Member Info for happysparrow

ItsRiskyThat also put out the idea on Advfn that delay was due to changing personnel getting up to speed. - see his post on A d v f n on 16/5/19. Extract: "There are several critical documents that the government needs to approve and you know things have changed in the government. You know the will seems to still be there. Several of the people in the regulatory bodies are different. Several people have changed and any time there is a change, you need to bring the new people up to speed and justify why things have to be done in a certain way. This is what causes a lot of delays. '

This idea of new placements, together with robberyrob's explanation of fear and caution in going forward (too, with Buhari having to be certain that if he is selling state assets to foreigners then he must get good value), might explain the long delay we are experiencing:

Further to that, perhaps supporting that view, I've just picked up this from the NewsNow site - Sun News Nigeria:
Why we retired 11 staff, top management in fresh shake-up –NNPC
'The Nigerian National Petroleum Corporation (NNPC) yesterday explained why it retired 11 senior staff and carried out a major shake-up affecting 19 members of the top echelon of the national oil company. Spokesman of NNPC, Ndu Ughamadu, in a statement said the exercise was a routine, proactive backfill exercise meant to bridge the gap that will be created by some management staff retiring soon.

According to him, such an exercise was always carried out before the final exit of the concerned staff. He said, “in all, 30 senior staff were affected by both the statutory retirements and redeployment.”

He gave the list of staff on statutory retirement between May 1 and July 31 this year to include the General Manager, Chad Basin, Aniya Francis Umaru, who is from the North-eastern part of the country and retired on May 6, 2019; Adewale Solomon Ladenegan, Managing Director, KRPC, who hails from the South-west and retired on May 13, 2019 and Musa Sulyman Gimba, who is the Group General Manager, NNPC Leadership Academy, who also is from the North-east and retired on May 14, 2019.

Others include Umma Ayuba Musa, who is the General Manager, HR & Admin Services, Duke Oil, from North-west and retired on May 19, 2019; Emmanuel-Ate Mariagoretti Ndidi, General Manager, Support Services, NGC, from the South-south region, retiring on May 30, 2019; Tsavnande Thaddeaus Atighir, Executive Director, Operations, from the North-central; Okor Ovieghara, General Manager, Upstream/TA to GMD, who hails from the South-south region; Barau Mohammed Kabir, Managing Director, NGMC, who is from the North-western region; Dawaki Salihi Abubakar, the General Manager, NLNG, LIMS, from the North-west; Ibrahim Aminu Bagudu, the Executive Director, ETSD, NPDC, who is from the North-west and Yusuf Shimingah Matashi, the Managing Director, NPDC, who hails from the North-western region retires on July 17, 2019.'

Thanks robberyrob - some really interesting research you are putting out this morning.

This is what I've found so far:

Golden Eagle Petroleum Limited is an active company incorporated on 16 December 2013 with the registered office located in Edinburgh, City of Edinburgh. Golden Eagle Petroleum Limited has been running for 5 years 5 months. There are currently 1 active director and 0 active secretaries according to the latest confirmation statement submitted on 13th December 2018.

Status ACTIVE
Incorporated 16 December 2013 (5 Years 5 Months Ago)
People Director/President Andrew Allister Knott
Shareholders 2 shareholders
Confirmation Next statement date 13 December 2019 due by 27 December 2019
Last statement dated 13 December 2018
Accounts Next accounts made up to 31 December 2018 due by 30 September 2019
Last accounts made up to 31 December 2017 (Unaudited Abridged)
Classification • Other business support service activities n.e.c. (82990)
Activity The oil and gas exploration.
SME Size Micro – Less than 10 employees or turnover under £2 million
VAT Number Unreported
Registered Address 50 Lothian Road
Festival Square
Edinburgh
EH3 9WJ

Checked my history.
This was the subject of robberyrob's post.
What does SAVP (?) not want us to know about this?
Is there anything about Lekoil's relations with the Ministry that is of concern, also? (one of my unanswered questions to Jessica)

Tier, I've still had no reply from Jessica.

Anyone know why robberyrob's post and thread have been removed - it looks like it's touched on something that someone wants to hide from shareholders?

robberyrob - please remind us of the subject - and why it is of concern.

