just too many shares issued
think there is still downside in short term

the news in Star said that SC submission by end of this month Nov. Hopefully approval in Jan16.
Then can see some possible upside

cont

Sona’s head honcho Datuk Seri Hadian Hashim tells StarBiz he is targeting to submit the proposed QA to SC by end of this month.

For the deal, Sona is expected to use 40% of its trust money, whereas the SC has stipulated that a QA should use at least 80% of the SPAC’s trust monies.

Hadian says that Sona is looking at an initial capex of US$80mil, which would be funded from the trust money. This will be used to undertake further development of the Stag Oilfield to enhance production including the drilling of infill production wells.

“The current cost of production is about US$26 per barrel and we are also targeting to ramp up production of about 20% to 25% as a start,” he said.

According to an industry expert, the downside of CLIQ’s deal is the to fix its production efficiency, while for Sona it is to sustain the production considering it is an 18 years old field.

“Both companies’ entry cost is quite attractive and reasonable considering they are producing oilfields and at the current low oil price environment, but main hurdle is to sustain the productions and would need additional capex to maintain the field,” the expert said.
the star

PETALING JAYA: Although CLIQ Energy Bhd and Sona Petroleum Bhd have both announced details of their qualifying acquisition (QA), it is left to be seen if they will pass the hurdles of securing both the regulators and their shareholder approvals. And the trick is for them to do so within a tight time frame.

In Sona’s case, it has to secure these approvals by July 29, 2016, which is about nine months away, while CLIQ has a shorter deadline, namely April 9 or 159 days away.

Amid gloomy mood looming the oil and gas sector, convincing 75% shareholders to agree on their proposed acquisitions will be a tough one, especially both counters is trading at a discount to their cash value.

According to Hong Leong Investment Bank (HLIB) Research recent report on SPAC, CLIQ and Sona have net cash per share of 71.8 sen and 47.9 sen respectively.

At the current share price of CLIQ at 68.5 sen and Sona at 44.5 sen, the upside to their cash value are 4.8% and 7.6% respectively.

CLIQ has already submitted its QA to the Securities Commission (SC) and targeting to call for a shareholders meeting early next year.

CLIQ managing director and chief executive officer Ahmad Ziyad Elias told StarBiz that CLIQ was targeting to complete the deal in early-March next year.

Recall, CLIQ identified its QA in March this year that involved an acquisition a 51% stake in two oil fields from Kazakhstan-based Phystech Firm LLP for an estimated US$117mil. The price for the oilfields was based on assumption of a crude oil price range of US$70 to US$89 per barrel (Urals crude oil) between 2015 and 2021.

Urals crude oil is a basis for pricing for the Russian export oil mixture that hovers slightly below Brent crude and above WTI crude. On Monday, Urals was trading at US$45.71 per barrel.

Ziyad said CLIQ’s evaluation for the first operation forecast was US$52.40 per barrel.

Although the deal will exclude liabilities, payables, cash and receivables, CLIQ’s proposed QA is beyond its affordability due to the weakening ringgit. As at March 31, CLIQ has RM345.8mil in its trust account.

When CLIQ announced the proposal in March, the asset cost for CLIQ is RM433mil, but due to the sharp decline in the ringgit against the greenbag, the value is now about RM510mil.

Upon completion of the acquisition, CLIQ will only need to pay US$90mil or RM393mil, and the remaining US$27.3mil will be paid by the end of the third year.

CLIQ had proposed a RM210mil rights issue to make up for any foreign-exchange loss and the balance would be for capital expenditure (capex) to develop the field. The proposed rights issue is conditional upon the approval of the proposed QA.

According to CLIQ’s proposal, the oilfields in Kazakhstan started production in 2008, producing about 1,400 barrels of oil per day from 102 wells.

It has been estimated that the Karazhanbas Northern Field’s 2P reserves (proved and probable) as at Jan 1, is 39.4 million barrels, which translate to 20.1 million barrels as per CLIQ’s 51% stake in the field.

Based on back-of-the-envelope calculations, CLIQ is paying US$5.84 per barrel for this deal, which is higher than Sona’s QA deal.

Sona is paying US$50mil or US$3.08 per barrel for its planned acquisition of 100% equity in the Stag Oilfield off Western Australia.

Note that the Stag Oilfield has been in production for about 18 years, while the Karazhanbas Northern Field is about seven years.

Ziyad said the development and production cost for the asset was around USD$15 per barrel.

“We projected the cost to be less than US$10 per barrel when the company ramp-up production to 7,500 barrel per day at the end of fourth year operation,” he said, adding that the company was aiming to drill 400 wells from 120 wells currently.

Post completion of the QA by CLIQ, there is a requirement of US$30mil (RM131.64mil) working capital for the first year, of which CLIQ will finance US$15.3 million of it from their 51% shareholding, and the remaining will be by Phystech.

“We only need to fund the first and part of the second year capex. The following years will be from project generated revenues,” Ziyad said.

