Member Info for Jiving

Also I seem to remember someone quoted an email from some time in last 10 days where Arthur mentioned that Essar M had actually prompted/requested a bid for their 20%? Maybe Kola & Arthur lowballed the offer out of misplaced confidence and the Indians in turn over-reacted.....

On your points.

1. Agreement. EssarM may keep their 20% or may sell at better terms than initially proposed by Shorecan.. So COPL could potentially not only keep their existing 40% but increase to 50%.

2. Do EssarM actually want full ownership of OPL226? They had for it what 4-5 years and got nowhere, except run up a bill of what some $50-60m & annoy the Nigerians. Another 2-3 years would have passed (under Shorecan control & court case) before they resume 100% ownership if they win. Then they have to start afresh with new partners (?) and restart negotiations having just blown up a laboriously negotiated agreement between Shorecan & the NNPC.

NoEasy great summary. I think its important to recognise that both parties pointed the finger at each other regarding non-compliance (QCs dream if it went to Court), but EM is the only one to issue a notice with a compliance date. From the Canadian second quarter MDA:

"ShoreCan and Essar Exploration and Production Limited, Mauritius (“Essar Mauritius”), the company that owns 20% of Essar Nigeria shares, are currently in dispute about whether the other party is in compliance with its obligations under the Essar Nigeria Shareholders Agreement."

The share pledge is clearly part of the overall package crucially including that of the oil service provider. Whatever the final wording/outcome it is not going to jeopardise the overall package otherwise clearly Arthur could not have agreed to it, he is not so stupid as to agree to terms he knows will make the oil service provider pull out or be fundamentally unacceptable to it. However it is clear that the Essar Mauritius issue needs sorting first before we can expect any announcement regarding oil service provider.

PIjoe. Thanks for your comments. Please can you give the page the share pledge stuff is on. Tks.

I imagine once the PSC is signed with Mozambique authorities (& the consortium) they will want some sign of activity - given its land based I would have thought relatively easy to start exploratory drilling in places the seismic look good, which of course coasts dosh. Please note I am not an oil industry person, so somebody with industry knowledge will have a way better grasp.

BB. Yep thats how it reads so presumably Arthur is factoring in expenses above the usual $400k per month. At some stage Mozambique is going to need resources, as well as OPL226.

Baking. Its a requirement in compiling a Prospectus that companies & their advisors have to list in great detail all the risk factors relating to their business. A lot of this stuff is in all prospectus's even those for giant companies in FTSE100 ie 'Cyber Attacks or Terrorism', 'seizure, expropriation or nationalization', Governmental Regulation etc etc

With regard to the specific risk facing COPL in the near future I found little that was not already well known (in RNS's and Arthur's podcasts) & discussed on the forum. They have interestingly already flagged in advance the need for a further placing in April 2019, actually that is merely reflecting arithmetic reality & hopefully will stop pointless exchanges here about whether they will do another placing sometime. The clear hope is that come April 2019 the company & OPL226 will be way stronger than they are now and a placing will be at a correspondingly higher price.

Pijoe. Interesting stuff but Shorecan board is two directors Shoreline (Kola & Tunde Karim) and 2 directors COPL (Milholland & Astor). It is the board of Essar Nigeria that has the Essar representative, namely the COO of Essar Oil Ashish Kumar.

Aim. You write "I know it’s coming..", well how do you know, what is the source for your knowledge/confidence? Or are you like the rest of us 'hoping' not 'knowing' it will come soon.

Jay. Spot on, its too easy (do it myself) to focus on Arthur's bad run & negatives and not the positives. He has clearly found & kept a top class partner in Kola, he has sufficient presence in the global oil industry that he can cut deals with players like Exxon (& we hope Schlumberger), he has been through a lot & seen a lot which likely makes him a wily & calculating negotiator. Wish to God he would keep us better informed but aside from that....

Thanks for everyone's input (R_Dunc, NoEasy, BB, others), my summary. Its looking like the stake for the oil service provider will be in a well/or individual oil field say Noa, rather than in the whole OPL226 license/concession. The stake will come from Shorecan's (80%) interest & not from Essar Nigeria's, so it will not dilute EM's 20% stake or actually involve Essar Nigeria. Therefore in practice EM will not have a veto, but the oil service provider however may not wish to proceed without 100% OPL226 stakeholder agreement.

It seems EM want out of their 20% but are not happy with the terms initially offered by Shorecan. So rather than haggle they have decided to use a Trump-like tactic of threatening the 'nuclear option' to try to move the eventual compromise more in their favour. Do they realistically want/think they can get back the whole OPL226 license ? Look at their downside - costly law suits lasting years; Nigerian regulatory issues to go through from scratch; a powerful dispossessed Nigerian billionaire fighting them every inch of the way; finding the funds to fight the legal battle & develop the license. If the EM guys misjudge they can easily end up not just with nothing but nothing plus hefty legal fees. It may cost Shorecan a lot to buy them out but the upside of course is Shorecan would end up with 100% of OPL226 in return.

I think Arthur & Kola make a good impressive negotiating team & they have a good chance of dealing with the EM crisis & moving on with the first well development, but the whole process has been put back by X weeks/months. Frustrating but not terminal.

Wideyed. He is just trying to disrupt the board by asking the same tedious question 15-16 times in an hour.

Ask the CEO yourself, you are the one telling everyone to only take the CEO's word for things. Get on with it:
amillholland@canoverseas.com

Sub. This is a discussion forum & that what we are doing discussing our company. If you dont like it is is you who should clear off. Set up your own forum with your own rules, all the posters you abused are acting exactly in accordance of the rules, you are the one breaking them with abuse.

Lets hope if talks are agreed with Essar Mauritius that Arthur lets us know in an RNS.

NoEasy. 100% with you on Essar. I worry that the two sides have not been 'talking' but exchanging threats. I know Arthur has proposed 'good faith' negotiations over the differences & I hope to God thats the way it goes.

Yep its all about Essar now. Afraid its sell or sit it out. I am sitting it out.

Aim. I certainly hope you are right - but what is the basis for your expectations?

R_Dunc. Thanks for that info on Teather. Is it a big hassle signing up, do you have to open an account, etc.

Teather is the way to go to even things up for us long suffering PI's maybe?