Member Info for happysparrow

Hi, Peakview - I'd say they rustled up whatever cash they had and threw it into the pot. It seems a gift at this price if Rockrose is offering 20p - and the board suggest they have a better strategy (we wait to see!). Rather than seeing it as support, I regard it more as robbery - 10p is just too low, and it's coming out of existing shareholders' pockets.
ATB

Yes, very much metaphorical front line today (perhaps no more serious than the Frontline I put on my cat?) As you say, it's only money. Nothing like a real front line.
Another big day for Brexit today. Family here fought in both world wars. So I can guess what you think of our politicians and their lack of respect for democracy. Have been increasingly busy campaigning to Leave over the last 6 months. Let's hope we are out this Friday.
ATB.

Questions submitted as follows:

'Dear Fiona MacAulay and Andrew Hockey,

I submit further questions for your investor call this afternoon:

Question 1: How many shares do you expect to issue in the coming years for each category, as follows: 337 million after 10p placing + 197 million from LOG loans, + director/employee share options/warrants + placing for equity element of FID funding = total shares expected to be issued?

Question 2: How much FID funding do you need to raise in total (Malcolm Graham-Wood suggested £250 million) if there is no farm-out; and what % of that is likely to be equity placing?
And how much of this funding do you hope to receive through farm-out?

Question 3: What do you regard as the main risks for the company between now and first gas?

Question 4: As you have rejected RockRose's offer of £26m out of hand, at what valuation would you consider engaging with a new offer, if it came in today? (For example: £75 million). And why?

Yours sincerely,
........'

Understood, rxdav.
Yes, you've somewhat put yourself in the front line, and I don't envy you.
I agree that they have the questions, and that now they must supply adequate answers.
Too, by us putting our questions and discussion on the bulletin board, then they know this is public knowledge - very important in my view.
However, I will send them my breakdown of smaller lesser questions as official submitted questions, so that they cannot duck them without people knowing. And too, it might inspire others to dig down into the answers and explanations given.
Very best of luck for this afternoon.
ATB.

Morning 600T,

yes, there are many questions, but I've always got a good impression from Fiona and Andrew as being very fair people - (and trust in management is one of my main investment criteria, so sorely disappointed as to what has gone on). From this i'm expecting pretty full and candid explanations to start with which will answer a lot of the questions (though we might not like the answers); and then much more hard-nosed and competent people than me will drill down into the detail to see if their explanations stack up. There may well be institutions or real big-hitters on the call? But, yes, many people will be on side with their strategy already - it is of particular interest to know why the administrator supports this strategy rather than the 20p RRE offer, what did he know that small shareholders haven't yet understood. Let's hope we can get a more equal basis for investment from this CC.

I am still fully in favour of selling the company now and will not support their 10p placing strategy. They will have to work hard to change my mind. At the end of the day, if no change, then I will have to sell up at a loss and move on. Time will tell.
ATB too.

Morning, rxdav, hope you're feeling sprightly.
And glad your granddaughter is doing well.

Regards 'I will be letting the questions we have asked and the BOD do the talking tomorrow - I think it likely that what they don't / won't say may prove just as illuminating as what they do say - ' you can only do your best, and we are grateful for your efforts.

My view is that Fiona and Andrew will make every attempt to answer our questions and be cooperative - perhaps I am naive, but they know they have to convince us if they want us to remain invested.

They asked us to submit questions. The purpose of this is for them to know what we want addressed. They may well deliver these answers adequately in their opening talk. Too, many people will be raising questions, perhaps same/similar questions, and by the time you get to ask yours, there will be nothing left to ask. I hope you never even have to ask my questions as they have already been adequately answered.

Thus you will have the unenviable task of editing your questions to take into account what has been said before. To this end I have broken down my question so that you can ask those bits that don't get answered before you get to speak.

As follows:

Question 8:
- The central question (that everyone will ask) is why do they think their 10p placing strategy is in the best interest of shareholders, rather than the strategy of putting the company up for sale now. And compare strategies.
- Get them to explain how many shares they expect to issue in the coming years for each category, as follows: 337 million after 10p placing + 197 million from LOG loans, + director/employee share options/warrants + placing for equity element of FID funding.
- Ask how much FID funding do they need to raise in total (Malcolm Graham-Wood suggested £250 million) if there is no farm-out; and what % of that is likely to be equity placing. And how much funding do they hope to receive through farm-out.
- ask what do they regard as the main risks between now and first gas.
- ask that, as they rejected RockRose's offer of £26m out of hand, at what valuation would they consider one they would engage with, if a new offer came in.

So hopefully that gives you some flexibility , and a list to crosscheck against as the talk progresses.

