RE: Why is this not a positive move ?19 Feb 2024 08:46
Meadow we have a very large group of share holders on telegram any lengths are welcome to join, the letter is self explanitory and we have kept it as professional as possible.
Baron Oil shareholders call to action.
16 February 2024
For the attention of Andrew Yeo, John Wakefield, Jonathan Ford, Keith Bush and Andrew Butler.
We are writing to you today as an organised group of shareholders with a substantial equity holding in Baron Oil. We would like to open dialogue with you concerning recent events.
Yesterday, Baron Oil announced a large placing of approx. £3million at 0.05 pence, close to Baron Oil’s all time low share price. The funding was outlined as being used to support the development of the Chuditch PSC, yet has diluted long-term holders by approximately 26% without any sign of well funding being close to being finalised.
We appreciate that, like most AIM companies, Baron Oil relies on the equity markets for funding. However, at the time of the placing Baron Oil held approximately £3.65m of cash (as at 31 Dec 2023) and was due to receive an additional c $1m imminently following the Timor Gap farm-up. Accordingly, we consider that Baron Oil was in a healthy cash position, as this was also noted in Baron Oil’s most recent interim results.
In those interim results Baron Oil’s Chairman commented that Baron Oil were “in advanced discussions with a number of potential funding partners”. Long-term holders are very disappointed in you all for raising at such a low price, one not seen since 2021, which makes a mockery of the progress so far. Shareholders were told at the AGM June 2023 that Baron Oil would not raise prior to an announcement on funding and that we did not need to raise due to our cash position and also that shareholders would be able to take part in any such funding. Yesterday’s end of day RNS prevented many from doing so. We now know that nearly £1million has been spent over the past year and would like to know what this has been spent on leaving us with £3.65million. You are all getting paid very well while diluting loyal shareholders.
During the AGM update held June 2023, Baron Oil noted that its share price trades at a “significant discount to Peers”, the implication being that the share price should be approximately 14 times higher. It is therefore bitterly disappointing that Baron Oil has chosen to make a significant placing at a price c. 50% less than what it was at the time of such statement and without any comfort that well funding is in place.
We (both collectively and individually) have written to the Baron Oil Board on a number of occasions to request that PR be improved.
This will be in 2 parts.
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