ADNOC launches second bid round for oil, gas blocks

The supercomplex at Umm Shaif field, 150km offshore from Abu Dhabi. (Supplied)
Updated 01 May 2019
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ADNOC launches second bid round for oil, gas blocks

  • The bidding will be for both conventional and unconventional resources, and the successful bidders will enter into agreements granting them exploration rights
  • In conjunction, ADNOC Distribution, the fuel distribution arm of ADNOC, posted a 6.6 percent rise in first-quarter net profit on Wednesday

ABU DHABI: Abu Dhabi National Oil Company (ADNOC) said on Wednesday that it has launched the second exploration bid round for five new oil and gas blocks.
The bidding will be for both conventional and unconventional resources, and the successful bidders will enter into agreements granting them exploration rights, ADNOC said in a statement.
The new blocks are three offshore and two onshore.
Meanwhile, ADNOC Distribution, the fuel distribution arm of ADNOC, posted a 6.6 percent rise in first-quarter net profit on Wednesday.
Profit was 578 million dirhams ($157.37 million) in the three months to March 31, compared with 542 million dirhams a year earlier.
Analysts at Dubai-based Arqaam Capital had expected a profit of 543 million dirhams, while Egypt’s EFG-Hermes had forecast that the company would post a profit of 558 million dirhams.
ADNOC Distribution said net cash generated from operating activities decreased in the quarter as a result of working capital movements due to fluctuating oil prices.
The company said it expected low single-digit growth in fuel volumes beginning in the second half of this year, as a result of an expansion of its network in Dubai.
HSBC on April 8 raised its recommendation to “buy” from “hold,” and target price to 3.2 dirhams from 2.6 dirhams.
In 2017, ADNOC listed 10 percent of ADNOC Distribution, the largest operator of petrol stations and convenience stores in the UAE, on the Abu Dhabi Securities Exchange.
The company is seeking a secondary listing for its distribution unit overseas, three sources told Reuters in April.
Reuters reported last June that ADNOC was considering selling another 10 percent stake in ADNOC Distribution.
One of the sources said ADNOC was considering listing ADNOC Distribution on New York’s Nasdaq exchange, while a second source added that a London listing had also been discussed.
Another source said Abu Dhabi was also one of the options being discussed.


Slack primed as latest unicorn to make market debut

Updated 19 June 2019
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Slack primed as latest unicorn to make market debut

  • Slack is a cloud-based software company that markets online tools for information sharing and workflow management
  • Current customers include Nordstrom, Ford and HSBC and the company has more than 95,000 paid customers overall

NEW YORK: The 2019 parade of big new Wall Street entrants continues this week with the debut of Slack Technologies, underscoring investor hunger for new companies in spite of some high-profile stumbles.
Nearly halfway through the year, US markets are on track for one of the biggest IPO seasons ever in terms of money raised following a stream of offerings from former “unicorns,” private companies worth more than $1 billion.
Yet two of this year’s biggest names — Uber and Lyft — currently trade below their IPO price, along with Snapchat, which has lagged its initial price for most of the time since it went public in March 2017.
Still, there have also been plenty of prominent companies that have risen since their initial public offerings, including jeans company Levi’s, Tradeweb Markets, which builds electronic marketplaces, Zoom Video Communications, and mobile application and software system Pinterest.
The most dramatic jump has been in food company Beyond Meat, which now trades at more than six-fold its entering price.
“The public has a huge interest” in new companies, said JJ Kinahan, chief market strategist at TD Ameritrade, adding that the mixed performance of the 2019 ex-unicorn class is comparable to that of the broader market.
“There aren’t a lot of other choices besides IPOs for investors seeking growth,” said Gregori Volokhine, president of Meeschaert Financial Services, who attributes the rush of funds in part to central bank policies promoting liquidity.
“There’s an excess of underinvested funds worldwide,” he said.
In terms of sheer volume, the number of IPOs in 2019 so far — 93 — is roughly equal to last year’s figure, according to Dealogic.
But the funds raised, $34.5 billion, stand 13.6 percent above last year’s sum and the highest for the comparable period since 2000, according to Dealogic data.

Direct listing
A cloud-based software company that markets online tools for information sharing and workflow management, San Francisco-based Slack parts ways from the other big companies this year by opting for a direct listing instead of an IPO.
This approach, which was also employed by Spotify last year, cuts down on fees to investment bankers in IPOs. Although existing shares can be sold, a direct listing does not issue new shares, averting share dilution but also forgoing the new funds raised in an IPO.
The process can also be riskier in terms of share price volatility compared with an IPO, where underwriters line up investors in advance. In a direct listing, shares are exposed more directly to the open market.
Slack chief executive and co-founder Stewart Butterfield described the company’s technologies as a “brand new category of software” that replaces email in a company.
Current customers include Nordstrom, Ford and HSBC and the company has more than 95,000 paid customers overall.
“It turns email to messages and organizes them into team, project and topic based channels instead of individual in-boxes,” Butterfield said in a June 10 earnings conference call.
“It’s a team-first approach to communication, in contrast to email’s individual first approach. It creates a rich, searchable, permanent body of information that’s widely available across an organization, even for people who just joined the team.”
 

Unprofitable three years
The company, which is expected to be valued at around $17 billion when it enters the market on Thursday, reported revenues of $134.8 million in the quarter ending April 30, up 66.7 percent from the year-ago period.
But Slack, which has been unprofitable the last three years, reported a $33.3 million loss during the period, 34 percent more than last year’s loss.
Of course, many unprofitable companies have gone public and done well in markets for years. Yet the heavy losses and murky profit outlook at Uber and Lyft have been seen as factors in their lackluster performance since going public.
But investors remain keen on growth stories following the success of Amazon, Facebook and other tech giants that have emerged in recent decades.
A key beneficiary of this desire has been Beyond Meat, which has multiplied in value many times since going public May 3 at $25 and currently is priced at $168.92. The company has been seen as a main beneficiary of the growing alternative protein market, which some analysts think could top $100 billion in the coming decade or so.
Kinahan said in general investors have wised up after the early 2000s Internet bubble but that “it’s just unnatural” for stocks like Beyond Meat to move in an unbroken straight line upwards.
“There’s a healthy bit of skepticism in the market,” he said. “However, certain companies have maybe gotten a little ahead of themselves.”