Member Info for Jiving

"The Company has entered into an agreement with Chris Blackwell whereby he will be issued with warrants to subscribe for 3,000,000 new ordinary shares of 0.1 pence in the capital of the Company conditional upon him continuing to act as Non-executive Director of the Company on 11 May 2019 ("Warrants"). The Warrants are exercisable from 11 May 2019 to 11 May 2021, at an exercise price of 4 pence per ordinary share."

Interesting he doesn't get them till May 2019 & then they have a relatively short life of 2 years.
Seems a good deal from NFX's perspective they are getting strategic advice on JV's & possible takeovers at very little dilution certainly relative to a venture capital company getting involved (say 20% +).

Oilberta. I always appreciate your insights & historical background to the company. Please keep them coming they give us shareholders vital information & perspective.

Todays share price is a disappointment, but there have been too many pump & dumps (including by Arthur) and I think that hurts the reaction to news. I found this RNS a huge relief on two grounds:
1. NNPC. It seems we really are in substantive negotiations with the NNPC, not just in some unspecified position in a queue, after all the radio silence we have suffered for the last 10 months this is a positive. It could be the FDP submission is a 'final' submission, potentially reacting to earlier drafts & essentially giving the NNPC a proposal that already meets their concerns. Hey, we are actually being told roughly where we stand in the process!
2. Project Finance - this has been dragging on for well over a year. Now we finally have details, the name of the financial institution, together with a reasonably detailed financing plan covering the early development of the field. Again its not the answer to everything but its a big step forward from where we were 24 hours ago.

The details in the RNS specify "..an exercise price equal to the market price of the COPL common shares on the date of closing of the Facility." The terms are indicative we will not close the facility until everything is in place, at which stage we all hope the COPL share price will be (a lot) higher. Do you have a link to 0.5p?

I am very positive about todays news, IMO it looks like we are in substantive final discussions with the NNPC. We are not out of the woods yet but this is hopefully 'the beginning of the end'.

We have no idea what the share price will be on closing.
Actually a lot of us shareholders care about the details of the financing & any dilution attached.

We also have no idea whether there will be a placing before then because we have no idea when final NNPC approval will come.

Important to note the financing comes with equity warrants attached, so we have some dilution coming from here:

"Two-year term to maturity; and a grant to the lenders of US$3 million worth of warrants to purchase COPL common shares for two years with an exercise price equal to the market price of the COPL common shares on the date of closing of the Facility."

Aim. Good summary thanks. My friend of a friend in the industry said in his opinion the critical element in the co-crystal concept was proving bioequivalence to the satisfaction of the drug regulatory authorities. This is not a given. BTW I have got some interesting clues on timing which i will put together soon (got to rush)

Amnesic

Clearly you did not understand the article as you state “Petronas has put up another board member as Chairman” - where does it state that, who? What finally determines Petronas policy is the view & influence of its 100% shareholder the federal government under the new PM. We have yet to find the identity of the new Chairman it might be Marican Hassan (just a rumour of course he is old & may not feel able to do the job) but whoever it is will be subject to the approval of Petronas’s shareholder itself controlled by the PM.

You choose to misunderstand & misrepresent the point regarding it not being the share for you. The unexpected arrival of Mahathir as the new PM does indeed potentially change the previous arrangements between Sarawak & the federal government. The logic of my point is if you don’t understand the new risk perhaps you shouldn’t invest, your muddled mind turns this into the opposite “perceive grave danger - pile money in”.

Dr Mathahir & his role and abilities as PM are indeed a subject that fascinates me as I was a witness to his first term. Again you reverse our actual positions, I am objectively analysing his gradual accretion & extension of power. You on the other hand appear emotionally committed to a state of affairs regarding Sarawak’s oil industry that existed before the May election but which is now frankly up in the air.

In Parliament last week Economics Minister Azmin used the PDA 1974 act to explain that a 20% oil royalty payment could not currently be implemented as it contradicts the current 1974 act - so in fact the states need the federal parliament to amend the Act in order to potentially pay 20% to the states.

