Oh and he actually stated that the farm in partners were already in place if NT2 was NOT a success.....
But if NT2 is a success and he chooses not to go to shareholders for more money he is an out and out bloody liar and should be sacked. You cannot make a statement like that in the full knowledge that it is not even a possibility....
At his recent question and answer session in Edinburgh he stated that they were already in place.... As for his statement about shareholders and a cash call - if he didn't expect that to happen he is a bloody fool for raising expectations.....
CrustyPete - NR was under pressure due to the fact he did not offer the placing to existing holders. He therefore mentioned that in future he would consider doing this. As I understand the nomad would not allow him previously to take this route ( who knows if this was true ). Funding of NT3 would probably be achieved by a farm out and as I understand this is NR's preferred route. This is obviously all subject to the success of NT2. I would hope the BOD are talking to potential partners at present subject to all going to plan.
Early-bird following on from NT2 NR has already stated that he would expect shareholders to support a cash raise for NT3 development. Only in the event of a disappointing NT2 outcome would he be looking to farm down Ruvuma and then at probably 12.5%.
Now I know that nothing is fixed but that is his stated stratgey of no more than 3 - 4 weeks ago....
Also following NT-2 they have the option of selling down a stake of their interest (say 5%) on a successful appraisal to fund their interest on the NT-3 well directly following NT-2 without need for further equity raise from the markets. Or leverage money through debt now they have cash incoming however see this as less likely.
7% stake in Kiliwani is now bringing in (As of Aug) £2m per year cash vs the yearly cash expenditure of £800k.
Leaves £1.2m profit so on a PE of 10 the kiliwani stake is worth £12m alone.
Thats the deal clincher for me here, it has revenue in coming and relatively light overheads.
Chuck in big catalyst this quarter for 25% owned NT-2 well spud appraisal well (so relatively low risk) I can see an easy 50-100% upside between now and spud in december from current levels. Just needs Epsilon to stop selling.
Solo have never been in a better position and I am very much looking forward to the next 6 months. As for critising the running of the company, I save this for when it actually matters - face to face discussions with NR.
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