Member Info for Hedgehog100

16th Jan 2023 7:00 am RNS Post Year End Operational Update

16 January 2023 - Aura Renewable Acquisitions plc, a UK-based company whose objective is to invest in the global renewable energy sector supply chain and thereby build shareholder value, is pleased to provide an update on progress for the period from the date of incorporation on 4 November 2021 through to 31 December 2022.

Aura was formed as a special-purpose acquisition company focusing on the Global Renewable Energy Sector Supply Chain, particularly on businesses in the wind, solar, biomass, hydropower, carbon capture, waste management, energy storage, smart grid and green hydrogen supply chain.

The Company raised gross proceeds of £1 million on admission to the Standard Segment of the Official List of the Financial Conduct Authority and to trading on the Main Market for listed securities of the London Stock Exchange in April 2022. As of 31 December 2022, the Company had an unaudited cash balance of £809,000, reflective of the minimal overhead base following the listing.

The Company has actively and selectively reviewed potential international acquisition targets since listing and at the same time the Board has taken soundings from the investor community to seek to best fit investment appetite with the opportunities available.

Amongst others, and by way of example, companies in the energy storage sector, developing next-generation battery technologies, have drawn the Company's attention. Batteries play an essential role in the energy sector supply chain, facilitating the transition to a net zero economy and a more sustainable environment.

Many countries, including the United States and the United Kingdom, have realised the importance of secure domestic supply chains and have introduced legislation, government grants and other incentives to support their battery industries - an example being the Inflation Reduction Act under the President Biden Administration.

Our investment horizon is relatively wide within our chosen sector, and we will continue to assess and qualify what we believe to be value accretive opportunities in the UK and overseas. When our ongoing evaluation and investigation result in the potential for a transaction, the Company will give the market appropriate notice.

The Company expects to announce its results for the period ended 31 December 2022 in early April 2023. ...

https://www.lse.co.uk/rns/ARA/post-year-end-operational-update-f1xlki1k79z5hfg.html

Moreover, ZEN's improvement from B- to B+, from BCRA, has taken barely sixteen months.

This will clearly be very helpful in arranging project funding at more attractive interest rates than otherwise, which in turn can help to increase ZEN's profits on these projects.

And at this rate of improvement, an "A" rating should be possible in the medium term, which would be consistent with ZEN's mid-tier (i.e. market cap. of £100s. of millions) ambitions.

ZEN's last credit rating upgrade from BCRA, which was to B, was under four months ago.

So to be upgraded again so soon, to B+, is quite a testament to the speed and quality of ZEN's progress.

21st Sep 2022 2:05 pm RNS Credit Rating Upgrade

"Zenith Energy Ltd. (LSE: ZEN; OSE: ZENA), the energy company with proven revenue generating production, exploration and development assets in Africa and Europe, is pleased to announce that BCRA Credit Rating Agency AD ("BCRA") has upgraded Zenith's long-term debt issuer credit rating to 'B with Positive Outlook'.

BCRA is an independent credit rating agency operating since 2003. The Financial Supervision Commission ("FSC") and European Securities and Markets Authority ("ESMA") have fully registered BCRA in accordance with Regulation (EC) No. 1060/2009 of the European Parliament and of the Council on credit rating agencies.

The BCRA report can be viewed here: https://bcra.eu/files/rating_zenith_sep_2022_en.pdf"

https://www.lse.co.uk/rns/ZEN/credit-rating-upgrade-kxh2io7hint06qg.html

16th Jan 2023 9:15 am RNS Credit Rating Upgrade

"Zenith Energy Ltd. (LSE: ZEN; OSE: ZENA), the energy company with proven revenue generating production, exploration and development assets in Africa and Europe, is pleased to announce that BCRA Credit Rating Agency AD ("BCRA") has upgraded the Company's long-term issuer credit rating to 'B+ with Stable Outlook'.

BCRA is an independent credit rating agency operating since 2003. The Financial Supervision Commission ("FSC") and European Securities and Markets Authority ("ESMA") have fully registered BCRA in accordance with Regulation (EC) No. 1060/2009 of the European Parliament and of the Council on credit rating agencies.

