These figures are now six months old and reflect oil prices at some $20 plus. Now the situation is changing. does anyone have contact with the BOD and ask for six months Management Accounts with a proposed future forecast?
With respect it's an emphasis of matter not a full qualification.
I appreciate it is not good, but if you read the detail in the note to the accounts it focuses on historic events. At the time the accounts were prepared it was a disclosable fact and as such it needed to be reported.
I'd rather a set of accounts without it, but you could look at it another way. It's not interest cover, it's current ratio, which is largely easy to overcome if the company is cash generative anyway.
What you also seem to have not mentioned is that the covenant was broken, yet the bank did not recall the loan! The bank might not be particularly fussed - it will have been the auditors who will have pressed for this to be included in the accounts not the bank.
Also, MAGP is not in the hands of the bank as you put it. I think we've had enough scaremongering comments for one month don't you.
No, I'm not looking to come back in. A going concern notice is bad news indeed. MAGP is at the mercy of its lender. The report even states "Funding future growth will however be via the Group's own generated cash-flow wherever possible". In other words, no one will lend to them. They were supposed to be making bank-funded acquisitions in the first quarter this year, SS was pitching that to investors like me as recently as last November. Yet, at the same time, the company was in breach of its banking covenants. I suggested at the time that I was worried Snead didn't seem to quite have a grasp of the situation but I was reassured in conversation with him. Now we see that he did indeed have a grasp of the situation - in fact he knew far more than he was letting on. That is not good folks!
It may be that we see higher oil prices and that the financial situation improves but at the moment I think there are better prospects out there.
and you probably don't need to even look at the EOY results to work it out...
If the WTI continues above $50 everything will come good, if it returns below $40 then I think MAGP will probably follow Gt. Britain, Mr. Cameron, Mr. Hodgson (Mr. Corbyn - soon). In the mean time the band should play on.
GG - I am trying to decide if your fluctuating innuendo over the months has an ulterior motive. Please bear in mind that many of us have been in business for 50 or more years and have a reasonable handle on risk factors. SOS/RFW have always been up-front with their reporting. Added to which they have possibly accomplished more during their careers than the rest of us combined. Periodic attempts have been made to denigrate the company. Some of the remarks have been damaging, and we ought to remember that the BoD are not responsible for the oil price.
History shows the boom and bust years in the oil industry. There is no evidence to suggest the next 5 years are going to be any different. Rather let stakeholders make up their own minds. Included in the permutation are Scoop, Stack, Springer, etc which could be transformational across several OK counties.
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.