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"’CEG believes the disputed remaining $xxx, can be resolved by year end and at a discount. Payment if any will either be by issuing shares at a premium price and/or a payment schedule which CEG believes can be adequately serviced from future cashflow.’"
Fortunately (if you value transparency and accountability) management don't get to mark their own homework when it comes to accounts time. The auditors have to review cashflow and creditor forecasts for the next 12 months and work out if the business can still be audited as "going concern".
Personally I don't see how it can be. At 400-500 bopd, Trinidad is not making any cashflow which can service old debts or other liabilities, and there is no capital available to drill more wells and increase production/profits.
Antha,
Your assumption might not be far off the mark.
This often happens on aim especially with companies like ceg.
I really cannot understand why someone would invest in ceg at this time until the funding, final Results and clarity on their ability to settle all outstanding bills, and the actual paying of these bills.
Also a statement on current production, the ceo must be aware of the exact amount and it would be good to share this information with shareholders to put their mind at ease or not.
September might be a defining month for ceg and it's shareholders.
Jono, my guess is that the funding has already been agreed with a certain Wonga lender and the latest Pump & Dump were the placing shares being forward sold, seen it countless times before so I expect a RNS in the coming week announcing the funding, then of course there's the horror show Interim Results which should be an interesting read.
sc,
Still feel the need to shout, not a good sign.
For the record I'm stating the only facts available about the $2.9m the Bahamian govt has publicly stated that ceg owes them in licence fees.
Ceg might dispute the amount but have not stated exactly how much they believe they should pay or the amount that the govt refused to accept.
You seem to think that $500k is the amount due and even if that is the figure they agree on it is still money that is owed.
Ceg is in a very precarious financial situation, whereby there is a doubt as to whether they have or will have the funds to settle all their bills, not something to be ignored.
It wasn't a good result with S2 as the 81 bopd is quite a bit short of their estimate of 200/300 bopd they were hoping for to get the funds for further development.
Also the fact that the 81 bopd might only help to prop up the declining production from other wells so there might not be very little if any increase in production.
Like it or not facing the facts is hard but but ignoring them is something I'm sure you will continue to do.
Expect some form of funding soon but whether it is going to be for further development or just working capital, time will tell.
The delayed results are only up to dec 2020 so it will be interesting to see if they give a update up to June 2021 as that would be more beneficial to shareholders again time will tell and is only days/weeks away.
Also just to say I don't find your posts annoying just misleading.
I can't really accept your classification of the "disputed" amounts. Eytan explains here https://www.proactiveinvestors.co.uk/companies/news/948701/bahamas-petroleum-co-plc-shareholder-qa-948701.html, 5 minutes in, that the rig was zero rated during the delay but the cost overruns came from other personnel, services and equipment that were set idle. So even if Stena were at fault, it's not going to stop other contractors wanting their money. The only way to hold Stena accountable for the consequential losses would be to refuse to pay them for actual productive time, despite a contract no doubt making clear they are not responsible for consequential losses. I don't think it would be embarrassing for them to push for payment in that case; CEG would be laughed out of court.
So they are left trying to agree a settlement with the other contractors who did not cause the issue. This is where being short of the planned funding does matter. It's one thing offering $7m of creditors $3.5m on that basis that's all you have. But imagine trying to get them to agree a lower billing that even then you can't actually pay!
"Thanks for your $400k bill. To avoid a dust up, please agree to $200k so we can get our accounts signed off. Oh and we'll pay that over 3 years. We don't actually have any money or make any profits at the moment but we'll definitely get an elusive farm in to be able to drill some more wells and that will see you right."
Or the contractor can take them to court, or ultimately liquidation, in order to pursue the full $400k (I think we can all accept the assets could be liquidated and cover $10m of claims). There's no way I would preemptively accept a haircut to my billing, of course.
lol Antha........!
Not sure if "hypocrisy " is the word, but look in the mirror is defo the term I'd use....... :)
All the best (ya welcome......... :()
LLL, I'm pretty sure that he does make that very plain for all to see.
LLL, don't feed the troll.
SC posts are riddled with assumptions.
Bohemia: I’m not sure what our ‘argument’ is about. Your calcs are based on the OO RNS, mine were based on both the OO RNS and Trading update. It showed $10.7m cash on 31/5. We came to the same conclusion of a +/- $2m deficit. Where we differ is you believe it is something to worry about, but I do not. Here’s why:
1. A $2m deficit includes an assumption on your part the alleged legacy debt cannot or will not be scheduled for future payment.
2. It may not be payable if CEG insists the full DISPUTED $7m be wiped off……. ‘Sue CEG, let’s meet in court so you can explain in public how a piece of metal fell down the hole, delayed the drill and this clear act of negligence may have resulted in a disaster….’
3. I doubt it will be litigated. CEG and the supplier in dispute (we assume it’s Stena), will likely do a deal for +/- half the disputed $7m.
4. I agree $3.5m if paid in cash may create a $2m deficit, however CEG’s final offer could be……’CEG totally disputes $7m is due but to close the matter we’ll pay you $3.5m over 3 yrs, (or…. we’ll pay you $3.5m/£2.5m next week by issuing 32m CEG shares @ 8p. If the SP doesn’t reach 9p by Sep 2024, we’ll pay you the difference in cash. Take it or sue us…’
5. Incidentally, the above shares scenario is possibly why CEG rejected the Bizzell deal. A Stena deal does not attract £300k/yr interest nor security.
Key point: A +/- $2m deficit may not apply and even if it does, solutions are available.
Jono44: ‘Please provide your address, as I have issued an invoice for $2.9m because I find your posts ANNOYING. PAY IT in 7 days’ …Would you pay it? No. Is it due? No. Why? Because you will dispute it.
So how would you feel if tomorrow I posted…. ‘Jono44 owes $2.9m (theoretically true), but can’t pay it or won’t pay it…..’ implying you are either broke or at fault? So why do you, in your constant anti-CEG posts as an angry ex-holder?
Yesterday you tried to prove CEG owes $2.9m to the Gov citing a newspaper article. It cannot be disputed the Gov believes CEG owes $2.9m for license fees until June 2022. But CEG disputes this and believes it should be zero. Several RNSs from 2020 implied it, with words such as ‘if any’ re license fees due. However, if you refer to the 23/4/21 EGM/OO RNS you will note it is implied CEG made provisions for $500k. Although ambiguously written, xref Funding Requirements point H with Funding Sources point E. ‘H’ states $4m for LOL. ‘E’ states $4.5m including licenses (Source https://polaris.brighterir.com/public/challenger_energy_group/news/rns/story/xzm547w )
CEG probably sent a $500k cheque, but it was declined. They are now waiting for the election to conclude matters.
Key point: Disputed amounts due are NOT necessarily legally or contractually due. Similarly to my $2.9m hypothetical Jono44 invoice.
DYOR. GLA
Starchild
https://www.lse.co.uk/profiles/starchild
Ps..Pay CASH and I’ll knock off the VAT. Win win.