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Some worthwhile posts on the other board today.
Sparrow. Posters on there seem upbeat but I'm not sure what it is they are so upbeat about. Roy has been in charge for almost a year now and in that time gas sales equivalent have been pretty static at 4.6 to 5.1 per day. Just prior to Roy coming on board, condensate sales were 5548 pq and are now only a third of that. So the business has stagnated for 12 months and the only crumb of comfort is the hope that 2 or 3 existing customers out of over 30 will take extra gas amounting to 1.4 mscuffs some time later in the year.
We are therefore almost totally reliant on one of several big announcements that may or may not happen. Roy has mentioned during updates, the importance of growing organically but has so far failed abysmally to achieve that.
Unless they receive payment from Eneo or sell Westmed in the next couple of months, Roy will be needing to raise some funds from somewhere, in order to keep the gravy train from hitting the buffers. The next trading update will be key for me, selling a little bit more gas to existing customers is fine, but it's not enough to make the company profitable. We require something which will turn the business around, and thus far I agree with 3cb, I don't think what Roy has achieved so far is anything to write home about.
Another thing which concerns me, most other small cap companies I hold, the CEO's are out doing investor presentations, Q&A's, writing articles and all sorts of things to gain exposure and build interest in their business, Roy has done diddly squat from what I have seen this past year. I t does make me wonder what exactly is he doing for his handsome salary, because I question whether providing shareholder value is really what he is trying to achieve, the next update may possibly answer that question for me personally.
I disagree, but not as much as you might think. This company was going bust before Roy took over. My initial investment was based on a takeover - asset-stripping, effectively; I was not here for a recovery play. However, what Roy has done in 9 months is steady the ship - which is quite some achievement, for this was a dog of a company before - by the summer VOG should be cash neutral; too, he has aborted or delayed some scenarios that would have resulted in imminent collapse. However, as you say, this is not enough. If the share price is to progress from the 5 p level, we now need some big events to come in - Eneo, West Med, Aksa (or similar). This is what I'm here for; and from my research (which I post here) I expect at least one of these events to come in, in the next 6 months (and with no serious negatives either). That's the gamble - and only 5% of my funds are on this. If this come in, I can see a share price heading for 15p before year end, 25p even. A good risk/reward in my book.
I am not bothered that Roy doesn't do the PR stuff - the big events will speak for themselves.
HP- the company is still currently on it's way to going bust, with or without Roy. Yes I would happily take asset stripping if it would get the SP to just 10p. Let's be clear this is still very much a mistreated (the shareholders) whimpering dog of a company, nothing has changed on that front.
I have no idea what will happen here in the future, although I don't see Aksa being on the near term radar to be honest. Also think about this for a moment if you were Aksa. Now Aksa must be a billion pound enterprise at least right? If you were running Aksa, would you partner your new potential business operation in Cameroon, with a mickey mouse, poorly run loss making company, which is on the brink of going bust, and that is owed as much as it's Mcap from a government partnered business? It would make far more sense for Aksa, to watch Vog go bust and pick up the assets for the pennies in the pound they are now valued at. I f I were running Aksa, I would not partner Vog I would just buy them out. It's not like vog have any large institutional holders, just YF Finance and Haldron Capital, both of whom I feel would happily do a deal with Aksa and cut out the 60% of PI shareholders. The only issue may be Foo but he would agree to anything that fills his pockets, and Dik will happily pull his trousers down for a bit more cash.
If Eneo are not forthcoming with payment to Vog after receiving their large cash injection, I will be getting the feeling that we are being screwed over, and I'm not referring to Vog as a company, just their shareholders. I hope I'm wrong, but I had spent almost 10 years having lived in some of these corrupt countries setting up businesses, and seen first hand many honest and decent individuals and companies having been royally shafted.
