Due to my dissatisfaction and the feeling the BOD are not achieving anything worthwhile I wrote to BLVN and received the following reply "Thank you for your email. We understand and appreciate your frustration with the share price. Against a macro-economic environment of prolonged lower oil prices and continuing low sector sentiment it remains a challenging time for the industry. As we indicated in our Interims results at the end of March however we believe this also creates opportunity and we are actively screening opportunities alongside the progression of our existing asset base. Such evaluation does take time with rigorous processes required to ensure such transactions are in the best interests of shareholders – only once an opportunity has matured to an appropriate stage will an announcement be made.
We can assure you that we consider the interests of all our shareholders whether they be private or institutional holders. We recently held a private investor event in London as a forum for our shareholders to meet members of the senior team and raise discussion topics with our CEO Kevin Hart. We hope to hold another such event in the near future, which we encourage you to attend. In the meantime, we will continue to provide market updates to all shareholders as and when appropriate"
HKRBob I agree. I have seen far too many arguments made supporting this bod by citing XEL, GKP etc and their share price collapse. But this is an unfair comparison. They have leveraged way too far and are now on the brink of collapse with huge amounts of debt hanging over them. Bowleven on the other hand got lucky and managed to land a fair chunk of cash at the right time - even though it was less that we spent on the project! This was not good business on behalf of the directors. Fact - Oil is now hitting $50. The market attach zero value to anything apart from the cash in the bank and I am pretty sure that they are linking the share price to what they calculate is being used up. So when Kevin tells us that the share price is linked to the oil price it is not true. The share price is linked to the cash in the bank. Every month that goes by burns through another lump of cash and this is reflected in the share price. I am pretty sure he will be doing everything he can to get cash out of the business right up to December when I am pretty sure he will move on.
I think this share has most probably reached the point where the devil you don't know feels like a much better option!
The reason I left this share was my frustration with what had happened and what was going on. The BoD and KH in particular had presided over too many things that I judge as failings...
Spending so much on the Sapele drills and to be led to believe that they had been successful, only to find that they were worthless and eventually we lose the licences.
To not needing to fund Bomono as we would get a farm in, only to wait years and get extensions a-plenty. Then end up in the position were we had to drill and take 100% risk and cost.
To the Etinde drill, whilst being successful taking an inordinate amount of time and going well over budget. Leaving us in a position of running out of time and money and having to deal fast on our only good asset.
To upon finally booking some reserves farming down and relinquishing control over the drilling timescales.
And through all of that, by luck rather than skill our BoD managed to end up with a reasonable amount of cash in a time of massive strife for the industry. Surely the BoD could pick up some distressed assets on the cheap - For $120MN Premier Oil picked up 64mmboe producing at 15K barrels a day with a 2 year payback period - what were our options Aminex (FFS!!!)
From the day the Etinde drill was complete (3 years ago) we could most probably have made everyone in the company redundant (bar one person to sign the Lukoil offer - they approached us and there was no great skill on the BOD's part in attracting them) and we could have ended up in a similar position. Actually we would most probably be better off as we would have not spent on the ongoing GSA and BoD wages and never needed Suttie's infamous rights issue - Though we would have most probably had a $16MN fine for ditching Bomono.
There is still however a good asset and some cash reserves that may make this tempting to invest in. The only way I will contemplate returning to BLVN is: KH voted out Dec 16 when his reappointment is voted on There is a concrete date for the Etinde drill, that our partners contribute their share to (i.e. Bow don't risk drilling themselves) That we buy some assets that provide a cash flow to meet the ongoing GSA.
I've been in this share 4 or 5 years now, I think. (I remember Cheapaspastillas). Of course I'm disappointed like everyone else. I've bought on the way down several times but still have an average I'm not very happy with (about 45p). But I don't understand why everyone is aiming their frustration at KH. Similar shares like GKP, XEL, and CHAR have all done even worse over the past 5 years. This suggests that it is a problem in the sector rather than anything this board have done (or failed to do). Not that I particularly want to defend KH. I freely admit to not knowing very much about the company and I have no idea whether he has done a good job or not. But I can't see that KH going would improve anything. BLVN is probably undervalued now, just as it was overvalued 5 years ago. I will probably get my money back and some profit eventually, but it might be a few years yet. The real frustration is the opportunity cost. I have seen some of the shares that I was in a few years ago soar. Then again some of them have collapsed completely. So overall I just have to accept that I made a bit of a mistake, (No-one made me buy!) but in the long term I should do okay. The fact is that no-one is really interested in buying oil shares at the moment. Changing the board won't change that. I expect that will change but it's not guaranteed. Buying shares is a form of gambling. I accept that. If you think the share is likely to move up from here don't sell them. If not sell up and buy something else. It doesn't matter what price you paid for them!
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