sbalsam

IHC - great little company doing all sorts of value accretive things including the recent sale of a subsidiary for large gain and SIBs when the market cratered and dragged down the share price last year. The founder owns more than 50% through a holding company. Reserve Petroleum - even smaller company with major stakes held by the founding family. Trades a bit higher than cash + investments (no debt) with a very good small energy business - mainly royalties that in good times will throw off significant cash (which is where the cash came from). Cato - well-managed retailer where the CEO/founder owns about 40%. Lots of cash with no debt. Once things are normal, I would expect a return of the large dividend.

I own a small position as well. I agree with your high opinion of (i) management and (ii) the three Canadian asset acquisitions made over the last few years. I also love management's boldness in using the Company's free cash flow to make large acquisitions and meaningful buybacks. Again, this is going on memory from research done about 18 months ago, but I love seeing them take out companies/assets with minimal increases to G&A. G&A savings from acquisitions is something all companies talk about and rarely display while IPCO has been fantastic in this regard. IPCO comes in and buys very low when the target is unable (Granite and Blackperl) or unwilling (Suffield) to spend the money needed to optimize the project and then makes the deal look even cheaper when it pulls out meaningful amounts of G&A that the target had been spending. Why, then, do I only own a little? Really, it was just bad timing on my part. I found and fell in love with the Company and bought a major position in late 2019/early 2020. As covid was rolling in, I felt that oil could be hammered and sold most of my position at break-even (no, I was not as smart with my other longer-term energy holdings). If I have one quibble it is that they are not the lowest cost operators and that hurt them (most everyone else too of course) in the first half of 2020. I have bought a little back in recent months and believe the company will do very well in the years ahead. Steve

Typically you would get the cash as it is earned in a CVR type deal. There isn't any reason for them to hold on to it until the end. Hopefully they pay this first $8 MM out right away - would be a nice win. Unfortunately, the initial payout is only $3M USD. The buyer also pays $3M USD in shares (valued at Aus .08 per share) but these will be subject to a voluntary 12-month hold period. The deal has not closed yet and it looks like Allegiance is having a very hard time raising funds. Steve

There are a lot of long-time followers on this thread. And the Company has certainly been through a lot of ups and downs over the last couple of years (and throughout its history really). I am wondering if any of you have strong impressions of management and/or the Company's strategy. I have been pretty unsuccessful in communicating with management. I had a phone call with Bill Ostlund in early May and a couple of emails with Jeff Chisholm but received very little in the way of answers to basic questions and was not able to get a sense of the Company's strategic direction. With such limited interaction, I also wasn't able to get a good read on management's capability or shareholder friendliness. To be clear, I didn't come away with a negative impression; I simply don't have much to go on either way. Jeff did say that the Company is still hoping to have an in-person AGM later this year if travel/quarantining rules allow for it which is why they have not yet scheduled the meeting. (Currently, Thailand requires quarantine on return so he would have quarantine periods on each end of travel to Canada.) If that does not look possible, they will do a zoom meeting. If anyone has anything to add, I would greatly appreciate it. Steve

Bskptkl - I have the going-forward yield for the Ds as 6.8% (at a $15.75 price) based on the current t-bill rate. Does that match your assessment? Steve

I applied this afternoon and received the following reply by email shortly thereafter along with a copy of my submission: Your application to Value Investors Club for company PAN ORIENT ENERGY CORP has been received. Due to the volume of Applications, it usually takes us a few weeks to review applications thoroughly. I will let people know the timing of the response. Personally, I decided on applying to VIC over posting the idea on seeking alpha as I would value the chance to see private member comments and recent ideas. But, with the very low acceptance rate, I was hoping for a quick response so that I can post the idea elsewhere while it is still timely if it is not accepted. Steve I received a response on my application on July 1 - six days after my application.

