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The rationale being discussed for the proposed Forum Energy Services option, from the point of view of why do they want it?, appears to be that Forum wants the £40+mm. of losses in AAOG to use to defray tax on future profits within Forum. The AAOG Board attributes nil value to its tax losses in the balance sheet, since they see little chance of their ever being used. If I were a shareholder here, I’d be writing to the Board suggesting that they re-value these losses as a matter of some urgency and, in the absence of a tempting cash offer for the shares from Forum which recognises at least part of this value, I’d advise the Board to recommend rejection of the proposed Forum terms. (This assumes the losses can be used in the way described and have a realisable value to a bidder. )
..Dexter Perreira is a director of an independent mining (not oil/gas) consultancy which has done some work for Philex Mining, PXP’s mining parent.
...and re your interlocutor elsewhere, Paul Forrest has had no publicly divulged involvement with Forum Energy Limited since he got involved with Poundland - he resigned as company secretary at the end of May 2019. And I can’t find a reference to Dexter Perreira at PXP - though he may have access to better info than I have. Worth a question, I should think.
I see the cast list is growing. The trouble is, I really detest that film. Quite disturbing.
I still think these proposals re Forum Energy Services and AAOG are merely a deliberate distraction. The kind of thing that might get cooked up between a double glazing salesman and a menswear wholesaler/part-time model. What conjurers call “misdirection”.
I'm just countering postings that are presented as fact when they are just unsubstantiated conjecture. Just had a quick look at PXP and all but one of their assets are located offshore in the SH. If they wanted to be involved in a UK centric asset I'd have though they'd be more interested in something in the North Sea rather than the clapped out Poundland Gas field. Not going to trawl over Forum Energy Ltd accounts but on a quick look I can see the losses and related party transactions. By the way Prof, surprised you don't post on the Anguish BB, follow the yellow brick road?
gkb47: are you enjoying your amusing exchange on the Angus site? I’ve had a look at PXP and should think they’ve got enough on their plate without getting involved in Poundland. Forum Energy limited’s accounts look pretty dodgy to me too, they’re going to need another re-capitalisation by year end or another rollover of a large inter-company loan. None of PXP or its group subsidiaries appears to have a positive cash flow and it’s hard to see how any advantage they might get in terms of a UK AIM quotation would compensate them for the cash drain Poundland would represent. Forum Energy Limited itself appears currently to have no employees and the Directors are unpaid. There’s also an “emphasis of matter’ in the auditors’ report which rewards scrutiny. In any case, as another poster put it of the people involved with Angus/Poundland on the other Angus site, “these people are not Machiavelli, they’re Baldrick”.
I think the only real difference between Angus’s and AAOG’s treatment of tax losses is that Angus discloses the quantum - about £19.8mm. While they may be carried forward indefinitely, they can only be used within the company within the Group in which they arose. Almost all in AEWB3. There seems to be a doubt in Angus’s case as to whether they would be useable by a company that took over Angus. I’m no accountant either but wouldn't place reliance on balance sheet tax losses as an asset value guide.
I agree, again. In the AIM oil and gas sector there seems to be quite a number of companies whose shareholders would do better if they were wound up immediately. I’ve come to the conclusion that they carry on (and keep getting share placings away, somehow!) merely to allow their Directors to take (surprisingly enormous, in the context of their P&L and balance sheets) salaries, expenses, club memberships, bonuses, share options, port etc. When will the penny drop with the “mug punters”, the CFA, AIM, the Serious Fraud Office etc? I suspect some of these people and their advisers would be up on racketeering and/or wire fraud charges in the USA. Though even there, the SEC seldom seems to notice offences until someone tips them off with chapter and verse.
I don't know, I'm not an accountant but unlike Anguish Energy they don't appear to recognise those tax losses (Anguish say their tax losses are indefinately available to be carried forward against future taxable income ). As you say AAOG do have a retained deficit of £41.474 m though so it may be available, just not stated. I also notice they have the same accountant, Crowe UK LL, another coincidence? Don't know why these companies seem to exist just to raise money via Placings to pay lifestyle Directors and incur large tax losses? Something for Professor Marvel to figure out maybe?
gkb47: I agree. When Wingas/Gazprom sold Poundland to Angus, they did so on the basis that they couldn't find a way of making it profitable. It’s there in their directors’ report. The interim MD of Angus said at the time that was because Wingas would have hired Halliburton, who would have charged £15mm. to do the whole job, ha ha. Angus have spent a lot more than the £2.5mm. that Wingas gave them for an abandonment provision(ha ha), and now Angus want another £12mm., of which £2mm. at least, by my reckoning, will now go in arrangement fees etc - so they’ll need more. Then there’s the estimated £12.8 mm. abandonment liability that Wingas estimated was required, in their last published accounts. And forward sales at 30p. of up to 70% of the gas they’re expected to produce! No, I can’t see a profit in it either and it’s not clear that Angus can find a bank which can.
None of these companies possesses such a pot as you describe. We’ll know more at the end of this month with the Forum Energy Services/SEL accounts - assuming the two companies favour us with their publication. Incidentally, I’ve had a flick through the AAOG accounts and the only reference to tax losses is this, on p. 49 of 66:
“Factors that may affect future tax charges
No deferred tax asset has been recognised in respect of tax losses because of uncertainty as to their future availability, which depends on the Group making future taxable profits.”
I can’t find a reference to the quantum of tax losses. Are investors here assuming that the total figure of £41mm of accumulated losses are offset-able against future profits, to reduce the tax bill? Is there an accepted figure for tax losses?
Just had a look at the cashflow situation and unless I've missed something AAOG don't have a pot to pee in do they? I'm not sure why anyone would want shares in AAOG even if they could get re-listed, I just don't see sufficient future profits from Poundland Gas to justify acquiring a shell who's only 'asset' is an accumulated tax loss due to prior mis-management? Something's not stacking up here...
if this is the end and it was all a ruse then why not just stop there and why bother adding statements that they asses other opportunities in natural resources sector and their intention is to re-admit to trading. So I hope there is still life in this and even if we are diluted massively it good be a good price to pay if we are part of something good as with previous management we would get absolutely nothing. So good luck to Sarah and new board, I trust they are sincere and I hope I am not wrong
There could be a resurrection :
'The Company continues to assess other opportunities in the natural resources sector. As above, it remains the intention of the board to re-admit the Company's shares to trading upon exercise of the Option or once it has found another suitable business with which to partner. '