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Kentan, thanks for the informative post !
I agree with most of what you just said but I think the company is now well positioned to thrive. Yesterday's announcement was quite surprising, new directors with a wealth of experience, previously worked for the big boys (Shell, ExxonMobil , etc.) and great network of connections in the Oil sector, Osa himself is a precious asset to the company knowing his professional background, previous achievements and again his network of connections within the government sector in Nigeria .
Financially nothing to compare to where we were in H1 , A lot of cash in the bank, a"Swiss" on board & market maker as well. 2 more lifts and OML113 will be cash flow positive. Panoro's deal is a clear confirmation that our share in OML 113 should add much more value to our Market Capitalization than where it is at the moment.
Its also worth to mention that Manuel Lamboley, the new Non-executive Director is also a director of Zark Capital Limited, our new investor, to make sure their investment is properly managed [Manuel has long-standing relationships with major investors and financial advisers worldwide, with a particular focus on the natural resources sector. He has been a non-executive director of several listed companies in the mining and energy sectors, including International Mining & Infrastructure Corporation plc,]
Fingers crossed the sp will re-rate to 'low' teens before the end of the month.
Thanks Kentan
Your input is very much appreciated
Chris
Thanks for your interest.
I have been around this share for 2 re-incarnations, from the distant days of Astar Minerals, when we were suckered into the Mexican debacle and change of name to MX Oil to reflect the possibility of millions ... that quickly faded once the truth came out about our partners Pemex.
Then there was the ridiculous phantom $18m bid by the Nigerian Consortium that never materialised, again a false dawn.
Recently the goings-on that surrounded the Sheikh and the name change to ADM Energy, though believable and did happen, proved to be another disastrous foray into the market once he had mysteriously resigned as self-appointed President and sold his shares.
This all happened under the stewardship of Stefan Olivier ... once could have been a genuine mistake, the second time it looked very dubious, to say the least. The third you couldn't make up (but Stefan did and got away with it). Now he is history but his partner in crime is still lurking in the background ... I do not need to spell it out.
That is why I could never recommend a buy ever again on this share, no matter what transpires. From now on it is "Hold" only until there is an opportunity to get out at par (20p).
Will it ever get to 25p again ... unlikely now Stefan has gone, so no likelihood of another "Miracle Phantom Buyer" sniffing around (Spoof news) to ramp the price.
Panoro Energy is a very well run company, it keeps its mainly Norwegian investors up to date on what is going on with a CEO who has empathy with the personal shareholders. It is a pity it is not listed on AIM or the junior market in the UK, if it was I would be an investor (and would have seen my investment rise 300%+).
I will continue to monitor all and everyone involved in ADME, past and present, to see what little games they are up to.
Kentan
It sounds as though you know what you are talking about here, so I (and some others I am sure) would appreciate your input
I note you have a "hold" opinion, is there a realistic chance of the sp eventually reaching the 25p of a few months ago when dodgy Sheikh arrived?
Holding here since the demise of MXO where I picked up shares very cheaply, but foolishly topped up at higher cost
Are the latest BOD sufficient, along with the finance from Zarc to turn this around?
Any idea why Peel are holding a 19% stake in such a tiny oil company?
Chris
From the announcement:
The deal will have an effective date of June 30, 2019, with a long-stop date of December 31, 2020. The sale requires approval from the Department of Petroleum Resources (DPR) and the Nigerian Minister of Petroleum Resources. Other companies have struggled to make timely progress on asset sales in Nigeria, with the approval process being dragged out. Should it take more time, both companies have the option to end the process.
The contingent payment is triggered once the Pan-Aje subsidiary has covered all costs spend to the date of completion. Following this, PetroNor would pay Panoro $0.15 per 1,000 cubic feet of gas produced for sale from the Aje field, up to $25mn. Gas from the field will be exported to Lagos. The first phase of production from Aje began in May 2016 and is currently producing around 3,000 bpd of oil and condensate.
So from that, we can expect a protracted approval process by the Nigerian Government and if it takes too long both parties can pull out of the deal. Nothing moves quickly in this respect in Nigeria or anywhere else in Africa (unless wheels are oiled ... get my drift?).
The $25m ceiling for the gas royalty deal to Panoro, although attractive, is many, many years down the line, to date, we are nowhere near the funding process to facilitate the next phase (gas), let alone have a fully producing gas pipeline in place.
The mention of the pipeline to Lagos makes sense with the newly constructed giant Dangote refinery about to come online.
I don't see how you can add a potential of future income to a valuation when there is no defined strategy in place to move it forward
The calculation should be based on the Full Economic Interest (not just stake) - so 12% not 6.5% is more relevant
This deal represents a lot bigger transaction in terms of Phase 2 than just buying the current 6.5% stake - it invloves them becoming a 45% Operator in the future when legalities are sorted
Yes. 6.502%, valued at $25m (not $10m for 12%, Dan). So that's $4m per percentage point. We own 5%. So that's $20 (plus cash in bank).
As cminhinnett says ~ 15-16p per share.
That's just the valuation we've got for Aje, and doesn't factor in any extra you may think OO's plans, and the stake-building from Zark / PH, to be worth.
And there is a nice gap up to 15p from here.....
just need to break 7.00p.
The ownership is actually 6.502% (check the Panoro website), therefore the value for the ADME % is more like £10m, therefore using your calculation, the share price should be closer to 14p - 15p.
how am i been negative
$10m for 12% equates to $5m for 6%
simple maths in my opinion
can you give any consideration for Phase 2 which there has been no update on.
PetroNor are small fry and are paying in shares
PetroNor are looking to take a lead role with Phase 2, these agreements are going to take months and the long stop date is 31st December 2020 (so don't expect any progress on Phase 2 until mid next year realistically)
(dan, don't forget the money
still owed by adme for grenada.)
Wondered when Dan would be here with his negative spin, just what are you doing here? Why do you spend so much time on a share you only have negative things to say about?
Panoro have sold just over 12% ostake of AJE for $10mUS
ADME has circa 6% Economic Interest in AJE - so valued at $5mS
Convert $5m is £3,860,000 at todays rate
add in circa £1m cash - once all funds received
Say £5m Value for ADME at over 60m Shares - say 8p based on Panoro figures as been fair value