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Gulf Keystone and the acclaimed Exxon and Chinese “conversations” were very open opportunistic mild interests. And that was before the oil price collapse and before it turned out Shaikan is not the giant people made it out to be. Hence majors are not really that tempted for large but uncertain quantities of 22 API, high sulphuric geopressures, and slow exports/payments:

a. Any enquirers were and even more so now would be looking for very cheap takeover projects, not just Gulf but M&A in general
– in contrast to idiots here thinking it was Exxon for £8 or the Chinese at £45

b. Todd Kozel was a continual problem, everyone HATED his smirk and didn’t want to deal with him. There isn’t a single partner, investor, or potential bidder he hasn’t p!ssed off with his amateurism, arrogance and greed. He’s gone now but his legacy of sh!tting on this company remains.
– in contrast to muppets here who backed him and his salary ahead of CG concerns that came too little too late

c. Uncertainty behind Gulf’s claims and technical data
– in contrast to the silly hype many people have pandered on and the regurgitation of blah blah blacksheep’s now impossible 100bn bl prediction, the data room and tests do not concrete the high octane dreams of the ops team. This has backfired onto Gulf’s competency as an explorer/operator, and hence suspicions on the quality of the asset.

d. Kurdistan being Kurdistan
– proof is in the pudding still no O&G law, exports are being legally chased down by Baghdad, KRG seems to have no money to pay explorers

e. Financial health, or lack thereof. Everyone saw Todd was merely creaming the capital injected by investors, before actual findings were independently certified, before revenues, before cash flow, before profits. With low cash on the books, it is a buyer’s dream to sit and wait for a distressed slip up.

Talk about Todd Kozel delivering you lot out on a silver plate to be plucked. I hate to come back to TK but the fact is you can really thank him here given the current slate of problems and debt the company cannot now shake.

SO, ignore the Exxon/Chinese mentions, come to terms that yes there were some kind of.. talks if one could call it, those are facts but no it wasn’t significant to write home about, dispel the myths that this was a hot pancake bidding war ripe for harvest by leveraged PIs

The majors are looking for cheap takeovers, that has been the sector’s M&A mentality in recent years now, as with Tullow’s most recent opportunistic proposal completely from left field.

Time to really buckle down and rethink from scratch the hard work required to get the current problems off the ground:
1. New blood and leadership
2. Financially resolve structural problems beyond just diluting placements or increasing debt ceiling
3. Rethink plans about how to deal with a non-paying KRG.

Potentially an asset swap into something non-Kurdistan with some actual cash flow?

The real goal has always been to demonstrate operational competency, prove continued appraisal and upside, and remain financially solvent. Forget takeover unless you want to be battered on price.

BooHoo’s higher marketing spend is very much in evidence – I keep seeing ads for the company on TV. Also, my niece has been educating me on the phenomenon of Vloggers – these are young people who do home-made videos, put them on YouTube, and in some cases (e.g. Zoella, and Alfie) have built up enormous fan bases of mainly teenage followers.

A few fashion companies (especially BooHoo) have got onto this trend, and sponsor the best Vloggers to promote their products, and to promote competitions, where teenagers can win free clothes, etc.

Zoella’s photoshoot of BooHoo’s new spring/summer season got a staggering 1.3 million views on YouTube in just 3 days, and 120,000 thumbs up votes. Those are stunning statistics, and shows that the top Vloggers have a greater reach than fashion magazines. They basically promote clothes & make up, and generally talk nonsense to the camera. They have no discernable talent, other than having an engaging personality, and being pretty.

Note also that BooHoo works with an Australian Vlogger called Lauren Curtis, and are planning to tie up with American Vloggers too. This is all very encouraging, as it shows that BooHoo understand their market, and how to promote stuff to them.

My niece tells me that BooHoo is popular amongst her peers (17-19 year olds), but that the product quality is a bit variable. However, she concluded that it’s cheap, so, “you get what you pay for”.

I feel that BooHoo definitely need to focus on improving product quality though, or they will lose repeat customers if they disappoint them too often with poor quality product.

The valuation here is undemanding once you strip out the large net cash pile, and factor in the likelihood that analyst forecasts could now be too conservative.

The growth focus is on certain key markets, e.g. France, Australia, USA, which I think is absolutely right, as opposed to a scattergun approach.

The valuation here is ridiculously low compared with Asos, even though BooHoo is a higher quality business – making a far greater profit margin than Asos, which is struggling to make any profit at all currently, and is buying in top line growth by discounting.

BooHoo also has greater growth potential than Asos, as it’s only about one sixth of the size, so much easier to get strong % growth stats when you’re relatively small, whereas Asos will really struggle to get rapid growth now it’s c.£1bn turnover company.

So I feel Asos should come down from a PER of c.80 to about 25. Whilst BooHoo probably deserves a PER of 30+, to reflect its international growth potential, and higher operating margin.

I reckon BooHoo is likely to surprise on the upside with the next sales/earnings announcement. Management sounded confident in the last conf call, and said that the impact of the new marketing campaign from 1 Mar 2015 had been good.

DYOR as usual.

I’m sorry for not having posted lately but I’ve been exceptionally busy even though I’ve continued to trade. To summarise I’ve lost a lot of money on my Avocet holdings, made money on Amara, lost a lot on Gulfsands (which luckily I’ve managed to offload on its recent tick-up to 68p) and made a lot on long trades on both Xcite Energy and Quindell which I’ve timed out very well. I’m thinking of posting a statement of my account here if I figure out how to upload the data efficiently.

I still believe in Centamin as a long term play. In my view they are relatively immune to gold price perturbations compared to the vast majority of producers that I monitor – thanks to their low all-in costs.

At current price of gold and extrapolating forward to their full 50:50 split with the state by c. 2019, I still estimate their earnings per share at 12p+ (ie making their forward P/E c.5x!), so on a fundamental basis they remain considerably undervalued.

Dividend payments are due to be paid from this financial year onwards.

Their large capital expenditures on the 10mtpa expansion are complete – so free cash flow will rise and remain positive going forward.

They have considerable resources and reserves – so life of mine for Sukari is considerable – even at c.600kozpa.

Ev/OPCF for 2013 was just 4.3x – indicating both the low valuation and extremely poor sentiment across the sector at large.

2013 operating profit margin was 49%, whilst most of the global large producers were struggling around the marginal cost of production.

Costs/tonne milled at $46/t have stayed remarkably constant over the last 4 years with their overall average costs/t being $48/t (including UG operations!).

Unlike most of their peers they have a positive Cash/equity of +9% compared to high levels of net debt amongst most of the big producers.

I calculate all-in costs for 2013 were $710/oz (based on their cash flow statement) and $721/oz (based on their P&L figures) – so a pretty good correlation between the two methods.

So, on a personal level, I am pretty confident to both hold and add shares of CEY.