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Author: wanderer101x One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 91311  
Subject: Cairn offer for Nautical Date: 13/06/2012 07:09
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450p per per share, recommended by the board

http://www.investegate.co.uk/Article.aspx?id=201206130700132...

Now time to flush out others. Premier?

I hold
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Author: wanderer101x One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79428 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 07:35
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From the announcement:

Irrevocable undertakings to accept from directors (2.18 percent) and other shareholders (6.71 percent), total 8.89 percent
Letters of intent to accept from another 18.36 percent

Still very much in play IMO

Offer values 86 million barrels of 2C contingent resources at pounds 414 million, ie a bit over $7 per barrel. That would be approaching a decent price in these markets, but a) Nautical has more than enough cash to see it through to better times and b) at that level the price doesn't include anything for the upside. Seems to me Cairn are getting a bit of a bargain and there's room for a higher offer.

Full disclaimer: NPE was first drawn to my attention on these boards some years ago. Its successes with the drillbit since then have seen it become my largest holding. I can't remember who it was who first pointed it out, but whoever you are, I thank you.

wand

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Author: IRCQa Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79430 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 07:46
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I too am surprised at the price.

Have been a long term holder here and a fan of the management until now.

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79431 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 07:46
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A worrying trend pursuing the "Scheme of Arrangment" route it seems. Usually results in the Acquiror achieving their goal at a far lower price it seems as they tend to announce the takeover when they've already 50%+ in the bag!

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79432 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 07:50
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Ah just seen the announcement in detail. It seems they only have 27.2% so far - all to play for yes. Wont be getting mine for a measly 50% premium..Still, at least we know why they've been strong the last few days.

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Author: oilretire Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79433 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 07:58
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So who, if anyone, is likely to counter?

Taqa, PMO, KNOC(Dana)........

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79434 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 08:02
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Indeed Oil.
I suspect NPE wont be as popular as Cove...still we can but wait and see.

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79435 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 08:03
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Cash is king.

Love it.

I'll probably take the money and run thank you very much but will stick around to see where the share price goes.

Three parties now interested in heavy NS oil it would seem. A counter bid wouldn't be a surprise to me.

Now let's have a bid for SLG.

repo

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79436 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 08:09
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Offer values 86 million barrels of 2C contingent resources at pounds 414 million, ie a bit over $7 per barrel. That would be approaching a decent price in these markets, but a) Nautical has more than enough cash to see it through to better times and b) at that level the price doesn't include anything for the upside. Seems to me Cairn are getting a bit of a bargain and there's room for a higher offer.

I think NPE shareholders have been presented with a real gift by management by agreeing a takeover with a cash buyer at this point. Some may grumble about the price (isn't that always the case?) but 450p+ in cash today is worth a hell of a lot more than it was at the market peak for junior O&G. Assuming the cash is to be reinvested elsewhere, it's a great point at which to sell up and look for better value at the exit price.

WShak

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Author: luckyjonah Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79437 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 08:13
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Offer values 86 million barrels of 2C contingent resources at pounds 414 million, ie a bit over $7 per barrel. That would be approaching a decent price in these markets, but a) Nautical has more than enough cash to see it through to better times and b) at that level the price doesn't include anything for the upside. Seems to me Cairn are getting a bit of a bargain and there's room for a higher offer.

Does seem a bit cheap to me, surprised to see the board accepting what appears to be a low-ball offer - I wonder if there are any hidden "perks" to the offer, seats on the board perhaps? The question is, who if anyone might counter-bid... Enquest or Statoil?

[Brings XEL nicely into focus just now too - even the low-ball $7/barrel values Bentley (which is closer to production than Kraken, Mariner or Catcher) at 227p/share on the current conservative CPR figures. If it's as shorted as many believe there could be an interesting squeeze today.]

Cheers


-luckyjonah.

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Author: loglorry Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79439 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 08:34
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In short "I'm ooot" far better places to re-invest than the potential upside of a counter bid. Sold at 463p.

Hopefully some nice read across for XEL given the similarities of Kraken and Bentley.