600T, I'm posting this not as a plug, nor as a put down of IOG, but out of concern for your 'eggs in one basket' approach which you've honestly explained.

I use to have that same strategy, but came unstuck, largely through unacceptable management practices (SOU - perhaps dubious dealings by directors/financiers as trellis may perhaps feel the same; Globo - outright fraud; SDX - price perhaps kept artificially low to help interested parties?; I3E - flying kites regards farm-out?; and PANR, incompetent operator and death of owner with Vision.). To that I would now add IOG - as explained before, a huge disappointment through this unnecessary placing and massive dilution that benefits institutions, directors and perhaps employees, where selling the company would imo have been more beneficial to shareholders.

So I changed my strategy to diversify to mainly holding about 4 or 5 shares - these are SAVP, ECO, EME and UPL which I have confidence in; (and a few IOG which I hold to sell in the next 3 months on big news arriving). They are good companies and all are at a very good price currently. (I researched about 50 - 100 companies to select just these four). There are other good companies too, but with different risk/reward profiles and different timelines and types of operations. DYOR - but now I would always recommend diversifying a little.

I hope this is of help.
Good luck and ATB.

more like charity stuff.

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=2ahUKEwi5lb_Ao-jhAhWB16QKHQKqAygQFjACegQIBBAB&url=http%3A%2F%2Fwww.thecommentator.com%2Farticle%2F7354%2Fthe_uk_s_post_brexit_future_in_oil_and_gas&usg=AOvVaw2Qywn1f19_a7n_cS5nZA58

Now looking at broader opportunities in Malaysia working with Petronas (as well as Sarawakian opportunities provided by Petros/Brooke partnership), that have come out of recent meetings over last few weeks. 'Very interesting' says Steve Staley.
Yep, very interesting. Add this to extra opportunities coming from Tunisia's NOC Etap, and possible licence award in UK N.Sea next month. and we can see this business developing well through its good working relationships and connections.
One to build a stake in, and hold. This could be big.

I like the move towards self-financing their activities: Both farming-out some exploration and farming-in to production.
Note: 'and elsewhere' ... Egypt? A steadily growing portfolio mix.
'In addition, Entreprise Tunisienne d'Activités Pétrolières (ETAP), the Tunisian national oil company and our partner in the Saouaf Licence, has asked Upland to look at farming-in to specific, producing Tunisian oil fields where our expertise and access to funds will be of mutual benefit. A number of additional producing fields in Tunisia and elsewhere are also being assessed as candidates for a potential farm-in which would provide Upland with an ongoing revenue stream. These fields are mainly oil producers, at various stages of field life and most of which could provide Upland with net production rates in excess of 100 bbl/day.'

Workover, agree. If the resolutions pass I can see this being 9 - 12p for some time. Might rise somewhat on speculation of farm-out, but will fall again if farm-out delayed, that's at least until Harvey comes in - and trouble if it doesn't. From comments on here it looks like the 10p placing will be voted through. I'm not at all optimistic about what will happen then.
But I still am invested on the basis that a farm-in will come in (far more likely a buyout), and hopefully by the end of June. That is my risk/reward I remain invested for.
I appreciate that this is a minority view.
GLA (whatever the outcome).

Continued.

[Too, it seems Martin Ruscoe has been offered placing access as a sweetener to resign (his resignation conditional on the placing going through)? My view is, if so, just pay him off - no need to do it through a placing - just get rid.]

And so, how will the administrator react if the placing, and the changes perhaps put forward by him, does not pass?

I think he will then look at the situation similarly to myself, and for the same reasons he will insist the company will be sold now - to the farminees probably [The offer of the likes of RRE for the debt will still remain as his last resort - but otherwise he will not touch RRE with a bargepole]. To do this, he may allow us to put back June's £3.6m loan repayment for a couple of months so as to provide liquidity during a delay of farm-out or whilst selling the company. In exchange for delaying loan repayment, if needs be, he will insist on getting the contract changes he wanted in the placing as to what happens with the LOG loans on the sale of IOG.

