Post by
luckythor on Sep 05, 2013 12:15am
Observation
Both articles in the Wall Street Journal (just under 3100 boe/d) and Bloomberg (3452boe/d) has production for the company NVS at the lower end of the scale. WSJ production report is the end of 2012 and Bloomberg for the end of Q2. Neither mention the fact that production was over 4000boe/d in Q1 and has returned to this level in the first week of July. Also, oil price increased significantly in the first week of July and the company as agreements for $106+ oil for just under 50% (1700 boe/d) of their supply since Aug 1st and a small hedge for 2014. If my calculations are correct the company NVS should have revenue of over $30M for Q3 and substantial profits, In trying to justify the price TSX shows 189,375,042 shares o/s which at $1.18 equates to $223,462,550. I have read contradictory reports about the sale, however $ 320M less debt = $247M being the most consistent, which means that warrants/options exercised are worth $23.M plus applicable fees less transaction fee (healthy return for those involved). I ask could someone read the year end statement and advise me if they read that the company NVS believed that their value was $ 377M before/after debt. If that is the case, I believe that mgmt. has accepted an offer which is $57M short of their own evaluation of the company........possibly they wanted a bid on the table and expect another offer which would bring the offer to where I think it is reasonable????? Yan Chang has the right to match all offers (first in).
Any way, I, too, will be voting no to this proposal, however, I believe it will be a "slam dunk".
Also, Marl, I agree with your reasons to sell a portion, however, I can not take a 10% loss ($23K) for the sake of selling when I believe this deal to be solid, but here's to your profit!