Diesel
15 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Beatley, PMO have tweeted that refinancing to be completed qtr1 2020. On that basis shorters are in a bad place, if they were hoping to force equity raise. If sp should dip on jittery pi’s selling & not seeing the opportunity,I’ll be topping up.
Beatley
15 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! The Telegraph Lenders plot break-up of Premier Oil as loans loom Lenders to Premier Oil are demanding a break-up of the FTSE 250 explorer as it hurtles towards a deadline to pay back more than £2bn of loans. “Lenders to Premier Oil are demanding a break-up of the FTSE 250 explorer as it hurtles towards a deadline to pay back more than £2bn of loans.†The article suggests hedge funds own 40% of the outstanding debt, which gives them to power to block Premier forcing something through with a majority vote. This absolutely stinks, given the improved debt metrics this refinancing should have been a breeze, but then your creditors don’t usually have the biggest short position in Europe against your equity. Worse case scenario, Premier bow to pressure and have to raise some new equity giving ARCM a chance to close their short, probably at a profit. Best case scenario, a new lending group emerges and ARCM have to cover. Never bet against the debt holders is generally sound advice, but you never know.
Diesel
11 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Am I missing something, PMO are in a much stronger position than when it was refinanced. Without going through my reasoning, but I think that point is indisputable. If that’s a given, surely common sense tells us that refinancing will be a lot less risky for lenders & simpler/cheaper to agree in 2021. Tell me what Im missing GK, I’m genuinely interested.
Beatley
11 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! So holding a company to ransom, that is providing energy and supporting British jobs is something to be admired and respected? Interesting choice of words there GK. ARCM are playing games, anyone holding the debt knew it wouldn’t be paid at maturity and would need to be refinanced. ARCM could sell their debt in the secondary market and walk off into the sunset with a healthy profit on the back of Premier turning the business around, but no, they want another pound of flesh. The outcome certainly isn’t clear but on the back on the back of the improved debt metrics this isn’t going to all one sided like it was last time, especially when the shale cowboys are still able to raise financing at rates better than our own.
gk10
10 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Good evening, Good to see the same old faces are still happy to promote this share. This short is fascinating and has the potential to put the company into administration if the reported debt held by the shorter is correct. I don’t believe it will or that the intention is to see the equity hit zero but the position they have created has to be admired and respected. Let me give you one scenario of where they could have spent some of their reported $380m. Take the retail bonds for example, they could well have been picking these up for under £40 during 2016 and around £80 in the run up to the 2017 refinancing so at an average of £60 they only needed to spend £75m for the crucial 25% of the votes needed to block any resolution at a bondholder meeting. These bonds are now trading at or slightly above face value so potentially they are sat on a profit of £50m with the controlling vote and that is ignoring the coupon they will be receiving. The above scenario is purely hypothetical but if they do have the controlling vote over £500m worth of the debt and one crucial financial instrument in the debt refinancing that has to be agreed and implemented by the end of May 2021 for potentially £75m or at worst full face value of £125m it makes you wonder where the rest of their reported $380m has gone? This could only work on a heavily indebted company with limited scope to borrow due to the complexity surrounding the recent debt restructuring with several financial instruments interlinked where the senior debt of those instruments is equal, secured against assets held by subsidiaries of the holding company and had zero chance of being paid off at maturity. This hedge fund appears to have played a blinder, it makes you wonder if they showed their hand as the negotiations have now begun. This could make the convertible bondholders look like amateurs. Good luck to the brave!
Beatley
09 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! My reasoning…I’m sure no one will mind that we’re going off topic given that us and tes123 are the only ones that post. Reserves position unchanged so NAV should remain the same, current price trades at a huge discount to this. Even with the reduced production, they’re practically all oil so EBITDA remains. Lots of fat to cut, G&A costs are near $100m, Premier are a fraction of this. Lastly, some good quality assets that could be sold. Although to be honest, if the price stays around this level or lower I think Tullow will be bought within 6months.
lots_of_sense
09 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Beatley, I looked very briefly at Tullow this AM and bit more just now and although it seems all the bad news is out, my concerns were as follows: FCF reducing from $350m this year to min of $150m next year at $60/barrel. Production reduced to max of 80 kbpd next year and then 70 kbpd from 2021-3. Debt expected at $2.8 bn at YE, and $2.6 at end of 2020 Willing to listen to offers So reducing free cash and forward production guidance and alot of debt = IMHO not touching it with a barge pole. Now, if all is as they say it is (which is not great obviously), why say they are willing to listen to offers ? To me, that sounds like they don’t think they can turn it around and then the question is why ? Interesting they quote debt to ebitda at 1.8 to 2.0 and being comfortable with the covenants with the banks, but surely not all the debt is sitting with banks and not sure the banks are as comfortable with the debt to equity ratio now sitting at over x3.25 rather than x1.1 last night ? Anyway, I hope you get the steal of the century but I’m staying well clear.
Beatley
09 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Good to see you’re still about Diesel, it is a little quiet over here so may take the plunge at some point. I would say definitely Tullow related lots_of_sense, just goes to show how well Premier have been performing relative to their peers. That said, I have just sold a few of my holdings here and taken the plunge in Tullow at just over 50p. Always thought they were overvalued, but the current share price has overshot the other way.
lots_of_sense
09 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Was looking for the reason for the drop this morning, ie news on Zama sale or something but seems more more likely an over reaction to Tullow’s problems who have lost both CEO and Head of Exploration today and put themselves on the block along with a share price drop of 56% today ! Anyway as long as PMO don’t rush out trying to buy Tullow we should be ok. Debt down (good), debt up (bad) IMHO
Diesel
08 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Evening Beatley & Lots of sense, I only v occasionally look in on II these days, but both of you are posting some great insights. I now post only on lse under the beerbull moniker. ( diesel was taken). I think if you also moved across to lse a much wider audience would read & enjoy your posts. Either way looking forward to sunny uplands for PMO & it’ll be interesting to see what happens tomorrow given the amrc reveal.
Beatley
06 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! It is very odd, especially with it being some a large position, feels a little underhand, but not sure what difference it would have made it everyone was aware of it earlier?! They have, points below: Historical disclosure issue for ARCM, position was built between Feb 2017 and July 2019, not traded since July Hedging their credit exposure, position was built at the same time as they were acquiring debt in the secondary market Premier were not aware of the position until this week, disclosure explains the different between stock on loan and declared short positions Premier expect ARCM to close the position when we refinance, discussions on the this are progressing well and hopeful to resolve in Q1 2020. Last point is interesting, hopefully we’re doing more than just extending the maturities with the current interest rates.
lots_of_sense
06 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! They have had to reduce their shorts in the past, like in Jan18 and Jun/Jul18 but nothing recently. Just so surprised that they didn’t have to disclose the short interest earlier as I imagine as a large creditor they might also have had access to some company information that is not public ? i.e. creditor discussions ? Any thing back from IR yet regarding it ?
Beatley
06 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! As you can imagine, I’m all for it
lots_of_sense
06 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Indeed, just wonder if any hedge funds thinking its worth a punt ? Currently looking at £1.4m MTM loss for every 1p move up on their short alone ! and its not like you can get out of a short that size quickly given the normal trading volume on PMO.
Beatley
06 Dec 2019
Highest short interest in FTSE 250 according to Sunday Times! Likely well offset by the gains they’ve made on the debt, but could still shoot them in the foot if someone with deep pockets decided to test their resolve.