Log

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79441 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 08:39
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Assuming the cash is to be reinvested elsewhere, it's a great point at which to sell up and look for better value at the exit price.

WShak

Any views on potential reinvestments for NPE holders or is oil going to fall more and the market weaken?

repo

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Author: Proselenes Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79442 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 08:56
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Well, if that is the last of the "corporate" events CNE has it might now open the door to a FOGL and/or RKH farm in.

CNE were the top contender and as per FOGL announcement the potential farm in partner had other deals to complete first.

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79443 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 09:28
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repo,

Any views on potential reinvestments for NPE holders or is oil going to fall more and the market weaken?

I'm fully invested at the moment so have to sell before I buy, which makes me extremely choosy over taking on new positions. If I had received a windfall from NPE, however, I'd be putting it back to work pretty quickly in companies that have assets which are proven to be worth well in excess of the market cap. At the junior end, that means companies which can sell bits off if they get themselves into a bind. Take your pick as to which ones meet that description.

However, ultimate value depends very much on what happens at the macro level because, if Europe does fall apart, POO will plummet. In the past, I've said that I want to rebuild my O&G exposure but it's highly correlated to the euro crisis so doing so may be the equivalent of jumping from the frying pan into the fire. Whilst prices are undoubtedly cheap in junior O&G if POO holds up, they will still get hit badly if it doesn't. As I said on Twitter, with POO at $84, it's still at a price we would have dreamed of only a few years ago. I'm cautious because a price collapse is not difficult to imagine and I believe that would hit any O&G I buy as much as it would hit my bank debt. The best conditions I ever saw for O&G stocks was in 2009 where there were bombed out prices AND a low oil price. We're a long way from that today and there is plenty of scope for prices to plunge further.

In short, I'd reinvest any takeover windfall (or dividend payments) into asset backed O&G but I'm loathe to sell what I have to chase the market. Current prices represent someone calling you to afternoon tea rather than anyone loudly ringing the dinner bell as they were in 2009.

WShak

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79444 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 09:33
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Hi Pro,

Well, if that is the last of the "corporate" events CNE has it might now open the door to a FOGL and/or RKH farm in.

CNE were the top contender and as per FOGL announcement the potential farm in partner had other deals to complete first.


Agreed that CNE seem most likely to make a move in that area but any farm-in must surely reflect a price much higher than existing market caps. for it to excite investors? Was it BHP who committed to a farm-in a few years ago which put a lousy read-through value on FOGL shares? That strikes me as the chief risk for FOGL.

WShak

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Author: snaj Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79445 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 09:36
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Petroceltic (PCI)?

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Author: djpreston Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79446 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:02
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Ithaca at below the price prior to the announcement of the offers looks a good bet to me..

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79447 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:07
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SOCO!

You know it makes sense....

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Author: loglorry Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79448 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:10
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repo one of the most compelling re-investment opportunities would seem to be SLG. At 90c there is a lot of asset backing but as we know they are short of a few bob. I have an overweight position already so I'm reluctant to add more exposure because if there are problems with Breagh flowing or further overruns it will be hit very badly and could be taken out with a cheeky bid.

Ironically I'd rather pay more like $1.30 for SLG when they have Breagh up and running than 90c now for two reasons. The asset will be almost fully de-risked but perhaps more importantly they'll be less prone to a cheeky bid which could see them taken out on the cheap.

On a more positive note the upside on SLG is certainly there if Romania comes up trumps and there is a good chance that this might happen. If SLG get a good run of luck (rather than a bad one) I can see the stock being over $4 in a year or two.

The other stock you and I both like is WZR but one needs to curb ones enthusiasm as the amount of oil it has found is only one small factor in determining the stock price there.

Soco - pretty low risk when the price falls to 270p mark which it often does and the buy back kicks in. AGM today isn't it? Maybe we'll see why production ramp up isn't forthcoming?

PCI as mentioned before for all the same good reasons are also worthy of some cash perhaps.