Question 10 for the administrator is largely self-explanatory. You may want to open that Malcy suggested that turning down a 20p offer for a 10p placing strategy might not be regarded as 'responsible'. If the administrator is not there, then best to still ask the questions slightly rephrased for that circumstance.

Question 6 is up to you whether you ask or not. It basically says how can we trust you to use the placing money as you say you will, after having misapplied the Harvey funding previously.

Not an enviable task, brave of yourself to put yourself forward, and no criticism will come back to you on my part. I am grateful for all your efforts.
Good luck

Thanks, rxdav.
Very best wishes and luck for your youngster - far more important than any of this.
All the best.
HS

Thanks rxdav, that's fine by me.
I caught Trellis's post, but don't agree - that's because we hold fundamentally different positions.
I think it is in the best interests of shareholders for the BoD to engage in selling the company now. We need an offer in by the 23rd April. And that makes a need after that date for a shareholder action group redundant.
Trellis is happy to go with the placing, as long as there is better oversight by shareholders on the BoD's decisions.
(This not dissimilar to the split between 'No Deal', and those who are prepared to pass the Withdrawal Agreement then attempt to manage its outcome. Yes, I am strongly in favour of No Deal too.).
No disrespect to Trellis, but I think you can see why I prefer questions to be put directly. The most important thing is that we ask the questions, and I thank you rxdav for fronting this in order to get those questions asked. Too, I'm sure there will be many people that will ask their own questions independently. And hopefully the CC will be very informative and worthwhile. What comes after that will depend on those answers, and the willingness of the board to be open with us.
Good luck. rxdav. ATB

Yes, thanks rxdav - that's all fine by me.
With question 9 - if the administrator ducks the call (and shareholders will take a negative view of this), then probably best to ask the board anyway for their response as to what the administrator thinks on these points rather than not asking these questions at all.
Thanks for all the efforts.
ATB

And this is my new correspondence and question/s submitted. Good Luck and all the best.

'Dear Fiona MacAulay and Andrew Hockey,

Regarding the Conference Call on April 10th, this is both a request and a submission of question.

I understand the Smith & Williamson administrator has a seat on your board, and so I request that his/her presence is available to IOG shareholders at the Conference Call. (Like us, he/she only has to dial in to the call - and maybe it is part of his/her responsibility to LCF/LOG debtholders to monitor this anyway?).

I would like to hear from him/her:
- Why he/she is supportive of the board's proposed 10p placing strategy - rather than engaging with RockRose Energy, and putting IOG up for sale to all comers, now? Please explain.
- Since the revelation of the 10p placing, the misapplication of Harvey monies, and near insolvency of IOG - has his/her support for the board's strategy diminished; and if so, with what caveats does his/her support now come? Please explain.
- Does he/she recognise any conflict between an IOG shareholder's interest and a LCF/LOG debtholder's interest? Please explain.

Please answer this question on the call regardless of my ability to make the call. I shall post this question on the LSE bulletin board today under the name 'happysparrow'. Another poster may ask this question on my behalf.

I am grateful for yours and the administrator's full explanations, and will listen with interest. (Can you record this call and put it on your website please?).

Yours sincerely,
..........

rxdav, Hi, - apologies for more work for you!

This is my original question and correspondence submitted:

'Dear Fiona MacAulay and Andrew Hockey,
Below I submit a question for the Investor Conference Call of 10th April. Please answer this question on the call regardless of my ability to make the call. I shall post this question on the LSE bulletin board today under the name 'happysparrow'. I am grateful for your full explanation, and will listen with interest.
Yours sincerely,
........

Question as follows:
'Given we face the prospect of over one billion shares being issued*; considerable risk, not least failure to farm-out, failure to fund FID, or find success at Harvey; and the need to pay back LOG loans and FID debt funding - it will be many years before we see a 20p share price, if at all.
Isn't it in the shareholders' best interest to stop spending money and PUT THE COMPANY UP FOR SALE NOW? - a £25m offer from RockRose would bring us an immediate and certain 20p per share; rival bids could push this up to 40p to 60p per share. Consequently, my instruction to the Board of Directors is to engage with RockRose's potential 20p offer immediately.
[* 336m after 10p placing, 197m from LOG loans (RockRose figures), director + employee options/warrants, and a likely £50m+ placing @ 10p for FID funding.]
End

Hi, rxdav, thanks for all the hard work you've put in this weekend - very helpful.

One thing though, my question has been altered in your final draft. There are reasons why I would prefer that it remained as I originally put it:
- I have already submitted the question. I don't want to give them a choice of what they want to answer by having similar questions put to them.
- I wanted to contrast their strategy with a better strategy in financial terms, demonstrating that they would unlikely get 20p for many years, whereas selling the company might get 40 - 60p within months.
- I wanted to give them the analysis of why dilution might be one billion shares so they can refute it if they want to, by arguing specific figures - which would provide useful information for us.

