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HOG - Hawkley Oil and Gas

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It's my only holding as well, but that has me only 10% invested, so I can still sleep soundly!

I believe it's just a technical selloff, along with everything else - the volume is tiny, so I doubt if there's anything sinister about it.
 
All a bit sad and painful with HOG continuing to slide. Finished at 35c - 2c below the new share issue price. And there was a fair few sales.

Is there any likelihood the share placement can be withdrawn? I remember this happened a couple of times last year with CTP and I think CXY.

I am absolutely amazed that there isn't some reasonable buying support from at least the directors to

a) Show some confidence in the company
b) Try to keep the current share price at the new issue price.

This assumes of course that there isn't some nasty news in the background.

Just doesn't look like good investor management. Any thoughts ?


______________________________________________________________

Does anyone have any comments on the prospectus for the additional shares? They certainly spelt out all the risks HOG could face but apart from that it seemed ordinary .
 
Yes, there were a fair few sales yesterday - stop losses will have been triggered. However the volume was still well below the daily volumes of late 2010 - so I still think the current action doesn't have a lot of meat behind it. This doesn't mean the sp won't fall further, of course - 29 or 30c is now on the radar from a technical perspective (coincidence of the 61.8% Fibonacci retracement of the 2010 upmove and the bottom of the 2011 downtrend channel).

In a more positive light, the number of shares currently offered at 37c or less is worth a lot less than $3m - so if there is a genuine demand for $3m worth of shares, then selling such a large number now in the expectation of being able to buy them back at less than 37c may be unrealistic - there just aren't enough on offer at the moment. But time will tell - volume can appear from nowhere.

Of course if the sp stays below 37c the company are going to be $3m short in their CR -not the end of the world, and the company may have other options anyway - they still have the $15m from the major portion of the CR, and that was oversubscribed - surely a vote of confidence in the fundamentals.

Those are my thoughts!
 
Say the price drops below 30c... why would an investor sign up for the CR then??? or the institutions????
 
BrightGreenGlow said:
Say the price drops below 30c... why would an investor sign up for the CR then??? or the institutions????
Click to expand...

The way I read the announcement, it seems to me that the instos have already signed up to the placement. It would just be the retail investors wondering whether or not to subscribe through the SPP if the market price is under the SPP. I'm currently out of HOG, but if I had the cash, I know what I'd be doing...
 
Surely the institutes wouldn't sell for a loss straight away given the assets that will be acquired with the money.
 
BrightGreenGlow said:
Surely the institutes wouldn't sell for a loss straight away given the assets that will be acquired with the money.
Click to expand...
They might if they know that, due to the current market sentiment, the price was going to fall further and they could pick up more shares for the same total cost.
 
zzaaxxss3401 said:
They might if they know that, due to the current market sentiment, the price was going to fall further and they could pick up more shares for the same total cost.
Click to expand...

I think it is time for HOG's management to show just what sort of value HOG already offers with one successful well and reinforce the future value when the gas plant is built and extra wells are drilled in Sorochynksa. (Given that this field is already proven and producing excellent volumes of gas and oil the extra wells can be viewing as engineering actions rather than pure exploration. A bit like building a new factory with a certain demand for its supply). This doesn't even value the drill in the Chernetska field which is supposed to be much larger - but as yet unproven by the current team.

At current prices and returns HOG is exceptionally good value. But that doesn't mean it can't be overlooked
 
zzaaxxss3401 said:
They might if they know that, due to the current market sentiment, the price was going to fall further and they could pick up more shares for the same total cost.
Click to expand...

Maybe, but to spring a stunt like that the instos would have to dump up to $15m worth of shares on the market, ie about 45m shares, and then hope that they can buy them back lower. Are they into Russian roulette, or are they already satisfied that they have bought value at a reasonable price, 37c?

For what it's worth the buyers slightly outweigh the sellers on the MD at the moment. I assume all the buyers are genuine, I know there is at least one - me!
 
HOG announced the start of the Chernetska drill today and took the opportunity to remind the market of the (excellent) oil and gas flow that had come from the earlier 1980's drill.

If it follows the form of the Sorochynksa No 1 drill it should/could be 3-4 times more productive than the original flows. Company suggest it will take five months - takes us to October-November. (Be a great Christmas present...)

http://newsstore.fairfax.com.au/app...t/quote.ac?code=hog&submit=Go&section=summary
 
Yep, I've been surprised to see HOG retreat as far as it has, given it's current cashflow from Sor #1?? I guess though, I was also surprised to see the cap raising ann so soon after them claiming that cashflow would see them through - that definitely looks bad

Similar to SDL ann cap raising after repeatedly saying that they had enough cash!

Long time to drill the well, averages 30m per day?

SHould they get some good gas flows though, there should definitely be interest
 
Well HOG finishes at 33c again today - more than 10% below the issue price for the capital raising.. There won't be many stags for this capital raising !

Could one see the capital raising at 37c as a clever move to lock in "good value" money ? Or did the capital raising (which at announcement was at a significant discount to the share price ) actually precipitate the fall in SP ?

Makes it very hard to see how current shareholders will take up the offers for the extra shares. I wonder if the current directors will take up the extra shares ? They have suggested they "may" do so in the Annual General meeting notice.

And it would be good to hear some further positive news on oil and gas sales, incresae in production, kicking off the next couple of drills and an update on income versus SP.
 
It's definitely underwhelming the current SP performance, and certainly no-one could sensibly take up the SPP at these prices unless they only can afford a few hundred dollars worth.

I would really like to see a proposed timetable for the gas plant at Sorochynska and the additional wells, management came out of left field a little with the CR, so it would be reassuring to see a plan with time-lines and a little more thought than this is what we'll use this money for.
 
Surely no one is going to participate in this capital raising when you can buy them on market for around 34c?
 
The main bulk of the cap raising is locked in with instos, etc. - but the SPP will get very little showing as you point out the current SP is less than the offer price. Matters little when it's only 20% of the overall amount IMO.

Still reckon this is great buying opportunity - just wish I hadn't blown all my cash trying to short the AUD
 
^^Same here, but I've put all my spare cash into a silver ETF...so we'll see how that goes..
 
PinguPingu said:
^^Same here, but I've put all my spare cash into a silver ETF...so we'll see how that goes..
Click to expand...

I'll see your and raise you Been trading in and out of silver for the last three months and was kicking myself that I didn't just buy a couple of contracts at $33 with a trailing stop and would have been LAUGHING instead of bloody trying to be a smartass and pick the top of the AUD

Ah well, it's all part of the game I keep telling myself - stick to my plan, AND STOPS, and don't fight the trend
 
I received my SPP package earlier this week from HOG. I haven't even bothered to look at it. Why would I when I can pick up shares on-market for 4c/share less than the SPP price? I hope the SPP is fully underwritten (I can't remember now) because HOG will have a massive shortfall, IMO.
 

No, from reading the docs last night I recall that the 3 million shares for retail investors is not underwritten and you are right PM unless the price jumps up pretty quickly then there will more than likely be a shortfall. I still dont really know why they did the raising to instos and retail investors at this point anyway?? Time will tell if it was worthwhile but not for us retail investors at this stage.
 
Not sure how HOG will have a shortfall, besides it being symbolic. The 15 million as indicated by the costs estimation will be enough to fund all the work that has been stated thus far, with the 3 million shortfall coming from the "acquisitions" fund thingy of 4.5 million. The initial 15 million has already been sold to institutes etc, oversubscribed.
 
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