anyone got any ideas about the block trades that went through today?

website: http://www.sterlingenergyplc.com/



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Hi all, I have been lurking on this thread for a while I am in at 18.5 and spotted this link posted on advfn suggesting a figure of 17p

http://www.guardian.co.uk/business/story/0,3604,1336614,00.html

Do you suppose we will get a take up offer or will these go straight to the markets? Might have known the price would fall in the short term....it always does as soon as I top up again! Long term I'm sure these will rocket!

thx for the link. the guardian probably has it right, they would have heard it from brokers involved. if that is the case then happy happy days. put this is perspective, we may be diluted but the mkt is obviously in agreement with the continuing fortunes of SEY and their management.

Some interesting observations on advfn. Have a look.

MS

Sandrew, we won't get to see any of the new shares. It says in the RNS that the 97m will be in a placing to the institutions. Would have been nice to get some though, but would have taken a lot of time I think to set up for us to get them. I remember Kenmare did something similar early this year for retail investors, buy 4 new shares and get 1 warrant free. But of the top of my head it took quite a few months to sort out.

Shame....usually a good chance for a bargain!

If the news in the Guardian about the placing price being 17p is correct, I wonder if we will actaully get anywhere near that with a view to buying more? Any thoughts anyone.

sagem
The MM's love people like you

not really...obviously this has been well researched otherwise we would be deeply discounted by now. expect the price to move closer to 17 (and maybe slightly below) by Nov 20th. only because of the overhang issue. the reason why we are holding steady now is to reflect the potential premium concerning the drill programme. good news. there is a chance we could even see 20 soon and the issue be hugely oversubscribed....

there is a chance we could even see 20 soon and the issue be hugely oversubscribed....

Proptrade - won't the amount and the price already have been agreed with the purchasing institutions? How could it be oversubscribed?

not sure if it is a bookbuild or set price...of course if 17 in the fixed level then it will be first come first served but what will be key is how quickly the stock is placed. if there is/was appetite for more then these will bound through 20.

proptrade - and wouldn't it be in the co's interest to place as few shares as possible at the highest price? It would certainly be in my interest!

Re How good is the deal?

It seems to me we should be taking our lead from the company and the investors putting in the 97m. They have access to all the facts and presumably the inside track on the latest drilling data from Mauritania.
Our back of the envelope attempts to calculate the value of the deal and in some cases to suggest its not really good, can't help but be wide of the mark.

Got this from an other BB.

To me then there is no doubt that this must be a fantastic deal for SEY with 1 but. And its quite a big but and its the political risk.
We have already seen recently what happened to the Hardman share price when the Mauritanean government had to deal with a group plotting a coup (it fell from about 93p to about 77p). On the positive side the government seems to be very successful at putting down opposition. And of course much of Africa can be regarded as having unpopular governments or governments with a rebel group. So on balance I will hold.

From a personal point of view one further complication is that I also have a considerable holding in Hardman!
With SEY now mainly a play on Mauritania instead of a balance betwen the Gulf Mauritania and other countries, I have too much invested in one play. I think I will reduce Hardman though not Sey. The opportunity may come as soon as next week with the Capitaine exploration well drilling currently in block B.

MS

nice post, thx.

chinapete - a agree of course but any chunky investor needs a disc, however small. if there is great demand then that disc will be minimal

Thought this was of interest from Edmond Jackson today

Sterling deal not so stunning for private investors
The Aim-listed oil and gas exploration group announces a substantive investment in Mauritania, by way of a 97 million placing to institutions to exercise its right to participate in developing the offshore Chinguetti field.


The relative scale is shown by Sterling's capitalisation of 150 million (at a share price around 19p) and also reflects how importantly Mauritania is regarded among the dynamic small to mid-cap UK-listed exploration companies.