He added that the first development phase will ramp up production by 30% from 1,400 barrels of oil per day currently.

However, Phystech’s earnings before interest, taxes, depreciation and amortisation (Ebitda) margin has been on a decline from 38.3% in 2011 to 17.5% in 2013. The decline was due to production inefficiencies, but is expected to improve with the new proposed development plan, CLIQ says.

On the Sona deal, after calling off its proposal to acquire Salamander Energy (Bualuang) Ltd’s gas producing assets offshore Thailand, it recently announced its second QA attempt.

The deal involves an oilfield that has been in production since 1998. The field is expected to have 2P reserves of 16.2 million barrels and currently producing 4,600 barrels of oil per day.

Read Edge weekly latest

Cliq's QA hits the wall as SC requested them to revised purchase price lower, and indication of not approved unless price is lowered

There was analysis of purchase comparison between Cliq's QA and Sona's QA - Sona investment cost is USD3.10 per barrel vs Cliq's USD5.80 - 46% cheaper than Cliq's cost

Profit assumption on SONA too.....

From the analysis, Sona came out winner VS Cliq

Sell Cliq and Buy SOna

cliq's QA hit the wall with SC requested for revaluation of the purchase price as good as not approved unless price is revised lower
Read Edge weekly

the worst period is over, now entering a new phase but still have to go through the turbulence of processes

the sceptics and the negatives that worry over anything and everything, shud sell to the buyers and have a peaceful mind

those who worry about anything and everything shud just sell and take your concerns and misery out of your mind

The Stag Oilfield investment - about 40% of fund, pls bear in mind there is additional capital investment for Infill production wells to expedite oil production and future oil exploration cost.

I believe SC will approve the QA as the deal is favourable to shareholders.

As we are entering buyer market when many big O&G players need cash badly, more opportunity for good acquisition in the next few months

I believe Sona will acquire another assets with the cash available.

Agree, after this deal, can still go for another good acquisition and in 1-2 years the oil price recover above usd55, I think this is going to be an interesting investment.




trader66 With this purchase, SONA may still hold a lot of cash to look for other QA if any. Indeed, this is a very good move for this wise acquisition. Just wait, if every steps go smoothly. Believe this counter will attract a lot of fund Mgr's investment. It will definitely show a quantum leap price in near future.

03/11/2015 17:26

my confident towards sona increase few notches with this QA. Particularly concern over purchases where you don't know who the real owners and from certain countries eg Rusian, Indon, Africans... Those cases are normally related transactions hide under nominees, flippers, marked up prices and high degree of cheating...

this deal looks clean, good and the sellers are reputable and they need to sell for cashflow

Thumbs up, Sona

habis lah
panic selling cont tmrow morning

armageddon

cliq warrant didn't move much after QA announcement
yup, don't feel right
do the right thing
sona warrant shot up after QA announcement
do yr own analysis and investment

how come no limit down? almost 50% down

sell Hibiscus, sell Cliq
buy Sona

if your purchased price is is 0.30cts, conversion price is 35cts, that means u have to pay 35cts to convert to mother share

your total cost is 65cts

now the warrant at market price is 11 cts plus conversion price 35cts = total cost is 46cts

Posted by matilda > Nov 3, 2015 10:30 AM | Report Abuse

Assuming l have purchased sona warrants at 0.30 sen and the exercise price is 0.35 sen, what will be the amount l have to pay to convert? Could someone help.

if the QA is done, the son price easily around 20 to 25 cts
just my opinion

Thanks Mun Hong

Sell and convert to Sona for exposure in oil and gas

anyone know whether the son is convertible by 7/2016 or 7/2018.
if no QA, mati kon kiau in 7/2016
got QA, CONVERTABLE BY 7/2018?

BETUL MY INTERPRETATION?????

if got QA THEN CONVERT BY 7/2018?

Laoliu - the warrant need to convert by july 2016 or 2018?

looks like the son is undervalue
buyers just slurrrp slurrrp
good upside indeed

can expect more local and foreign funds to buy



Posted by LaoLiu > Nov 3, 2015 12:10 AM | Report Abuse

Good, I like the panic buy you said. Hopefully another trend up occur.

if the stock can go up on average 0.05 to 1 ct per week, I am satisfy dy

another KOS?
give me 80cts, I am satisfied dy




officejanitor Hooray !! Excitement in the penny stocks again. But wait….

How do we value sona from this announcement? Let’s do the maths.

Based on Santos latest report, annual production probably around 1200k bbl. After deduction on production cost, depreciation & depletion, and admin of around USD32 bbl, we have a gross of USD18 bbl if oil stays at USD50 bbl.

On pre-tax basis, 1200k x 18 x 4 ( USD/MYR ) =RM86.4m per year. At a PE of 12 = RM1036m or 73 sen/share, excluding cash reserves IF the deal goes through.

And if, the proposed infill drilling is successful, there will have additional upside.

Therefore, we have a base case of 1P of 70sen/share to a 2P $1.20/share and 3P $1.80/share? But bear in mind the following ..