To summarise my position - Mahathir becoming PM in May was unexpected and he is gradually unravelling many of the decisions/policies of the previous administration (see Singapore & Chinese backed infrastructure projects). He is also replacing Najib’s appointments with his own across a broad swathe of government institutions & state owned companies. The grave state of the federal governments finances means he is loathe (unable?) to allocate additional oil revenue to the states. Both sides claim legislation is on their side, and here I do agree with what I take to be your point that in the end there will most likely be a compromise “…for all to find a mutually constructive approach..”. But the end result is unlikely to be as advantageous to Sarawak & UPL as the arrangement with Najib, possibly they may have to trade increased oil revenue for less control of their resources. Actually neither of us or indeed the parties themselves know where we will end up.

I actively welcome conflicting opinion (confirmation bias harms investors), it is you who has muddied the thread with misrepresentations as outlined above. As I set out at the end I think we are in practice actually not far apart in our expectations regarding a negotiated deal and as neither of us can predict the future, it is events

Rift for once we are in agreement! I note this in the RNS:

"Essar Nigeria has prepared a work program for this initial campaign on OPL226 in the form of a field development plan ("FDP") for submission to the Concessionaire, NNPC. The Company expects the presentation of the FDP to NNPC to occur in the near term."

Jay did you see the two interviews Dan did after the July operational update? I thought they were both positive & he presented a picture of ongoing progress - which is what you wanted. But he didn't have any real results to trumpet, and therein lies the problem. Like you & others I bought into the concept (BTW a friend of a friend in the industry sent me a detailed critique of my 'novice mistakes' investing in a pharm new venture...) but the concept actually has to be proved in practice in the trials, then Dan has something to boast to the market about. Until then he would just be repeating everything he has said before, which IMO might have the contrary effect of highlighting that we dont have any practical results..... I believe you like me are a long term investor - its the day traders rushing in on the basis of the usual rampers who are really hurting.

Petronas is the Malaysian state oil company, it is wholly owned by the Malaysian federal government. The Prime Minister of Malaysia in charge of the federal government is called Dr Mahathir, who therefore has the ultimate say regarding the Petronas board & policy - in both theory and above all in practice. You seem to have misunderstood the Petronas article, there are two 'Hassans' involved, outgoing Chairman Sidek Hassan who completed his tenure and left on 30 June when his contract was not extended. The second is Hassan Marican who is rumoured to be the strongest candidate to be new Chairman - a position that is & remains vacant (a new director not chairman has recently been appointed). Hasan Marican is an old Mahathir crony who serves on his Council of Eminent Persons, which is a 'shadow cabinet' deciding important economic policy.

Mahathir is the most important & powerful post-independence Malaysian PM. Even a cursory understanding of his past actions illustrate his ability to get his way by whatever means necessary (this is why history is crucial). What his intentions are regarding Sarawak and the division of the spoils between the federal & state governments remains up in the air & subject to negotiation. He faces a simple arithmetic problem, the past government massively over-borrowed, & signed up for cripplingly unaffordable infrastructure projects. On top of that his election promises included dropping a consumption tax and increasing public expenditure. The sums simply don't add up, he most likely needs more oil revenue not less, this is a huge constraint on any Sarawak deal that leads to the federal government receiving less revenue. On Wednesday the federal economic minister Azmin stated the 20% royalty change was dependent on a federal law being altered - ie its in the hands/control of the federal government headed by the PM.

The role and influence of Mahathir on the future of the oil industry in Malaysia & Sarawak is critical & central. If you are unable or unwilling to accept that perhaps this is not the share for you. BTW, UPL is not simply about Malaysia - I would draw your attention to their activities in Scotland & North Africa - so investors are not simply buying a Malaysia play.

I began this thread began with a short, simple, uncontroversial question, you did not need to turn it into a lengthy unnecessary dispute.

You seem to have misunderstood my post - I most certainly did not suggest Bolhassan has 'no' contacts at a federal level but that they are less senior than those of Norza. Only a fool would suggest that and I was not the one that suggested it.