All this said I will be sitting on most of the cash I've just raised from NPE because the EZ crises has the potential to get a lot worse and in the past I've been far to ready to re-invest too early and I'm trying to learn to be more disciplined.

Log

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79449 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:20
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Log,

All those companies you mentioned have a lot of things going for them, with different risk/reward profiles. There are quite a few out there, not to mention some exciting exploration plays focused on Africa who have already discovered oil/gas (AOI, OPHIR, etc) . Bigger market caps though.

WShak

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Author: loglorry Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79450 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:39
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Was yes a lot going for them but plenty of risks in today's market too. Bowleven looks very good at these prices but again without funding and a strong market behind it the share price could stagnate for years. I'm interested to know what you think about HOIL. The recent pipeline news together with the excellent 'on the ground' post on TMF must make you a bit more confident that they might be able to get their enormous gas find to market? I'm guessing the pipeline would be oil primarily but perhaps a second gas line possible?

Log

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79451 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:54
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Hi log,

All this said I will be sitting on most of the cash I've just raised from NPE because the EZ crises has the potential to get a lot worse and in the past I've been far to ready to re-invest too early and I'm trying to learn to be more disciplined.

I can't see much point in selling NPE to sit on the cash because there are two or three players out there who might be interested in a counterbid. If I sell it will most likely go straight back in, unless the market changes significantly for the worse. Even then I'll probably buy.

I suspect there is a bit of a disconnect going on at the moment with the stock markets not giving a monkey's about oil and gas stocks and the cash rich companies operating in the sector, beginning to think that longer term they are buying very cheap resources without too much of an eye on where the oil price/stock markets are going in the short term.

Other bids seem quite likely, imv.

repo

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Author: loglorry Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79452 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:58
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I can't see much point in selling NPE to sit on the cash because there are two or three players out there who might be interested in a counter bid. If I sell it will most likely go straight back in, unless the market changes significantly for the worse. Even then I'll probably buy.

Because if the macro picture falls apart and the POO goes down with it I'll want to have some cash to take advantage. I might never get that chance and so be it I've missed out on a possible counter bid. That's investing though and there are some pretty ugly numbers coming out of the Eurozone at the moment so I think the chances of being able to deploy cash much lower outweigh the chances of a significantly higher bid.

You pays your money and takes your choice I suppose.

Log

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Author: Proselenes Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79453 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 10:59
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WShak, the POO is likely this month and next (and last) to be it lowest for 2012, so its no surprise we are seeing lots of actively in mergers and acquisitions. I also expect plenty of farm out news.

You can generally tell when the big companies know the POO is at its bottom, its when those with cash start buying up the smaller players as the low POO makes it attractive to spend money.

Short term therefore the focus is on other companies which may be sold or farm out, but come the start of Q3 a rising POO will bring explorers back into focus sharply and the M&A activity should peter out.

Its a bit of a gamble therefore, you have to try to pick a company that is highly likely to get brought out in the coming 2 months for after that the explorers should be the ones getting all the attention again.

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79454 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 11:00
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I'm interested to know what you think about HOIL. The recent pipeline news together with the excellent 'on the ground' post on TMF must make you a bit more confident that they might be able to get their enormous gas find to market? I'm guessing the pipeline would be oil primarily but perhaps a second gas line possible?

HOIL is very cheap in my mind although I don't own any. There is a huge amount of gas there which is valued at very little and a very large director ownership in the shares. A positive surprise with London arbitration over Uganda would also be great news. They are spending big bucks on the asset, and even buying back shares, which I don't believe Buckingham would allow if he was simply talking his own book. I don' think investors will go too far wrong by backing Buckingham because he's clearly not daft.

What I would say, however, is that the market is valuing gas in Kurdistan at being worth virtually nothing if HOIL is anything to go by, so I would be wary of other firms there that claim that they own X bboe without having a good understanding of how much is oil. bboe( where it is mostly gas) can be bought incredibly cheaply through HOIL so why pay more elsewhere?

