Sobering Look At Sona Petroleum

Ok, the deal seems to be off. If you look at it, that is possibly the BEST thing that can happen for Sona. The mother shares have been pummelled from 55 

sen to be around 44 sen following the proposed deal with Salamander, owing to the sharp falls in oil prices. No deal means back to cash valuation. Why still fall when the deal is off... its good that the deal is off since oil prices has corrected a lot from whence the deal was announced. Now they can skeet new assets with better pricing. Maybe not 55 sen, but should have no issue climbing back to 50 sen.

On behalf of Sona Petroleum, CIMB Investment Bank Berhad and RHB Investment Bank Berhad wish to announce that Sona Petroleum had, on 24 November 2014, received a notice from SEBHL and Salamander pursuant to the SPA stating that the boards of directors of Salamander and Ophir Energy Plc (“Ophir”) have reached an agreement on the terms of a recommended acquisition to be made by Ophir and/or a wholly-owned subsidiary of Ophir for the entire issued and to be issued share capital of Salamander via a scheme of arrangement (“Offer”). It is a condition of the Offer that the agreement between Salamander and Sona Petroleum in relation to the Proposed Transaction is terminated. A copy of Salamander’s announcement dated 24 November 2014 (“Announcement”) is attached herein. 

  

Notwithstanding the above and with the receipt of the SC Approval, the Board of Directors of Sona Petroleum (“Sona Board”) remains highly committed to complete its Proposed Transaction. The Sona Board is seeking further advice on the Offer and will engage with Salamander before deciding on the next steps.

The Sona Board will continue to provide updates on any further development as and when they arise. 

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Why Global Investors Keep Looking to United States for Guidance

Thats the first thing you learn when you step into an investment career, but do we know why. I mean, we know its big, but just how big? This map shows clearly why. It dissects out the states of the United States and correspond that to a country with the similar GDP for that state. 

Its an incredible map as it puts into perspective just how important that entire economy is ... its like over 50 countries .... That may partially explain why most Americans do not travel much, they have most of what they need there. For us, we may need to travel for business, but for them traveling within a few states there is like making business contacts with a few countries.

We also give Americans a hard time when we find out how few actually travel outside of America ... but just trying to cover a few states is already like covering a few countries, and each of the states are actually quite different in their make up and essence.

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Low Oil Price Providing a $1.3 Trillion Fiscal Stimulus

You cannot just be focused on one side of the equation. Yes, lower oil prices may affect the revenues of oil exporting nations. It may even be a reflection of the oversupplu, maybe brought on by rogue nations milking oil for funds for war and terrorism. It could also be a strategy by OPEC to decapitate shale oil production ventures which needs oil to be safely way above $80 to make it feasible.

Whatever it is, lower oil prices will also mean savings for almost all nations, and in actual fact may go a long way to boosting demand and improve savings for reallocation of resources t

o other areas of the global economy. The report below from Bloomberg pegged stimulus at $1.1 trillion, now it should be $1.3 trillion. Thats a whole lot of QE in a different form and manner. Not all news is bad, the pendulum may swing but there is always a counter balance.

The lowest oil price in four years will provide stimulus of as much as $1.1 trillion to global economies by lowering the cost of fuels and other commodities, according to Citigroup Inc.

Brent, the world’s most active crude contract, closed at $83.78 a barrel inLondon yesterday. That’s more than 20 percent below its average for the past three years, amounting to savings of about $1.8 billion a day based on current output, Citigroup estimates. Savings will climb to $1.1 trillion annually as the slide cuts costs of other commodities, leaving consumers and companies with extra cash to spend and bolstering growth, according to Ed Morse, the bank’s head of global commodities research in New York.

Crude prices are plunging amid signs that OPEC, supplier of 40 percent of the world’s oil, won’t act to eliminate a surplus as global growth slows. Combined supplies from the U.S. and Canadarose last year to the highest since at least 1965 as producers tapped stores locked in shale-rock formations and oil sands. The global economy will rebound next year, with growth quickening to 2.98 percent, the fastest since 2010, according to analyst forecasts compiled by Bloomberg.

“A reduction in oil prices also results in a reduction in prices across commodities, starting with natural gas, but also including copper, steel, and agriculture,” Morse said yesterday in an e-mailed response to questions. “All commodities are energy intensive to one degree or another.”

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