I applied this afternoon and received the following reply by email shortly thereafter along with a copy of my submission: Your application to Value Investors Club for company PAN ORIENT ENERGY CORP has been received. Due to the volume of Applications, it usually takes us a few weeks to review applications thoroughly. I will let people know the timing of the response. Personally, I decided on applying to VIC over posting the idea on seeking alpha as I would value the chance to see private member comments and recent ideas. But, with the very low acceptance rate, I was hoping for a quick response so that I can post the idea elsewhere while it is still timely if it is not accepted. Steve

Anybody have a sense of the timing on acceptance or rejection of an application? Steve

Forward Pharma (FWP) just traded at $4.62 and has a bid/ask of 4.65/4.84. I assume FWP has about $77M of cash ($11.00 per ADS-equivalent) and no liabilities and will like run down another $10M over the next year and a half (to $9.85 per ADS) based on recent pace of $5M annual spend. Steve

Cash and Treasuries were $22.6M at September 30 with no outstanding debt. (The Company paid off its $9M of debt in Q1.) Looking over the operating cash flow over the last three years, Q4 has seen positive CFO of about $7M in 2018 (largely, inventories coming down), and $6M in each of 2017 and 2016 (split between operating profit and inventories being sold down). And Q1 over the last three years has not seen a reversal with small amounts of CFO in 2019 and 2018 and just under break-even in 2017. If that pattern held firm in Q4 2019, TLF has more than half its market cap in cash and would be trading at a 20%+ FCF yield on Enterprise Value. With major shareholders managing the company, I think that puts shareholders in a very good spot. Steve

MLP

Why don't you like MLPs? Is it just the tax implications or are there other issues? I prefer c-Corp over MLP mostly due to ease of dealing with them (no K-1). Energy and even midstream is cyclical and volatile, so one can benefit from buying and selling at the “right time “. MLP are a pain in the butt when dealing with partial sales, distribution recapture etc. Also, 60% + of my assets are in tax deferred accounts, which are no-go for MLP (UBTI concern). I would consider an MLP (and indeed own one) for a long term holding only, preferably something I never intend to sell. I think only EPD is really of high enough quality and even there are rumbling about converting to a c-Corp. I know you were focused on midstream and not the royalty sector but since you are talking MLPs, I wanted to point out that DMLP has structured its business so that it can be owned by a non-taxable account such as an IRA. DMLP is a partnership but its income is not considered UBTI (it is UBTI that causes a problem for non-taxable investors). It avoids UBTI because (i) it has no debt and (ii) it has structured its mineral interests as royalties so that it is not considered to be actively operating a business. DMLP commits to continue to avoid UBTI. Steve

Just an FYI - for those who are still holding and thinking about selling and for those who sold to plan for taxes ahead of time: Based on my conversations with the company, it is anticipated that both distributions paid this year (the 6 cent distribution and the current 12 cent distribution) will be treated as returns of capital (non-taxable) rather than dividends (taxable).* (See note at bottom of this post.) The flip-side of this is that you have to reduce your cost for the shares by distributions received to find your tax basis. So, if you bought at .24 in December 2018 and sold September 30 at .24 and will ultimately have received both distributions (assuming you are all right about the ex-date and that this won't trade on a due bill basis), then you will have no dividends but an 18 cent per share capital gain. If you are holding this in a taxable account, then that gain will be taxed at ordinary income rates since you have not held the shares for a full year. If you hold this in a retirement account, then this issue does not apply to you at all. If you are still holding the shares, I am certainly not telling you to hold just to get to the 1-year period but if you are on the fence because your estimate of value is petty close to the current price (or are scared that you might be wrong about the distribution dates), then you might want to keep the tax issue in mind and consider the difference in after-tax profit based on your marginal tax rates. One proviso - the analysis above would change if the Company were to end up selling the Sesen Bio royalty this year in that the Company would have an annual profit and the amount of the distribution that is equal to the year's profits would be deemed a taxable dividend (even though there are cumulative past losses greater than the current year profit). Of course, that would still likely be a good thing despite the current tax hit for the distribution. *Note that this is different than the prior 2017 distribution that was treated as a taxable dividend (even though the company had cumulative losses to date) because the rule is that a distribution is taxable to the extent of current year profits (which the Company had that year) even if there are cumulative losses. Feel free to send me a message if you have any questions on this. Steve

Hi Omagh, I use InvestorX to search for Company filings (as a replacement for SEDAR). How do you use it to search for insider filings? Best, Steve

Thanks Fishwithwings. Steve Attached. Disclosure: I am long the stock. Do your own work before buying.