You really need to do some more detailed historical research into understanding how politics & business work in Malaysia, particularly when Dr M is PM. In particular the critical importance not simply of past networking with the old government but the critical need for ongoing networking reflecting the dramatic change in government in May. Dont forget to investigate the basic relationship between Petronas and the federal government who controls it - Dr M calls the shots, he controls the legislature & appoints the directors of Petronas. As I pointed out in my previous post he is working his way through the major state related companies changing their composition one by one:
https://www.nst.com.my/business/2018/06/377833/changes-seen-petronas-board

To refresh my memory of various company details I re-read the June 2017 Prospectus produced for the share placing that took place. I was interested to read the following Board remuneration details (have they changed since?). Salary:

Arthur Millholland C$360,000 pa
Harald Ludwig C$150,000 (+C$15,000 pa for chairing a committee)
Viscount Astor C$95,000 pa

However it does't end there. For the financial year ending 31.12.16 they also received option awards, these were valued at:

Arthur Millholland C$669,400
Harald Ludwig C$398,400
Viscount Astor C$189,300

Those are good points Amnesic, but this isn't primarily about the technical responsibilities of non-exec Chairmen. In the case of Upland & Malaysia, high level Malaysian (inc Sarawak of course) contacts are going to be crucial to securing & maintaining the right deals for Upland. I think Staley is one of the best CEO's in the small business sector but in Malaysia he is & will remain an outsider, its all about picking up the gossip & the leads well before they become public.

I have worked in KL first for a Western company & then in a JV with local colleagues with top level contacts - it was chalk & cheese - without the local input you had virtually no chance of getting anything but the crumbs. Bolhassan may have the contacts in Sarawak but does he have the same level in KL. No doubt you will have seen last week Mahathir's effective dismissal of the entire board of the sovereign wealth fund, the federal authorities are still going to be crucial players.

Aim. You mention 'scaremongering' I haven't seen any examples of that in recent posts just rational posters raising perfectly sensible & reasonable points - thats what an investor discussion forum is all about. The best laid plans of the smartest people can still go wrong - history is full of them.

What's the thinking about Zakaria resigning as Chairman (due to sports commitments) and being replaced by Bolhassan? See RNS 6 July.

NoEasy. I genuinely believe that an honest appraisal from management of where we stand & their perception of the way forward would be better than the current no-comment policy - whether it is 'positive' ie final approval 'likely' this year or negative 'first half 2019'. This is a policy/attitude specific to Arthur and not due to regulators or any external factors.

Personally, I thing it is extremely unlikely we will get approval before the next equity issue & am basically pencilling in first half 2019, if Buhari's party goes into total meltdown all bets could be off.

Of course we are not going to get suspended, what nonsense.

I don't know about the other long term holders but I feel we really really are owed an update on where we stand in the NNPC process. It might need to be delicately phrased but there is so much going on in Nigeria, we are owed an honest appraisal of the situation from 'our' company and 'our' CEO. Some US$13,000 per day, every day in outgoings surely buys us a couple of paragraphs? The share price has suffered as much from the lack of any meaningful management explanation as from the OPL226 situation itself - even a statement with minimal information would IMO likely help the share price or at least stabilise it.

R_Dunc. The relevant text in the email from Cathy was ; "Those deals you have seen progressing ahead of ours is because they were ahead of us in the queue.".

As far as I can recollect this is the first time anyone has formally mentioned a queue, it gives us no information as to where we are in the queue, we could be anywhere in it. Companies all around the world keep their shareholders informed of how applications are proceeding and when particular hurdles are met, there is always a way of doing it if you want to do it (I invest in gold & silver mines and the licensing & approval of exploration & development is at the heart of their activities, never have I come across a COPL style total news blackout), sadly Arthur chooses not to inform us.

NNPC is the state owned vehicle for the Nigerian Govt to manage joint ventures and regulate the industry. The head is an important political appointment of the President & so of course its at the very heart of Nigerian politics. The political battles going on in the Niger delta & with other states are all about the division of the spoils from the oil industry, & the President appears to be trying to arbitrate them. The article R-Dunc linked to on Mon 21.42 is vital reading & presents a pretty bleak picture of political infighting & impasse.

I had previously taken an optimistic view of the election thinking Buhari would try to kickstart the oil industry by pushing through approvals & go on the election trail as the man boosting Nigeria's most vital industry. Perhaps he still intends to, from an article also linked to last week he is reported to be signing PIGB on 1 August. I don't think anyone, possible even including Kola, can honestly predict how pre-election politics will affect the final approvals for OPL226.

I welcome the comments & discussion we are having today, I have learned new stuff good & bad, its all food for thought.

Mk, I agree our main hope is Kola. An election that seems to be having negative effects could turn to our advantage - politicians need political contributions to fund their campaigns and it would be quite usual for them to turn to wealthy local businessmen. This of course is not corruption and is the same process that occurs in the US, UK & elsewhere, it often appears that those donors then get favourable treatment.