WShak

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79455 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 11:03
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I can't see much point in selling NPE to sit on the cash because there are two or three players out there who might be interested in a counterbid. If I sell it will most likely go straight back in, unless the market changes significantly for the worse. Even then I'll probably buy.

Despite my caution, I'd agree with repo on that. Whilst POO might plunge, it also might not so I'd stay fully invested.

WShak

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79456 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 11:09
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You can generally tell when the big companies know the POO is at its bottom, its when those with cash start buying up the smaller players as the low POO makes it attractive to spend money.

I'm not sure that's true at all if you think back to 2009. Most O&G executives were terrified when POO dropped to $40 and no-one made a move on buying up assets apart from Premier, who bought Oilexco for the price of its debt. Imperial Energy was also bought out by the Indians but they were then scrambling to get out of the transaction as POO plummeted.

I don't think O&G executives are particularly good investors, and unlikely to have any greater insight over when the best time is to make aggressive moves in the market. Historically, they always seem to dither when valuations are at their cheapest.

WShak

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Author: loglorry Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79458 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 11:23
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From westhouse (hope I'm allowed to post it):-

NAUTICAL PETROLEUM
Strong Buy

Cairn announced this morning that it was making a recommended cash offer of 450p per share for Nautical Petroleum. The offer values Nautical at £414 million. The parties intend the offer to be effected by was of a Court sanctioned scheme of arrangement. The offer price is at a 51.1% premium to yesterday’s closing price of 297.8 pence.

We consider the offer of 450p somewhat undervalues Nautical. Nautical has a 25% partially carried interest in the large Kraken field, a 6% partially carried interest at the Mariner field plus a 15% interest in the discoveries in the Catcher area and an attractive exploration portfolio plus £70 million balance sheet cash. We value Nautical on a commercially risked basis at 762p per share and have a target price of 550p per share. We consider the offer values the company at Kraken, plus Catcher plus cash but excludes value for Mariner and the risked exploration portfolio.

Nautical is an attractive “off the shelf” portfolio of pre development assets poised for Field Development Plan coupled with material exploration upside. It would be attractive to established North Sea companies looking to consolidate their reserves position and we would highlight Statoil, Maersk, TAQA, Canadian independents and Kuwaiti National Oil Company as amongst potential counter bidders.

Cairn’s offer for Nautical comes hot on the heels of the acquisition of Agora Oil and Gas. This signals a shift in Cairn’s strategy from high risk high impact exploration to a more balanced and derisked portfolio of development and exploration assets.

Given the exit of EnCore Oil, Agora oil & Gas and Deo Petroleum as part of the North Sea consolidation story we see a potential read across for other established North Sea independents such as Ithaca, Antrim and Valiant as acquisition.

We maintain our STRONG BUY recommendation on Nautical with a Target Price of 550p.

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Author: unwize2 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79459 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 11:30
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The Market has been hopeless at valuing E&P's for the past few months and weak shareholders are shooting themselves and everyone else in the foot. This is just another example, to me 450p seems a bit light, but when NPE closed last night at 289p and only a few days ago went as low as 260p why should Cairn bid anymore?

I wrote one week ago:

Using prices their assets have traded for I make NPE worth around 500-530p a share.

That by the way included oil found at Mariner, Catcher & Kraken plus cash. It assigned no value to further expo at Catcher, Ketos or the rest of the portfolio.

Another good example of a company going for less than it should was Encore. I found out from a reliable source after the bid completed that senior management at PMO calculated they could have paid 90p per share for Encore, but why bother when they had traded for the previous 2 months at circa 40p?

The one plus point as WShak posted is there is plenty of other stuff trading at substantial discounts, if NPE goes for about 15% less than it should you can recycle the cash into something else at a much higher discount.

Because of NPE's mix of assets its hard to guess if another bidder will emerge, PMO clearly like Catcher but I can't see them being very interested in Kraken, they could spin it off, but is it worth the bother? Statoil like Mariner and presumably would be interested in Kraken but are they interested in light oil? Enquest have bought heavily into Kraken, would they have the financial firepower to also buy all of NPE?

