WTI $59.20 +77c, Brent $64.39 +$1, Diff -$5.19 +23c, NG $2.33 -9c
With no company news on Friday I was justified in waiting for the day, as the best news came from Opec late in the afternoon as the KSA added to the already better than expected deepening of cuts to 1.7m b/d by adding a potential 400/- b/d to make cuts of 2.1m b/d. Opec + will meet again in late March to assess the situation at an extraordinary meeting.
Predator Oil & Gas
Predator, through subsidiary PGVL has announced that it has executed a Rig Option Agreement with Star Valley Drilling for the Guercit permits onshore Morocco. The option is to 31 Jan 2020 and provides for a rig mobilisation date with a window of 15/3/2020-30/4/2020.
The plan is to drill Moulouya-1 prospect to a depth of 2,000 metres which is expected to take up to 30 days. Completion of the first well will release $1m of PGVL’s $1.5m bank guarantee with ONHYM. The option with Star allows PGVL to extend the programme by drilling either an appraisal well or a follow-up exploration well to capitalise on the reduced costs of having the rig available.
This is a smart move by Predator, it is cost free until at least 31.1/2020, it has a firm drilling window and the release of the ONHYM guarantee adds to working capital. Also creating efficiency is that as the rig is in country working for SDX mobilisation costs are kept low and there is the potential for drilling partners to contribute dis-proportionately to further exploration costs as the EIA has already been completed.
The company is aiming at multiple gas targets in the first exploration well – which could open up for the first time the Tertiary gas play in the Guercif Basin in a prospective area covering over 1,000 sq. km. Previous drilling had focused only on deeper Jurassic targets which were easily defined on old seismic and gravity as large anticlines. Success on these targets would be transformational for Predator not just in itself but as the licence is close to local infrastructure and its high domestic prices potentially very profitable indeed, 2020 looks most exciting for the company indeed.
Rockhopper Exploration/United Oil & Gas
Confirmation this morning in an Abu Sennan update that Rockhopper will receive cash of $11.5m and 115m odd shares at 3p which is 18.5% of United’s share capital and subject to certain lock-up and orderly market provisions fora period of up to 12 months from completion.
United has said that its suspension has been lifted this morning (the shares are down 22% at 3.125p) having raised $6.25m at 3p issuing the above mentioned 115m shares. The deal is expected to close in January 2020.
ISS Corporate Services has reported on the recommended cash offer of 19.21p for Amerisur Resources by GeoPark saying that the ‘shareholder support for the transaction is considered warranted’. This is based on a ‘significant premium offered to company’s shareholders, it has a cash consideration bringing certainty of value to shareholders and no other concerns have been identified’. Considering all these matters ISS have recommended the management proposal to shareholders.
The board has received a number of proposals and accepted an offer that was over 50% above the three month VWAP, in that respect it is appropriate that the offer is accepted by shareholders.
Anthony Joshua v Andy Ruiz Jr looked like a little and large mismatch on first glance as much as it was in the first fight but this time AJ was more circumspect and won easily enough. Trouble is with Wilder and Fury tied up for most if not all of 2020 the chances of getting into either of those bouts seems tricky.
In the footy Liverpool are really making life look easy although the Foxes are yapping at their tails albeit from a distance. The Noisy Neighbours welcomed the Red Devils who at 9-1 proved a fine bet and ran out winners. Chelski lost at the Toffees, Spurs beat Burnley 5-0 whilst the Hammers host the Gooners tonight.
Although ISS Corporate Services say “no other concerns have been identified” with regard to the Amerisur bid, my concern is that the company being sold for considerable less than it’s worth. For example, page 5 of the May 2019 AGM presentation boasts (not for the first time) that our directors have created $367,500,000 worth of value through “opportunistic acquisitions”(a figure that they’ve no doubt used to justify salaries, bonuses and options). Add that to the $46,000,000 of cash declared in the interim results and the $20,000,000 spent building the OBA (which must be worth at least its construction cost, but quite probably more), and you could reasonably infer from the information the directors have recently provided us with that the company is worth $433,500,000. That converts to about £334,000,000 or about 50% more than the current bid. Moreover, I’ve watched the various interviews that John Wardle has given over the past 18 months, including to Malcy, and he’s repeatedly encouraged us to believe that the company was considerably undervalued at 15p to 17p – indeed he suggested that the 30% interest in CPO-5 was worth that much alone. Now, just in time to cash in on favourable share options that were about to expire, our directors have, without anything more than a bland one paragraph statement, recommended that we sell up.
I’m disappointed as well, i thought the company was worth more, i wonder if the shareholders will vote against the bid?
Your comments on Amerisur are disappointing to say the least and dispel the belief that you might be in anyway independant or neutral. How long was Amerisur at 12p? Barely a couple of months and this had been walked down, so please stop rubbing salt into wounds. Regards
My apologies if the report i focused on was distressing, only trying to highlight that news. I’m equally disappointed at the price as i’m sure the company are.