Member Info for GT6546

Looks as if more places are starting to pick up, and report, on todays' news regarding Lekoil.

Within the past couple of hours Nairametrics have published this:

'Lekoil fires its Founder/CEO over alleged governance breach'
https://nairametrics.com/2021/06/03/lekoil-sacks-its-founder-ceo-over-alleged-governance-breach/

I just made a quick visit to the press/news section of Optimum Petroleum's [OP] website.

I couldn 't see anything new.

But I did find it very informative a number of months ago - when I read up on Lekoil back then - as OP's website has useful and utilisable historical information, particularly relating to Afren, Lekoil and the geology of the oil and gas fields relating to OP 's, Afren, Afren (in liquidation) and Lekoil's interests in the region in and around OPL310.

Anyway, after reading letters and court judgements on OP's site, and comparing them to information released by Lekoil (including Lekoil's original AIM Admission Document) it occurred to me 'these guys need to meet, [and shake hands?] more!

I wonder if it would ever be possible for Optimum Petroleum to have a board member (for representation and ease of communication purposes) on Lekoil's board?

And for Lekoil, for the same reason and purposes, on Optimum Petroleum's board?

OPL310 is one of many assets Lekoil has an interest in.

Things have been 'leking' (if you'll pardon the pun) for a wee while now at Lekoil.

There is an 'optimum' window in the coming weeks and months for change and advancement, that Lekoil and Optimum Petroleum sh ould seek to advance and capitalise from.

And 'make hay while the sun shines ' so-to-speak'.

I wonder if - in time - well known investor, Richard Griffiths, will end up taking a stake in Lekoil?

As part of the changes af Sterling Energy, when it became Afentra, he took quite a sizable stake in Afentra.

And Griffiths was a major stakeholder in George Oliver's run 'Eland Oil and Gas'.

At the time Seplat Petroleum bought it (for £200-300 million?) I thought it was overpriced, but when I saw recently what it had added to Seplat's production and revenue figures, I think it may have been a bit of a bargain.

Am hoping, patiently, to see Lekoil become the energy giant it could become.

On balance, I think the benefits - and potential upsides - arising from Akinyanmi's departure outweigh the possible risks or downsides.

The two new board members, alongside Sterling Energy/Afentra board member (lawyer Tony Hawkins) have presumably considered, analysed, researched, mobilised, lobbied and discussed etc at length t he possible risks/downsides of Akinyanmi's departure and how to mitigate and/or circumvent them?

After the changes at fellow Africa focussed energy company (the cash rich Sterling Energy), and it's emerging transformation into renewables and fossil fuel focussed 'Afentra'(which stands for 'African Energy Transition'), I think T ony Hawkins ma y have left the board of Afentra.

If so, he may have freed up a lot of his time to devote to Lekoil, to cover all the 'angles' and 'bases', so that gives me confidence.

The two new recently appointed board members, alongside Tony Hawkins make a formidable team.

If I remember correctly one is an Afro-American lawyer, with significant connections to capital state-side, and the other is a [mathmatician?], founder of Hadron Capital, a major shareholder in Lekoil.

Lekoil does of course need significant amounts of capital (under the/an unfolding new direction) to develop and grow.

Revenues from oil and gas comprise a very major part of government funding in Nigeria.

The Government and the people of Nigeria are pragmatists.

The people at Optimum Petroleum (Lekoil's prospective partners at OPL310?) are also very influential and pragmatic too.

They would much rather see the assets under the umbrella of Lekoil directed and managed by those with access to international capital, a scrupulous attitude and attention to corporate governance, shareholder and stakeholder returns and a refreshed, transformed and revolutionised
Enironmental and Social Governance (ESG) policy.

In the past a bit of a personality cult, vanity and a bit of vain-gloriousness may have been allowed to develop and enmarsh Lekoil, centred around a small number of peop le.

A line needs to be drawn under those days.

A lot of activity - and new ideas - at San Leon Energy's Nigerian assets is seeing w onders performed with extracting shallow/onshore/marsh based oil/gas assets, which will ho pefully give Lekoil a new impetus, urgency and ideas to expand it's existing oil production, s ituated in broadly and generally similar terra in.

A recent Lekoil director (George Oliver) - if I remember correctly - was a key figure a number of years ago in an oil company bought at a good price by Nigerian based Seplat Petroleum (recently proposed, I think, t o be renamed Seplat Energy).ago

I wonder what he learned, and what he was h oping to achieve, from his brief time as a Director at Lekoil?

