Member Info for Maldini1

Loss, this point also crossed my mind. For the time being, we have to assume that the current offer ticked more boxes than the others. However as the bones of the deal are now public knowledge, the exclusivity period not only gives our secret JV partner time to sort out their DD and finances but it also gives other interested parties time to work up any improved offers. Coincidence? I’d like to think that maybe it was part of the negotiation planning. Nothing is signed yet and no binding commitments have been made, so improved offers very welcomed thank you.

Putting aside emotions, suspicions and conspiracies for one moment it might be worth reflecting occasionally on the fact that we own a £1b worth of gas. We have an offer on the table to buy into and fund production of the Horst and we’ve got the prospect of more drilling with someone else paying a fair chunk of the costs. I haven’t heard anything different since the HOT RNS was released to suggest that a deal isn’t being worked through and if and when an acceptable deal is signed off we might stand half a chance of recovering some value.
Unless OGIF and ONYHM push for a change in BOD, we’ll probably have to make do with the one we’ve got, assuming that the big boys have already given the thumbs up to the recent changes. If a group of Pis want to ask some hard questions of the BOD, good luck to them, although I suspect that it’s what the BOD do over the next 10 weeks which will ultimately determine how rosy or gloomy our future might end up looking. All still to play for.

I’ll leave the sums to the people with the calculators. However, the Company has made no secret that it intends to drill. This is from the HOT RNS “Fundamentally, the Company continues to believe the Tendrara basin requires further exploration drilling to unlock fully the basin potential and to deliver enhanced value to shareholders.”

This deal is designed to ensure that there is enough money for meaningful drilling because that’s the most likely route by which people will recover their investments. How much could it be worth? We’ll see when we know how much more is discovered but even modest success with the drill bit will be worth the effort.

Quite so Jones. But still useful to have a bit more clarity instead of having to second guess what was meant. Still, as you say, no counting of chickens just yet.

Partridge, this is a good example of how more facts equal less speculation. If we’d known this bit of detail at the time that news about the HOT was released it might have provided some reassurance to investors instead of all the heat it produced. Unfortunately we have come to expect and think the worst in relation to any news put out by SOU but there’s the potential for a decent story here... and confidence will begin to return as long as some worthwhile snippets like this continue to be made available. Not everything is necessarily top secret, the skill is to understand how much SOU can give out without compromising rules or confidentiality.

I suggested some days back that anyone intent on heading down a legal route to get the redress they think they’re owned, would serve their own interests best by waiting until after they know what the proposed deal brings. Starting a half ****ed and protracted witch hunt now doesn’t seem to be the clever thing to do when we want the Company to be focussed on the very thing that every investor wants.... and that is to recreate lost value. After that, personally I care not a jot what people do but I don’t want them compromising my chances of recouping some money because they choose to pursue a vendetta.

Let’s get back to discussing production, drills and value creation.

I hear what you’re saying Medi, but the doc is still technically relevant until the BOD changes are officially implemented. The FSC offered us a glance of where the decision making process has shifted.

We’ve been through the mill with this investment. Value destroyed, trust and confidence stripped away and suspicion abounds. Furthermore the BOD has been pretty much changed overnight and we have the makings of a deal in place which unsurprisingly has not met with universal approval. On the face of it things couldn’t get much worse....exactly!

Sincerest sympathies to every investor nursing large losses (including me). However, if you think that the situation is irretrievable, then there really is no hope or way back. However, if there are to be any signs of a recovery then it starts with the BOD and it starts with re-establishing the conduct under which the BOD will operate. For once the cooperate advisors have done their jobs and hence the publication of this morning’s corporate governance document. It’s a start and I hope that it’s a sign that things are improving.
Next stop? A decent deal and new gas discoveries? Well I’ve put it on my Christmas list so time will tell.

Here’s to that Eric.