The BCRA report can be viewed here: https://bcra.eu/files/rating_zenith_jan_2023_en.pdf

Andrea Cattaneo, Chief Executive of Zenith, commented:

"We are pleased to have had our issuer credit rating upgraded following the Company's recent progress. It is the Board's expectation, in view of Zenith's very significant revenue generation potential during 2023, that the Company might achieve additional upgrades, which will further facilitate our access to non-dilutive fixed income debt securities to finance our expansion.""

https://www.lse.co.uk/rns/ZEN/credit-rating-upgrade-4btrlp2achf6as5.html

Some extracts from the January 2023 BCRA report on Zenith Energy:-

"Unaudited interim FS for the six months between
April and September 2022 show a new record
revenue generation with net sales revenues
reaching CAD 11.6 mln. Accordingly, the
accumulated amount is about 5 times higher than in
the corresponding prior-year period and 140%
higher than net sales revenues for the whole FYE
March 2022. The sustained high energy pricing
climate will support revenue generation in the
second half of the financial year as well."

"GENERAL CONCLUSIONS

The rating upgrade reflects the large increase in
sales revenues and the expansion of assets
portfolio through the recent acquisition of OMV
Yemen, and the potential acquisition in Benin.

The stable outlook reflects the progress that the
group has achieved in building a well-balanced
portfolio of assets with untapped reserves and
existing production, as well as the expectations for
a sustained high energy prices climate, supporting
the growth of revenues."

https://bcra.eu/files/rating_zenith_jan_2023_en.pdf

So Flashgarden has today reappeared here, for the first time since ZEN announced on 10th. January that it had won the Sèmè project in Benin.

The day before that Flashgarden posted this:-

flashgarden Posted in: ZEN Posts: 118 Price: 0.825 No Opinion
RE: RNS - Electricity Production 09 Jan 2023 16:49
" ... If they dont deliver then why should anyone believe that their other plans will come to anything?
The overly optimistic talking up of the company actually sets up ZEN for a fall."
https://www.lse.co.uk/profiles/flashgarden/

And previously, he had incorrectly dismissed the hopes of ZEN's Yemen acquisition as "unfounded speculation" and "just hot air".

It's hard to believe that anyone with a significant shareholding here would post negatively rather than positively after that fantastic Benin project win.

So Flashgarden may have tried to mislead people by implying that he still has a significant shareholding here, by talking about a £10K. buy he made, but not mentioning if he subsequently sold:-

flashgarden Posted in: ZEN Posts: 118 Price: 0.825 No Opinion
RE: Question for the negative posters 09 Dec 2022 11:19
"canary,
do you mean 'always posting negatively' or do you mean 'not posting positively'.
Been in zen for years. ...still am.
My last purchase was approx. £10k middle of this year. Not that I can back that up with proof so its a meaningless statement tbh. ..."
https://www.lse.co.uk/profiles/flashgarden/?page=2

And now he's leaping to the defence of the discredited poster Mls, after the nonsense Mls posted on Friday in respect to two trades in ZEN totalling £20.60:-
13-Jan-23 08:33:01 0.80 552 Sell* 0.80 0.90 4.42 O
13-Jan-23 08:33:01 0.80 2,023 Sell* 0.80 0.90 16.18 O

All of Flashgarden's posts on LSE in the last 30 days (18 in total) have been on ZEN, and he, like Mls, seems to have nothing of any real worth to offer the LSE community.

12th Dec 2022 7:00 am RNS SPA Signed with PETRONAS for South Sudan Portfolio

"Share Purchase Agreement Signed with

PETRONAS for Acquisition of Entire South Sudan Oil and Gas Portfolio

Savannah Energy PLC, the British independent energy company focused around the delivery of Projects that Matter in Africa, is pleased to announce that it has entered into a Share Purchase Agreement ("SPA") with PETRONAS International Corporation Limited ("PETRONAS") to acquire PETRONAS' entire oil and gas business in South Sudan (the "PETRONAS Assets") through the acquisition of Petronas Carigali Nile Limited ("PCNL") (the "Transaction"), for a total cash consideration of up to US$1.25 billion, subject to certain completion adjustments (the "Transaction Consideration"). The Transaction Consideration is expected to be financed through a combination of the enlarged Group's available cash resources and debt . ...
For the years ended 31 December 2019-21, PCNL reported average audited profit after tax of US$130.6 million. ..."

https://www.lse.co.uk/rns/SAVE/spa-signed-with-petronas-for-south-sudan-portfolio-agcyx6re9oee1cl.html

SAVE (Savannah Energy) announced last month that it had agreed to acquire a South Sudan O&G portfolio, from a major, for US$1.25 billion. South Sudan is comparable to Yemen both geographically & policically.

