I don't agree with everything that Tom "the Sheriff of AIM" Winnifrith says, but he seems to be doing rather more than the AIM Advisory Board. One member of that Board was mouthing-off earlier today about the LSE Main-Listed client of one of his colleagues on that very Board!
btw the CEO of one of the Nominated Advisers was told about very serious abuse and hard-core pornography issues involving one of hos AIM-listed clients. What did he do? He got his internal lawyer to look into it (I have no idea whether or not he looked at the porn) and then he buried his head in the sand. That particular issue is ongoing.
I think the issue with AIM is compounded by PI's feeling that the mm's continually take the 'P' out of them with the price manipulation - certainly to an extent not seen on the main markets.
And therein lies the danger of AIM's collapse - other PI's like me who enjoyed being treated reasonably fairly on AIM in years gone by are sitting here waiting and hoping to make a profit on their investments and then are getting out of AIM altogether. Ok,, there will be an influx of 'new blood', but if the volume of unsuspecting PI's is less than the volume of PI's who are P'd off and leaving....
Not a good situation, AIM need proper regulation before it self destructs imo
You're on the ball. Though it's very interesting (or worrying, depending upon whether you look at it from an academic or investment perspective) that even a proven track record might be illusory when it comes to wildcatting, though obviously far less so the further you move downstream.
Take for example the once-mighty Tullow. Their shares IMO traded at a premium because of their early success with Jubilee, but a hedge fund manager said to me some four years ago that they'd been shooting fish in a barrel. When they moved into fresh territory, the dry holes kicked-in. Then take the ex-Emerald the Dog team. Fresh from their 30x bagger which they achieved in 6 years through very steady progress with an appraisal bias in proven oil basins, they thought they could do the double at Sterling Energy. But they used a different frontier wildcatting strategy, and so far it's achieved nothing, with the shares trading at well below cash.
If one's further downstream (appraisal, development, production, service companies, refining, filling stations, etc) then it's "general management" and those of us with management careers can put a handle on that. But wildcatting? We're in a VERY strange place with that. Colonel Drake, 'Dad' Joiner and the rest were there 150 years ago. It's all to do with statistics and psychology.
I said to a friend of mine (head of an AIM E&P) "I reckon you should call upon a statistician to address how many holes you need on that acreage". He thought he knew best. "No, I don't need to do that, half a dozen will be enough". Someone else drilled it. No statistician was used. The shares were slaughtered and at the end of years of work they STILL had no idea whether the acreage was any good or not.
Nicki - you are right, the dynamics of the game are changing with the O&G explorers. The swings in sp that could be traded in the build up to spud and discovery have long gone (re:TRP & FOGL recently). investors are wanting more substance and a proven track record, with perhaps some projects on the way to production (re: Sou). However, it doesn't stop the "riser followers" being manipulated like they were today (and yesterday) by TRP and the MMs, which to be honest I have no sympathy for if they are now stuck with TRP shares. The writing was clearly to be seen but greed obscured the vision. We know there are few "rules" on AIM so it is Caveat Emptor, and don't complain if you get sold a dud.
AIM wasn't like this when it started. But it's going downhill at a rapid pace of knots.
If you look at the TOTAL volume of oil that's been discovered via AIM in the past decade, it's in excess of 30 BILLION barrels In Place and might be closer to 100 BILLION In Place. But the vast majority of that is attributable to just one company and their shares still don't reflect the reality of discovering a Super-Giant.
If shareholders cannot get a return on Super-Giant discovery, what possible hope is there for the rest of the sector? None whatsoever, on current evidence.
The $64,000 question is whether the acreage acquired by these E&Ps was actually any good, or if it was basically moose pasture. With the shareholders embarked on ultimately doomed Wild Goose Chases, following crazy geologists who convince themselves they can "see" oil on hazy seismic maps, and then wash them in fancy colours using Photoshop to persuade the shareholders that there's (probably) oil down there.
The large scale failure by Tower and many others to find oil is s very serious issue. It may be that it's a very long, and astronomically improbable sequence of bad luck. Or it may be that "the game's up", and it's all over.
Nobody really knows...but nobody is going to keep paying for it!
And the model of "grab a licence for peanuts, do s bit of seismic, and then farm it out on a 2-for-1" seems to be finished.
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.