I'm a bit surprised the board would recommend an offer at 450p but maybe they are concerned about raising debt over the next few years if the Eurozone crisis rumbles on.

Anyway to make holders feel better about the lowish offer I have mentioned before I am buying a new home and as a result I needed to raise some cash, so I had to reduce my holding in either SIA or NPE, guest which one I picked?

Regards

Unwize

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79460 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 11:38
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Courtesy of Westmorelandlad on ADVFN, some pretty bullish comments from Westhouse

NAUTICAL PETROLEUM
Strong Buy

Cairn announced this morning that it was making a recommended cash offer of 450p per share for Nautical Petroleum. The offer values Nautical at £414 million. The parties intend the offer to be effected by was of a Court sanctioned scheme of arrangement. The offer price is at a 51.1% premium to yesterday’s closing price of 297.8 pence.

We consider the offer of 450p somewhat undervalues Nautical. Nautical has a 25% partially carried interest in the large Kraken field, a 6% partially carried interest at the Mariner field plus a 15% interest in the discoveries in the Catcher area and an attractive exploration portfolio plus £70 million balance sheet cash. We value Nautical on a commercially risked basis at 762p per share and have a target price of 550p per share. We consider the offer values the company at Kraken, plus Catcher plus cash but excludes value for Mariner and the risked exploration portfolio.

Nautical is an attractive “off the shelf” portfolio of pre development assets poised for Field Development Plan coupled with material exploration upside. It would be attractive to established North Sea companies looking to consolidate their reserves position and we would highlight Statoil, Maersk, TAQA, Canadian independents and Kuwaiti National Oil Company as amongst potential counter bidders.

Cairn’s offer for Nautical comes hot on the heels of the acquisition of Agora Oil and Gas. This signals a shift in Cairn’s strategy from high risk high impact exploration to a more balanced and derisked portfolio of development and exploration assets.

Given the exit of EnCore Oil, Agora oil & Gas and Deo Petroleum as part of the North Sea consolidation story we see a potential read across for other established North Sea independents such as Ithaca, Antrim and Valiant as acquisition.

We maintain our STRONG BUY recommendation on Nautical with a Target Price of 550p.


The price has held above 460 so is that people punting on a counter bid or Cairn mopping up lots of votes to get their prize?

repo

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79461 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 12:02
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Hi WShak,

What I would say, however, is that the market is valuing gas in Kurdistan at being worth virtually nothing if HOIL is anything to go by, so I would be wary of other firms there that claim that they own X bboe without having a good understanding of how much is oil. bboe( where it is mostly gas) can be bought incredibly cheaply through HOIL so why pay more elsewhere?

This situation may not last forever with three pipelines being built and Turkey hungry for gas. The pipeline plans are moving ahead as indicated by the excellent post the other day from a star of the World Cup. That means for WZR, the big chunk of gas in the estimated current, and now too low, imv, 5bn plus potential BOE resources on WZR's blocks is starting to look like it might one day, perhaps sooner than even us fans think, be worth something. I posted that on ADVFN but it applies even more to HOIL and does indeed suggest that Mr Buckingham is no mug. With $7.7 per msf being achieved in Turkey you don't have to too sharp to work out that HOIL 's gas, currently being valued by Mr. Market at close to zero, looks very cheap;-)

http://www.iraq-businessnews.com/2012/06/12/new-kurdistan-tu...

http://www.westernzagros.com/ see the first part of the audio and the slides detailing the new pipelines.

http://media.corporate-ir.net/media_files/irol/15/153906/Can...

Footnote page 5 for the price, but also shows why Turkey is hungry for resources.

repo

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79462 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 12:10
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Given that Hoil is circa 50% off its high (and significantly lower than at the time of TH's Genel presentation speech saying Kurdistan companies were now fully valued post the Exxon news) I wonder whether Genel is taking another close look.

A 180p/sh bid, some 50% premium to current, would surely come close to winning it. 200p/sh bid would surely see investors rushing for the exits.

