Member Info for Blubay

Shorters always love to make a plausible issue of a non-issue unfortunately, reasonable doubt is how it's done every time

Joe is pointing to the small areas of light grey undercoat paint on the upper part of dark grey rig tower frame, and speculating that this might indicate structural failure/repair. Tupical of Boatman style short reports ;-)

Or you could form a JV between HE1 and EAH to complete the drill programme... ;-)

@JH - the rig purchase was recorded as a 'post balance sheet event' (see note 28 in the year end consolidated financial statement) therefore it was not itemised as a cost in those accounts ending June 2023.

https://www.helium-one.com/wp-content/uploads/2023/11/Helium-One-Global-AFS-2023.pdf

Imagine you're a venture capital fund. I come and ask you for £2m. I offer you a choice between two investment scenarios (a) a major dilutive shareholding in a loss making prospecting company with a near zero share price and no collateral security, or (b) a collateral asset backed loan to establish an O&G drilling company in an under-catered region with high demand, and established relationships to government and private sector clients. The business plan for this new company would be based on mix of cash fee income and taking equity in prospective client companies in the region. If this company were subsequently successful beyond its original financing then HE1 would be the beneficiary, as the sole shareholder, but without any liability if if failed (as it's a private company).

They're not going to do a share placing, keep up

It's not about you or me holding or trading our shares, that doesn't help the company at all. It's about how they can persuade a new investor to fund the completion of the drilling programme. Those kind of block investors are only interested in one thing, security of their capital and making a profit return on their risk. Given that there is practically zero chance of raising enough new share capital at this point (due to the massive shorting of the stock on public markets) they have to look to other financing models, including loans against assets or lower risk incentives to private investors. I'm just rehearsing one example of company restructuring (spin off) that is sometimes used in these situations.

I think that's a selectively optimistic reading of the range of risk, but yes, that's the one favoured by the company and cited in broker reports aimed at recruiting new investors, which is fair enough. But if you prefer to up it to 20% then each to their own, or 30% even, no problem. The point is that tempting an investor into an East African O&G rig operation business probably has an 90% chance of being commercially profitable, compared to investing in a helium prospecting with a 70, 80 or 90% chance of not being commercially profitable. The potential rewards for the investor are of course less but the so is the risk (unless the rig operator were to accept equity instead of fees for the rig hire). Just idle speculation anyway

...with a less than 10% CoS

That would be the bigger question, but from an investor or JV perspective there is far less risk in a bread and butter O&G rig business in East Africa with fully refurbished and tested kit, and some obvious clients, than there is prospecting for helium with a

HE1 is the sole subscriber (shareholder) in East Africa Holdings, with limited liability of £1, currently registered as a non-trading private company. What are the chances of this new company structure being used to spin off the rig operating business (e.g. a management buyout operated by Lorna). HE1 then use the revenue from their rig sale to fund leasing it back from EAH to complete the drill. Just idle speculation...

@sineq - if you listen to what the company has said it’s clearly explained. They wanted to drill the basement at Tai. They’ve spent money on casing that so they can stabilise it and go back, but that now means a smaller bore drill to finish which they don’t have and requires long lead items. Rather than wait with crew they have moved to drill a different kind of fault play at Itumbula first. The issue now is time and money, which are in short supply.

But the NOMAD in this case is also the broker who builds the book

Just as an aside, the NOMAD/broker in question just recently posted their first annual loss in the company's history for 2022, due to general shortage of new company listings, so I imagine they're squeezing their existing client companies twice as hard

But none of that is relevant to brokers turning a margin profit on discounted stock, they'll make their 10% anyway or already done it through forward selling

Don't be ridiculous Art, the CEO/Board can't breath in public without authority of their NOMAD let alone release an RNS

I imagine the brokers have a number of interested parties for a book build but none of them were prepared to take the risk at the existing share price so the broker (who has regulatory power over the company in terms of announcements to market) made them crash the price to get those investors over the line. That wasn't needed for the previous cashbox raise. Just idle speculation of course... ;-)

He was careful in his wording, they were required to announce it by their NOMAD (who is also their joint share broker)

If you think the board had any choice at all in their answers you are very naive

Like many small companies before them, they (and their shareholders) have been squeezed by their own brokers, it's brutal but that's AIM