Member Info for MarketGunslinger

Fair enough Kels - thanks for being so clear on what your position is. I can certainly see from your point of view that the quickest way for you to get your 1.3p back will be to get funds from the SNPC. However, since I am taking a somewhat longer-term view I would like to see the company built up solidly so that they can properly exploit the potential of the Tilapia asset. To me this means that we get the production assets in place first and concentrate on the SNPC money later.

Also, all I am concerned about is an agreement to get the money paid back rather than receiving it as this will mean that we can raise debt to fund the exploration project.

That said, if we can build for the long term and get to 1.3p fairly quickly (and I believe that we can) then that would be great for both of us. Good luck to you too.

Kelsbells, the only person anywhere who thinks that the entire future success of Zenith depends on them receiving the SNPC money is you. Every day you are on this board complaining that they haven't received the money yet and it is simply a straw man that you have created so you can criticise the company.

As I have been saying to you for months now. To drill Tilapia, we do not need to receive all of the SNPC money, we simply need to get to a stage where it is acknowledged that it will be paid and then we can raise funds via debt – which will be serviced via the payments from SNPC or from the production assets that ZEN are in the process of acquiring (one of which they have acquired today).

Zenith is doing exactly the right thing and continuing the plan that they had two years ago – though in this case the have learned from their previous mistakes and are not putting all of their eggs in one basket as they did in Azerbaijan but are instead acquiring production assets spread across different jurisdictions in Africa.

The acquisition of 22.5% of an asset that produces 700bopd is a great first step toward this. It has cost very little money and will contribute a stable cash-flow going forward. We need to add another couple of these kind of assets in the near future and then we will be that rare thing – a small cap oil and gas company that is in revenue and still has exploration upside.

When paid social media promoters start posting that "they are expecting some great newsflow" it means that there is news coming imminently and the company expects it to be good.

Agreed Tiburn. It is a gamble when we do not know what the asset will be but in my experience shell companies often work out quite well which is why I like them so much. Also, the level of the gamble is very much limited by knowing a bit about who is behind the shell. In this case Forum having considerable financial firepower and connections makes it much less of a gamble than many.

There are a few nice looking shell opportunities about at the moment though where as you accurately put it the risks are considerably outweighed by the probable gains.

The early bird catches the worm and all that...

There is no certainty on this but I am assuming so otherwise there was no point in having the raising. Also, it would have been impossible to convince those who just put in £645,000 to have invested unless they were made inside and given a reason to put their money in.

We know from the RNS of March 12th https://www.lse.co.uk/rns/ZEN/update-on-acquisitions-9l3ru8h9d9lav1f.html that the company were in negotiations for the following assets:

1. Acquisition of 80% of AAOGC - this was completed on May 5th for 100%
2. Acquisition of West African assets - one producing 600 bopd and the other which is not running at the moment but last produced 1,000 bopd
3. Acquisition of 22.5% of the Sidi El Kilani Tunisian asset producing 700bopd for $500,000.

My money is on it being number 3, the Tunisian asset, as the AAOG deal has done and we have already had an RNS about the Tunisia deal https://www.lse.co.uk/rns/ZEN/acquisition-of-sidi-el-kilani-from-kufpec-3qtvakx15yp4zk3.html which implies it is further along in negotiations than the West African one is. The money is also right from the raising.

In short, the asset has not been purchased yet, but there would have been no other reason to raise the money and (perhaps more importantly) no other reason for the money to be invested.

"and hopefully those in placing might have been promised some good news to come very soon"

My money is on the acquisition of the Tunisian production asset.

New website and new 2020 investor presentation have just gone online: https://twitter.com/zenithenergyltd/status/1270685326592352257

ivans - why do you perceive it as "poor form"?

Genuinely interested. As far as I am concerned, as long as a good chunk of the placing money is (like last time) used to purchase a new asset I am comfortable with it.

itsagame - frankly, if you believe that the license will not be renewed and ZEN have just thrown £200k and their key (potentially) "company making" asset down the drain then you should sell out now. If I thought that there was any chance that the license would not be renewed then that is certainly what I would do.

Of course the license is going to be extended. That was all sorted out before the AAOG purchase was even made hence AC's meeting with the President: https://twitter.com/DavidBurton1971/status/1230749438886342658 and also the front page story in Les Depeches de Brazzaville: on May 13th 2020 https://mobile.twitter.com/zenithenergyltd/status/1261240297582985217.

MrEMC2 - Remember that 6 months is the maximum time limit. I think that things will move far quicker than that. If I did not, then I would not be here.

Forum have clearly been working on projects for AAOG since they acquired the ISA shares (and control of the company) back in January. You can bet your bottom dollar that they did not wait until May 4th to work out what assets were coming in.

"It was obvious in January how important the 5.3m from snpc would be to having any chance of doing anything operationally in the next year, and I believe it’s now clear that we’re extremely unlikely to receive that money."

Kels - Personally, I do not understand why you think that there was any likelihood of the $5.3 million being repaid barely a month after the Tilapia purchase has been completed. This has never been claimed by the company nor indeed anyone else on this forum other than you.

Like I have said repeatedly in the past the only logical way Tilapia works is:

STAGE 1 - Purchasing the asset (done)

STAGE 2 - Getting the license renewed (imminent in my opinion, but as I have said before I think that it has already been agreed when AC met the President and it was announced in the national paper)

STAGE 3 – Starting to get money paid back from the SNPC (I have always assumed that getting this sorted would be in Q3/4 this year and given the travel restrictions imposed by Covid definitely more into Q4.

