SEA - Sundance Energy Australia

[Sdajii]

A lot of the recent gains wiped today. SEA looking to relocate their listing to the Nasdaq and terminate the ASX listing. Directors like it … the market didn't apparently. Not sure how this will affect S/H's … What do you guys think about the plans?

Today was a very painful day. This has been my worse financial year for over a decade, the last two weeks or so seemed like SEA was finally turning around and I was almost feeling hopeful, then today we get this shocker.

Obviously an announcement saying the board unanimously recommends the company cease trading on ASX is going to immediately smash the price on the ASX. Why buy something on a platform which you soon may not be able to sell it on? Hopefully the market overacted today and there will be a recovery tomorrow, but it's also possible the panic will continue. Difficult to call.

The market hates uncertainty and this will overall keep the price lower than it otherwise would be until we get the result in November, and I expect that will increase the American price either way.

This company has made a few moves not related to the fundamentals of the company (particularly this one and the consolidation a few months ago) which have had large and predictable impacts on the share price, which may well raise eyebrows in anyone paying attention. The timing of this, just as a recovery was beginning and set to go into full swing, but before it actually did, is... well, it perhaps says something unpleasant.

Long term this is probably a very good time to buy. Very short term it's a bit difficult to call, and it's likely that buyers on the ASX will end up needing to set up trading on the US system (which apparently is quite easy anyway, but I must admit I know almost nothing about) if they want to hold beyond November. I seems very likely the price will be much better by early November anyway. Interesting times over the next two or three months.

 

[Smurf1976]

The timing of this, just as a recovery was beginning and set to go into full swing, but before it actually did, is... well, it perhaps says something unpleasant.

To me, what it says is that management aren't particularly concerned about shareholders.

Price starts to recover on good news, gets smashed down by a purely voluntary action by management. Enough said.

 

[Knobby22]

I did post on August 28th that they said in their report that they were going to do this.
It will make life easier for them as a US company working in the US.

Maybe you should keep holding. It will be interesting to own a US company and see how it works.

Questions to ask though are:
Will they tax you when you sell?
Can you claim the losses in Australia against profits?
I have never bought foreign shares so don't know.

 

[N2Seeker]

To my completely untrained eyes, paragraph 3, page one of the asx announcement reads like share consolidation by a different name? Looks like a new 'parent company' has been put together to take over SEA while giving investors one share of the parent for every 100 held in SEA? Is 'holdco' in this announcement being used in its abbreviation context or is that actually the (perhaps foretelling) name of the ultimate parent company?

 

[PZ99]

I did post on August 28th that they said in their report that they were going to do this.
It will make life easier for them as a US company working in the US.

Maybe you should keep holding. It will be interesting to own a US company and see how it works.

Questions to ask though are:
Will they tax you when you sell?
Can you claim the losses in Australia against profits?
I have never bought foreign shares so don't know.

Neither do I. But I understand the US has punitive cap gains taxes so there seems little choice but to hold for the long term in the bigger market and hope for a shorter recovery.

I'd be talking to a tax agent to see if it's worth selling for a loss and buying back the next day (which might explain today's prices)

 

[ducati916]

DENVER, Sept. 10, 2019 (GLOBE NEWSWIRE) -- Sundance Energy Australia Limited (ASX:SEA) (SNDE) (“Sundance” or the “Company”) is pleased to announce its decision to re-domicile from Australia to the United States via a proposed Scheme of Arrangement under Australian law (the “Scheme”), which is subject to shareholder, judicial and regulatory approvals.

If the Scheme of Arrangement is approved, the Company will transfer its primary listing to Nasdaq, and will cease to trade on the Australian Securities Exchange (“ASX”). As part of the re-domiciliation, Sundance has entered into a Scheme Implementation Agreement (“SIA”) with a newly formed US corporation (“Holdco”), which will become the ultimate parent company of the Sundance group of companies following the implementation of the Scheme. Pursuant to the Scheme, Sundance shareholders will be entitled to receive one share in Holdco for every 100 Sundance shares held by Sundance shareholders on the Scheme record date. The Company intends to cancel its sponsored American Depositary Receipt program following the implementation of the Scheme.

So to actively trade them you would need a US brokerage (platform) or a platform that allows trading of US listed shares (pretty common now).

With SNDE (ADR) trading at $1.35 (down 20% odd) if you purchased US $1000 you would have 740 shares +/-

If you bought AUS $1500 at $0.19 (rough exchange ratio) you would have 7894 shares/100 = 79 shares +/-

The ADR must be a multiple of SEA shares (at this exchange ratio about 10X).