And how will the market react if the placing is rejected? Will we crash out? Who knows. There will be a mixture of strategies, and there can be no certainty as to which will have the upperhand. Some will say the SP was at 15p before the RRE offer, and will return to there until we get the farm-out. Others will say the placing values us at 10p now, no more. Others will attempt to push the price below 10p, making out we are insolvent, though in fact we are solvent to the end of June. Others will wait for the prospect of farm-out and Harvey appraisal. Others will believe that the longterm value of the assets and the quality of the management (IOG's pitch) will prevail. And others, like me, will say it is just too stupid for a cash-rich business not to buy us out - after all we have almost £800m of assets to develop, and the cost to them would be just taking on £40m of debt, and perhaps only having to make an offer to shareholders of £25 million (127.5m shares@20p) - pocket money to a company like Ineos - and competitive bids may bring this up to an offer of £100m imo. - and so, in my view, the SP will quickly rise to 20p+ on this prospect of the company officially up for sale.

I have voted against the 10p placing.
I maybe the only one?
Good luck all.

End.

Continued.

To close, questions have come in largely on 'How will the market respond if we reject the placing?' and 'Will the administrator then be open to the offer for the LOG debt from the scoundrels at RRE?'

This has many analogies with Brexit. The 10p placing is an appalling deal, but if we don't take it we are told we will crash out, fall off a cliff. Too, the administrator and LOG debt add a complexity not unlike the backstop.

Let's look at the administrator and LOG debt first.

Note: major mistakes made by IOG were:
- Not only to borrow from only one company (eggs in one basket) but to the extent that loans on conversion account for a majority of shares, and with that and 2 Log members on the board, IOG's independence has been compromised, resulting in mismanagement. [Well worth talking to Peter Young at the EGM on this aspect. I hope the administrator is there to take questions also.]
- Another fundamental mistake was to fail to rein-in spending from September onwards, when it must have become apparent that a Capital Markets solution was unlikely.
- In my view, this 10p placing is another catastrophic error.

What is the administrator's view?

He could have sold the debt to the scoundrels RRE for £40m. But he thought he would get a better return from IOG in the longterm, not just from servicing the debt repayments, but too, from converting the loan into shares at a much higher price (critical to his calculations in my view).

The 10p placing seems conditional on him getting certain assurances, plus added sweeteners to keep him onside.

He needs to keep IOG solvent until the farm-out comes in (which solves all problems) but as we are solvent to the end of June anyway, this suggests to me that the administrator, and perhaps IOG, expect the farm-out to be delayed, perhaps until we get the Harvey result (although it would be possible to arrange a farm-out on a pay some farm-out monies now, extra dependent on Harvey result).

He, and IOG, want to restructure the loan arrangement so that an opportunistic buyer cannot jump in to buy the debt, thus not only getting the assets on the cheap, but denying the administrator the opportunity to convert the loan to future higher priced shares.

Off the top of my head (Note: the circular is currently not available on the IOG website) sweeteners have been offered in exchange for putting back 2019 loan repayments, for he perhaps gets to convert some of the loan early, and too, gets to delay the 2015 warrants date to when they will be higher value, and which he m ay not be able to fund now. There also seems to be some change in the contract as to what happens to the loans in the event of the sale of IOG? There is perhaps confusion (or not revealed?) as to what current terms are, or will be changed to? - and this needs investigation at the EGM by those present.

[Too, it seems Martin Ruscoe has been offered placing access as a sweetener to resign (his resignation conditional on

continued:

So it should be clear that the idea that there is a Capital Markets solution is pure bunkum - and there probably hasn't been one since October. I expect Malcy raised questions about it outside of his October interview. It was soon after the funding was pulled, that MR resigned and was re-placed by Fiona, and that the Farm-out process was started in late December (I don't think shareholders were told of this potential farm-out until late February?). We were told it was problems with weak lending rates and the oil price. However, with their recovery, we seem no closer to a Capital Markets solution. We can see that the price offered for £16.6m of funds is only 10p. The publicising that we are so desperate for money is disastrous - a Ratner moment. What price do you expect to get when you are asking for a placing of £100m+, when the farm-out has failed, and the company is insolvent? At 5p at best? 2 billion share dilution? Clearly the idea of a Capital Markets solution is a non-starter, hogwash.