BmD- I think VOG is at about cash flow neutral by this summer? AKSA's concern is not with VOG, but with being paid longterm by ENEO and the Cameroon Govt - that is why Eneo/Govt has to repay Altaaqa/Vog if Aksa is to have the confidence to invest (and so Eneo repayment is likely to occur in the next 6 months imo). However, my initial investment was based on a merger/ takeover (either by New Age / lukoil, or by SEY). YF Finance paid 13p for their large shareholding; so I can't see a merger/takeover below that price. I think this could still happen, perhaps by Lukoil soon after Etinde FID. I think it is likely that the SP will hit 10p at some time this year - that's why I added to my holding the other day. Agree, the govt is not to be trusted. Too, if VOG went bust (cashflow), there would be many interested parties in picking up VOG's assets, not just Aksa - it would not go for peanuts; YF's 13p minimum would be necessary, imo.
Sparrow. Sorry mate but if you are suggesting there would be a fire sale of VOG assets at an sp value of 13p if we went bust, then I'm afraid you have truly lost it.
The directors regard it as a going concern but can't even get the sp to 5p.
Been busy with PANR today, added to my holding - great result, and I would recommend looking at the advfn board for those who wish to invest.
Back to VOG. Well, glad everyone thinks I'm a nutter :-)
I think what is overlooked here is that VOG have very valuable assets (infrastructure and wells). This is not like an exploration company, whereby when they run out of cash they go bust and the SP is worthless. The closest example here that must always be referred back to is SAVE's Accugas business. When 7E effectively went bust, the shareholders got almost nothing, but I think, if I recall correctly, SAVE paid about $700m for the assets to the bondholders - 7E was worthless as no cash to continue, but the assets are not worthless. I Don't think VOG running out of cash makes the assets worthless; and I don't think VOG have bondholders (?) so the return from the assets, even through a liquidator, would go to the shareholders (please correct me if I am wrong here). If someone wants the assets there will be a lot of competition for them from a larger entity with the cash to continue the VOG business - I can see SAVE being one of the bidders, as there is already some talk of SAVE buying something else, outside of Nigeria and Niger. Lukoil would almost certainly be a bidder. From the top of my head, VOG's assets are worth $100m+ (?); and YF Finance would at least want their 13p back. The value of the assets backing the company give me confidence that VOG will turn out to be a wise investment.
Sparrow. Having very valuable assets when you are in financial trouble is irrelevant to their worth to someone else. There are numerous examples of this, not least the latest being Arcadia Group.
So big and profitable that the owners took out over £1bn in divs not so many years ago.
But like VOG it was built on debt and mismanaged dreadfully. When the crunch came, albeit exacerbated by the covid lockdown but on the cards anyway, all those prime high street retail spaces counted for nothing and the names have been cherry picked for peanuts by online retailers.
Vog is no different I'm afraid.
Hopefully we will never get to that position, 3CB. Not much debt, cashflow neutral, 3 big events perhaps this year, and excellent new management here. But the closest example will always be SAVE's Accugas business - and clearly the assets did not go for peanuts - and, if it comes to it, nor will VOG's imo.
3card, I think you will find that very few of their high street retail spaces were their assets to sell as most were rented and they couldn't get out of the leases.
HP- I bet if you offered YF Finance 10p now, they would bite your hand off for it, in fact I'm sure they would take 7-8p. They are stuck with almost 61m shares which the cannot do anything with, matters not helped that 60% of total shares are in free float. If they manage to get out anywhere near breakeven, they will be thanking their lucky stars, I would love to listen in on the phone calls they are no doubt having with Woy!
This is YF Finance, BmD, a subsidiary of Meridian - they don't look like short term players, easily spooked, or short of funds. These people are out to make serious dosh.
https://www.occrp.org/en/paradisepapers/kazakhstans-secret-billionaires
(Nb: they've done deals with Lukoil before).
YF held over 5% of the company long before they took part in the placing at 13p and so their holding costs are far higher, but they were instrumental in the removal of Kevin Foo and I would imagine they are working with the new management to take the company to the next stage which will hopefully give some value to all the shareholders and the management, as their benefits come if they can get the share price over 14p.