Keep those negative thoughts to yourself Longy, I have mostly...

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In Da Hood

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21/10/21

09:46

Post #: 56958694
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Originally posted by longreach: ↑

I had a thought "outside the box " moment which won't be popular for SGC holders in the short term (and particularly option holders at all!). But don't misunderstand me, its very positive for the longer term for shareholders. Consider this:
I am (rightly or wrongly) of the view that SGC's current asset base could support an overall market cap well in excess of $100 million. The Philippine project, with the right deal, alone could support a market cap far higher than that. So under that scenario, whilst it would be good to have around .04x131 millions exercised in the coming months (=$5.2 million cash), that would increase the shares on issue to 477+131 million (=608 million shares), plus the cash.
An alternative would be to "keep the lid on the bottle" for the next couple of months. Other than report great oil revenue from Canada (which gets sunk straight back into additional well production), but no big news out of Borba, and similarly Philippines. That would very likely see little change in the share price leading up to December 31 options expiry date. Who would convert options with a share price sitting around the exercise price (probably only the uninformed). Thus you don't get the cash, but you also conserve your shares to the current 477 million.

After the options expire unexercised you then make announcements re Philippines plus Borba, the share price is +20 cents - you then issue only 30 million placement shares at say 17 cents, voila you have $5 million cash and 100 million LESS shares on issue.
Scary isn't it? (Especially if you're an option holder).

Would GJ be that calculating? Probably not. But its something to be wary of.

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Keep those negative thoughts to yourself Longy, I have mostly options better leverage lol. Also GJ does not strike me as the person to try and stiff his backers / shareholders / option holders.

I don't think so personally with oil prices where they are they should be going pedal to the metal on getting oil and gas pumping.

I think the silence is purely the fact whatever deal they are wheeling in the philippines is in motion and not settled yet. I also think they would literally be busting ass in Canada with those assets they have to get things turned up. I'm really interested to see what the production rate is coming up to, even if all the money is going into turning on idled assets so be it. Why build a 5 mile pipeline for $1m USD if you can spend $1m USD doubling oil production in Canada from existing assets, I'm guessing that is why Borba is on the back burner. The dynamics of the oil market means do whatever you can to get those assets back up to their hey day numbers. I'm sure I saw somewhere one of them was pumping couple thousand barrels pre-covid.

I still believe ultimately 88e directors are going to buy in for 30% or more of the phillipines blocks but that is just a hunch based on their capital raising and mention of other acquisitions on the 88e side. It's just too much coincidence that 88e now has 3 ex Nido directors, more than anyone they know what the worth, potential or otherwise of those assets is.

Ultimately the options were given to shareholder who backed the company in a capital raising. Except for those that lost faith and sold out for me to snaffle some

All in all i'm waiting with somewhat baited breathe they said regular updates now a cone of silence has fallen... hopefully that means something big is brewing.

We await.

SGC Price at posting: 4.0¢ Sentiment: Buy Disclosure: Held
12 Upvote

0 Great analysis

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