ZEN's agreed Yemen O&G acquisition has been agreed for a fraction of the cost of SAVE's, not only in absolute terms, but also in relative pricing terms.

Note that due to recent changes in listing rules, 'new' main-listed shells can only float with a £30M.+ market cap. (previous minimum only £0.7M.) ... unless they completed their FCA submission by 2.12.21, in which case they can float at the old minimum up until 2.6.23.

So the supply of small main-listed shells like TMTA will gradually dry up, increasing their scarcity value.

LOL, Mls's ability as a contra indicator is frightening ... in fact, last week he managed to time it to the precise minute! -

mls678 Posted in: ZEN Posts: 942 Price: 0.80 No Opinion
RE: Asset on its way 03 Jan 2023 10:20
"Let's not get personal again.
My statement was Zen take their time. Zen."
Member Info for mls678 | Members - London South East (lse.co.uk)

3rd Jan 2023 10:20 am RNS Signing of SPA for acquisition of OMV Yemen
Zenith Energy Regulatory News. Live ZEN RNS. Regulatory News Articles for Zenith Energy Ltd. Com Shs Npv (Di) (lse.co.uk)

Recent Share Trades for Newmark Security (NWT)
Date Time Trade Prc Volume Buy/Sell Bid Ask Value
12-Jan-23 14:52:36 35.64 5,000 Buy* 30.00 36.00 1,782 O

Thanks for that useful update, Dab, and well done on you top-up.

It's interesting that you had to pay close to the full ask for just 5,000 shares.

The market makers must be pretty low on NWT stock, and it wouldn't take much buying to move the s.p. up strongly.

It's also encouraging that the company is also apparently planning more than one presentation next month - which suggests that they should have some very positive material that they wish to share more widely.

An RTO is simply an alternative way to float on the stock market, and some of the world's largest companies have come to market via this route.

Including WPP, current market cap. over £9 billion:-

" ... WPP plc is a British multinational communications, advertising, public relations, technology, and commerce holding company headquartered in London, England. It was the world's largest advertising company, as of 2019.[4] WPP plc owns many companies, which includes advertising, public relations, media, and market research networks such as AKQA, BCW, CMI Media Group, Essence Global, Finsbury, Grey, Hill+Knowlton Strategies, Mindshare, Ogilvy, Wavemaker, Wunderman Thompson, and VMLY&R. It is one of the "Big Four" agency companies, alongside Publicis, Interpublic Group of Companies, and Omnicom.[5] WPP has a primary listing on the London Stock Exchange, and is a constituent of the FTSE 100 Index.[6]

The company was founded as Wire and Plastic Products plc to manufacture wire shopping baskets in 1971. In 1985 Martin Sorrell and Preston Rabl,[9] searching for a listed company through which to build a worldwide marketing services company, bought a controlling stake. ..."

https://en.wikipedia.org/wiki/WPP_plc

Note that the RTO route may have attractions to the IPO route that may give it additional 'value' to a company wishing to float:-

• A requirement to give away less equity than in an IPO.

• Potentially more speed and certainty - an aborted IPO due to market conditions could be very expensive, and time is money.

• The 'shellmeisters' may also have attractive business acumen, contacts, and 'clout', that may be attractive to the floating company.

Great find Aegos, thanks.

They say that good things come in threes, so here's hoping for a swift Yemen-Benin-Congo hat trick for ZEN!

TMTA could potentially be looking to RTO something much bigger than the average RTO, on the basis of:-

• The billion-pound track record of TMTA's chairman Harry Hyman.
• TMTA's institutional shareholders (institutional shareholders are comparatively unusual for a small shell).
• TMTA's significantly greater cash than the average small shell.
•The period of fifteen months since TMTA's floatation (smaller RTOs tend to be effected faster than larger RTOs).

And if the company floating is valued at hundreds of millions, then a shell premium to cash of a few £millions may be just 1% of the expanded equity, which is comparatively insignificant.

Thanks for that, Canary.

The last two paragraphs:-

"A total of 9,000 Barrels Of Liquids Per Day (BLPD) is expected to be produced at peak, of which 3,000 BLPD will be water and 6,000 BOPD is prognosed to be oil.
SAPETRO expects the field can still be drained optimally for another 16 years."
https://africaoilgasreport.com/2013/11/oil-patch-sub-sahara/sapetro-drills-ahead-in-seme-field-benin-republic/

6,000 BOPD= 2,190,000 barrels p.a.