So it is farm-out or bust. And the question remains - why would an industrial partner spend £250m on a farm-out (and probably taking 90% of the assets; though we might retain operatership on the strength of our excellent technical team who are familiar with the assets) when they can probably buy the entire business, including the excellent infrastructure and the technical team, for £50m (perhaps £100m if competitive bids)? There will be no farm out - there will be a buyout.

And it makes sense to buy-out the company before 23rd April when there are less shares in issue so that the price offered is more attractive to shareholders (£50m by 127.5m shares = 40p a share; by 337m shares = 15p a share). However, they may need further time to investigate the assets, but when they are ready to farm-out, I suspect they will buy-out instead. Thus expect a buy-out, if not by 23rd April, by the end of June.

Without the 10p placing, we still have monies to get to the end of June. The placing monies, as argued before, are to keep the company going in the event there is no farm-out at the end of June. If no farm-out, we are bust anyway, whether we do the 10p placing now or not, and then would have to have a real firesale of assets. The 10p placing is an unnecessary proposition. It has been deeply damaging to our current share price, and perhaps to our longer-term prospects.

So - continued (now where was I?)

Ah, yes. Back to the conference call. It was clear they didn't want to answer the hard questions. Two were 'How much money are we actually trying to raise for FID funding?', and secondly, 'What dilution do we face over the coming years?'.

With the first, no figures have ever been given as far as I'm aware.
Rockrose made this point on their 5th March RNS (they actually made a lot of good points as to why to sell the business now - but not to them imo), so well worth re-reading: · 'RockRose considers that it would be challenging for IOG to independently fund the field development capital
expenditure of c.£450 million without an industry partner in light of its current market capitalisation - particularly in the
current equity market conditions.'
IOG make the point, rightly so, that Phase2 costs can be funded from Phase1 production cashflow (and some Reverse Based Lending?). Thus it is only Phase1 that needs to be funded by farm-out or Capital Markets.
Malcy writes on 3rd April 'The money I assume that is being raised on this occasion will keep the company going until the farm-out process is finished and/or the raise of some £250m+ needed for the development of its gas assets has been completed.'
Malcy is close with Fiona particularly (possibly recommended her for the job?), and has interviewed Andrew Hockey on 10th Oct (worth another look?) So I will take it that we need £250m funding.

Like Malcy, I too assumed it was 'and/or' for farm-out and Capital Markets. I was expecting £250m would be raised 40% farm-out, 40% new debt, and 20% placing (hence £50m placing). However, quite strikingly in the Conf Call it became apparent that they were talking of either 100% farm-out (and from one industrial partner, not several, and not over time - not like Eco, for example), or if this failed, 100% Capital Markets.
I've misplaced my notes, but I recall Fiona saying that there would be no further equity placing 'after the farm-out' - this is because the farm-out is intended to cover all their forward costs (so, as argued before, why do a placing now?) . So expect this farm-out to be a massive one of £250 million to one industry partner.

Let's look at dilution. We currently have 127.5 million shares in issue. With the 10p placing we will have 337 million shares in issue (as argued before, an unnecessary placing at this stage if the farm-out is not delayed, or fails). RRE argued that the LOG loans would result in further dilution of 197 million shares (not refuted by IOG?). Director/employee options and warrants are outstanding - and continue to be given away (I have not done the sums, but 100m+ shares would not surprise me). Then there is the equity element of any Capital Markets solution (which could be £100m+ @ 10p = 1 billion shares in itself) if there is no farm-out. So, even with the farm-out, there is going to be considerable dilution, even if none of it is equity placing.

I'll try and respond to questions raised once I've put the basic argument out there.

Meanwhile, Rxdav, I thought this might appeal to you - will you be there?

This will be an event to behold. They need as much vocal support on the day as possible. #rollingthunder comes to westminster friday 12th april 1300 hrs. 8,000+ bkers will roll through london. approx 1,000 ex paras on foot. @ActionBrexit

All good points being raised here. I'm not ignoring them, but I first want to get my argument out in full as to why vote against the placing, and why it is best for existing shareholders to sell the company in the next few months. I am invested on the basis that the company will be sold in that timescale.