I think he is a le ading figure at UK and US listed Vaalco Energy.

I personally would also like to see Vaalco Energy develop some invoovement with Lekoil, perhaps in taking a stake, and appointing a b

There seem to be a number of factors propelling the gold price.

Factors that particularly relate to Australia are how sizable the mining industry is there and big a part it is to the Australian economy (particularly coal extraction), the recent widespread bush fires, environmental concerns - and concommitant pressure (including international lobbying, influence and pressure) relating to fossil fuels and their combustion emissions.

It makes me wonder if these will lead to LESS capital being deployed in Australian coal extraction, and MORE in gold extraction?

One of the end products is, after all, clean, shiny and golden (shining like the sun) and doesn't degrade; rather than being generally black and dirty as coal is, and having the potential to generate significant CO2 gas emissions.

Gold exploration, development in Australia appears as if it may have a bit a tailwind building behind it.

When I saw the rise, and viewed and read the Calidus presentations today, it caused me to recollect an announcement from a UK listed mineral company (ECR), with interests in Australian gold exploration and development.

In it, their CEO (CB) says there is "...currently a very high level of interest in gold mining and exploration in Australia..."

Good to see the Calidus price now over 30 cents.

Seems they have been giving presentations at a couple of conferences recently.

Quote from FT article: "Greg Eckersley, Lekoil’s interim chief financial officer, and John van der Welle, a non-executive director, both left the company earlier this month did not respond to calls from the FT."

Notable that the FT sought quotes from two FORMER directors.

Useful to know what their own thoughts are on the imbroglio and response to the debacle is.

Could be legitimate reasons why they didn't respond to calls from the FT (e.g. on vacation, short notice/tight FT deadlines or restricted to clearing media contact/quotes with their former bosses/PR/lawyers at Lekoil.)

One interesting facet to the imbroglio...Lekoil are now getting a lot of publicity in the media, particularly the financial media. And may possibly continue to do so for some time to come.

Thus, Lekoil's name, and to some extent it's future development aspirations (and concomitant funding needs) is being publicised and sort of 'advertised'. And reaching a wider audience (including some potential big budget funders?) than it was previously.

Thus, whether good, bad or a mixture of both, it's free publicity.

But it's early days yet. The sum, net effect of that publicity is difficult to judge and financially quantify as yet.

They will really have to address the salaries situation, and the number of directors, management team/staff, very soon, for example, in the Circular.

Unless there are time intensive developments requiring comparable time investment to the past, current levels of director remuneration and management/staffing - many might suggest - could not possibly be justified following disposal of Ormonde's tungsten interests.

Seems to me that if and when any cash comes in, paying out a substantial portion of it to shareholders may get a lot of support (and votes).

Let's see what's in the Circular.

Published next week?

See Note 10, page 48, 2018 Annual Report:

Quote: "The Directors have made the decision to make available for sale the Group’s interests related to the La Zarza project, Spain. Consequently
this has been reclassified as an available for sale asset at 31 December 2018. The Company’s interest in the asset is expected to be disposed of on commercial terms at a future date."

It's valued in the accounts as a held for sale asset, at 2,400,000 Euros.

Was reading the article below recently.

Does anyone know how much it is costing the Aje field partners (AJEP) to transport oil now, and what ADME Energy's share of the cost is?

What ARE AJEP currently using to transport the oil?

Are all the costs of transporting the oil nowadays, plus extraction and production costs from the well(s), safely below the value of the oil?

Are there any up-to-date estimates out, or available, of how many months or years of crude oil production from the existing well(s) might be recoverable?

Wall Street Journal: Oil Shipping Costs Soar to Highest Levels in 11 Years

https://www.google.com/amp/s/www.wsj.com/amp/articles/oil-shipping-costs-soar-to-highest-levels-in-11-years-11570731475

21 October 2019

https://www.pressandjournal.co.uk/fp/news/highlands/1871259/breaking-north-sea-oil-platform-evacuated-amid-emergency/

16 October 2019

https://www.energyvoice.com/oilandgas/north-sea/209845/two-workers-airlifted-from-enquests-heather-alpha-following-fire/

Correction: "offer", should have read "bid".

