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We pay for the development costs
we virtually get double of what we put into the development back from revenue
if there is no oil - its ADME who takes the lions share of the loss
If there is Oil - it is ADME who take the a good chunk of the profit and we will get our capex + profit first
Its similar to AJE with Yinkwa - while they are the main shareholder - they are also the operator, so the capex spent comes from them, but they get that back over double from the revenue (and they are paid first) so every time there is work done at AJE (there needs to be over double revenue to repay this ('project debt')
Why i like our position in Barracuda - but it is risky
What does ‘part ownership of a service contract’ mean?
Who pays the millions for the development costs?
If there’s no oil production there’s no revenue and no way to pay for services..
Makes no sense.
remember we don't own the asset, we just have part ownership of the Service Contract
Just to keep you all updated, I have not heard anything back from NHNL by email confirming or denying that they are a subsidiary of KOHN, so that still leaves me completely in the dark. However, I did email the company auditor with the same request on Monday so hopefully everything will be clarified in the accounts when they come out tomorrow.
Although I have been very unimpressed by the terrible corporate comms on this matter (though it was probably wishful thinking to even consider that corporate comms would be a priority for ADM) I am happy that it would appear that my worries were unfounded and ADM do still own their share of the rights to Barracuda and the rest of OML141.
There is no way that ADM could put out annual accounts reflecting their ownership of this asset if the ownership was not true and they would have had to release an RNS reflecting any change in ownership this morning before the accounts come out tomorrow. The lack on any RNS notifying of a change leads me to believe that our Barracuda ownership will be reflected in tomorrow’s accounts and therefore it must be safe. Obviously we will only get confirmation of this when the accounts are released tomorrow but I think that it is 99.9% certain that OML141 will be there.
I am sorry if my posts have confused anybody but I have been deeply concerned that we were going to lose the only asset of any significant value that we own and this would see my investment go up in smoke. The worst part is that the company could have cleared this up in a two minute email but they just chose not to. If they engaged with corporate comms in a less ham-fisted manner then I am sure the potential of Barracuda and the rest of ONL141 would be more accurately reflected in our share price.
I very much disagree with those of you who have posted that things are ok here and the idea that the reply from ADM was written by "someone who confused themselves" is simply clutching at straws. I still maintain that the company are being deliberately misleading. They answered my original emails in a very evasive way and then when I asked them direct questions they simply stopped replying at all.
As I have said on numerous occasions here, I think that there is some real skullduggery going on behind the scenes here. I want to know why NHNL are described on their website as being "100% Nigerian owned" but are described in ADM's RNS as being a subsidiary of KOHN. I believe that the truth of the matter is that NHNL are NOT a subsidiary of ADM and this is why the company have not answered my question about the ownership of NHNL.
Anyway, I have today written to NHNL asking them if they are a subsidiary of KOHN. It is a simple question and I hope to get a straightforward answer. I will let you know if I receive one.
Thats how i see it - it is two separate contracts, focusing on 2 different elements of the project, we are hopefully going to be partners on this moving forward
in regards to the ADME response, all parties need to be careful how much they can disclose due to confidentiality agreements that will be in place
i feel we will need to wait the 2 weeks to read the accounts and formal trading update to get a clearer understanding, and then wait for a formal RNS from Zenith on there agreement in a couple of months
we are still waiting for an update on AJE with Panoro / PetroNor
couple of weeks and i think things will be a little clearer - but as already disclosed - we don't own or have any rights to own the Barracuda Field
Nicely summed up Ginksy. Much better than my ramblings. PS I am not Sally but I will forgive you!
Sally you are correct to say "The key point is that the RSA and RSC are different things." The RSC is the license owner to which zenith are talking to. The RSA is the developer of the area to which adme have control of. Two separate contracts as adme stated in the email.
I think you may have misunderstood the situation and may be causing yourself unnecessary worry. Asking who owns Barracuda is misleading and barking up the wrong tree. I believe AEGOS has already correctly analysed the position and there is no need for him to write to Zenith. Please reread all his posts on the ADM and Zenith boards since the Zenith RNS and then reread them several times. I did and the penny eventually dropped for me. I must admit it took a while! The key point is that the RSA and RSC are different things. ADM's interest is in the RSA. Zenith's potential interest if it proceeds is in the RSC. This is why ADM said in its email that there is no contradiction. As Dan says ADM and Zenith may end up collaborating. Perhaps Zenith's initiative is something positive. They see some possible potential in Barracuda and so do ADM. If it comes off ADM benefits through its indirect interest in the RSA. Zenith would benefit through its interest in the RSC (less than 50%) if it proceeds.
Having said that, it should be noted that ADM's statement in the March RNS that NHNL is a subsidiary of KOHN was incorrect I believe - see AEGOS's comments re this. I give them the benefit of the doubt that this was an unintentional error, but it ought to have been corrected before now and it is not helpful that someone in their organisation seems still to be confused about this. They seem to have repeated the error in their e-mail to you when they said "we hold an indirect interest in the RSC by way of our interest in NHNL via K.O.N.H UK ltd". They are wrong to refer to the RSC - but go on to say correctly "as per our announcement on 28th April we have a “70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141” I do not know who wrote the e-mail reply - possibly someone who confused themselves? I do hope they will correct it in reply to your email and clarify that NHNL is not in fact a subsidiary of KONH. But the fact that NHNL is not KONH's subsidiary does not mean that ADM does not have an interest in the RSA - it means ADM does not have an interest in the RSC.
