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I have to say that I fully agree MRC. I'm sorry to say it, but I do think that winding up this investment vehicle to form a shell company for the distribution any future Tanzanian returns would be the best possible end to this story of missed opportunity and poor leadership. History tells us that the current model clearly does not work.

Hi Steve

I hope Tom reflects on his time at Solo/Scirocco and realises the misjudgements that he/they made over the years. The BoD attempted a strategy well beyond their capabilities, fuelled by asset stripping the legacy investments to fund a scatter-gun strategy (North Sea gas, anaerobic digestion, etc.).

Albeit with the benefit of hindsight, it seems that only one of these projects ever had legs, which was/is Ruvuma. All us shareholders ever wanted was to remain invested in that flagship project by battening down the hatches and staying in the game. If the BoD had of preserved cash and run a lean ship, I'm sure that we could have remained invested, perhaps even protecting our full 25%. Things are really moving over in Tanzania now and it looks to me like a goer. Imagine being invested in that project now at 25% with a development licence and CPR on the way, and a new drilling programme around the corner, and with the government commencing the build of a pipeline to supply gas to the growing country for the next 25 years…

So, I hope Tom reflects on what could have been, and shows some remorse to the LTH that have lost a serious amount of hard-earned money for him and the BoD to chase unrealistic dreams in support of their delusions of grandeur.

I was under the impression that HE1 now has sufficient cash to drill Itumbula AND complete the drill at Tai 3, following the eye watering additional £6.1M raise. My interpretation of Lorna’s interview is that it’s Itumbula only at this stage. Have I misinterpreted anything?

We went into this drilling campaign fully funded for both drills. Even noting the struggles experienced, surely there should be enough cash to drill and test Itumbula and then complete Tai too. Or is HE1 just keeping quiet to keep their options open?

Fingers crossed for some good news going forward. By god this company (and my vastly weakened portfolio) needs it!

Aligator, whilst I accept that the recent history hasn’t been great for shareholders, I think your message is a bit negative. The technical issues with the rig were probably not foreseeable and could have affected the most experienced team. Bear in mind that the roughneck was working initially. It’s likely that such a snag can only come to light through loaded use when on-site. Your statement of “management team and BoD who simply come across as totally out of depth” is unfair. Random failures of plant and equipment do happen – fact of life.

Yes, the SP is terrible which is hard to take. The fact of the matter is that the drill at Tai found no free gas, which was very disappointing, considering DM’s chatter about hunting for the Goldilocks zone, and all the surface seeps, bubbles etc.

That said, we do have another bite at the cherry. Imagine if they hit free gas of 10% Helium at Itumbula? It could happen. It should happen! That would be a gamechanger. It would also make your post age quite badly.

I say we give them freedom to complete the job that they set out to do. If after all that there is still no helium then I’ll be first in line to give them a b********g.

IG, I think you're oversimplifying the topic of background helium concentration. Just because the background concentration of helium in air is usually 5ppm (where ever you are on the planet) doesn't mean that HE1 are using this particular benchmark. More likely they are referring to local background seeps, which will be much greater.

Who knows, perhaps a concentration closer to 10% could have been seen on the local mass spectrometer?...

Agree KevinRound - my thought was Aminex as soon as rig sharing was mentioned. If so that's pretty encouraging as the rig required for Aminex's CH1 will be pretty substantial (unlike the previous gear used at Tai). Aminex has reported that it will drill CH1 in March (hopefully) which fits in with the timeline for Helium One's programme.

Possibly Mrc, but I think it will be difficult to justify a placing when Ruvuma cash is round the corner. As you say it all depends on what's left over once Gneiss fees are paid, etc. Hopefully reassurance will be given at the investor's presentation this afternoon.

Mrc - just re-read, yes you are correct regarding not yet having secured the debt funding:

"...it is the intention that EAG will, subject to securing the necessary funding, acquire two plants through 2023 and a further two plants in 2024"

The RNS suggests that the plan is to complete the next AD plant purchase by Feb 2023. It will cost £4M; £2.8M of which is intended to be debt, and presumably, the remainder will be Ruvuma cash.

"The acquisition requires £3.8m of acquisition capital as well as approximately £200k in closing costs, and will be debt funded to approximately 70% of the total. "

So I guess two risks remain
1) can they get the loan; and
2) can they get the cash from ARA!

I've just skimmed this one Mrc, but it looks to me like they're funding this expansion with debt. Goon news, no (unless I've read it wrong)?

"If finance is readily available, why have SCIR not obtained any?"

I imagine that the catalyst for procurement activities will be the completion of the ARA deal. Bank finance may be used to expand the portfolio later on. I've no idea what the strategy is but hopefully more will be revealed on the 7th.

You would think that I would run for the hills on this one given my history, but...
1) I really do think that the Ruvuma deal will go through and, ultimately, SCIR will receive $16M (£13.4M);
2) EAG need to bring value to the table which should reduce the reliance on Gneiss (lower fees). I sincerely hope that the BoD got the message on this point via Big Double;
3) AD and other green energy technology is a growth industry - fossil fuels are dying and will need to be replaced (as SharePick's link below confirms);
4) finance is readily available for green tech, so this, alongside the Ruvuma cash, may reduce the need for future dilution; and
5) they already have one successful AD plant up and running - the model does therefore work - the next few purchases should be rinse and repeat.

