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Topcat you say" in an ideal world this deal gives us revenue to advance/progress Tanz - yes i understand that. the reality is we will have to fund our share of Tanz before we earn the equivalent revenue from this deal - meaning our only option will be to dilute."
This is completely wrong and exactly my point about your misunderstanding. They are already earning since 1st Jan 2019 (backdated on closure of he deal) with ongoing monthly earnings from production. Monthly Nett earnings will be around 1.7 million per month. The next well is 3 million and solo already have this money.
Dilution is a word bandied about the aim market,
When a company issues additional stock, it can be good or bad for shareholders. ... Stock dilution refers to the issuance of additional stock by a company, for any purpose. Some of those purposes are bad for outside shareholders, some are neutral, and believe it or not, some are actually good.
Not going to take part in the offer then Topcat............. for a guess.........!
kinda looks like a good deal to me............but I'm in a different position to yourself.
All the best (I wish you well :)
I have to hang around AA because my holding is now worth so little due to the constant diluting that my only hope is this turns around.
cperkin - in an ideal world this deal gives us revenue to advance/progress Tanz - yes i understand that. the reality is we will have to fund our share of Tanz before we earn the equivalent revenue from this deal - meaning our only option will be to dilute.
trrime - dilution is dilution - whether they need to survive or to buy assets they cant afford.
This company has constantly diluted to fund projects it cant afford. We should not be diluting to fund projects - how do you not get that?
Our business model should be invest, progress, sell and then reinvest income and sale monies
what we actually continue to do is dilute to invest, dilute to progress, dilute to progress, and then hold assets which we cant/dont sell.
This company has been diluted to produce 10s of millions of pounds over the past few years, it needs to show a return on that investment before diluting us again. that was what this whole board has talked about for the past 2 years and called an emergency egm for last year isnt it?
But it seems now to be suddenly ok to do it because we have a different name in charge?
Whats the point of hanging around with a outlook like that, how is it dilution ( more shares yes but a much bigger company when it comes back as Scirocco.
Topcat, the whole point of this deal is to produce income, cash, earning to fund further development of the current assets including Tanzania, so I don't think you do get it.
We will have to agree to disagree and wait for the OO + the resolution of the licence in Tanzania that seems to be moving forward at last.
We will know in a few weeks.
I do get it cperkin
We are again getting diluted to fund projects where a return is still a long way off. We will dilute to fund this new deal, then Tanz will need progressing to the next level and we will have to dilute again to fund our share of that, then we will get fed the usual stuff of "we are not the operator we are in the hands of AEX. and things take their time in Tanz"
Then we will need to dilute again while an exit strategy for Tanz is put into place.
Meanwhile our sp will probably have dropped multiples of times due to all the delays/no income and dilution. When we do eventually get some income our sp will rise to below where it is now meaning all current holders and LTH lose out. meanwhile our BOD earn hundreds of thousands and talk about all the improvements and future plans they have for us.
I completely understand that this is a new BOD and we have to give them the opportunity and time - but the ONE thing that was expressed to them when they agreed to join us was that shareholders were no longer going to fund projects by dilution - that future projects HAD to be funded by a sale/farmout etc... of our Tanz asset. Yet here we are being diluted 12months in!!!! with no update on ANYTHING from Tanz.
It's not right
Philo/Topcat. I don't disagree regarding KN-1 and the remedial work and the old aex CEO to be quite frank fed shareholders a load of bull. It seems clear now that no effective remedial work has been or will be completed on KN-1 till the PSA terms are confirmed and the resolution of the $7.6 Million owed to the JV for historical gas sales is settled. By the way, solo are owed their 8.x % of that.
It's effectively a new company, forget all the Ritson stuff, this bod have disposed of everything they felt was not viable and kept H1& Tanz, while they are concentrating on buliding the business as they promised and so far have been true to there word, now if you can't see that then you are being very shortsighted.
Topcat
That’s my experience also.
However, I think we have to have some confidence in the current BOD and what appears to be a much more robust investment than previous ones.
