Here's my 23c...
Positives:
- Now fully funded for the 2 well campaign (plus some extra contingency cash) so the issue/hamstring of funding and farm-out won't be on the minds of people until the end of the year after the wells are drilled.
- Likely that farm-out offers were in the region of $25M for 30% odd. Much more dilutive than what we have done in the last 2 raises to secure the funds and still keep all of the upside. People who complain about this CR would probably have complained even more if we did a farmout at a $100-$120M valuation instead.
- If a discovery is made, any future farm-out in future would probably be more in line with $500M++ for 30%. Paying our share of more appraisal and development without anywhere near as much dilution.
- Jett Capital are involved this time as well as PAC, so (hopefully at least half) of the raise has gone to US based investors. In addition, it will raise awareness of IVZ among Jett Capital clients as well as a wider group of US investors who hear about the raise. Interested to see how it trades on the OTC given Jett Capital clients likely also scaled back and maybe will turn to the market to top up (
https://www.jettcapital.com/).
- Capital raise in a time of strong newsflow so should flush any shares that are dumped fairly quickly. We'll see on Monday/Tuesday how the shares were allocated and how many went to 180 Markets (who would probably be the worst for pip flipping). Hopefully a large portion to Jett Capital.
- I'm now expecting a spud date announced early next week and think it will spud next week or the following week. Can't really start drilling a well and not have the funds for both secured. Doesn't send a good message to raise funds after drilling starts but before hitting any reservoirs.
Negatives:
- Quite a generous raise, offer was closed in an hour on 180 Markets and in a few hours for PAC Partners. I assume Jett Capital would have closed just as quickly. Means IVZ could have raised higher (I think if they did 26-28c and with the 1:1 option it would still have easily got over the line). At least if there is some scale back then some investors may want to top up on-market. I guess management didn't expect such a share price run up the last week or two and the discussions around the CR would have been more or less decided a week ago.
- Probably some panic when we re-open as traders exit in anticipation of buying back in lower. Will be interesting to see how the balance between momentum traders leaving, people wanting to de-risk / free carry and people who want to buy in for more exposure now that more boxes have been ticked. I think we'll drop back in to the mid-high 20c range short term but hard to see it dropping down to or below the CR price given the string of news expected.
I put in my bid for 200,000 shares ($46k worth) and will be holding them through results of the 2 wells.