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Author: nigelpm Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79463 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 12:23
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A 180p/sh bid, some 50% premium to current, would surely come close to winning it. 200p/sh bid would surely see investors rushing for the exits.


I just can't see that having any hope whatsoever with Buckingham sat at 33%.

In some ways his large shareholding is actually a blessing albeit it also concerns me slightly in a "take out on the cheap" being on the cards.

I guess a lot would depend on Lansdowne (11% stake) and CRMC (10% stake)

There's certainly no way a bid would succeed at 180p if Buckingham and those two entities didn't want it though.

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79464 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 12:39
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@NigelPM,

Agreed regarding the difficulty in finalising a takeover if Buckingham(@33%) rejects, but, given all the talk of a deteriorating macro picture for the global economy, for Poo, perhaps such a decent premium in the current environment might sway it for him. I personally wouldn't place much faith in Lansdowne and CRMC - a bid at 200p would be a 65% premium. Most institutions would surely not turn their noses up (I'm pretty sure nearly ALL PI's would head for the exit particularly as I'd prefer to reinvest a nice profit elsewhere eg WZR,and increase my holding in Soco.

I don't expect Genel would pay higher given they were reluctant to chase Hoil previously.

Concur regarding the blessing - it means we wont get taken over on the cheap. But,unlike your good self, I'm not au fait with what Hoil's fair value actually is nor have I the skills to quantify it.(I bought in on the idea, "Kurdistan" being the last frontier for major finds, and the fact that it had some production,Russia, with all the other explo opportunities thrown in as an aside)

Am the first to admit that, whilst I've done some exploratory reading (Oil 101 by Downey) and a couple of videos on "Oil Drilling - How it works" etc my knowledge is fairly limited compared to many, particularly yourself, Wshak,EE,DJP, Oil Retire.

Disclaimer - I tend to focus on Blue chip divi payers predominantly. :)

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79466 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 14:25
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FWIW, I've sold 30% and stuck it into two of the solider asset backed companies out there.

PMO for the reasons that it is just above the price that it bought at Encore at 70p for. It seems that CNE were very keen on another 15% of Catcher and PMO have 50% of that, with production set to grow rapidly and according to some a very overpaid management;-) They have Coaster next to Catcher, drilling soon, which could be more than pretty good, though I suspect that it will be dry.

The production growing to 100k will attract a bid, sooner or later, and if it doesn't those boys will probably do a nice deal to buy something else. I have gone on record saying that their exploration isn't up to much, but they have taken steps to rectify that, with the deal with a certain AB.

Anyone fancying their assets might be advised to strike fairly soon because these crap market conditions might not last forever and if they leave it too long Mr Market will start looking at the growing cashflow in prospect and they might even have some explo success, outside of the Catcher area.

The scavenger in this Pompey boy says that after some crap drilling results and in a crap market given what is down the track, you might as well shove them into a corner and see what they're made of, when the bidding tables are turned. Five to five and a half quid should sort it, imv.

About 20% of the monies went into SIA. A whole company sale could be imminent even, and the premium most likely a fair bit above the NPE deal based on today's price.

repo

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Author: thebuffoon Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79467 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 14:31
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I'm pretty sure nearly ALL PI's would head for the exit particularly as I'd prefer to reinvest a nice profit elsewhere eg WZR,and increase my holding in Soco

That's a bold claim; not to mention that the second part of this sentence isn't relevant (non sequiteur) to the first. :^}

I would be very unhappy if a bid of 200p was accepted.

Buffy

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Author: WShak Big gold star, 5000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79468 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 14:44
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Hi repo,

About 20% of the monies went into SIA. A whole company sale could be imminent even, and the premium most likely a fair bit above the NPE deal based on today's price.

I expect both PMO and SIA will do well over the medium term.

SIA is an interesting case in that the shares would be lower without the share buyback operation currently going on. A significant portion of recent volume has been covered by the company's brokers mopping up the shares and it'd be interesting to see where the shares would trade without support.

