No less than four RNSs out today
1) Morgan Stanley have declared a 19% holding
2) Artemis have 5%
3) Altima have 5%
4) OZ Management LP and Och-Ziff have 19%
(nb all holdings rounded to nearest whole %)
That sounds like quite a vote of confidence doesn't it?
I have not reached the level where I have to declare my holding but I will state that it is about 1.5% of my own personal bunch of bananas.
Fangorn
Probably a good place to start woudl be this thread on Deo Petroleum (LON:DEO) .
Essentially its a very highly regarded technical team with a vast experience of the North Sea starting out with a smallish but simple asset that can be rapidly progressed through to production. That they paid a snip in terms of $/bbl of 2C is a further benefit.
Where they go from here is anyone's guess but Id imagine that they will look for further asset purchases/farm ins and development opportunities.
Fangorn
the headline is they want to get rich slowly.
Its basically a start up by an experienced management team who have worked together before. They come from Oilexco's N sea business (that company's failure was not down to them. ) They have done a reverse takeover of a micro-cap to get a listed vehicle. They have then done a small fund raising and bought their first asset - a small field discovered by Nexen and now ready to be developed. It is not a spectacular asset, and it is pretty small. But they reckon they can make a decent turn on it and it is a start. They seem to have secured enough support from institutionl ainvestors to make future fund raising achievable.
The strategy is the same old tried and tested approach taken straight from the E&P start-up text book - chapter 1. the attraction is that they have a good looking team - management and technical. They have investor backing. They have their first asset which is a prosaic but practical development task which will lead to relatively early cash flow albeit modest in scale.
I do not expect these guys to shoot the lights out any time soon. I do expect them to build a company in a methodical and patient fashion much like Dana did. That's an approach I like. Other companies I've seen with the same ambition have made the mistake of starting out by focussing on exploration rather than production and when they've been disappointed have had no plan B. By going for a development to start with DEO are opting for a much lower risk approach - the reward is also lower of course but the EMV works out better because the odds are better.
So I'd characterise them as aiming to build a production base which will ultimately support exploration in a self funding way.
It's worth looking at the web site www.deo-petroleum.com
and also at the broker analysis published this week by First Energy - I am not allowed to quote that wholesale but their management summary says:-
"...initiate coverage on DEO Petroleum ...Speculative Buy ...target price of £0.80 per share...US$35 MM market cap ....AIM listed pure play on the UK Central North Sea with 12 MMBoe WI contingent resources in the Perth group of fields.....extremely experienced management team, (who) operated 30% (137) of all the E&A
wells drilled in the UK North Sea between 2004 and 2008....recent Perth acquisition ....a critical mass. Additional acquisitions are likely to follow....(Perth asset) risked at a conservative 60% chance of commerciality.
This suggests no value is given for the alternative option to develop the fi eld with a Floating Production
Storage and Offl oading (FPSO) facility, unlocking 2.9 MMBoe additional resources. The submission of a Field
Development Plan (FDP) for the asset could derisk the development of Perth Core with an unrisked value of
£1.50 per share, three times above the current share price....."
I've only taken a very small position - 1.5% of my portfolio - so just an early worm kind of thing (its what the early birds get)
HTH
T
Appreciate the colour Tourn, and thanks for the link Djp. Will go take a look.
From your comments it does have some immediate appeal - as you say decent management team with technical expertise, and , more importantly, they're looking to build up in a methodical and patient fashion. I too like this approach.
To coin a relatively famous phrase if you're that way inclined:
"Good things take time, that was how IBM was built!"
Gratias
http://moneyam.uk-wire.com/cgi-bin/articles/20101202104221PF15D.html
Credit Suisse now have 7.7%.
Better top up quick T or there won't be any more left for you.
Thanks Peter - nudged me into doubling up......
see there's some generally positive press coverage available via google....
T