At an oil price of say c. US$100/barrel, that could have a sale value of c. US$219M. p.a.

And the profit margins must be pretty tasty, with last commercial production having taken place in 1998 when oil prices were below approximately US$10 per barrel.

And ZEN will have a 'free ride' in respect of the US$100M.+ already invested into the infrastructure:- 
"The last operator is reported to have made infrastructure investments for an amount exceeding US$100 million prior to exiting the project due to low oil prices."
https://www.lse.co.uk/rns/ZEN/exclusivity-for-block-1-s232m232-field-in-benin-copv9dcudq0024x.html

"A balance view is the market and investors does not believe at the moment in Zenith or that the deals with not come off. Plus, a lack of information about funding does not help."

Botham,

I don't buy the first two points. Both Yemen and Benin look like done deals to me, and experienced investors will know that. And they will also know that pulling off these sorts of deals, like ZEN has done, shows their credibility.

It could be though that the funding for these is a partial factor: not a concern, but a temporary and partial brake.

Apart from that, the oil price has been relatively weak recently, and small O&G s.p.s as a class haven't been doing that well for several months now.

But that can change fast, and the outlook for the oil price this year looks bullish:-

"Goldman Sachs: Oil Prices To Hit $105 On Solid Demand Growth
By Tsvetana Paraskova - Jan 10, 2023, 3:40 AM CST
Goldman Sachs believes solid demand growth could send Brent climbing to $105 by the fourth quarter of 2023.
China has now reopened its borders and allocated large crude oil import quotas to its refiners, supporting the thesis for strong demand growth.
Goldman Sachs believes the downside for oil markets is limited due to the ability of OPEC+ to intervene in oil markets. ..."
https://oilprice.com/Energy/Energy-General/Goldman-Sachs-Oil-Prices-To-Hit-105-On-Solid-Demand-Growth.html

"1% of market cap is not a lot of shares traded especially given today's positive announcement."

Botham,

At a rate of 1%/day, the entire issued share capital, on average, would be traded in just a few months.
And many of the shares in issue are not in free float.

Sometimes a penny share will see a greater % traded, but these tend to have smaller market caps. than ZEN: 10% of shares traded in a £1M. market cap. company would be less by value than the amount of ZEN shares traded today.
They also tend to be pump-&-dump spikes, with a buying frenzy caused by Twitter ramping.

You also seem to be almost obsessed by the number of shares traded.
But where is any evidence of a positive correlation between number of shares traded, and s.p. performance?
I would say that if anything, the reverse is true: some of the best s.p. performers have been relatively lightly traded, whereas some of the most heavily traded shares have been investment disasters.

Remember that to have consistently high volume, you need a constant stream of sellers as well as buyers.
So a lightly traded share can just be a sign of a very confident and happy long term shareholder base.

Benin will be a licence award, not an acquisition, so there will be no purchase fee.

And of course ZEN now has large revenues, and in the latest half year broke through to pre-tax profit.

Funding is always forthcoming for good projects with attractive returns, and ZEN has a range of options when funding is required, which could of course be used in combination.

And arranging project funding could itself be a huge s.p. catalyst.

At the current s.p., ZEN should more likely to go for debt rather than equity funding, unless there is a significant s.p. increase first, or the funding is at a significant premium (the last placing was in November 2021, at 1.1p/share, which was a 7% discount to the closing s.p. the previous day).

Some useful material from MarketGunslinger on 28th. September:-

"We believe that a major acquisition will come in the next quarter. Will this leave us with too many assets? We will look into taking partners and farm-outs to minimise our management and financial commitments. We have a significant African management team (it has increased threefold) including expats etc. This allows us to look at things more cheaply than flying out people from London to do analysis."

"I believe tremendously in the future of the company and I will buy more shares when it is permitted but it is difficult for me to find a legal window to do this because of all the asset purchases etc. We are looking as well for some other institutional investors to add to our existing two."

"With respect to eh bond market we are in the continental Europe market and this is helped by our recent rating increase. We believe that we will get another rating increase before the end of the year."

"How long before Benin could start reproduction and how much?
6- 8 months from the first day of operation. Money not sure but there is the community of contractors in Nigeria who have a very low level of new business and there is a willingness to support us with supplier credit which will reduce our need for capital."

"Once they acquire their next African assets they will be looking for farm-in partners on all of the African assets to share the costs."

