Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
'I am still sticking with £1 per share or thereabouts, but only should we receive around £1 per share. ' - amazing perspicacity required for such a prognosis. It shouldn't be dismissed out of hand - it is worth at least £1.
And this is the link to part 1 of the Nightline documentary on Theranos: https://www.youtube.com/watch?v=87SWZ0Pna8k
"this tells amyone with an ounce of common senswe that he sees the current share price as undervaluing our assets"
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Another view:
Why has he bought such a peanut amount (c£17,000) ? (his salary in 2018 financial year = £323,000) .... is it an attempt by the board to encourage the share price higher by a seeming act of confidence...?
However, in my view, if he really thought that the share price was undervalued and that it would have to increase to reflect the true value of the company's assets then wouldn't he buy far more? .....If he had bought £100,000 + then that would be significant
Looking at his share options he has 1.5m (with 'acquisition' price of 84p ...) that can't be exercised until 07/10/19.... [ and another 1.5m tranche of share options (with acquisition price 67p) that can't be exercised until 25/01/20......
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Note: I looked at and bought into Sound in a small way over a few months from Feb 2017 but had sold out completely in mid May 2017 (losing just c£1,000..... I can only sympathise with those who have lost eye-watering amounts - even if it is still on paper - and losses are always relative to a person's situation). Too many question marks for me on investigating further into the company and the the CEO's mode of presentation - he seemed to me to be evangelising private investors and projecting a confidence that potentially would induce people to do what they otherwise wouldn't ... even if it is always caveat emptor...
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Not applicable to Sound as such but there is the connection with regard to 'confidence' projection - the remarkable story of Elizabeth Holmes - founder and former CEO of Theranos - now facing jail as a 'master of deception' - look at who she convinced to be on her board..... her defence attorney seems to be saying 'the company would have got there in the end.....' and so all would be fine in the end - a case of 'fake it until you make it' ? ...... https://www.youtube.com/watch?v=PvznWSEKoEE
With O&G exploration however there would have to be a deliberate misleading of others on the basis of known contrary information.... which doesn't apply to Sound as far as I can tell..... The CEO may genuinely think his enthusiasm was justified and that he thought that there was (and still is) a great opportunity. The trouble is there was no real downside risk for the CEO given the salary being earned, the share options exercised etc. - unlike the private investors who hold all the downside risk. A book worth reading on this issue is 'Skin in the Game' by Nassim Taleb (author of 'Fooled by Randomness; Black Swan; Anti-Fragile).
At the interim stage (30 Sept 18) Carclo were close to or at their overdraft and loan limits........
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Total Liabilities = c£110m (current = c£45m + non-current = c£65m (of which c£29m is the 'current' shortfall in their pension fund)
Current Assets = c£82m (of which c£11m is cash)
[Ignore the Non-current assets = c£84m (but c£26m of this is 'intangibles (e.g. goodwill) and c£8m deferred tax assets, leaving c£50m of plant, property and equipment assets - but what would they and the intangibles be worth if they had to be liquidated....? )]
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So the company is in a very difficult financial situation - and are even looking to their customers to help out: from the RNS:-
"In addition, discussions are ongoing for the earlier than planned customer reimbursement of monies incurred by Wipac for the design and development of future production programmes".
Cash flow generated from operations for the 6months to 30 Sept 18 was just c£1.6m (and overall a negative cash flow of minus c£4m).....so they are not generating the cash they need to get them out of the hole they are in.....
In my opinion I think the company needs to be re-capitalised or it will be bought out......
Only about 10% of the Netherlands gas production accrues to Parkmead - there are other partners.....
From Parkmead's website:
"Production
As at April 2018, Parkmead produces approximately 780 barrels of oil equivalent per day from a portfolio of four gas fields in the Netherlands. Parkmead holds a 7.5% to 15% working interest in four producing onshore gas fields in the Netherlands; Geesbrug, Brakel, Grolloo and Diever West."
In the 2017 annual report the balance sheet shows in non-current liabilities a 'Provision for other liabilities' of £37.15million ..... if that crystallizes then it will take Trinity many years of positive cash flow to pay off.........
It is not clear what the status of much of this is - (other than some decommissioning costs etc.) - from what I can glean from the Annual Report, and nothing is mentioned by the auditors of this high provisional liability.....