I do agree however with your comment about NT-1.
Topcat I don't think you do get it.
This is a producing asset with current income and backdated to the first of Jan 2019. Earnings 2020 nett after costs = €20,000,000 to the company with total assets with an NPV10 of over $100 million. This is nothing like an old NR deal and pure exploration play, it's producing with a forward plan to increase those production revenues.
€20 million income is significant, consider the PE ratio for an O&G company.
I do get in ArielArrow
We were diluted time after time after time to pay for Tanz, and were told years ago that we were speaking to potential 3rd parties about selling this asset.
We waited years for a GSA and then it wasnt complete so it had absolutely no effect on the share price
We were told that NT3 (Chukumba or whatever its called now) was to be drilled immediately after NT2 - 2 years later and its still probably a year away
We've had lie after lie about remedial works at NT1 - no income for 2 years for a leaky valve?
We diluted to pay for our share of Helium1 - well here we are again years later and absolutely no income from this one either.
Now we are in the same position - are diluting to invest in a new project with promises of future income.
meanwhile my shares are worth a fraction of what they were 5 years ago... and people like you post on here daily talking about his this is good business and promising for the future?
It's only a couple of years since we sat all year around 0.4p pre consolidation awaiting for a GSA which was to transform the company - since then we have consolidated 20-1 and then dropped in sp by 60%+ and now we are being diluted/consolidated again to pay for some new promise. While absolutely nothing has happened in Tanz for 2 years?
People need to open their eyes here
Topcat, you don't get it, they are raising money to pay for a business that will generate income, how could they ever move forward without doing this, take a look at Sqz & RRE who have both multibagged using this approach.
I don't disagree with that Topcat, however without a licence in place there can be no effective monetisation of Ruvuma and certainly not one that would provide value to shareholders.
I think the BOD have been extremely clever by protecting the Tanzanian assets whilst transforming the company into a profitable production company. SOLO or rather Scirocco will be earning more from gas sales than Aminex ever did per year and I used to refer to Aminex as the big brother here.
of course they are raising?
Both the old and the new BOD were told by shareholders that we no longer wanted to be diluted for new investments.
They were told their priority should be/was to release equity from Tanz either with a sale/farm out - and then to use that money for investments.
I may be wrong but this just seems like same old same old... dilute to invest for the future - which never comes
They should have a little FAQ section on the BB OG ;)
Chris - You have the patience of a saint. Actually, St. Christopher has a familiar ring to it!
Sorry €20,000,000 per annum that should be as in millions.
Of course they are raising, you don't get production assets producing thousands of barrels for free. The point being that Nett (Not Gross - double it) earnings will be €20,000 per annum with an upside from converting the 2C to produce more than double that.
Looks like a great deal, depending of course on the offer price and what happens during suspension with Ruvuma and Helium-1
I said this was a dilution and stick by that. The rest about massive uplifts is drivel and hype. LTHs shafted again by an inept board just wanting cash to pay their wages.
I've also had this letter from HSBC
The worrying bit for me is that it is headlined " decrease in value"
Seems to me that after all the new BOD's promises of "being aware of Solos history of dilution and shareholder sentiment" that actually they are going to do the same as NR and dilute us to pay for this new deal - and actually at a time where expected news from Tanz should have pushed our sp back up to a reasonable level.
Lets not loose sight of the fact that the main driver for our SP is production. Other projects are / will be good when they land with "when" being the key word. Sure we can all agree the BoD are just getting a move on. If other projects land, great. In the meantime I'll take production
I asked them about that Vike, they were quite clear that any activity on the primary assets whilst suspended will be baked into the price. Now if we consider any result to be fair depends on Ruvuma, H-1 delivery first.
My concern also. I hope they are not going to shaft the LTHs.
I hope they don't set a price until after the licence extensions have be approved. Otherwise we'll be diluting at a huge discount to the company's existing NAV. Timing for this acquisition is a bit awkward if TZ announcement is made while we're suspended and market can't react.