Petrohawk sold 50% of its Haynesville midstream assets (pipelines, gas treatment plants, etc) to Kinder Morgan (a pipeline company). They didn't sell any acreage. I dont know that ADI really owns any midstream assetts that they could monetize.
So if they need cap, why don't they just sell off other asetts such as Yemen ? I thought that's what they were going to do...sell Block 7 ? Hell.....a couple weeks ago Petrohawk sold out 800+ million $$$ worth of the sacred Haynesville shale, a play they have been in for quite some time to gather more cap for the Eagle Ford play. What is the strategy for Adelphi if they are not selling Yemen ?
So if they need cap, why don't they just sell off other asetts such as Yemen ? I thought that's what they were going to do...sell Block 7 ? Hell.....a couple weeks ago Petrohawk sold out 800+ million $$$ worth of the sacred Haynesville shale, a play they have been in for quite some time to gather more cap for the Eagle Ford play. What is the strategy for Adelphi if they are not selling Yemen ?
Petrohawk sold 50% of its Haynesville midstream assets (pipelines, gas treatment plants, etc) to Kinder Morgan (a pipeline company). They didn't sell any acreage. I dont know that ADI really owns any midstream assetts that they could monetize.
hilcorp will require some considerable capital from the jvp partners when drilling commences on the acreages, so adi is preparing themselves for all eventualities and outcomes in the near term the way i see it. and giving themselves a potential injection of new capital from new investors which imho is critical at this point also..
unpopular as always a cap raising is, but imho its part and parcel of development.
imho the value about to be attained by the jvp through the current wells being opened up and the injection of new blood is excellent timing and will be positive for adi long term.. no one can argue a cap raising will be popular with current holders but its necessary and well timed imho
all imho and dyor
Well if there's any good news out of this then this might be it. I pass on my compliments to the Board for taking a careful approach to future "possible" expenditures for the corporation. It seems to be a wise strategy and a good worst case scenario to be prepared for such things such as the need to furthur drilling Yemen if necessary.
The downside is that it may be a gloomy projection on paper for ADI and perhaps will shun some investors, but knowing what is going on in Texas and seeing it here with my own eyes the ADI and AUT seem derisked to a level that I am comfortable with.
IMHO and DYOR, of course. I'm no expert. Just watching the rigs go up over here that's all. And MAN are they going up fast !
The upside to this is that getting a large placement at a small discount to market rate shows the amount of confidence the market has. The downside is the dilution. This has halved ADI's advantage over AUT in the joint venture profits.raise $5.5 million through a placement of 22 million ordinary shares at $0.25 per share(“Placement”)
30 April 2010
Company Announcements Platform
Australian Stock Exchange Limited
Exchange Centre
20 Bond Street
SYDNEY NSW 2000
Via ASX Online
ADELPHI TO RAISE $5.5 MILLION TO PROGRESS SUGARLOAF DEVELOPMENT
Adelphi Energy Limited (“Adelphi” or “the Company”) is pleased to advise that it has resolved
to raise $5.5 million through a placement of 22 million ordinary shares at $0.25 per share
(“Placement”), predominately to institutional and sophisticated investor clients of Hartleys
Limited, which acted as Broker to the Offer in respect of the Placement. Adelphi’s long-term
cornerstone shareholder AWE Limited has confirmed its ongoing support for Adelphi and has
committed to take up a pro-rata share in the Placement to maintain its 32.5% shareholding in
the Company.
Funds raised pursuant to the Placement will be primarily used to fund the development
program at Sugarloaf following the rapid progress made by our operator in relation to the
recent farm-in wells, where flow rates of up to 1,132 bopd and 4.4mmcfg/d have been
achieved.
Commenting on the success of the Placement, Adelphi’s Managing Director, Chris Hodge
stated:
“As demonstrated by the sustained strong oil and gas flows achieved from the first two wells
on production at Sugarloaf, which we consider to be comparable with the best achieved in
the Eagle Ford, Adelphi’s perseverance at Sugarloaf is now beginning to reap rewards. We
are excited by the potential upside offered by the ongoing work program - with results from
the 3 wells that have recently been drilled expected to be reported over the coming 4-6
weeks.
We are also very pleased with the strong support that has been received in respect of the
Placement, which will ensure Adelphi remains well funded to progress the Sugarloaf
development.”
The Placement shares will be issued pursuant to the Company’s 15% capacity under ASX
Listing Rule 7.1. On completion of the Placement, Adelphi will have cash reserves of
approximately $9.5 million.
Adelphi’s latest investor presentation will be released separately this morning to ASX.
"institutional and sophisticated investor clients of Hartleys
Limited, which acted as Broker to the Offer in respect of the Placement"
Does this change Hartley's price target given the dilution then or was it already factored in?The recent push on AUT may not be a coincidence then.
Not too fussed given the new investors shouldn't introduce too much volatility. However with the cash injection, the emphasis has shifted a bit from operational excellence(which hilcorp has proven) to strategy.
Since ADI has released a presentation much like AUT did last week. Perhaps new blood will be attracted!
I'll bet that Hartleys will be promoting the stock at a much higher price than they paid. I'm annoyed that they had the offer at a discount price and the offer was not made to all shareholders. AWE were given a pro rata issue for them to maintain their percentage holding, but then they are represented on the board so they were able to look after themselves. Hartleys were handed about $1M in easy profit.
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