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Thanks for the link CP. Organic versus inorganic growth. Surely it must be more cost and time efficient to drill more wells in the existing concession to reach the production of 130 mmscf/d that the existing contract gives room for. The Mnazi bay partners will drill more wells when the demand for gas is there. The production guidance for this year is 60-70 mmscf/d, versus a production capacity of 100mmscf/d. So far 5 out of 6 wells in the field have been successful and in operation.

A merger with SCIR is of course another alternative. But, I doubt WEN shareholders would favor any merger with the current market cap.

What about a merger between AEX and SCIR. SCIR's main problem is to find funding for their share of capex. AEX is a bigger company in terms of market cap, and all shareholders seem to be enthusiastic about the prospect for the license.

I very much doubt, that you will find any WEN shareholders that would vote for a merger between AEX and WEN, at least if the merger terms were to be based at current market cap. Giving AEX and WEN shareholders 43% respectively 57% of the new merged company.

Everyone cannot be successful in trading on news and sentiment. Those could look for value instead. I would assume that most holders of AEX stocks are in the red. Unfortunately, that applies to many WEN holders as well, but to a lesser degree.

Thanks for your comment. So, what you are saying is, to be successful on AIM you have to be a trader and sell on good news when momentum is strong and that valuation doesn't matter on AIM.

I have posted this comparison before on the Wen and Scir boards in a discussion with C Perkin. I post it here as well, and I would like to hear your reflections. Please stick to the matter of valuation versus peers.
The numbers for WEN, may have changed slightly since I first posted this in October.

" The current valuation of the company is still very low with a market cap of about 32m £, and a net cash position of 14 MUSD (11m £) results in an EV of 21m £.
Let’s make some comparison with AEX and SCIR. First we have to make some very optimistic assumptions like license extensions, successful drilling s and GSA and PSA agreements in place without “usual delays”. Let’s also assume that the Ruvuma license reach a production capacity in line with target of 140 mmscf/d within budget and with similar terms for GSA and PSA as WEN.
In a number of years, AEX and SCIR share of production capacity (25% of 140mmscf/d) would be in line with WEN’s 32%of 100 mmscf/d. Actually we would also have to assume that TPDC will take a 20% stake in the field, reducing AEX and SCIR’s share to 20% of 140 mmscf/d.
If all goes well, AEX and SCIR will become gas producers. The bad news is that they might be valued like one, and that is not very encouraging. Applying WEN’s EV (21m£) on AEX implies a share price of 0,55p. For SCIR this comparison will be more difficult, as we do not know at what terms SCIR can raise funding for their 35 MUSD investment in the license.
I do realise that valuation should not be based on production capacity alone, especially if the demand is not there. A more appropriate comparison would be based on proven and probable reserves, but as we have no information about that we cannot do that right now.
I do hope, that AEX and SCIR will be successful and become gas producers in the future. It is fair that the companies and their shareholders get a reasonable return from their successful drillings in the Ruvuma license, but current valuation seems far too optimistic to me."

Cperkin, you argue that the only return that you will get from WEN is the 8% annual dividend. This is not the case, as WEN has substantial organic growth opportunities. Current production is only about 70% of production capacity. Drilling of new wells will come in a couple of years to match growth in demand for more gas. Here is a fairly recent interview with the CEO, where both organic growth as well as aquisitions are discussed. Starting at about 11 mins into the interview. I am happy to note, that her view about the valuation is in line with mine. https://www.youtube.com/watch?v=NiaztsAbNvw

