SMALL CAP MOVERS: Petroceltic shares crash after buyout offer at 83% below value; Regency Mines buys back into Gatwick Gusher
An apparent low-ball takeover offer from Petroceltic’s largest shareholder sparked extreme volatility in the oil and gas junior’s shares on Friday.
The £6.4million, or 3p per share, takeover offer is a far cry from the $500million that was previously on the table when Dragon Oil thought about buying the company nearly eighteen months ago.
Offering 83 per cent below Thursday’s closing price, clearly, the offer is way below market expectations and it has already been dismissed by one City analyst as ‘deeply insulting’.
The buyout offer for oIl and gas junior Petroceltic has been dismissed by one City analyst as ‘deeply insulting’
Nevertheless, Petroceltic and its shareholders face very real uncertainties given it owes around $218million and is currently avoiding default only due to the leniency of its lenders – which on Monday waived due payments until at least March 4.
Worldview, the activist shareholder behind the £6.4million offer, which already owns 29 per cent of the company, said it believed the value of Petroceltic’s equity is ‘close to zero’ due to the ‘parlous’ financial position of the company.
The activist shareholder has been in dispute with Petroceltic’s management team for more than a year, and has previously failed in attempts to sack the board.
In early deals, Petroceltic shares crashed as much as 66 per cent to a low of 6p though those losses have pared somewhat and at 11.5p it was down just over 36 per cent for the day.
Whilst London’s blue-chip market has been pulled back and forth by crude oil volatility and Brexit inspired sterling weakness, the small cap FTSE AIM 100 benchmark rose steadily this past week, rising just over 1.4 per cent.
Elsewhere on Friday there were a number of other big small cap moves.
Australian mining minnow Thor Mining shot up by about a third after confirming it had trousered A$2million as part-payment for its previously agreed A$3million sale of the Spring Hill gold project.
Shares in Patagonia Gold, another mining junior, were boosted by about 20 per cent as the company unveiled plans for an initial open pit mine in Argentina; the project will have a two-year life before it transitions into two separate underground projects.
MX Oil, which was set up as a Mexican oil business, confirmed it has made a quick turn on its interest in a Nigerian oil field - which it has agreed to sell in a deal worth US$18million.
In the faller’s column, Chinese renewables group Auhua Clean Energy dropped nearly 30 per cent after confirming its shares will be suspended because it has not yet hired a new AIM advisor following Grant Thornton’s resignation last month.
On Thursday, electronic components firm Solid State fell as much as 45 per cent after telling investors the UK Ministry of Justice is terminating a contract for electronic monitoring hardware.
Exploration: Regency Mines bought back into a 5 per cent stake in the Horse Hill or ‘Gatwick gusher’ oil project
News of a dilutive share placing, to raise £1.25million, sent Beowulf Mining shares down about 30 per cent.
Meanwhile, Africa focussed coal-bed-methane group Tlou Energy gained almost 25 per cent as it started production tests from a pilot well in Botswana.
Edenville Energy advanced as much as 50 per cent on Wednesday as it secured a mining licence for the Rukwa coal deposit in Tanzania.
Trinidad oil firm LGO Energy was lifted by news of a non-binding agreement over a possible $20million funding deal, though, investors now await further updates about a binding deal.
Earlier in the week, the Horse Hill or ‘Gatwick gusher’ oil project was back in the news as Regency Mines bought back into a 5 per cent stake in the project following last week’s breakthrough well test results - it previously sold out last year.
- Petroceltic International PLC Share Price | This is Money
- Thor Mining PLC Share Price | This is Money
- Patagonia Gold PLC Share Price | This is Money
- Mx Oil Plc Ord 1p Share Price | This is Money
- Auhua Clean Energy Share Price | This is Money
- Beowulf Mining PLC Share Price | This is Money
- Tlou Energy Limited Ord Npv Di Share Price | This is Money
- Edenville Energy PLC Share Price | This is Money
- LGO Energy PLC Share Price | This is Money
- Regency Mines PLC Share Price | This is Money
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