The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Would be useful to get an updated balance sheet but I suspect this share is worth between 250-300p based on the value of its 1) cash and current assets net of debt, 2) its Egypt assets based on the net yield in cash after development expenditure related to keeping the asset going and 3) its London listing. Hopefully, someone will offer to take us out or New Med increases its offer in order to provide a premium to the current market share price wallowing around 240p which has little downside but a bit of upside. Views welcome.
If it is ok with you, SmallInvestorCal, and thanks for the warning, but I think I’ll stick with Hawkins and SAVE and see what happens once we get to the Nigerian Courts. I’d hope that SAVE’s external lawyers took a read of the legal docs before they invested and gave a high probability of success otherwise, why would SAVE have invested. Are you saying SAVE are stupid?
“Currently drilling wells” with money that should be being paid up to Lekoil plc in accordance with the agreements Lekoil Limited entered into in [2015] in order to raise the $200m or so from the shareholders of Lekoil plc or so. I think you need to add this to your chat for completeness.
Pointdexter - I concur. Right old game going on here with IIs with far more money and probably better insight into what is going on. I still feel that broadly this share is heading north but dangerous game to be trading this share given the volatility and the uncertainty around the overall asset base.
Will be interesting to see what Lekan does next. Feels like his options are narrowing but still plenty of resistance likely until this hits the Nigerian legal system which it probably will and that could be a long old journey with the lawyers enjoying a lot of fees and both parties ending up with very little to show for it all. Unless of course, somehow but unlikely, both parties can negotiate a settlement of some description. We shall see.
Pandou - I’m trying to get a handle on what Lekoil’s net interest in Otakikpo might be worth. Admittedly, there is the issue of that cash not being passed up to Lekoil plc (in theory a 90% share of the cash being generated by Lekoil Nigeria) and that cash either being used badly or leaking out before it gets to plc but I would find it helpful to calibrate the size of the prize that is being fought over net of the bank debt and the patient creditors that are owed of course. Any ideas? $5m, $10m per month at today’s oil prices?
I’m intrigued and still hopeful of getting something back from my investment north of the GBP1.9p previously offered.
Anyone got a view on what Otakikpo is worth in a $100 POO world and who controls the cash being generated by that asset and where is it going or being held somewhere? An up to date set of accounts would be useful.
I am a STH here and just pleased the GoI did actually turn up with a cheque. I don’t understand why the shares price is rummaging around at 190p. I’d be surprised if a sum-of-the-parts valuation didn’t come in at 250-300p. No doubt a bunch of people and traders far smarter than me in the room trying to make a quick buck due to the convoluted TO process which the PIs don’t need (as they can easily sell into a liquid market) and probably done simply for the benefit of some IIs who would need to sell as CNE is getting smaller and they may not be allowed to hold a smal m/cap stock in their portfolios. For me, will keep holding and ride it out and see what happens. Hopefully, one of the smart guys in the room will see an opportunity for a complete take-out and at a significant premium to current SP in due course.
I think that the deal the Board have just done will prove in time to be a better deal than the (alleged) current 1.9p per share offer. Just an opinion and I may well be wrong but it is my prerogative as a LEK shareholder to find out. LEK now has the cash funds and the Partner to resource a legal pursuit of its ownership and contractual rights in Cayman and Nigeria.
I have 2 decades experience of Nigeria and oil/gas and whilst the Nigerian judicial system is not perfect and can often be derailed, eventually, with the right support, the Courts will eventually get to the right answer - but, it may take a while and we shall find out in due course.
Positive momentum and encouraging developments. The SAVE team will have experience of operating in Nigeria and the legal gymnastics and patience that the process to monetise our assets / contractual rights will require. I’m holding in the hope that Lekan realises that he has to come to the table with a better offer or suffer the financial consequences. As for Lekoil plc, as I have said before, I don’t believe it has a future in itself and hopefully we either get a better offer from Lekan or SAVE take us out and absorb LEK. GLA.
Unexpected and strange movement downwards in the SP today. The stated NAV 31-12-21 is about GBP1.4bn versus a market cap of GBP1bn or so with a lot of that actual NAV in US$ cash and significant upward swing in the value of its oil and gas assets in 2022 to date due to market oil and gas price increases. I guess it will have to be a hold then until the market price reflects the value of this company’s assets. Tender will probably be a bust but with a special dividend in its place maybe doesn’t matter and will just have to hang around for the Company’s strike price offer, a takeover approach and the analyst broker reports. Unless, the experts know something we don’t!
I can’t believe that SAVE and the Lekoil plc Board embarked on this latest strategy without having first engaged proper external legal advice (including reading all of the corporate docs and agreements) and arrived at a position that they believed that they have a robust legal position. Then again, maybe I am just naive. If the Caymen courts rule in favour of Lekoil Nigeria, then basically Lekoil plc is finished so at least we the shareholders in Lekoil plc will know that reasonably soon now and than can sell up or write off our investment and move on. I believe that Lekoil Nigeria’s assets are worth a lot more than 1.9p per Lekoil plc share and the protaganists are simply fighting for a share of that. In theory, Lekoil plc is entilted to 90% of the cash up flowed out of Lekoil Nigeria. Of course, it is in Lekoil Nigeria’s economic interest not to upflow any cash as this reduces its leverage. Time will tell but I personally still think it is worth hanging around to see and maybe get some upside from the 1.9p per share allegedly currently on offer. Just my personal view and as always, DYOR and thinking.
“You lose the lot” - do you mean, your shares would become slightly more illiquid? I will continue to own my shares regardless of whether or not the shares are listed. Nozzla - Please explain what you mean as I don’t understand
Presumably the plc Board have done the best deal they could find under the circumstances. Starved of cash by the refusal and/or inability of Lekoil Nigeria to upflow cash and refusal of Lekan to pay back his loan, they have managed to find enough cash to cover them for a year or so which will pay for the legal action they are probably contemplating for the recovery of their assets and to pursue defaults under the various corporate agreements they signed originally. Personally, notwithstanding the heavy dilution, I will stick with this and see what happens rather than take 1.9p per share currently offered by Lekoil Nigeria. If somebody wants to offer me more than 1.9p for my shares now or SAVE offers me shares in SAVE in exchange for my LEK plc shares I would consider that too. At today’s price of oil and gas, Lekoil plc assets are worth a lot more than 1.9p per share and everyone knows that. No doubt this will turn even nastier and legal but hey ho, worth sticking with it IMHO but to all, DYOR rather than relying on any individual’s opinions.
Savannah Energy look like a credible outfit and their entry (announced today) looks like the beginning of the end for LekOil plc and Lekan and some hope of a resolution for us long suffering Lekoil plc shareholders. I’m going to hold tight to see where this goes but would be more than happy to swap into Savannah Energy shares if given the chance.
Agree - so much has changed since the publication of the last annual report that it is hard to gauge what this Company is currently worth particularly given oil at >$90 and gas in heavy demand. We just have to be a little more patient for the GoI to (hopefully) pay and the next substantive report from the Company Management together with the Brokers more in-depth analysis. That said, I would be disappointed if this wasn’t somewhere in the 230-250 range by Summer 2022.