Member Info for cautionyourblast

I’m still surprised that there hasn’t been an unsolicited bid.

Message reposted with corrected grammar: apologies!

I finally took the plunge here and bought two chunks at lunchtime, each for 16.1 pence, having waited for Seven to complete (and then I rather forgot about SAVP!)

There are so many moving parts that it is difficult to be quantitative before the annual report is published. Clearly a lot of asset and a reasonable chunk of debt are being taken on in Nigeria. However, the 11 December CPR (especially the free cashflow forecasts and the 2P reserves) make this a potentially very cheap opportunity.

I also rewatched these two videos and reviewed the latest presentation:
https://www.youtube.com/watch?v=kFgfzrRAByI
https://www.youtube.com/watch?v=nFlqR_nrOFc
The second is from October 2018 so progress if obviously not as fast as anyone would expect, but I feel now the routes to revenue are clearer given the completion of Seven. I watched another AK video some while back and was concerned: however, he presents far better and more clearly in these two.

I have some reservations over management and the COO and CFO are new, of course. Anyway, most of you have probably watched the videos and my comments are pretty obvious. The next set of financials here are going to be fascinating.

Thanks to other posters for insightful and helpful comments which I hope over time to be able to add to.

I finally took the plunge here and bought two chunks at lunchtime, each for 16.1 pence, having waited for Seven to complete (and then I rather forgot about SAVP!)

There are so many moving parts that it is difficult to be quantitative before the annual report is published. Clearly a lot of asset and a reasonable chunk of debt are being taken on in Nigeria. However, the 11 December CPR (especially the free cashflow forecasts and the 2P reserves) make this a potentially very cheap opportunity. The latest presentation and the

I also rewatched these two videos:
https://www.youtube.com/watch?v=kFgfzrRAByI
https://www.youtube.com/watch?v=nFlqR_nrOFc
The second is from October 2018 so progress if obviously not as fast as anyone would expect, but I feel now the routes to revenue are clearer given the completion of Seven. I watched another AK video some while backend was concerned: however, he presents far better and more clearly in these two.

I have some reservations over management and the COO and CFO are new, of course. Anyway, most of you have probably watched the videos and my comments are pretty obvious. The next set of financials here are going to be fascinating.

Thanks to other posters for insightful and helpful comments which I hope over time to be able to add to.

Am I the only one who gets confused about the pricing of various types of Vanadium? Would anyone be kind enough to direct me to somewhere where I can educate myself in the context of the BMN output. I have a chemistry degree (well, natural sciences, anyway) but I still manage to mix up pricing between oxides, ferroV, lbs, kgs and tonnes (tons?)
Help!

...have much clarity (not money)...

I agree that few of the numbers have much money, capex included.
I re-read the accounting policies note on revenue in page 93 of last year's financials: it's far from clear (to me, at least). Taking that and trying to back-calculate the revenue for the year did not get me anywhere close: I was miles off. This lack of clarity throughout will be a significant barrier to investing for many (IIs and PIs). For me, I've bought into the growth story and the solid balance sheet. Management will need to show real progress this year, especially with margins being under pressure as they are (brent minus 22 is currently USD32/bbl).

The unpleasant and confrontational tone on this bulletin board does not lend itself to meaningful debate surrounding the opportunity. On the good boards on this site, I have learn a lot from other investors. We've all been right and wrong in the past and made good and bad posts. For instance, I bought this immediately before it took another dive down last week. I also posted last week a list of some pros and cons (at very high level), my first post here which immediately drew a response that it was "nonsense".

I genuinely think there's an opportunity here given the fundamentals, but management must deliver on this roadmap to 55kbopd and beyond. And where there are delays (which there have been), explain them in detail and if/how they can be avoided going forward. If they can't do that, I'll be selling.

If you're bitter about your position here, please sell up and find better opportunities. Finally, the people who draw the most respect on these boards are the ones who post in detail, who have some humility and who don't escalate anything unpleasant.

I imagine I'll get abuse for this post, but someone had to say this.

This is a fascinating one I bought last week: these are some very high level notes - some of which is obvious stuff. Market cap GBP69m, 2,000 employees.

79% owned by wife (CEO) and husband (COO) team. It does construction, facilities and supply chain & logistics mgmt in places such as South Sudan, Somalia, Mozambique and the CAR, also a bit of middle east. So it looks like "barge pole" material, but...

Pros
1. Founded 2004 and has geographical diversity in its projects and is expanding its regions and countries.
2. The management team are ex-NGOs and international development bodies. I suspect this is their life's work. They take modest salaries for directors of a listed company.
3. Barriers to entry in the areas they operate are very high - great as competition for tenders (especially by experienced parties with a proven track record) will be low. Presentation says competition is much larger companies who bid much higher prices.
4. Clients include the US & UK govts, aid agencies (eg UN), NGOs and corporates. High quality counterparts - credit risk managed.
5. Listed for about 18 months, now have liquidity and structure which allows them to tender for bigger projects.
6. Significantly growing their "revenue backlog": It's USD166m at last report, up from USD119m. This is their pipeline. Quite how scientific this is, I am still trying to ascertain.
7. Targeting bigger, longer term contracts with services revenues.
8. Prior year PE is 6. Very low for a growing company with a cash pile an a decent contract pipeline.
9. Cash pile at 31 Dec 18, USD26m (29% of market cap).
10. Dividend yield 2.5% more than three times covered. Expected to increase.
11. CFO bought GBP60k's worth in Dec 2019.
12. Price/NTAV = 1.5.
13. Revenue growing.
14. Institutional shareholders are in (despite the huge ownership by management.
15. Management highly aligned with other shareholders, but see A below.
16. Take sustainability and integrity seriously. Good... and also, this will be good for winning tenders too.