I am keeping my fingers crossed that what I have said in this post is correct - it does not help that some of the statements from ADM about NHNL being a subsidiary of KONH are wrong!
Dan - No, this is not a standard reply at all. All they would have to do is confirm that “as per the RNS of March 23rd NHNL is a wholly owned subsidiary of KOHN which is majority owned by ADM. Under no circumstances would we allow our subsidiary to enter into negotiations with another company that would in any way affect our holding in the RSA”.
However, they have not done this. They have just avoided answering the questions on the basis that they know nothing about Zeniths negotiations with their own subsidiary.
They have still not replied to my follow up email.
This stinks.
We are going to lose Barracuda and any claim we have to any of the rest of OML141. Mark my words…
Standard Replies in regards to what you get - as per this RNS
it would sound that Zenith Contract is a different type of agreement and we will be in some way collaborating with them on Barracuda (if they agree to go ahead)
I was extremely unhappy wit the last reply as I cannot believe that ADM as the 51% owner of KOHN would not have an idea about the negotiations that their own subsidiary is carry out with a rival AIM listed company. Something is very fishy here.
I have sent them back the following email:
Dear Sir,
Thank you for your reply. However, I am confused as to how you cannot be a party to Zenith's discussions with NHNL. You have stated a number of times in your RNS releases and in your emails to me that NHNL is a subsidiary of KOHN UK Ltd. Since ADM has been announced as owning 51% of KOHN then it is your own subsidiary that Zenith are negotiating with.
How on earth can you be allowing NHNL to negotiate with Zenith without your knowledge if you are the the majority owner of the company via your stake in KOHN? Surely as company owners you could revoke this exclusivity deal in a second if you were not happy with it?
With this in mind, please could you have another go at answering my questions?
1. Can you confirm that in the event of any sale of the RSC to Zenith Energy AMD Energy will still maintain their 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141?
2. Can you confirm that it is the KONH UK Ltd subsidiary of NHNL (the company who own 100% of the RSC) that Zenith are in negotiations with?
3. At what point and under what transaction did NHNL end up being a subsidiary of KONH UK Ltd as it’s website still maintains that it is 100% Nigerian owned
4. please could you confirm what percentage of ownership KOHN UK Ltd has in NHNL?
Kind Regards,
xxxx
I will let you all know as and when I hear a response from my latest email. However, my concerns have been increased rather than decreased by the correspondence I have had. I am every more convinced that we are about to lose all of our Nigerian assets.
Please would somebody else also email the company and see if you can get any more clarity than I have received please?
I have now written to the company a number of times by email. In the first email I said
“As an investor in ADM Energy, I am extremely concerned that Zenith Energy is claiming that they have an exclusivity agreement to purchase an asset that ADM have previously informed the market that they own. Both of these announcements cannot be correct and I think that it is important for ADM to issue an RNS clarifying what is happening.”
I got the following response:
“Thank you for your enquiry. To clarify matters the Zenith Energy announcement with Nobile Hill-Network Ltd (“NHNL”) does not conflict with our announcement. We are not ‘asset owners’ but we hold an indirect interest in the RSC by way of our interest in NHNL via K.O.N.H UK ltd as per our announcement on 28th April we have a “70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141”
I then replied with the following additional questions:
Can you confirm that in the event of any sale to the RSA to Zenith Energy AMD Energy will still maintain their 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141?
Zenith Energy RNS stated that they were in negotiations “with Noble Hill-Network Limited ("NHNL"). Can you confirm that it is the KONH UK Ltd subsidiary that Zenith are in negotiations with?
I also have a query about KONH UK Ltd. Since this company was only set up on February 19th 2021 I am confused as to how the Nigerian company NHNL can be it’s subsidiary especially since NHNL describes itself as being “100% Nigerian owned”. Please could you advise me of how this is the case?
Also please could you confirm what percentage of ownership KOHN UK Ltd has in NHNL? We have already paid KOHN £575,000 for our 51% stake in them but it is very unclear as to exactly what this has bought us. Will the money be refundable if it turns out that there are issues?
I received the following reply:
In respect of your queries below, I hope you can appreciate that, as ADME is not party to Zenith’s discussions, we are unable to comment on the contents of their announcements in so far as it relates to their activities. We would suggest that you contact Zenith directly should you need further information on any statements they have made.
I have written to
Regulatory Complaints
UK Regulation
London Stock Exchange
10 Paternoster Square
London EC4M 7LS
I firmly believe we aren’t being told the truth on Barracuda - disappointed ex-investor here.
What’s going on here? This is becoming beyond a joke. Surely the regulators have to force an announcement showing who owns what. What a farce!