CALIMA ENERGY LIMITED (ASX:CE1) - Ann: Trading Halt, 59410397, page-81 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

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rosencrantz

2,806 Posts.

591

07/02/22

16:11

Post #: 59410397
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Originally posted by TheGoss31: ↑

i agree with the sentiments expressed by @binwood and @jophda here. we need to be balanced in what the take out here is

positive: cleaner BS with less debt and additional funding for capital program in the next couple of months
negative: eroded trust in mgmt/Board messaging in the future outlook (as they explicitly flagged several times recently "funded by op cash flows and credit facility". whatever way you cut it, there was a stuff up on working cap/budgeting that drove this cap raise

Net net? we'll have to see the market reaction. Rationally, a reduced debt risk should be a net positive even after taking into account the dilution (whether FV was 75c pre-raise or 70c post-raise, does it really matter?). Irrationally, lots of retail punters will be annoyed and flee (I won't be) so my guess is this will get pushed down to the cap raise price of 20c or below. Anything at 20c or below in my mind is a buying opp (and i'll be loading up)

fundamentals are improving daily and in 3 months we'll see the cash generation flow in

the bigger q for me personally is what (if anything) this says about montney transaction - feels like a $100m capital injection from a $100 sale is off the cards now (and a smaller cap injection or perhaps a 50% stake farm-in from spending say 50m over next 5 yrs is what is more likely to be annoucned). thoughts?

Expand

the bigger q for me personally is what (if anything) this says about montney transaction -
Same.
The Investor presentation refers to '100% interest in >33,643 acres of Montney drilling rights in BC, with 10-year continuation
lease over 49 sections due to successful 2019 drilling campaign'
So, the earlier, regular references to 62400 acres in Montney now dropped.What happened to the lost 29000 acres?
These drilling rights over 29000 acres expire in November 2022. However most of these are held under 5 year drilling licenses which can be enlivened with further drilling . So, as far as I am concerned Calima has 10 months to find a farm-in partner to drilling 1 well costing C$7.5m .
What I don't like is this willingness by management to willingly downplay Montney.If the Peters&Co mandate reveals no buyer then a fresh mandate should be issued - In London or NY or LA- to find a buyer for this 29000 ' lost' acreage.
Still a willing buyer of CE1 shares at 20 cents.

Originally posted by TheGoss31: ↑

i agree with the sentiments expressed by @binwood and @jophda here. we need to be balanced in what the take out here is

positive: cleaner BS with less debt and additional funding for capital program in the next couple of months
negative: eroded trust in mgmt/Board messaging in the future outlook (as they explicitly flagged several times recently "funded by op cash flows and credit facility". whatever way you cut it, there was a stuff up on working cap/budgeting that drove this cap raise

Net net? we'll have to see the market reaction. Rationally, a reduced debt risk should be a net positive even after taking into account the dilution (whether FV was 75c pre-raise or 70c post-raise, does it really matter?). Irrationally, lots of retail punters will be annoyed and flee (I won't be) so my guess is this will get pushed down to the cap raise price of 20c or below. Anything at 20c or below in my mind is a buying opp (and i'll be loading up)

fundamentals are improving daily and in 3 months we'll see the cash generation flow in

the bigger q for me personally is what (if anything) this says about montney transaction - feels like a $100m capital injection from a $100 sale is off the cards now (and a smaller cap injection or perhaps a 50% stake farm-in from spending say 50m over next 5 yrs is what is more likely to be annoucned). thoughts?

Expand

CE1 Price at posting: 23.0¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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