I don't really see why Soco is still around though - you'd have thought they'd have cut a deal by now, which suggests that the board members have plans for the company beyond simply selling out.

WShak

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79469 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 14:55
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Hi Was,

If you read the AGM report on ADVFN it would seem that the problems they've had with PV are now sorted. They are other cryptic comments on there which might confirm your view that a sale might be close.

Imv, they'll now ramp up production and flog it. Octoberish?

I bought some more but have dumped QED to pay for them. Laxey might have sold me a dummy on that one though.

repo

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Author: loglorry Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79470 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 16:03
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I don't really see why Soco is still around though - you'd have thought they'd have cut a deal by now, which suggests that the board members have plans for the company beyond simply selling out.


Perhaps the AGM report here www.stockopedia.co.uk/content/valuation-sentiment-and-sp-dir... might answer this.

It seems that the ramp up in production which was promised was being blocked by PetroVietnam because they were worried about producing too much water. In reality this doesn't apply for this sort of reservoir we are told. PV are not onside but it took a year so production should now increase.

I suppose a bid might not be forthcoming if it were known that there were problems between PV and Soco and these have only just been ironed out.

I guess once again we have to believe that this is/was the case and it might be nonsense.

It is also worth nothing the board think that £20+/bbl is about right which is far higher than the current price and given that they and related companies have controlling interest I guess that leaves a bit of an impasse where a buyer will no pay the massive premium required above the traded price.

Anyway we'll see how production increases now that PV are onside.

Log

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79477 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 17:13
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@Buffy.

Whether the second part is, or is not, a non sequitur in your view is irrelevant - as anybody rushing for the exit is highly likely to have,what they consider, to be better investment opportunities to reinvest in. Mine are , of course, as highlighted.

It wouldn't be the end of the world imv if 200p were bid as my average is alot lower. And I see WZR, particularly, as offering far more upside than Hoil both short term and long term.(Just my opinion of course)

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Author: thebuffoon Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79478 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 18:19
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Fangorn,

Whether the second part is, or is not, a non sequitur in your view is irrelevant

You seem to have a poor sense of humour, not to mention a poor grasp of grammar.

I did put a smiley, but since you are being so arsey, I'll be more direct.

Your statement was a nonsense. If you don't understand, that's your problem. My comment was not irrelevant.

What your average is, is relevant to you, not the majority of PI's.

You have no idea what HOIL is worth, you just have casino chips...

WZR may or may not have more upside. That IS irrelevant.

Buffy

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Author: Fangorn22 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79481 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 19:46
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You might want to check your own grammar whilst you're at it.

Your posting history versus mine is irrelevant to the whole discourse. Why don't you just admit your attempt at being funny fell flat.

I really don't understand why you are being so confrontational over this - my opinion, whilst being different to yours, may be no more or no less correct than yours. And Hoil is certainly being priced at what the market thinks it is worth not what you seem to have calculated it is worth. Nor would I be holding out for top dollar in these current markets either. Most bid premiums seem to be coming in at 50-60% of recent trading levels despite analysts(and punters like yourself I suspect) valuing them at 200-250% above where they were trading immediately prior to the bid being announced.

As to my last, I rushed that off as I was in the middle of an phone call at the time and couldn't believe you were being so arsey.

Sarcastic sign off I see. I personally think you're being a bit presumptuous with your conclusion.

Don't worry, I wont be engaging in any conversation with you going forward as I've better things to do with my time suffice to say Hoil will get taken out for alot less than you currently value it oin your back of the fag packet calculation.

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Author: rhomboid1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79482 of 91311
Subject: Re: Cairn offer for Nautical Date: 13/06/2012 20:13
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At the risk of getting back on topic I take the view that Hoil is one of the least likely cheap takeout prospects for a number of reasons,

Firstly they have no funding issues , just lots of cash and more coming when the Uganda tax grab is ruled in Heritage's favour

Secondly Mr Buckingham has effective veto over any offer and he strikes me as a man unlikely to give up 'his' company until he is ready.