We also do not need to get the money back in full to move forwards– an agreement that it is owed and a repayment schedule put into place would be enough to ensure that the company could borrow against it to pay for exploration costs - especially when they have income coming in from production in Tunisia or West Africa.

mls678 - It kindof depends how you count it. For example, UKOG have carried out 14 formal placings since 2018 and Zenith have carried out 23.

However, if you include the points in time when the various loans were converted for UKOG and they had to issue equity to service these then it goes up to 55 times.

The other companies have issued significantly less often. Block have done it 7 times, AAOG 7 and SOLO 10 times.

I totally agree that it would have been much better for Zenith to have raised a bunch of money in one shot, and I bet that the company would have preferred to do that as well. However, it is not as simple as just saying can I have £5 million please. I mean you only have to look at what happened to AAOG when they stopped being able to raise capital and just turned into a zombie shell company that had to sell their assets for peanuts. Also, equity raisings happen for every small cap oiler - UKOG issued an additional 2 billion shares to raise £4 million less than a week ago. They are a much bigger company than Zenith but the just hit their shareholders with a 25% dilution.

The clear bit of blue sky in this recent raise for Zenith is that it was fully subscribed - therefore showing that they still have the confidence of the markets and it also looks like the money has been raised for an acquisition . We know that AC is going after a number of targets (Tunisia, Italy and West Africa) in quite an aggressive acquisition strategy. M y money would be on seeing news on the acquisition completion on one of these soon - presumably Tunisia.

"Anyone want to add up all the repeated placings Zen have done last 2yrs?"

As of today, he total value of placings that ZEN have done since Jan 1st 2018 is £13,542,055 (basically £5.5 million per annum on average)

To put this into context, in the same time period:

UKOG have raised £51 million (£20.5 million per annum)
AAOG raised £23 million (£9.2 million per annum)
BLOE have raised £18.5 million (£7.4 million per annum)
SOLO have raised £6 million (£2.4 million per annum).

Good night all, MG.

I'm a little ****ed off about the credit rating drop but least they had the good grace to announce it in the Norweigan RNS (and presumably the UK one tomorrow) So I will at least give them credit for being as open with the drop to B- as they were with the original B+.

I am going to read the full report tomorrow - it's too late for me to go through that tonight.

"Anyway, how do you think I'm trying to do something.!"

Err, because at 16.26 on the 22nd May you posted on this public forum:

"Hi irishmouse, on behalf of Kilkenny and c/o,we have a private investigator lined up in London who will decimate DS JB And JC through the fraud squad and Scotland Yard , we have the evidence to procure a high court action, it will require funding from all shareholders who wish to be involved after progress from Forum.Best wishes to all."

It didn't take Sherlock Holmes...

Papa9911 - That is the second time that you have made the rather odd allegation that I am David Sefton. For what it is worth, I can assure you that I am not - and I do in fact wish you good luck in your attempt to hold him accountable for the terrible mismanagement of the company. However, I also think that Alex MacDonald also has to take a reasonable degree of responsibility for the Tilapia failure as well - do not make the mistake of letting him off the hook, just because he is good at throwing blame in other directions.

But yes, I do know a lot about how the stock market works and how new assets and management can reinvigorate a company share price if it is done correctly. It is why I am invested here.

Rastuss - there would be dilution in an RTO as well. Whatever happens next there is going to be dilution. The point is that the value of the asset that is put into the company should increase the share price enough to outweigh the cost of the dilution - not necessarily instantly but over time.

Also, what is the alternative? CHAL remains here with no income and no substantial assets? It would have to raise money anyway just to keep the lights on.

Rastuss - there would be dilution in an RTO as well. Whatever happens next there is going to be dilution. The point is that the value of the asset that is put into the company should increase the share price enough to outweigh the cost of the dilution - not necessarily instantly but over time.

Also, what is the alternative? CHAL remains here with no income and no substantial assets? It would have to raise money anyway just to keep the lights on.

There are a number of ways that this could be done:

FIRST

The company would do a raising at a fixed price (but hopefully one that is higher than where it is today). It would be done wholly to a selection of private investors who would be made inside (ie aware of what the asset that was being vended in was). They would look at what they think that the asset could be worth in the future and make their investment (at a premium) based on this. The reason that they would buy in a placing as a premium instead of on-market is so that they could buy shares in significant quantities.

The company would pay for the asset in a mixture of cash (from the placing) and also shares (at the placing price). The seller of the asset would agree to this as they would be in receipt of some instant cash and also share that would likely go up in value.

SECOND

They could farm-into a project where they agree to take, say, 50% of the asset in exchange for paying for all of an oil drill (if it was an oil project) and giving the owner a free-carry (where they do not have to invest any more money) through to production. The company would still need to raise money but the share price should increase once they show that they have a potentially valuable asset and they can raise capital at a premium to the current share price in the way described above.

In the first instance the seller of the asset is able to generate revenue by receiving cash and being able to sell shares on the stock market. In the second instance, they know that they are going to be funded through to production without it costing them any further money.

There are a number of other options as well but these are the first that spring to mind. The bottom line is that whatever happens the company will need to raise capital by issuing shares. If they have a very good asset then they may be able to issue these shares at a premium of the current price but failing that they may have to issue at a discount. Either way, they will raise the capital based on the fact that the value of the company with the asset in it will be far greater than it is today.