So would be grateful if you asked the question as I put it. I appreciate my question is rather a mouthful. Probably best to say you are asking a question on behalf of happysparrow, which has already been sent to them, then read it out in full so as to make sure the question gets asked and isn't in any way ducked by the BoD. Mind you, I had hoped they would be reading this out in full themselves.

Too, I'm about to submit a further question to them (will do this tomorrow) about getting the administrator to attend the Conference Call so we can ask him directly why he supports the boards strategy rather than selling up IOG now, and is there any conflict between debtholder and shareholder interests. Will put this question on this bulletin board when I've sent it in.
I haven't sent in the question on the 'escrow arrangement' which bluntly implies that they are now completely untrustworthy - so I'll leave this one up to you if you feel you want to take things in this direction.

But do appreciate your efforts.
ATB.

Enjoy your sundowner, rxdav. I think I'll open a bottle too. Workover, too? Peace, Sunday and a hangover.
Thanks for all your work on organising the questions, - very helpful.
ATB.

But avoid Clapham Common!

A fairly blunt question ( I have not asked this) would be:
'Given that funds previously set aside for Harvey were not used for that purpose, this time are the BoD willing to put the placing monies for Harvey (£9.6m) and Goddard (£2.5m) into an escrow arrangement?'

Well, I guess you might have known I'd ask this. Will put it forward, but not sure I can attend, so if it is not read out and answered, I'd be grateful if someone asked it on my behalf. ATB, happysparrow. This is what I wrote:

Dear Fiona MacAulay and Andrew Hockey,
Below I submit a question for the Investor Conference Call of 10th April. Please answer this question on the call regardless of my ability to make the call. I shall post this question on the LSE bulletin board today under the name 'happysparrow'. I am grateful for your full explanation, and will listen with interest.
Yours sincerely,
.......

Question as follows:
'Given we face the prospect of over one billion shares being issued*; considerable risk, not least failure to farm-out, failure to fund FID, or find success at Harvey; and the need to pay back LOG loans and FID debt funding - it will be many years before we see a 20p share price, if at all.
Isn't it in the shareholders' best interest to stop spending money and PUT THE COMPANY UP FOR SALE NOW? - a £25m offer from RockRose would bring us an immediate and certain 20p per share; rival bids could push this up to 40p to 60p per share. Consequently, my instruction to the Board of Directors is to engage with RockRose's potential 20p offer immediately.
[* 336m after 10p placing, 197m from LOG loans (RockRose figures), director + employee options/warrants, and a likely £50m+ placing @ 10p for FID funding.]
End

In my view it is best for the shareholders if the Company puts itself up for sale. ((Perhaps the detailed list of assets in yesterday's accounts was just this?)
But the BoD seem to be out to keep their jobs and salaries rather than do this?
And I cannot fathom out why the Administrator is backing a strategy of the BoD continuing further.

Yesterday it became public knowledge that IOG was close to insolvency (and, like May, this is what the BoD threaten us with if we don't back their atrocious placing deal).
It was also clear that shareholders (and perhaps the Administrator) had been misinformed, to put it lightly - and that the monies allocated to Harvey appraisal had been spent elsewhere.
We cannot carry on like this; these assets need a cash-rich company to take them on. And NOW.

We saw how atrocious the 10p placing was because of our desperation for cash - why does anyone thing we will not also get very harsh terms for the farm-out, or for the FID funding?
Dilution will be horrendous - not only the 10p placing, but also for all the options, warrants and, importantly, the Convertible Loan Notes - and then we have the equity portion of the FID funding to look forward to. At a guess, I expect we will need a market cap of £150m+ before this share gets to 20p (The assets are worth £782m if Harvey comes in, but maybe £500m if it doesn't?). This will take years - (whereas we could have got 20p in March).
Too, we have to bare the risk of no farm-out, no FID funding, and a failed appraisal well. This strategy does not favour the existing shareholders. And I shall not support it on the 23rd April.

Instead, if we put ourselves up for sale now, we have great assets for a cash-rich company to develop. RRE has clearly shown an interest at an opportunistic 20p. Ineos is also likely to be highly interested. Those involved in the farm-out too (why not buy the whole company with its excellent infrastructure, rather than just a few wells?). We are a lame duck - it is a great opportunity to buy - and this strategy of competing bids is in my view the best way forward for shareholders now, given our close to insolvent position.

ironic then if RRE buy us out for 20p!

Thanks, Moley

Hi, Moley. I was thinking of the volume much earlier in the year - when we had all the trouble with TW and crew. This short position could have been built up over months?

Good work on looking through the accounts.