Thirdly they have some very interesting acreage to explore offshore of Malta which will be drilled Q4;

http://www.heritageoilplc.com/pdf/Activity_Schedule_April_20...

So on balance they're here for a while yet and have major upside with cash and escrow monies covering the downside

I hold from way back ...so still sitting on a hefty profit thankfully

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79504 of 91311
Subject: Re: Cairn offer for Nautical Date: 14/06/2012 13:57
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NPE has moved up a bit today on much lower volumes?

Does anyone have any informed views on what might be happening?

Are Cairn just mopping up enough shares to force the deal through or is there something else happening?

repo

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Author: Fabius1 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79511 of 91311
Subject: Re: Cairn offer for Nautical Date: 14/06/2012 17:36
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Repo

Presumably, a rerun of the 'Encore' hedge prototype we saw last year. Assuming the offer is firm (haven't looked at the details), limited downside from market fallout re Europe and the customary resultant Lemmings routine versus possible counterbid upside. Just guessing.

F1

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Author: tournesol2 Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79519 of 91311
Subject: Re: Cairn offer for Nautical Date: 15/06/2012 10:44
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...Are Cairn just mopping up enough shares to force the deal through or is there something else happening?

I thought that was specifically prohibited?

AIUI a would be acquirer has to offer all shareholders their best price. They can't make a general across the board offer of X and then go out and buy shares at a price >X without having to revise their original offer.

Or am I mistaken?

T

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Author: tiswas1 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79521 of 91311
Subject: Re: Cairn offer for Nautical Date: 15/06/2012 11:05
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900000 just gone through at 465.5 so who is buying at that price if it can not be Cairn?

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79522 of 91311
Subject: Re: Cairn offer for Nautical Date: 15/06/2012 11:20
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T,

You are right, this is prohibited, but I'm pretty sure that it goes on through third parties.

Low volumes today. It looks quite strong though comsidering the 450p offer price.

I've sold half. Still a chunky sized holding as it was one of my favoured oilies. The third takeover within 8 months after Encore and DEO, in my portfolio, which never runs much beyond about ten stocks.

repo

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Author: FleecednFlogged One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79524 of 91311
Subject: Re: Cairn offer for Nautical Date: 15/06/2012 11:37
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Buying through third parties would be prohibited under Concert Party rules. Anyway, where's the benefit to Cairn? At the moment they look like getting Nautical for 450p per share, so why pay anything above that?

If a higher bid emerges then everything changes. It is the prospect of a higher bid that induces someone to pay 465.5p per share in the market. Downside risk limited to 15.5p.

Some of the conditional support for the bid will be suspended if a competing offer 5% above 450p emerges. It's that small percentage which I think is encouraging the speculative buying interest.

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Author: repobear Big red star, 1000 posts Top Favorite Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79525 of 91311
Subject: Re: Cairn offer for Nautical Date: 15/06/2012 11:43
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Cairn has very little real support as yet. Given that probably less than a third of shares will be voted, there is every incentive to acquire some more votes particularly as it is a bargain basement price.

Buying 15% a up to 470p to secure the deal and getting the rest at 450p won't look too bad a couple of years down the track, I feel.

Rules are broken every day of the week in the UK markets. I'm not saying it's happening here but you nnever know.

repo

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Author: loglorry Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 79527 of 91311
Subject: Re: Cairn offer for Nautical Date: 15/06/2012 11:56
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No repo in this case I don't think Cairn would undertake this sort of skulduggery. It is pretty easy to get caught just one whistle blower somewhere along the line and if that happened they'd risk loosing the whole deal. While I think a lot of nonsense does go on particularly in AIM I think the takeover rules are pretty well followed. Cairn will have advisor anyway in the form of investment banks and I just don't see them allowing rules to be broken this way.

I think the extra 15p being paid is just option value on a higher bid coming out of the woodwork. It is only 3.3% after all so not exactly pricing much chance of a higher bid.

Although not a lot of support right now the offer is pretty decent and I don't reckon they'll have too much trouble given the current market and the fact it is a cash offer.


Log

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