02/11/2015 15:14

luckily is a good QA
if is a screwed up QA, then really confirmed salted fish

slow and steady, no hurry
cant expect rocket men chart

licence is given to goring goring crispy

due to the announcement, NO UMA

sharky, lets goring limit up up

those reverse takeover by those European and JoLow by issuing shares will not worked

What seller wants is hard cash cash

Cash is King

Vendor Santos need cash, this deal will go through

once this deal has gone through, be sure there will be more mouth watering deal later as Sona still have extra cash and convertible warrants to play with

value of stag oilfield last year- wow wow usd200m

While it has been suggested that Stag could fetch up to $200 million, it's understood the purchase price is significantly less given the tumbling oil price and the heavy writedowns around the globe in the sector.

by
Sarah Thompson
| Anthony Macdonald

Santos is poised to announce the sale of its Stag oil field asset off the coast of north-west Western Australia in the first concrete sign that deals are getting done as the battling oil and gas group fights for its corporate survival.

Lending sources told Street Talk the final sign-offs were being inked late on Sunday night as Santos lets go of its majority stake in the Stag field, about 60 kilometres offshore from the town of Dampier, to an offshore acquirer.

Perth-based firm Miro Advisors has been running the sale.

While it has been suggested that Stag could fetch up to $200 million, it's understood the purchase price is significantly less given the tumbling oil price and the heavy writedowns around the globe in the sector.

The Stag field, discovered in the early 1990s, is 66.6 per cent owned by Santos while Perth-based Quadrant Energy owns the remainder and is the operator.

Stag is a conventional oil production platform connected to the Dampier Spirit Floating Storage and Offtake vessel. The field commenced operation in 1998 and produces up to 8800 barrels of oil per day.

With all these numbers flying around – and indeed offers flying towards Santos head office – it must be getting difficult for Santos and its advisers to value the group's equity. It also looks like the equity value may be less than what Santos had been hoping.

Santos has received two bids for its offshore Victoria parcel of assets which include fields in the Gippsland and Otway Basins while it's also in talks about offloading a 3.6 per cent stake in the PNG LNG project to Japan's Marubeni, revealed by Street Talk on October 23.






































However, the biggest variable for Santos investors in valuing the company is its GLNG operations in Queensland, with fund manager sources telling Street Talk there are rumblings about a potential writedown.

Those looking in the rear view mirror will be ruing the lost opportunity to raise equity when the share price was still above $12 a year ago. Hindsight is a wonderful thing.

Meanwhile, sales desks and arb funds are still trying to work out how to play Asciano's takeover.

While Qube and friends – and their broker UBS - handed a "get out of jail free" card to a lot of fast money funds last week, they are now wondering what to do with stock leftover.

The problem is that Brookfield Infrastructure Partners deal in its existing form looks dead in the water, and there is no knowing when Qube and co will attempt its break-up play. So with no sign of any imminent live deal, merger arb funds may be forced to dump their stock.

Asciano is also expected to suffer a big index down weighting, now that Qube is on the register, which could also drag on the port and rail operator's shares.





Read more: http://www.afr.com/street-talk/santos-strikes-deal-to-sell-stag-oil-field-20151101-gknyxd#ixzz3qJ6DRkfA' target='_blank'>http://www.afr.com/street-talk/santos-strikes-deal-to-sell-stag-oil-field-20151101-gknyxd#ixzz3qJ6DRkfA
Follow us: @FinancialReview on Twitter | financialreview on Facebook
http://www.afr.com/street-talk/santos-strikes-deal-to-sell-stag-oil-field-20151101-gknyxd

the son can go limit up 30% at 11 cts

looks like the son will be goring up by sharky

buyers piling up, hope credit suizze don't sell to spoil the party

Have to find rocket men, not only sharky

IVAN2222 CONFIRM AFTER 2.30PM SHOOT TO 0.5 above

02/11/2015 11:48

http://www.theedgemarkets.com/my/article/sona-buying-australias-stag-oilfield-us50m-its-qa

hope this deal will take the price above 60cts in few months

good time for sharky to goring up the mother and son

thumbs up


Posted by kensen > Nov 2, 2015 10:04 AM | Report Abuse

Super good deal - USD250 mill (Salamander) for 4,800 barrels based on equity interests of 40% Vs USD50 mill for 4,600 barrels

yeah, agree, this is a much better deal than Salamander, high cost and only 40% stake

seems like a good acquisition based on costing and estimated reserves

1. costing usd50m and Sona reserve cash balance can be invested in the oilfield for higher production (without going for bank borrowing) - seems good

2. reserves seems ok for the price - thought I am no oilmen

3. target IRR at least 15% - seems good

nevertheless, any research report and analysis by oil men will be good

Can any oil expert give some opinions on the oil fields, reserves 1P, 2P and 3P etc

share suspended for morning, open at 2.30pm

oil price is low, excellent timing for QA. Thumbs up

Ini kali lah