Can anybody cast light on this?
Thank you !
Why do you leave out the information that the Director of EME who is stepping down is well past retirement age (having well over 50 yrs experience as a petroleum geologist.....) Things can be framed deliberately to mislead ... -- Whether you are right on the prospects for EME with regard to the Sacramento basin waits to be seen. -- Have you ever stated whether you have any shares in EME or are you that unique form of rat - a public service rat, so to speak? :)
To evaluate the deal numbers are required: cash out and cash in over the next 4+ years and assessment of the risks of the required investments in the three fields .... Has this been done and the forward earnings per share? If so could someone point me to the source. Apologies if this is covered in a posting in the past. The deal increases the scale of Serica which brings some advantages but what is the cash flow and eps going to look like? -- It is stated NOVEMBER 21, 2017Source: RNS Number : 0444X Serica Energy plc that: "Initial Consideration expected to be exceeded by Serica's share of net cash flows from the BKR Assets between 1 January 2018 and Completion of the Acquisition anticipated in mid-2018" - so Serica expects their share of net cash flow from the BKR assets in a six month period to be more than the £12.8m initial consideration - what does that tell us about the underlying net cash flow retained by Serica? ... the wording doesn't sound as if in the first six months of 2018 it will be that much more than the payment of the initial consideration of the purchase cost ..... So with the remaining £287.2m cost of the purchase to be paid over the next four years after the completion of the acquisition....along with incurring additional operating costs, investment costs; and accrued decommissioning costs....... what will the numbers look like? I have read that the Bruce and Keith fields are due to cease production by c2023 if no further and successful investment undertaken.....does anybody know the scale or nature of the investment required to extend the lives of these fields? - and what is the risk of failure here? Does the deal really only start to make money for Serica when/if there is a successful exploitation of the Rhum field? From the outside it is not at all transparent to me what this deal will do in terms of the scale of cash generation and eps for Serica ....in the next, say, four years......
wheelyb: Ah, and Google's Sergey Brin and Larry Page got lucky when they tried to sell their company for less than $1m dollars and it was rejected......and when they saw another company making money from adverts connected to searching; and Steve Jobs got lucky when he was fired and when he returned to Apple a small company approached him with the idea of a digital music store; and got lucky when he was shown the finger swiping technology used on the iPhone; and Bill Gates got lucky because someone at IBM knew his Mother and thought the bright boy Bill who knew about computers could help them find an operating system for their PC; and Bill got lucky when the owner of another company with an operating system - Digital Research - got cold feet with IBM when approached (apparently because of the proposed terms ...) The question is would they have been able to succeed if the particular opportunity had passed them by..... and I suppose with TC - can he repeat the success he had at Dana?..... maybe down to the team he has with him.....
It was meant just as an observation related to presentation of information etc. - not the basis for investing (which is to look at their strategy, through their accounts and the background and past success of the directors etc etc.). The nature of this kind of business means there is quite an element of risk. You may be sitting on quite a large loss (about which I can only sympathise) which may account for language like 'treacherous' company; 'incompetent' (well give me a bit of TC's incompetence if it has provided £60m in the past for him....). Finances aren't run inefficiently on the basis of licenses not working out as planned - you might argue that their technical staff have made mistakes/wrong calls which then impact on the financial position, or their strategy has been wrong, but that is another matter not one of financial management as such. Do you/we know enough about the situation at Diever West and the opportunities available to Parkmead? Judgement in business is not clear cut even if you are the bright of the bright - whether technical or commercial. Did you know that Larry Page and Sergey Brin tried to sell Google for under $1m in 1999 (to Excite who didn't buy....) Well does that mean LP and SB are incompetent for trying to sell their company for under $1m when just ten years later it was worth $167 billion; why couldn't they see in 1999 what wonderfully successful projects they could invest in... :) Anyway, let's see what pans out in the next few months.... bw
Yes, what you say is apposite - I think it was a bit unfair of me to suggest it was a 'hobby business' for him ! I am not sure on what Isengard7's characterisation of their Chartered Accountant is based - seems unwarranted; likewise I wouldn't call the company a 'disgrace'. The company seems to have competent and professional people on board and has an excellent website (compare with Empyrean's - which couldn't be more amateurish). Similarly to others, I would like to see more informative communication about how the company is doing between the formal reporting periods. However in my opinion, better Tom Cross's approach than, say, what happens at Sound Energy.....
