the buyback and divi policy (when formally confirmed) are excellent news indeed. they signal the turning point in the fortunes of this stock and herald a new era of revenue generation and growth for San Leon. at today’s share price, the market effectively imputes a negative value on our 10% interest in OML18, which is, patently absurd : i suggest our interest should be valued in 100s of $m. with no debt, no liabilities and $40m in the bank, San Leon today represents a highly unusual value play on AIM for risk investors. the recent Eland news was timely, reaffirming a real market in Nigerian oil stocks.
Totally agree Alaric as would tosca, jite knows exactly what oml18 holds and beyond imo hence he bought into the company…
I have actually bought a tranche on the back of the buyback announcement, even though I think it is too small, going to be difficult to track due to SLE priced in GBP and the buyback amount announced in USD and the rate fluctuating like mad. I copy here my post from the buy back thread because some people seem to have missed it …
Well, a standard buyback has been announced, but it is small, just $2m.
Still, I’ve bought a 2nd tranche @27p + costs to add to my @37p holding, I now have an average of around @31.56p (not counting my old original shares).
Whether or not this buyback will be enough to raise the share price in the market I tend to doubt it, but it could at least put a bottom in.
Also if SLE choose to now announce and pay a divi, any drop on the back of that payment will mean the buyback goes further. Could be quite a smart move, but it certainly isn’t the $7m+ I think is probably the least required to move the market a lot (I.e. =>5% of market cap).
I’m hoping a combination of the two will see me retrieve my capital with a small %age profit. No indication of how long the buyback programme is expected to take. I hope they are aggressive early on and on any price drop later, not a boring same amount each day which at this percentage of market cap is going to be useless.
18 October 2019 Proposed Share Buyback
San Leon Energy plc today announces that, pursuant to the shareholder resolutions passed on 27 September 2019 at the Annual General Meeting, it plans to acquire ordinary shares of EUR 0.01 nominal value each (“Ordinary Shares”), up to a total value of USD 2.0 million (the “Buyback Programme”). In accordance with the shareholder resolutions, the Company is proposing to acquire the Ordinary Shares at a maximum price of the greater of (i) 105% of the average market price of such shares for the previous five days and (ii) the higher of the price quoted for the last independent trade and the highest current independent bid or offer for such shares.
The Buyback Programme will be independently managed by Cantor Fitzgerald Europe, the Company’s Nominated Adviser and joint broker, which will make trading decisions independently and without influence of the Company within certain pre-set parameters.
A buyback of Ordinary Shares on any trading day may represent a significant proportion, or possibly all, of the daily trading volume in the Ordinary Shares on the London Stock Exchange (and may exceed the limit of 25% of the average daily trading volume, as laid down by Article 5(1) of Regulation (EU) No 596/2014). The Company may therefore not be able to benefit from the exemption laid down in Article 5(1) of Regulation (EU) No 596/2014. The Company confirms that it is not in possession of any unpublished price sensitive information, other than the information disclosed in this announcement.
Ordinary Shares acquired as a result of the Buyback Programme will be cancelled. The Buyback Programme will be funded from the Company’s current cash balances.
The Buyback Programme will commence with immediate effect and will continue until the Buyback Programme is completed or earlier if the board of directors of the Company decides to terminate it.
The total number of Ordinary Shares is 455,622,127 which is a market cap of approx $158m or approx £123m
I think the reason for waiting to announce the buy back is far more likely to do with the planned date of announcement of the dividend.
At a guess, judging by the first day (and the RNS hasn’t been released showing the buys yet), I’m guessing that the buy back amount will last between 30-45 days only.
I say it is too small in my other post, but it would be just right if they have a buyback programme of this size every quarter. However, that is a big assumption. Also, I may be wrong on the amount required to move the market significantly, but it is difficult to tell how many spare shares are floating at the moment. There may already be signs that liquidity is tight. The tighter it gets, the more the price will be pushed up … unless it turns out to be Tosca releasing the shares for sale (which I doubt).
I still reiterate that there was no need to wait for an expected extra $7m to arrive before announcing anything when an interim dividend is due.
Whether or not this buyback is supposed to reduce shares in circulation, thus increasing the dividend per share slightly or because the price had dropped to too low a level and the company believe the market is undervaluing them (in which case there would usually be a press release saying that) and how it all plays out remains to be seen.
Finally, I will try to track the buyback in a new thread for anyone interested. It could be important for people like me holding @31.5p who are looking to exit, hopefully with a decent profit, possibly including a dividend payment.
It will be important if the buyback does increase the share price as it goes on. If it does, then when the buyback runs out the share price may then start to drift again (depending on the divi announcement), so it may be the best time for me to exit as the buyback comes to an end.
It will be difficult to track due to the circumstances outlined in my reply to @melody2maker.
Good luck all!
As Prior pointed out the shares are being cancelled. A company can re-issue new shares whenever it likes of course.
However, the buyback can’t be spread over a number of years because permission has to be resought every year at the AGM. Also, if you tried to spread a $2m buyback over years it would have zero impact on the market.
If they are going to persist in buybacks as a means of ‘returning cash to shareholders’ I would hope in your position (planning to hold for the medium term) that they are aiming for $2m every quarter.
Meanwhile, any dividends will go slightly further as they are spread among less shares. However, if you look at the numbers in the new buy back Oct 2019 thread it is going to be measured in small fractions of a pence per share improvement (click on the grey San Leon Energy (lse:sle) next to Market Discussions above and you will see other threads)
And so it begins!..
Is this the nick butler ex sle!.
If so, he’s not shouting it from the rooftops in his C.V.
"This blog is on the relationship between energy and power, plus the global trends and influences on the industry. It usually appears on Monday.
Nick Butler is visiting professor and chair of the Kings Policy Institute at Kings College London. He spent 29 years with BP, including five years as Group Vice President for Policy and Strategy Development at BP from 2002 to 2006. He has also served as Senior Policy Adviser at No 10, Chairman of the Centre for European Reform and Treasurer of the Fabian Society.
Nick Butler is an investor in, and an adviser to a number of companies and institutions in the energy business. The views expressed are solely his. This material is not intended to provide and should not be relied upon for investment advice or recommendations. Readers are urged to seek professional advice before making any investment.
I think this is more interesting, frankly. You must be holding your breath, @linksdean?
Early signs are I may have got it wrong saying that the $2m buyback is too small. I hope so! I think there were 90,000 shares bought today. We shall see at 7am tomorrow
I Don’t have to hold my breath eadwig…fine where I sit thanks…
Well I am, and I assume I have a lot less at stake. I haven’t seen a buyback start like this since HSBA’s first buyback in 2016 which turned the stock price from @431 to @675p and a paper loss into a handsome profit for me. That one completed just before Xmas also, which I think this one might.
OK, Ok, I’m getting a bit carried away, but it all looks good so far
HSBA first buyback…
Fingers crossed eadwig…