So - the 10p placing continued:

Hopefully I've made the case that the placing is not necessary at this moment, that we have sufficient resources to get to the end of June and a farm-out decision. It should also be clear that the vast majority of the placing monies are for events after June. The farm-out should have funded these events. So it should be clear that the placing is really to keep the show on the road in the event that the farm-out is rejected or delayed. [Note: as said before - there is no Capital Markets solution - it is there to string us along (the farminees certainly won't be fooled by it - they know they are the only game in town)].

The BoD can get us to agree to the placing as they hold out the prospect of a farm-out and Capital Markets solution. If they came to us after the farm-out had failed, and there was no prospect of an acceptable Capital Markets offer, we would rightly say 'What is the point of continuing? You are just kicking the can down the road. Better to bite the bullet and sell the company.' and we would call a halt and insist the company was sold. Too, come the end of 2019, what then - with money spent, more placings so as to drag on further, with no farm-out in sight? In both cases - after June, or after December, we will be in a more desperate and worse situation to sell the company (particularly if Harvey failed!)

So shouldn't we be insisting the company is sold NOW?

By rejecting the placing we do not allow them to kick the can down the road any further. It is time for them to face reality and concentrate their efforts on getting the best price for the company.

Too, I do not want to dilute the shares in issue from 127.5 million to 337 million before that sale takes place. That would mean if there was a £50 million offer for our company (I hope for twice this) we would get about 15p a share instead of about 40p a share. [Too, there is some confusion as to whether the convertible loans convert on takeover - which, if so, would more than half those above figures.]

It is also clear to me that anyone considering farming-in to the company would be far better off to buy us out in full. There will be no farm-out. The farminees are in the best place to buy our company. I expect, and hope, that it is Ineos. More later on this.

Fiona said placing at 10p was 'disappointing' - no, a bloody disaster - just one more fundamental error (I'll write more on this later) - a Ratner moment.

This company is addicted to spending money - another fundamental error - it has brought us to its knees. We mustn't give them more.

The Conf. Call avoided the difficult questions. Two fundamental ones are 'Is this placing money really necessary?' and 'Why wasn't the placing been done after the farm-out rather than before?

The Farm-out is to be completed by end of June 2019. We do not need placing monies to cover anything beyond this point. If we do, then raise at a higher share price, after the farm-out. [Note: the idea that any Capital Markets alternative exists is now pure bunkum, has been probably since October 2018 - It is Farm-out or bust. - more later.]

Our current funding position is £2.9m in cash and £3.93m undrawn LOG loan (RNS 25th Feb). We don't need to extend the 2015 LOG warrants. If exercised they would bring us in £1,287,500. We need money to the end of June only. Liabilities are a £3.6m interest payment due to LOG in June (which probably could be re-scheduled a few months?) and wage payments of about £200K a month. Conclusion: we should be solvent whilst we get to farm-out completion from our existing resources.

The only thing we perhaps need to fund is the work involved in getting the farm-out completed. If we want to raise such money, then the £2m offer to existing shareholders should complete it. This offer should take priority over the Subscription or Placing to Institutions which are not necessary.

Let's look at what they are raising: Placing @ 10p = £16.6m; subscription of £0.275m; Open Offer of £2m = total of £18.875m. Some Notes: They bigged up 12 institutions taking the placing, but who wouldn't buy-in at a ridiculous price of 10p? In my book these institutions are as much vultures as RRE. They are not needed - send them packing. The average price for the month before was 18p, so 15p would have been a fair offer, not 10p. The subscription offer is also unnecessary, and if you want to be unkind, parasitic. Martin Ruscoes £120K seems a pay-off for resigning (resignation is conditional on getting the offer); and Esa I's and Rupert Newall's combined £80k is called 'incentive').

And this is what they are spending it on: £9.6m on Harvey due to spud after farm-out (Why is it not part of a free-carry? Why not delay it a little?); £2.5m on Goddard (why not delay it a little? The placing doc. says it is phase 2 project anyway); the remaining £6.775m on working capital and project costs to end of 2019 (we only need funding to end of June farm-out - no farm-out all is lost anyway).