Harry Wilson, chief executive, says: 'This represents a stunning deal for Sterling, and establishes us as a key player in Mauritania, now recognised as one of the global hotspots for oil exploration and development activity. It cements our close relationship with the Mauritanian government going forward as we have been confirmed as a strategic partner to help it develop its oil and gas reserves.'


But it appears a less stunning deal for existing private shareholders in Sterling (SEY). A key aspect of equity valuation is - or should be - is the first right to subscribe for new capital raisings. As is regrettably the case nowadays, you can tell when a deal is truly juicy: brokers and institutions snatch all the equity.


The standard excuse from companies and their brokers is that management had to move swiftly to close a deal that was in the best interests of shareholders. There just wasn't time to raise funds via a rights issue, which would have been more costly too.


Neither of these excuses are robust. If a board has a strategic objective then it should raise capital when it is in owners' interests. Look at the example of Warren Buffett in the US, who makes a firm point of raising funds ahead of acquisitions. Secondly, cost to whom? If the deal is really so exciting, it is private shareholders cut out of any discounted fund raising who lose out. Let's not mince words: pre-emption rights are being flouted.


Evolution Securities is broker to the issue, but ultimately the Sterling board is responsible for safeguarding shareholders' interests.


Anyway, with the Mauritanian government exercising its right to acquire a 12% interest in the Chinguetti field, Sterling will gain an effective interest in the oil production revenues - with production expected to start in early 2006 at a gross projected rate of 75,000 barrels of oil per day.


A 10am extraordinary shareholders' meeting is convened for 18 November. If anyone can attend, they ought to ask why the board is cutting existing owners out of this promising deal.


My stance may seem sour, but unless this matter of pre-emption rights is tackled head on the City will repeatedly elbow private shareholders aside. It will be interesting to see if Sterling directors enjoy privileged status in a discounted placing.


Modest placings that are struck to fund smaller opportunistic deals, have a role. It is the scale of this one, with no sign the board has any concern for pre-emption rights, that puts me off (with fresh money). I still respect the Sterling management's track record, and my personal stance is also influenced by my having exposure to Mauritanian oil via a sizeable holding in Dana Petroleum (DNX).


With the shares unchanged at 19.25p it looks like the placing price may be in the late teens anyway, so existing holders have a chance to top up in the market. If institutions and directors were to get a material discount then it would be objectionable.


Existing holders should give serious consideration to buying more. Despite Sterling's rise from 3p a share in 2002, today's deal could be a watershed. The main risk is oil prices coming off the boil and consequent markdowns in shares. You have to be steeled for this.

The days of cheap oil are gone. I think at least $35/40 a barrel when they come off their highs some time next year.

MS

That is a great piece from Edmond Jackson

I agree with most of his points.

I have had all day out, and time to think. I will be holding on, I will be clearing the decks to obtain more stock, and I can't go to the city to ask for a share placing to cover the expense.

But I will still do it, this is worth a fortune barring political risks over the next 3 years or so imo.

Tells a story

I agree sww. This is my biggest investment by far. If this goes pear shaped, which it won't, it's back on the game for me. I understand King's Cross is a good place to start.
Now the serious stuff: It's my wife's birthday today so I'm the chef for tonight's family meal. Serloin sreak with the full Monty followed by apple pie and who know's what else. Did splash out on a bottle of champers, the real stuff not the usual Cava. So with any luck I'll be late on parade in the morning due to a sore head.
Don't know if I should grill or pan fry. Any suggestions?

MS

Depends how you like it?

If it is rare, then heat a pan with oil , (just a tad if it's non stick), get the pan and oil up to a decent but not burning temparature, (that would be smoking and far too hot), chuck 'em in and keep them moving, obviously you can do it the same for various cookings, i.e. medium and well done, with well done, I would do it under the grill, and again it is important to ensure that well done does not become charcoal.

Now we know why you starve most of the year, she must be a real tyrant!!!

Happy birthday from the SEY bb. people and have a good evening.

Any other questions I'll be watching.