My valuation argument for not aquiring AEX or Scir. (posted before)
I would assume that Wen as well as other gas producers in Tanzania have been offered to farm in into the license, and it will be a question of price versus risk/reward. Wen has stated that they are in a so called “close period” for some time now, so it might relate to discussions regarding a possible farm-in.
However, from my point of view I hope that WEN instead allocate their funds to buy backs and dividends or investments into the Mnazi bay license instead of investing in new projects. The current valuation of the company is still very low with a market cap of about 32m £, and a net cash position of 14 MUSD (11m £) results in an EV of 21m £.
Let’s make some comparison with AEX and SCIR. First we have to make some very optimistic assumptions like license extensions, successful drilling s and GSA and PSA agreements in place without “usual delays”. Let’s also assume that the Ruvuma license reach a production capacity in line with target of 140 mmscf/d within budget and with similar terms for GSA and PSA as WEN.
In a number of years, AEX and SCIR share of production capacity (25% of 140mmscf/d) would be in line with WEN’s 32% of 100 mmscf/d. Actually we would also have to assume that TPDC will take a 20% stake in the field, reducing AEX and SCIR’s share to 20% of 140 mmscf/d.
If all goes well, AEX and SCIR will become gas producers. The bad news is that they might be valued like one, and that is not very encouraging. Applying WEN’s EV (21m£) on AEX implies a share price of 0,55p. For SCIR this comparison will be more difficult, as we do not know at what terms SCIR can raise funding for their 35 MUSD investment in the license.
I do realise that valuation should not be based on production capacity alone, especially if the demand is not there. A more appropriate comparison would be based on proven and probable reserves, but as we have no information about that we cannot do that right now.
I do hope, that AEX and SCIR will be successful and become gas producers in the future. It is fair that the companies and their shareholders get a reasonable return from their successful drillings in the Ruvuma license, but current valuation seems far too optimistic to me.

Here are the slides, for those of you that are interested.
https://media.moneyam.com/a/2020/11/2-Wentworth-Resources-Katherine-Roe-V2.pdf

Thanks for your reply. Yes, market sentiment is a factor to take into account. Wen had its highest market value ahead of the Tembo drilling in Mosambique. However, not all drill results turn out to be positive. As I have been a long-term holder of WEN, I remember the long waiting period before agreements with the Tanzanian government gets finalized. Such waiting can be very tiresome for all shareholders, not just traders. I wish you good luck with the timing of market sentiment. From your reply, I read that you will not be a AEX shareholder when production is up and running, as the company then will be low risk and boring. Personally, I prefer low risk and dividinds insted of playing market sentiment.

Cperkin, I posted this reply to your question on the WEN board, but you have probably not seen it as you haven't reponded to it. So I post it here as well.

C Perkin, sorry for a late reply to your question.
“What's happening next here HighYield? Maybe WEN want a slice of the pie, SCIR have 25% for sale.”

I would assume that Wen as well as other gas producers in Tanzania have been offered to farm in into the license, and it will be a question of price versus risk/reward. Wen has stated that they are in a so called “close period” for some time now, so it might relate to discussions regarding a possible farm-in.
However, from my point of view I hope that WEN instead allocate their funds to buy backs and dividends or investments into the Mnazi bay license instead of investing in new projects. The current valuation of the company is still very low with a market cap of about 32m £, and a net cash position of 14 MUSD (11m £) results in an EV of 21m £.
Let’s make some comparison with AEX and SCIR. First we have to make some very optimistic assumptions like license extensions, successful drilling s and GSA and PSA agreements in place without “usual delays”. Let’s also assume that the Ruvuma license reach a production capacity in line with target of 140 mmscf/d within budget and with similar terms for GSA and PSA as WEN.
In a number of years, AEX and SCIR share of production capacity (25% of 140mmscf/d) would be in line with WEN’s 32%of 100 mmscf/d. Actually we would also have to assume that TPDC will take a 20% stake in the field, reducing AEX and SCIR’s share to 20% of 140 mmscf/d.
If all goes well, AEX and SCIR will become gas producers. The bad news is that they might be valued like one, and that is not very encouraging. Applying WEN’s EV (21m£) on AEX implies a share price of 0,55p. For SCIR this comparison will be more difficult, as we do not know at what terms SCIR can raise funding for their 35 MUSD investment in the license.
I do realise that valuation should not be based on production capacity alone, especially if the demand is not there. A more appropriate comparison would be based on proven and probable reserves, but as we have no information about that we cannot do that right now.
I do hope, that AEX and SCIR will be successful and become gas producers in the future. It is fair that the companies and their shareholders get a reasonable return from their successful drillings in the Ruvuma license, but current valuation seems far too optimistic to me.