"Share buy-back is still under consideration but it will depend on how much cash the operations generate. Andrea wants to buy more shares as soon as he is able but with the acquisitions that they are currently undertaking he needs to wait for a legal window to do so."

Volume 15,814,452 [10/01/2023 13:32]
https://live.euronext.com/en/product/equities/CA98936C1068-MERK

Botham,

There has already been nearly 16 million Zenith Energy shares traded on the Oslo Stock Exchange today, and it's still just lunchtime.
Plus the c. 1.3 million ZEN shares traded in London today, and that comes to nearly 1% of the Zenith Energy shares in issue, which is very substantial.

Well done to ZEN for winning the Sèmè project in Benin.

The three month timescale, from latter September, to select the preferred bidder looked ambitious for Africa ... but it's come pretty close to being met.

So today's news is both a vindication of ZEN's operational and financing abilities, and of their ability to deliver on their expectations.

There was quite a bit of competition for this project :-

"Tullow veterans line up to revive Sèmè as Zenith snaps at their heels
Several companies are keen to take on Benin's only oil field, which has been dormant since 1998. In the running are two juniors, Baobab Energy Africa, founded by former Tullow energy execs, and Zenith Energy. ...
Issue dated 11/10/2022"
https://www.africaintelligence.com/west-africa/2022/10/11/tullow-veterans-line-up-to-revive-seme-as-zenith-snaps-at-their-heels,109833626-art

But as I posted on 12th. October:-

"I've had a quick look at ZEN's 'competition' for the Benin Project, and it just confirms to me that ZEN should be the clear front runner.
ZEN looks to be the only listed company looking to take on the project, and the others also don't look to have the experience and track record that you would want."

ZEN are already delivering - you would have to be blind not to see it.

And the increase in interim revenues of nearly five-fold (4.936 x higher), i.e. nearly 400%, shows how quickly revenues can be ramped up by new and expanded operations.

30th Nov 2022 9:02 am RNS Half-year Report
" ... The Group generated revenues from oil and natural gas of CAD$11,571k (2021 - CAD$2,344k) ..."
https://www.lse.co.uk/rns/ZEN/half-year-report-zruvcyrci0abvf8.html

It's also interesting to project even a significantly slower rate of growth forward, to illustrate the potential here, with the Yemen acquisition, and three other potential big licence awards or acquisitions on the boil: Congo, Benin, and Egypt.

E.g. allowing TWO years for interim revenues to five-bag, and then two further years after that to five-bag again.

CAD$11,571K. x 5 = CAD$57,855K. interim revenues = CAD$115,710K. annualised revenues.

CAD$57,855K. x 5 = CAD$289,275K. interim revenues = CAD$578,550K. annualised revenues.

I.e. annualised revenues of well over half a billion Canadian dollars, in just a few years.

We were hoping for a big deal by the end of the year, and got one on 3rd. January, proving the naysayers badly wrong.

How many other small O&G companies are delivering this sort of progress?

Certainly none than Flashgarden is recommending!

Of course some degree of slippage is par for the course in resource development, and indeed business as a whole, but you have to distinguish between companies where it never seems to happen, and those like ZEN it very clearly is happening.

Medcaw Investments (MCI), another small shell, floated just before Christmas, and highlights ARA's value.

MCI raised £0.45M. net in its float, at 10p/share, and its current market cap. is over three times the level of ARA's: market cap. £1.8M. at 10.5p/share.

On Admission, the Company had a cash balance of £702,393, according to its prospectus on its website

First Day of Dealings on the London Stock Exchange PRN 21.12.22 08:00:00

"Medcaw Investments plc, a company formed for the purpose of undertaking an acquisition or acquisitions in the life sciences sector life sciences sector, focusing on companies developing medical or wellness technologies and therapies, is pleased to announce that, following the publication of its Prospectus on 16 December 2022, a total of 17,132,095 ordinary shares of £0.01 each in the share capital of the Company will today be admitted to the standard segment of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of the London Stock Exchange plc.

Dealings will commence at 8:00 a.m. today under the TIDM ‘MCI’ with ISIN number GB00BM8SQP62 and SEDOL BM8SQP6."

https://www.londonstockexchange.com/news-article/MCI/first-day-of-dealings-on-the-london-stock-exchange/15767500

10.50 -% (-)
MCI ORD GBP0.01
https://www.londonstockexchange.com/stock/MCI/medcaw-investments-plc/company-page