Initially, due to the messing around, probably a negative impact for a while. Might be an opportunity though for new entrants, if the fundamentals do in fact improve.

jog on
duc

 

[ducati916]

Interesting.

So are you unaware of them being about to become cashflow positive, even including debt repayments, or do you not believe the figures as presented? Unless something drastic happens (even if the price of oil drops fairly considerably), they're set to become cashflow positive before the end of the year, possibly this quarter.

If you are representative of a significant proportion of the market, the cashflow positive announcement, which should be one of the next two quarterlies, could bring quite a rerate.

So I have been trying to understand where this positive cash-flow might come from.

The financials 2014 to 2018 reveal the following (all compounded):

COG + 10%
Sales + 5%
CapEx (-16%)

Hence the losses and poor showing.

Now as the 2019 annual report is not in, some guess work has to be substituted:

Sales +23%
COG +6%
CapEx +2%

So if these figures (kinda/sorta) workout, then yes, SEA could show positive cash-flow. My concern would be: if the CapEx was where it should be, would SEA still remain cash-flow positive? Further, the underinvestment (if this is correct) would come back to haunt SEA at some point in the future.

Thoughts?

jog on
duc

 

[qldfrog]

So far quite a nice day, should i send a cheque to Trump or to Iran?

 

[Sdajii]

So far quite a nice day, should i send a cheque to Trump or to Iran?

A friend last night asked me about how I was going with money after I'd mentioned I'd been doing very badly over the last few months. I said I expected tomorrow (now today) I'd do well on the stock market. She didn't really understand that, so I didn't go on to say that I was expecting to be making money due to a massive drone attack in the middle east!

Today's gains were good but I'd say it has further to run this week unless SA announces that the plant is repaired and back in operation or imminently will be. Trump seems to be getting everyone expecting him to attack Iran, but I think he may just be playing games again so he can look like war was all on the cards but he decided against it because he has a great temperament, the best temperament, a temperament which is the envy of all others, and he is a very stable genius.

If the refinery is out of action long term (weeks rather than days) and/or Iran gets attacked and/or Yemen/'Iran' launches further attacks on Saudi Arabia (even if unsuccessful), oil should really run and SEA should follow.

 

[Sdajii]

The end of the September is an interesting time. Saudi Arabia has promised to be back up to full production before the end of the month, so early next week we should hear something about it. I'm a little doubtful they'll quite make it, but near enough will be good enough. The market is already pricing in the assumption that they will be, so there's some potential upside and little downside.

The SEA market seems to be pricing in an assumption that the Dimmit sale won't go through, presumably due to the buyer pulling out after the drop in oil price. I'm guessing it will go through so there's some upside for SEA next week/month.

It'll also be interesting to see if SEA managed to lock in any hedging during the peak of the recent oil price spike.

 

[Miner]

Folks
who are following SEA and holding, could you please share your thoughts on proposed 100:1 conversion offer and NASDAQ listing of this stock ?
Last few days the share price is going north, shareholders have approved the amalgamation and very soon the stock will NOT be traded on ASX. So it will be effectively a foreign stock and to be followed all norms as well as higher brokerage, different taxatio.
What is your view on holding the stock or to sell off now ?
I do have small holding but having a dilema.
https://www.asx.com.au/asxpdf/20191108/pdf/
[URL]https://www.asx.com.au/asxpdf/20191002/pdf/4494c63x2f2jp1.pdf[/URL]
From the 132 pages scheme booklet, unfortunately I am unclear at what price SEA is getting convered considering last few days the share price has gone up even the current price is at the bottom most phase.

 

[qldfrog]

I sold off at a significant loss not to bother
Remember link, any australian company successfully moving OS?
Shareholders here will be suckers is a usual trend from my history

 

[System]

On November 27th, 2019, Sundance Energy Australia Limited (SEA) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between SEA and its shareholders in connection with the acquisition of all the issued capital in SEA by Sundance Energy Inc.

 

[Kremmen]

Now that the move to NASDAQ: SNDE is complete, value is up a bit. (US$19.08, equivalent to 27.8c in old SEA equivalence.)

However, the move also means dealing with Computershare, who are inept, bureaucratic and greedy.
* Parts of their web site don't work properly.
* They insist on sending all documents by snail mail to your Australian address.
* They charge brokerage of US$25 + 12c/share.
(Note that a number of big US brokers have reduced their brokerage fees to zero recently.)