Cons
A. No control at all by IIs/PIs given founders own 79%.
B. Key man risk on founders.
C. Geographies in which they operate, but they are diversified.
D. Potentially lumpy contract awards and potential delays could make for lumpy revenues and volatile earnings.
E. Interims showed margin under a little pressure, but recent update suggest revenue marginally ahead for 2019 and earnings "broadly in line" with expectation.
F. Share liquidity given tightly held.

Surely they'll plan to grow it and sell it?
Constructive thoughts most welcome.

Hi pickedpeck
I joined you here today after RAI came up on one of my Stockopedia screens. Good to see you here too.

I guess everyone here has watched it, but I thought this prez to be a good intro to the business.
https://m.youtube.com/watch?v=ArhzvOGW03M

Thanks for the extremely valuable insight, AB.

Thanks, CCC!
The fundamentals now look fairly compelling here (my pros and cons were an attempt to set that out).

Quite right, CJ. It's unfortunate because the company is being hit hard by events which are beyond its control. Agreed that in the longer term this looks attractive. I'm adding o my watchlist, having half-followed it for a year or so.

Hi weathervane
Those were posts I have made on other shares I own, have owned or in which I’m interested. Purchased my first lot of GKP today, rather than any listed equity, ever.

I hope that’s clear. All the best.

Thanks for the comments, AB. Doesn’t the deeply-discounted sales price mitigate at least some of this concern? I do agree with you that the company is beholden to one party, the government, for its livelihood (or otherwise).

You’re kind: thanks, Taff!

I work for myself, Max. Thanks for your post, I'll take it as a "welcome to the bulletin board"

I made my first purchase here this morning buying a decent chunk (in the context of daily volume) though I may well add.
Here are my thoughts - some of this is obvious, some may be misplaced so I would welcome thoughtful comments: thanks.
PROS
1. Good asset producing cheap oil with decent infrastructure so lots of oil cheaply produced.
2. Serious 2P reserves by comparison with SP
3. Serious BOPD by comparison with current SP
4. First class balance sheet, mostly as a result of the restructuring after the 2014/15 car crash
5. Management team are reasonably compelling and they do deliver, albeit not quite in line with their set timetables (e.g. the PF-1 pipeline seems to be a bit later than originally advertised and BOPD in the 2018 annual report targeted 55,000 BOPD in Q1 2020 (see page 11 of the 2018 financials).
6. P/B is currently 1.0
7. PE hardly looks challenging (unless circumstances on the ground go pear-shaped)
8. The strategic plan, even if delayed should give significant upside to price.
9. Dividend yield currently attractive and well-covered (buy-back programme is ok, I suppose).

CONS
A. Management does not have skin in the game, but they did get significant remuneration packages and zero-cost options last year (see remuneration report). These weren't voted through very strongly at AGM.
B. Kurdistan political risk (obvious) both involving Baghdad, but also Turkey and the wider middle east mess.
C. Its a bit concerning that an RNS comes out every time the product is paid for. Therefore questionable receivables.
D. Related to C, there's one counterpart here and its government: risk of sequestration?
E. Brent minus 21 or 22 dollars seems to be the price. What happens if crude falls? Apologies if this is covered in the accounts or presentations somewhere and I've missed it.
F. One asset only (eggs, basket, etc.)

Oil is a hated investment right now. This outfit has its issues but the production, balance sheet and, crucially, the potential for significant growth made me press the button. Anyone want to add to these lists of pros and cons?
Thanks and GLA

I know most of you will already have watched this Malcy chat and I see some comments below.
https://www.youtube.com/watch?v=yyuXo72qquY
I was honestly shocked by the lack of quantitative clarity of the presentation in respect of the assets, little numeric detail and the overuse of words like "very", "big", "unique", "major", etc. I would expect to see less of a pitch and more detail on the roadmap, its costs, benefits and risks.
It's not easy for a relatively early-stage company to present effectively and with numbers, but I imagine that this style shown here won't cut it going forward (with either IIs or quality PIs of whom there are many on this board): I would expect the NEDs to speak to him about this. Compare it with Peter Levine's session with Malcy on President Energy.
I'm not yet invested in SAVP, but remain tempted by apparently attractive assets at (currently) low cost. Management is clearly a concern (I hope it isn't going to be an Amerisur rerun).

This shop reminds me rather a lot of the now defunct Amerisur (where I had a very large position and made a relatively modest profit). Shareholders left to guess the story; jam tomorrow; generous remuneration....but also a very promising asset base.

I suspect that if this goes up, it will be despite management rather than because of them. The word "revenue" seems not really to be prioritised. Where is the road map for income, BoD?

I suppose I'll have a little punt with some of my AMER and ELA proceeds.

Hope you’re feeling well after your op, Daddybigbucks. Glad to see you posting again. Best wishes.