With regard to restructuring of LOG loans - good idea, but no need for it to be conditional on the placing; and we can meet current commitments to end of June anyway, if we have to.

So this placing is largely unnecessary. If necessary, then raise money after the farm-out.

This is from Hargreaves Lansdowne (my proxy and broker - check with yours if you want to vote - my instruction to them will be to vote against resolution 1 & 2 - Note - you only have until 16th April to vote by proxy, otherwise you have to attend the EGM. ):

Are the proposals subject to Shareholder Approval?

Yes, the proposals are subject to Shareholder Approval at a General Meeting to be held on 23 April 2019. If you wish to vote on the proposals please give us your instruction before noon Tuesday 16 April 2019.

This is from the EGM circular they sent (Nb: no proxy forms enclosed - all done electronically with HL):

12. General Meeting
A notice convening a General Meeting of the Company, to be held at the offices of Fieldfisher LLP,
Riverbank House, 2 Swan Lane, London EC4R 3TT on 23 April 2019 at 11.00 a.m. is set out at
the end of this document. At the General Meeting, the following resolutions will be proposed:
1. Resolution 1, which is an ordinary resolution to authorise the Directors to allot relevant
securities up to an aggregate nominal amount of £3,220,550 in relation to the issue of the
Placing Shares, the Subscription Shares, the Open Offer Shares, the LOG Shares and an
additional number of new Ordinary Shares equal to approximately one third of the
Company’s Enlarged Ordinary Share Capital on the basis of full take up under the Open
Offer; and
2. Resolution 2, which is a special resolution to authorise the Directors to allot New Ordinary
Shares on a non-pre-emptive basis in relation to the issue of the Placing Shares, the
Subscription Shares, the Open Offer Shares, the LOG Shares and an additional number of
new Ordinary Shares with a nominal value of £842,880, being equal to approximately 25 per
cent of the Company’s Enlarged Ordinary Share Capital on the basis of full take up under
the Open Offer.

[Caveat] .... In the event the Resolutions are not passed at the General Meeting neither the Fundraising nor
the LOG Restructuring will be able to proceed. In those circumstances, the Company would need
immediately to seek to secure alternative sources of funds to enable it to fund its corporate
activities in the period immediately following the General Meeting. ....
[NB: I do not necessarily agree with what follows - it comes as a warning/ threat? Agree the resolutions or you will lose all your money? DYOR ]

I hope to put the case for voting 'against' on this bulletin board in the next few days.

Morning, rxdav, and a big thank you for fronting the talk yesterday. I did catch it, but did not involve myself in the questioning, instead quietly listening to what was said, but more importantly, what wasn't, then coldly analysing.

I think your summary gives a good account of the event, and too, I found it disappointing that we were being given a load of flannel with none of the difficult questions answered, and your intervention really helped to pressure them into being more open with us. (and I really cracked up with your opening 'Well, all really jolly up to now; but let me tell you it won't be so jolly from now on'. Brilliant. Too, you really kept their feet to the fire, and pretty much summed it up for me with 'well, it's jam today or jam tomorrow, and I prefer jam today.'). Much appreciated. Thank you.

Thanks too to Moley for the notes. Very helpful reminder. I took some brief notes myself. One important note I've got scribbled in though is that the comment 'no need to raise further equity' related to IF the farm-out provided all the funding for FID. Note too, 'raising equity' is not the only type of dilution we face.

I'm really pushed today, but will try and put out my analysis over the next few days (if anyone cares to know). Having slept on it, my view remains that this 10p placing is a disaster for shareholders, and that there remains only two viable options for us to obtain value:
a) a small placing at 15p to get us to complete the farm-out process;
b) a sale of the company now - probably to one of the farminees.

Hence I retain shares on the basis that an offer will come in for the company in the next few months (perhaps 60p+). I am not invested on the basis that the 10p placing will be voted through - in my view, this placing should be soundly rejected. (Note: by voting it down, it would force the BoD to go for my other two options).
More later.