What we need (and I hope we will have) in any final deal is an undertaking from the JV partner to commit to a minimum number of drills during the first year of the deal. If we don’t get that and dividends from the Horst don’t start coming in till 2022 the shares could remain undervalued till then. Conversely, finding gas during the first year would kickstart the share price, giving people half a chance of recovering their positions and an opportunity to monetise their holdings before first gas, if that’s what they chose to do.

Trust, as we know, is of paramount importance and in short supply, so having confidence in the people responsible for a new drilling campaign could go some way to restoring it. However, wouldn’t it put the cat amongst the pigeons if the JV partner, having completed their due diligence, decided that Brian and his team were still the best people to lead the drilling. An inspired selection or sheer madness on the part of our prospective partner?

Well, if you were private equity and you were just about to put a few £m into drilling, wouldn’t you want to leave no stone unturned in order to reduce as much risk as you could? We might be assured therefore, that whoever is chosen to lead the drilling, the decision will have been made in sangfroid. And if you were a country, who thought that it was finally going to secure it’s own sizeable gas reserves, only to be let down again, you might want to ensure that you didn’t end up disappointed again. Two reasons maybe why investors should begin to feel a bit more confident that decisions taken by these parties during this critical phase will have been subject to significant scrutiny and challenge....and if it increases value for them, then it should for us.

davefrench/bigbench I think that’s right. Whilst recurring revenues from the Horst will likely keep things ticking over for a decade or so with regular payments, a concerted drilling programme and new gas is going to be the way to restore a material uplift to the share price. It remains to be seen how the drill ready targets closest to the Horst and other larger prospects are going to be funded in a way that sees them being drilled in a timeframe that satisfies shareholders and also meets Morocco’s requirements.

Yep I did.

Yep, a 50m share buy by the BOD members I would imagine.

Thanks all for your responses. On balance it looks like “fully funded by the purchaser” is in pole position but there’s still a possibility that the BOOT will prevail. Not so clean cut yet then. We’ll have to wait and see which of the possible finance routes wins out.

Thanks for clarifying Crude. Since the HOT RNS I got the distinct impression that some people had formed the opinion that the consortium approach for the pipeline was being replaced by the JV arrangement. That’s not how I read it, but I was beginning to question whether I’d misinterpreted the detail.

Do people believe that it’s de facto or an assumption that the proposed JV partners will be fully responsible for raising all the funds needed to build the required 120k pipeline?
We know that along with the pipeline, a central processing facility and a number of wells will be required to deliver the expected production volumes at the Horst. However, anticipating that a concerted drilling campaign is the thing that could really put us back on our feet, is it feasible that the BOOT concept for the pipeline may still have a part to play in the “deal” to ensure that (i) the JV has enough capital for its concession commitments and (ii) is also properly funded for a serious exploration campaign?

Time for a bit of unashamed ramping me thinks. Here goes:
The world will not end tomorrow. The gas in the Horst won’t go away. There will be a deal. Whatever it turns out to be there will be lots of drilling in the next 12 months. More gas will be found. Whatever % we end up with will give us significantly higher value than we’ve got today.
And most importantly...where we finally end up is anyone’s guess, so this message has about as much value as anyone else predicting otherwise.

“This was a rampfest on behalf of us beleaguered (and yes maybe also a bit deluded) investors still hoping for a ray of light. But what the heck it’s nearly Christmas.”

You can access the Q&A through twitter. Below is the Twitter message from Monday last.

Reminder that next FSC will be held this Wednesday 20th November. We are using a new format and the system is open for questions and will close at 5pm tomorrow and no live questions will be taken during the session. To log-in/register: http://yoursoundenergy.com

So how do we reconcile the fact that SOU and ONEE are targeting year end to sign a binding GSA (using reasonable endeavours) whilst the exclusivity period for the HOT doesn’t end until 14 Feb? Either the GSA is put back to Q1 2020 to accomodate the JV deal or negotiations (and funding) for the JV are more advanced than has been indicated. Wouldn’t our prospective partner want to be directly involved in the final negotiations of the GSA?