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No offense to Helpful but I think the Ben Turney Matt Lofgran 2015 shareprxphets interview is more informative because Elephant oil Matt Lofgran completely breaks down the structure and obligations for the Benin license.
A few years ago companies formerly called Prospex oil & gas and Paternoster Resources also held shares in Elephant oil. PXOG are now called PXEN and I believe Paternoster are now called RGO. I've looked and I see neither have released RNSes on Elephant oil. So both now probably don't hold.
Summary:
UOG was very happy to have nipped in quickly before large companies could move, to secure an option to participate. UOG thought that Benin had transformative upside. UOG had to cut back on Capex post the Rockhopper Egypt acquisition and the downturn. UOG said there were multiple targets of 200mil barrels+.
RRR had shares in a private limited company with no money to drill. The company has a license with transformative upside (according to UOG). RRR has now completed a share swap with a US Corp that intends to list on NASDAQ with the funds to commence an exploration programme. How is there any downside to this?
QED & DYOR
https://www.londonstockexchange.com/news-article/UOG/final-audited-results-and-notice-of-agm/14091594
"and the company acquired an option to make a new strategic low cost entry into Benin with transformative upside."
https://www.londonstockexchange.com/news-article/UOG/interim-results-announcement/14242001
In March, United announced an option to farm into Elephant Oil's Block B, Bénin. Bénin Block B is located onshore in the Dahomey Embayment (Coastal Basin) and covers an area of 4,590 sq. km (approximately 1.1 million acres). The Block is located to the west of Bénin's capital Cotonou continuing to the Togo border.
"The Dahomey Embayment of onshore Benin is a frontier area, with no wells drilled in it to date. However, the licence is surrounded by prolific hydrocarbon producing regions, and there are excellent positive indications of a working petroleum system. At this point, the Block B licence data is limited to a single seismic line and a CGG-acquired airborne Falcon Gravity Gradiometer survey. This data suggests the presence of numerous large structures in the licence, with the potential to hold >200mmbbls. The Allada structure has already been identified by Elephant Oil as a prospect. "
https://www.londonstockexchange.com/news-article/UOG/operational-corporate-update/14488303
Response to Market Conditions
· Proactive measures taken by United and its partners to reduce near-term Capex commitments during current oil-price uncertainty and the impact of Covid-19
o Deferral of Italian Capex improves cash flow and moves expected first gas slightly to H1 2021
o Deferral of Egyptian Capex reduces 2020 infill campaign from 4 to 2 wells, significantly reducing gross 2020 Capex estimates. Further optimisation of the Capex and Opex budgets is being considered.
o Completion of post-Egyptian-acquisition licence review sees divestment plans for selected non-core assets in the Wessex Basin and a decision not to exercise the farm-in option in Benin
o Substantial cut in administrative expenditure resulting in further cost savings
· Measures taken to minimise the impact of oil-price uncertainty and Covid-19 will help safeguard the company during the current industry challenges, with the aim of putting it in a position to take advantage of future opportunities
Why not do some homework?
https://oilafricanews.com/2019/03/12/united-oil-gas-signs-option-agreement-with-elephant-oil-to-farm-in-to-block-b-onshore-benin/
UOG wanted to proceed with Benin but had to pull the plug following the downturn under pressure from their funder for Egypt.
United will therefore not be continuing its option on Benin. Furthermore, when market conditions improve, United will be looking to divest its Wessex Basin portfolio. While the Company sees value in both of these licenses, the Directors do not believe that they offer the best return for United at this time
https://youtu.be/8TnDp9CSiHA
All will become clear in due course but let's suppose they hit just one of the 200mil barrel plus targets; what do you reckon that might be worth?
DYOR
I don't think I'm missing any point. I said IF he intends to hold long term, value will tend to nil.
IF he manages to sell into the promote then he's doing the smart thing.
Your comment on it being "very big for RRR" is sheer fantasy to me, but I'm very happy to be wrong. Out of interest what would you class as a return to be very big for RRR considering a current book value of £137,500? 30x? 50x? Adjusting for dilution of course.
You miss the point. Currently, RRR has a minority holding in a private unlisted company with no money to do anything.
Post the listing RRR will have shares in a listed company with the capital to do something: it either works out or it doesn't. There is nothing to stop RRR selling or reducing its position post listing: regardless post listing RRR will be in a better position.
DYOR
If AB intends to hold EO for long term then I would attribute nil value to it. Lofgran a specialist in shareholder value destruction. Take a peek at NTOG and previous presentations he's given.
There are a few interesting projects for RRR - this is not one of them.
If you Google "Ben Turney Matt Lofgran" up will pop the 2015 shareprxph"ts Elephant oil interview (written) that Turney did with Lofgran. By the way you will need to log in to shareprxphets.
For those who have no intention of logging in. Elephant oil acquired the Benin licenses in October 2013. They would be for over a 9 year period, broken up into 3 X 3 year blocks. At the end of the first 3 year period they would relinquish 25% of the license area. At the end of the second 3 year period they would relinquish a further 25% of the license area. They were also required to do some drilling during some of those periods but I don't recall them doing the required drilling. So the Elephant oil Benin 9 year license period will end in October 2022.
Red Rocks Elephant oil investment absolutely devastated the Red Rock share price. Red Rock gave E.O some Red Rock shares and they absolutely hammered away selling, pulverising the Red Rock share price. The Elephant oil boss was Matt Lofgran, so I will assume it was him who bludgeoned the Red Rock share price.
Well on what is actually happening on the ground it seems to me that RRR is making progress. Everything takes time unfortunately and in most cases it takes longer than we think. I would have thought that the share price would have been higher but that is the way it goes.
Thanks Helpful. I have been here ages so am waiting to see if AB can actually get something done that results in money for shareholder value.
Elephant? Vastly so. How much is down to whether they find oil or not. It looks pretty good and the amount of oil is that prognosticated is off the clock but until they drill, however certain they might be, they don't know. For disclosure I am a shareholder in the company that Elephant has reversed into and so I am pretty familiar with it.
There are few steps to be taken yet but it is looking pretty good.
More importantly, this is another asset on RRR's books where not much value is attributed but is in the process of coming good. Once Juno lists on Friday, we should start hearing a bit more about the royalties due on Mt Ida. There are two outstanding payments USD $8mil: $4mil on a decision to mine and $4mil on the start of commercial mining. Based on the business plan from a few years back the royalties to RRR based solely on the Magnetite at Mt Ida was about $10mil pa. The hematite at Mt Mason extends into the Mt Ida tenements and is covered by the royalty agreement with Anglo Pacific and the residual royalty agreement with Juno. It could be that the $8mil payments are triggered sooner than people think. Juno should get into production later this year/early next year, in which case RRR's shareholding will look pretty good.
I understand that Soma is making good progress at El Limon.
Elsewhere, I think something will happen on Macalder and Mikei plus Luanshimba looks like it is a good un.
DYOR
Helpful do you think this investment will be worth more than its current book value?
So that is the third IPO on its way.
Could/should turn out to be very big for RRR.
We need number four lining up now.
DYOR