RE: Turbulent Week24 Nov 2018 07:01
Great post-LedZep, sums it up nicely, the extra worry in my mind is we now know from JJ, from the FSC questions:-
Someone questioned whether Sound has enough cash to fund the 3 drills:
JJ, could you please clarify the balance expected to be remaining following the 3 well programs based upon Sound’s share of the 3 wells?
JJ Traynor (Chief Financial Officer)
The last update we gave was just over $30m cash mid-November. This compares to a well cost of around $7m-$10.8m 100% basis / $4-$7m net per well, with some G&A on top of that. We always reserve the right to seek funds, but today we are financed
The last line of which could mean more share dilution, as we have seen this week the company paid off a bill with more shares:-
Sound Energy, the Moroccan focused upstream gas company, announces that, consistent with its policy of preserving cash balances for operations, it has issued 88,740 new ordinary shares of 1 pence each in the Company ("Ordinary Shares") at an effective issue price of 17.85 pence per Ordinary share in settlement of fees for services provided.
So appears we are getting short of cash at this time!
The change in direction from a positive LE to a negative LE regarding we are now only trying to sell off the assets from our portfolio, not the company anymore, as bellow from FSC:-
As you will know the TE-9 result has shaken confidence amongst investors. Is it possible to provide any reassurance that our existing discoveries provide a level of protection for our investments should all three wells in this campaign fail? You have already declined to give a figure which is understandable but can you pledge that there is interest in the portfolio without further success with the drill. Thanks for fronting up - appreciated.
James Parsons (Chief Executive)
Yes - our plan to sell the portfolio doesn't change even if the exploration wells do not work. Obviously, the value of the basin and therefore the ultimate sale does change.
Then cast yourselves back to May this year on this discussion regarding the multiple CIP loans/repayments:-
http://www.lse.co.uk/ShareChat.asp?ShareTicker=SOU&share=sound_energy&thread=7C222479-6C5E-47A3-A4B7-7AA6BBD922D4
looked up LE and found this:-
An official ‘hierarchy’ laid down by the Insolvency Act, 1986, determines which group of creditors is paid first during an insolvent liquidation. When a company enters liquidation, each class of creditors must be paid in full before funds are allocated to the next.
Creditors are ranked as follows:
Secured creditors with a fixed charge
Preferential creditors
Secured creditors with a floating charge
Unsecured creditors
Shareholders
God, I pray that drill bit finds some more commercial Gas for us all, Or there is a real Plan "B"
Just ramblings from a totally disillusioned investor at this juncture in the so-called Sound Journey.
Sorry for the negativity, but my full glass has just cracked and leaked
Good luck A
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