Member Info for DanBrown83

Hi Spikey

Barracuda drilling is a bigger problem than AJE - our contract on Barracuda is that we (ADME) have the lions share of the expenditure (also the biggest slice of the revenue)

In terms of AJE, this is going to be a lot less in funds if anything fro ADME - obviously the costs are to be covered by the operators (we are not one) so any reliance of investment from us as an equity partner will be minimal, we have to remember again though that the 'project debt' is repaid first so our actual revenue won't start for a good 2 years

How have we lost Barracuda????
Only you actually think that
Our contract and Zenith's potential contract are different and we will be working alongside each other on part of the contract
As advised - we do not own Barracuda - we just own a contract on Barracuda

placing's typically come with warrants that have generous terms

we need money - c£1m to get into early next year for admin expenses - should of needed it by now but only guess is that BOD have paused there salaries - i'm sure they are hoping that they would have had something positive in last couple of months to come to market with but still nothing

We still don't have actual cash inflow from anywhere and that is to remain for the rest of this year at least, likely mid next year given the lack of progress in last 6 months

im more surprised given the accounts he didnt try and one done earlier - unless hey did but failed

If you read the reports, there are zero concerns on our involvement in AJE / Barracuda
How much we will realise from these opportunities is the real question
the Marginal Bid we knew had gone earlier in the year mainly from the lack of new in the trading update - but its pretty much confirmed
The market will likely look at the Cash Burn and immediate placing requirement - realistically £1m to get u to next year will mean another 50m shares at 2p

We kind of knew from earlier the Marginal Field Bid was never materialising - was an overall farce from Nigerian authorities with everyone winning there bid but sharing the spoils with someone else, was really just a cash cow for them and then let the parties work it out rather than actually pick the best bid

In regards to the CPR report - i am really disappointed - as per original RNS it was 4-6 weeks so to say there is still further technical appraisal required after 4 months is very poor

I think the real issue in the accounts is the increased Admin Expenses and again the current cash position- 2 years ago they were implementing huge cost reductions to make these manageable - now they are c£200k a month, we had £137,000 on 3oth June 2020 so lights out basically end of July, this likely means Directors have deferred salaries until next placing - which must be soon, the biggest problem in this respect is we sold shares in SD and have raised plenty of cash and haven't made much progress

In regards to AJE, we always knew that the two current wells basically ran out end of this year / early next year, and this is obviously reflected in current production,
The main part of AJE as I have said is Phase 2 / 3 and the completion of Panor / PetroNor and the semi relinquish of operations from Yinkwa - i will feel a lot happier when this happens

Ouch

At 30 June 2021, the Group recorded a loss for the period of £1,599,000 and had net current liabilities of £4,318,000 after allowing for cash balances of £137,000.

Placing must be very soon if cash was £137,000 3 months ago
Spikey looks right in this respect

The most positive part is the AJE Comments - which to me sound exceptional
Field Development Plan is in discussions with the prtners but delayed by PetroNor / Panoro (they have announced the long stop date end of next month) which has got to be a positive
The plan includes 3 new wells which will increase bopd up to 9000 (828 to us) which at current price less current costs is c$50,000 a day in Gross Profit, that is huge
Also there from the RNS, sounds like it could be ran through ADME / Trafigura who would be a great fit for the AJE project - if it gets to that volume - this deal would likely reduce the Revenue due to their off-take been at a lower price than the market price

Accounts are really poor
SpikeyJ assessment was right - Admin Expenses have soared and funding will be required despite selling assets and raising funds - see below from RNS
In the short term, the Group will require further additional funding in order to meet its liabilities as they fall due and continue to operate as a going concern
They have CPR in draft but needs some additional work before it is finalised
Really poor but probably expected

accounts are in - let me read

We pay for the development costs
we virtually get double of what we put into the development back from revenue
if there is no oil - its ADME who takes the lions share of the loss
If there is Oil - it is ADME who take the a good chunk of the profit and we will get our capex + profit first

Its similar to AJE with Yinkwa - while they are the main shareholder - they are also the operator, so the capex spent comes from them, but they get that back over double from the revenue (and they are paid first) so every time there is work done at AJE (there needs to be over double revenue to repay this ('project debt')

Why i like our position in Barracuda - but it is risky

No announcement from Panoro or PetroNor on AJE yet either

And here I was expecting a 7am Update
Suspension tomorrow if not published???

remember we don't own the asset, we just have part ownership of the Service Contract

True Spikey but give them an inch and they take a mile
All eyes on Thursday for Accounts + trading update + PetroNor / Panoro AJE Update who likely just extend their longstop date until end of year if their deal still not concluded

It will also be interesting to see the current cash balance in the update since the sale of SD and then the subsequent expense on Barracuda
hopefully we will see a balance of £400k+ and no need for placing this year unless it is for real investment
if Spikey is right and we will be placing soon expect it to be under £200k if funds are needed just for expenses
somewhere in the middle should be around christmas where we will need funds

I fully expect results to be issued 7am on 30th September - when have you ever seen a set of accounts early unless they are amazing

Turnover will have reduced - we never took part in one lifting last year and it has been COVID effected - what will be interesting is them admin expenses - should have reduced due to COVID anyway

The CPR Report is a big issue with me, its also why there is so much speculation on the Zenith RNS as we haven't published anything on Barracuda yet when we should have - it always throws up doubts

eyes a float - still well off and we have all seen what happens to SP's when they go on AIM
90%+ of AIM companies lose value as they capital raise
As we said, the Tech sounds great, but its early - good luck to it as it could make a huge difference to the world and the future of the planet

Thats how i see it - it is two separate contracts, focusing on 2 different elements of the project, we are hopefully going to be partners on this moving forward
in regards to the ADME response, all parties need to be careful how much they can disclose due to confidentiality agreements that will be in place
i feel we will need to wait the 2 weeks to read the accounts and formal trading update to get a clearer understanding, and then wait for a formal RNS from Zenith on there agreement in a couple of months
we are still waiting for an update on AJE with Panoro / PetroNor

couple of weeks and i think things will be a little clearer - but as already disclosed - we don't own or have any rights to own the Barracuda Field

Standard Replies in regards to what you get - as per this RNS
it would sound that Zenith Contract is a different type of agreement and we will be in some way collaborating with them on Barracuda (if they agree to go ahead)