C Perkin, sorry for a late reply to your question.
“What's happening next here HighYield? Maybe WEN want a slice of the pie, SCIR have 25% for sale.”
I would assume that Wen as well as other gas producers in Tanzania have been offered to farm in into the license, and it will be a question of price versus risk/reward. Wen has stated that they are in a so called “close period” for some time now, so it might relate to discussions regarding a possible farm-in.
However, from my point of view I hope that WEN instead allocate their funds to buy backs and dividends or investments into the Mnazi bay license instead of investing in new projects. The current valuation of the company is still very low with a market cap of about 32m £, and a net cash position of 14 MUSD (11m £) results in an EV of 21m £.
Let’s make some comparison with AEX and SCIR. First we have to make some very optimistic assumptions like license extensions, successful drilling s and GSA and PSA agreements in place without “usual delays”. Let’s also assume that the Ruvuma license reach a production capacity in line with target of 140 mmscf/d within budget and with similar terms for GSA and PSA as WEN.
In a number of years, AEX and SCIR share of production capacity (25% of 140mmscf/d) would be in line with WEN’s 32%of 100 mmscf/d. Actually we would also have to assume that TPDC will take a 20% stake in the field, reducing AEX and SCIR’s share to 20% of 140 mmscf/d.
If all goes well, AEX and SCIR will become gas producers. The bad news is that they might be valued like one, and that is not very encouraging. Applying WEN’s EV (21m£) on AEX implies a share price of 0,55p. For SCIR this comparison will be more difficult, as we do not know at what terms SCIR can raise funding for their 35 MUSD investment in the license.
I do realise that valuation should not be based on production capacity alone, especially if the demand is not there. A more appropriate comparison would be based on proven and probable reserves, but as we have no information about that we cannot do that right now.
I do hope, that AEX and SCIR will be successful and become gas producers in the future. It is fair that the companies and their shareholders get a reasonable return from their successful drillings in the Ruvuma license, but current valuation seems far too optimistic to me.

I know, but AEX still has ordinary general and admin expenses going forward. Furtermore current liabilities are higher than receivables.

I had a look at the AEX forum today, following the RNS that the farm-out now had been completed. The 5 MUSD in cash payment will be settled against advances and short-term loans. Most posts on the forum are about the negative share price performance today. However, no comments are about the fortcomming capital raise. It should be obvious since cash at 30th of June was 0.9 MUSD and short-term liabilities exceeds receivables. There are more than 100 posts and not a single one says anything about a capital raise.

I know, but I was referring how producing companies are valued by the market.

Congratulation all AEX shareholders. If everything from now on works like a dream, AEX will be a cash rich and dividend paying company in a number of years and valued in line with peers. With the current number of shares that implies about 0,8 pence/share.

Have a look at page 12 for guidance.
https://wentplc.com/wp-content/uploads/2020/09/030920-WEN-Interim-Results_FINAL.pdf

https://oilprice.com/Energy/Natural-Gas/The-African-Nation-That-Cant-Get-Its-Energy-Industry-Off-The-Ground.html

https://oilprice.com/Energy/Natural-Gas/The-African-Nation-That-Cant-Get-Its-Energy-Industry-Off-The-Ground.html

Re Tanzania, I assume you mean mick2020, when you say one WEN shareholder has predicted that AEX will go bust. As it looks right now, he might very well be rigth in his prediction. I have also posted on the AEX board, especially some time back when the AEX share were trading at substantially higher levels. I was trying to get AEX shareholders to diversify some of their AEX holdings into WEN, as I saw substantially lower risk and higher value in WEN compared to AEX. I am still of the same opinion, but has not posted on the AEX board for a while as it might be considered as I " was kicking on a person who is already down" ( I am not sure that is an expression in English, but I hope you get the meaning).

cperkin, please continue to do so.

Stay safe, you too.