Hargreaves Lansdown (HL) email (excerpt) on Keras's proposed Calidus share distribution:

[Start quote] "When will I be able to trade my shares on the Australian Stock Market?
You will be able to trade your shares on the Australian Stock Market once they have been successfully transferred into our HSBC Account. This process will begin on 29 November 2019 and may take a NUMBER OF WEEKS to complete, although we will work to ensure the transfer is concluded as quickly as possible." [End quote] [Capitals my emphasis]

How many weeks is "a number of weeks"?

Seems extraordinarily vague, imprecise and uncertain to me, and doesn't fill me with confidence.

So - in so far as it is currently proposed, planned and anticipated by HL - someone who may want to sell their Calidus share allocation, who happens to be a Hargreaves Lansdown (HL) client wont:

a) be able to do so for "a number of weeks" until;
b) "they have been successfully transferred into...[Hargreaves Lansdown's global custodian] HSBC Account?

What if the HL client wants (or urgently needs) to sell some or all of their Calidus during that "number of weeks" period?

If such an HL client is forced to take a metaphorical 'back seat in the queue' (when compared to holders of Keras shares with other brokers receiving their proposed Calidus distribution more speedily and timeously) I imagine some - perhaps many - HL clients may be very disgruntled, unhappy and displeased.

Particularly if they end up having to sit and watch an offer price (that they may have wanted to sell at) come and go, sitting on the sidelines...waiting for Hargreaves Lansdown's proposed, planned and anticipated "number of weeks"...

PS The 'Full valuation calculation' Keras Resources said could be found in Appendix 2 of their 27 August 2019 corporate presentation are actually in Appendix 3 on page 16. :-)

To avoid the AUD$200 DS Vickers broker fee, I would have thought HL should be improving their customer service by looking into grouping individual customer sell orders of Calidus shares into blocs.

Re, estimated post demerger, post distribution, I noticed that too.

As you say, HL said in their email:

"It is expected that the combined value of your Keras Resources plc and Calidus Resources Ltd shares immediately following the Demerger will be broadly the same as the value of your Keras Resources plc shares immediately before the Demerger. "

However, the nearest I can find in terms of near 'official' post demerger, post distribution estimated (but not guaranteed) possible values is in KR's 27 August 2019 corporate presentation on their website:

https://www.kerasplc.com/investor-presentations/

This is from page 12:

Keras holds 723,750,000 fully paid CAI
Ordinary Shares valued at c.£13.33m
? Keras intends to distribute its Calidus
shareholding pro-rata to its
shareholders, with the distribution
expected by the end of 2019, through a
capital reduction and demerger process
Value Calculation
Shareholder with 1m KRS shares
Pre-Demerger Value
? 1,000,000 KRS Shares: £4,750
Post Demerger Value
? 1,000,000 KRS Shares: £2,556*
? 316,168 CAI Shares: £5,649
? Total Value: £8,204
Assumes that KRS will trade at 50% of its NPV. Currently KRS trading at 53% discount to its NAV. Full valuation calculation in Appendix 2

Why would what Hargreaves Lansdown said about estimated, anticipated, possible value of holdings of Keras and Calidus in the immediate aftermath of the demerger and distribution be so different?

I see there is another apparent discrepancy in Hargreaves Lansdown's (HL) [supposedly corrected] email today.

HL say:

"What is happening?

Keras Resources plc has announced proposals of a Demerger whereby the Company intends to distribute its shareholding in Calidus Resources Ltd to Keras Shareholders. Eligible Keras Resources plc Shareholders will receive 1 Calidus Resources Ltd share for every 3.44229 Keras Resources plc shares they hold on the qualifying date, expected to be the close of business on 25 November 2019."

By 'qualifying date' HL presumably mean 'record date', which is the term Keras use.

However, Keras Resources (KR) say:

"Intention to demerge entire 723,750,000 shareholding of Calidus Shares held by Keras, and to distribute them to the Eligible Shareholders (currently anticipated to be those on the register at 6.00 p.m. on 19 November 2019)"

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/KRS/14244754.html

So HL give 25th November as the 'qualifying date' (whatever they mean exactly by 'qualifying date'). But KR give the 19th November as the EXPECTED 'record date'.

In KR's RNS, within the 'Expected Timetable of Principal Events', they say:

"Expected date of High Court hearing to confirm the Demerger Reduction 19 November"

and:

"Expected Record Date

6.00pm on the Business

Day of the High Court

order for the Demerger Reduction."

* The Record Date is expected to be on or about 19 November 2019 and the Company will notify the firm date by Regulatory Information System prior to the Demerger becoming effective."