pending the outcome of the US fiscal negotiations. If no agreement had been reached, a global recession and lower oil price were distinct possibilitites. With that risk out of the way, a tentative offer could now be firmed up.

If there's no further uncertainty concerning Causeway, there could be a result soon.

[utrecht_00] 02/1/2013 16:22

I'd forgotten about that. In all the excitement of PB going off to cobble an offer together. I suppose we won't know the reviews findings until after PB will or won't make an offer.

[ed 123] 02/1/2013 15:56

Another determined burst of selling at around 15:20 hours today. That slapped down the buyer(s).

Rose tinted specs on, I can see why a buyer might emerge at these lower levels (400p), but why would a holder sell at 400p when s/he could have sold around the 450p level during the past 6 months?

We'll probably never find the answer. Does it matter anyway?

Still waiting for the outcome of the strategic review.

[utrecht_00] 30/12/2012 12:18

pye- I agree, at this price there's good money to be made if a) a low ball offer comes in of 5 pounds or b) if they soldier on at 11500 bopd and now no debt it will be higher than this next year.

bulltradingdept- whats a fib level please and what does it mean? TIA.

[pyemckay] 29/12/2012 19:47

its time to buy in given a 25% min return form here, time to raid my savings.

will put an order at 385 for monday.. only short trading session though.

this is a no brainer now.