Bitethebull: "as I cannot believe with his personal stake in the company that things will be allowed to slide into oblivion." I, also, continue to hold as there would appear to be continuous, albeit quite gradual, progress. However, personal stakes are all relative; and if we look at things relatively regarding TC: I think I am correct in saying: Tom Cross netted £60m from the sale of Dana. How much has he invested in Parkmead? - probably about c£4m? (I haven't found/done a detailed calculation of what he paid for his shareholding; there was a loan conversion etc and various points of investment). If so, he has recouped half of that from Parkmead through salary and benefits since 2011 (see below) -- So is Parkmead really a sort of hobby business for Tom Cross? - in the sense that he hasn't got that much 'skin in the game' relative to his wealth - if it all goes wrong he is going to remain a very wealthy person. Does this explain the lack of communicated concern in what happens to the share price - and, at least as far as private investors are concerned, in communicating, say, what the situation is for the company with regard to the cash flow being generated from the gas fields that PMG have a stake in etc.... (although he may consider this should remain confidential between the required reporting times of annual and interim 6mth reports - to avoid affecting deal making for instance). He is a 'Chartered Director' - an Institute of Directors qualification. I would have thought one expected requirement if you run a publicly quoted company would be to make some comment if the share price fell continuously in 3yrs from 208p (16/9/14) to 34p (16/9/17) ...a fall of 83.5%. ===== Regarding Significant Shareholders PMG's website says this: The significant shareholders as at 30 May 2017 were: Name Number of ordinary shares held % of ordinary shares Thomas Cross & affiliates 18,850,779 19.05% Fidelity International 7,640,794 7.72% Cavendish Asset Management 6,468,293 6.54% Polar Capital Partners 4,666,646 4.72% However it is difficult to track the changes before/since then. In April (4/4/17) there was an RNS saying that Cavendish had increased their shareholdings to 5.69% but no other notification by RNS about further increases. Fidelity must have increased their shareholding to 8.94% after 30 May 17 as that is the figure given in the RNS about their reduction now below 5%. So not sure what is going on here in the last three months for Fidelity to decide to increase their shareholding and then reduce it.... -- From Annual Reports - salary and benefits for TC since joining Parkmead: 2011: £0.204m 2012: £0.291m 2013: £0.292m 2014: £0.745m 2015: £0.568m 2016: £0.509m Total: £2.060m
From Parkmead's Interim results financial report for 6mths to 31/12/16. Cash flow from operations:- 12 months to 30/06/16 = (£10.121m) 6 months to 31/12/16 = (£0.700m) So as at end Dec 2016 getting close to positive cash flow from operations..... 2017 - if they have increased gas production etc. then cash flow from operations should be positive. === Re: Athena field PMG say they 'will continue to evaluate an alternative low cost off-take route' - so the field may become productive in the future....
Didn't show the % clearly in the earlier post: The significant shareholders as at 30 May 2017 are: Name % of ordinary shares Thomas Cross & affiliates 19.05% Fidelity International 7.72% Cavendish Asset Management 6.54% Polar Capital Partners 4.72%
The total number of shares in issue is 98.93 million The shares being sold are a just a few tens of thousands for the most part. The MMs are dealing with these frothy PIs ...... The company/exploration industry isn't a kind of slot machine with instant finds and instant production. -- The significant shareholders as at 30 May 2017 are: Name Number of ordinary shares held % of ordinary shares Thomas Cross & affiliates 18,850,779 19.05 Fidelity International 7,640,794 7.72 Cavendish Asset Management 6,468,293 6.54 Polar Capital Partners 4,666,646 4.72
Hello Roadster - you say: "......I have a few shares in Sound Energy which is a company that really communicates ! " - having tracked Sound over the last few months surely they provide an example of how not to communicate.... :)) PMG have set out and communicated their strategy and inform the market when particular key events/outcomes arise. The ceo of Sound has spent an astonishing amount of time and effort communicating and enthusing the army of private investors that Sound has on its register ....because it has needed the army of private investors who hold a far higher % of the company than they do at PMG. Sound's communication has in my opinion obscured rather than clarified things for many private investors in Sound......