I'm painting a rosy picture here I know. I won't press the buy button at this stage as there are too many unknowns and potential banana skins along the way. However, I do intend to keep up-to-speed on this one in case the tide changes.

Interesting view Mrc. However, I do recall that TR told us that none of the potential purchasers had an appetite for a free carry (if those words can be believed). But if you're right, and TR took a free carry off the table to maximise cash for fees, then I would be absolutely furious!
To be honest I'm a little bit confused about drawing down from this loan facility for ongoing G&A - I don't feel like we've ever had a straight answer on this topic. Its all smoke and mirrors to me. I guess more info may come to light during the Investor Event on the 7th December. As you know, I'm not invested here anymore, but I am waiting on the side lines to see how the story plays out. If it all does come together for SCIR then there could be a decent return from where the market cap is right now, assuming good investments are made with the $16M.

Hi Steve

"That's where the whole deal is flawed. The $16 million should have been paid to us in one lump sum. It's not as if the operator is short of funds."

True, but the SCIR board started the divestment negotiations from a poor position which resulted in this outcome. This is business, not charity, so the purchaser will try to get the best deal they can and will exploit any weaknesses that they find. Wentworth had Tom R by the sphericals at the time, so the deal was ultimately dreadful for SCIR.
I do take some pleasure in the fact that Wentworth shot themselves in the foot when they lost the deal by screwing down SCIR so much to the point at which ARA entered the chat with their Step-In rights. Had Wentworth offered a deal with some free carry to SCIR (which we all wanted) I think that may have kept ARA at bay.

Yes Mrc, the full $16M is probably a bit ambitious for 2023. For what its worth I do think FID will be achieved, as there appears to be sufficient political will to get it over the line. Time will tell on that one.
If the deal doesn't go ahead then gawd knows what will happen. Presumably SCIR retains the 25% of Ruvuma and then either:
1) the CH1 drill goes ahead - SCIR defaults on cash calls and forfeits its share to the remaining participants (AEX and ARA); or
2) the CH1 drill does not go ahead - SCIR sits on its 25% (as no cash calls to fund) and waits for another sugar daddy to swoop in and buy it.

Regardless, I don't think SCIR would "cease to exist" as you say. They still have some cash in the bank, a slice of an AD project, Kiliwani, HE1 shares (no many), etc... But I agree it would not be a great situation.

Far be it from me to wax lyrical about this company (I've lost a King's ransom here), but I'm not sure we can say that the future is as bleak as you paint it to be Mrc. Lord only knows what the future holds here but you have to say that the $16M is looking more and more likely as the story unfolds in Tanzania. The full amount could land in SCIR coffers by the end of 2023 - who knows? The way the Tanz government are pushing things along is very encouraging. Even the pipeline to the gas processing plant is looking more likely than not to be constructed by mid-2023. Could be politician's hot air, but if not then SCIR are looking good for receiving the cash. What it does with that cash, and how much it squanders on consultancy fees is another matter entirely. Admittedly the track record is terrible on that front.
Personally I think that there could be some good growth here from where the SP currently is - that said I've I've made incorrect predictions about this company since 2011 so, for heavens sake, don't listen to me!

Hi Steve
To my knowledge this drilling delay shouldn't affect Scirocco at all. As far as we know the deal is still due to complete in December. The first $3M should also land at the same time. I'm interested to know what affect the loan facility will have on the $3M - let's wait and see. In any case, the BoD need to have another AD plant acquisition lined up PDQ otherwise why bother investing here?

Good to see the status quo resuming on this board with Mrc and cperkin at each others throats!

My cynical mind is now telling me that ARA announced an early (and I use the term very loosely) November CH1 drill to force SCIR out of the project. We'll never know what has gone on behind closed doors. I'm probably barking up the wrong tree, but I was suspicious when ARA pushed out the drill by 5 long months. It could all be genuinely due to rig availability, but I smell a rat!
In any case, the news is good for SCIR as it looks like the milestones will be reached sooner than previously anticipated, assuming that the drill does go ahead at all.

I'm surprised that today's RNS has had such an effect on the SP - there's nothing new in there that we didn't know already. Whilst its nice to see a rise for the LTH's sakes, it doesn't address the long term issues here at all.
Hopefully there is a good turnout today at Pinsent Masons for the EGM; the board have some real explaining to do, and I hope this little rise won't deter the attendees from speaking up. I lost far too much money here to give them the benefit of the doubt. This company needs serious reform and I think these resolutions being voted on today are a great start.
All the very best to the LTHs taking part today.

Good RNS in my view. I don't see any negatives regarding the back up rig. Contingency planning is not a new concept in business.
So, this rig can drill at 8 inches; what diameter was the previous rig capable of at Tai? Was the smaller diameter the root cause of the hole collapse?

Hi Steve, I was always uncomfortable about this loan facility. There were conflicting statements in the various RNSs about draw downs from the loan facility being deducted from the first $3M payment. Now it seems that it can be used as a blank cheque for the board to use for any purpose, i.e., Ruvuma cash calls or the bar bill at the Christmas do. Can this be true? I can't believe that it is, but who knows - I don't think shareholders have sufficient information to be sure.
If it comes to light that the BoD has been drawing down for non Ruvuma purposes then that really is not cricket in my opinion. I'm sure there will be a reasonable explanation for this but if that $3M is eroded when it lands in December they better have a damn good reason for it.

Good luck to all LTHs.