Member Info for mrc_mrc_mrc_mrd

Great news IMHO

https://www.pinsentmasons.com/out-law/news/draft-uk-oil-gas-levy-legislation-expenditure-relief

“Investment expenditure is defined in the draft legislation as capital, operating or leasing expenditure that is incurred for the purposes of “oil-related activities”. Expenditure incurred for “disqualifying purposes” is excluded, as are the costs of financing and decommissioning. All of these terms are defined in the draft legislation.”

“The scope of qualifying expenditure in the draft legislation is very broad. There is no obligation for it to be of a capital nature and it includes, among other things, expenditure made for the purposes of increasing the rate or longevity of extraction of oil; and leasing expenditures on a mobile production or storage asset under a lease of at least five years. However, routine maintenance and repair expenditure is expressly excluded, as is leasing expenditure on an asset in relation to which any company has obtained relief either under this provision or investment or cluster area allowances against the supplementary charge.“

https://commonslibrary.parliament.uk/research-briefings/cbp-9578/

How about requiring a shareholder vote on any related party transactions. Or requiring an independent assessment of the value for money provided by such parties.

If the BOD don’t have the honour to step down then shareholders should severely restrict their actions

NR will have looked these guys in the eye no doubt and seen their shiftless arrogance. No wonder he got out.

It certainly is a disaster either way but a real sucker punch if SCIR are responsible for costs until completion date.

BD - you should raise this with the Nomad - I may be wrong but don’t think previous years accounts have shown related party transactions. SCIR been paying Gneiss for years and it appears to have been improperly declared.

Fair. If I am wrong then the deal is a complete disaster

Highland - costs from effective date will be covered by WEN. They are the owners from the effective date and are responsible for costs incurred after that date.

Effectively any costs that SCIR incur between effective date and completion date will be reimbursed by WEN. How that happens is just process or semantics.

Good work BD - have you had legal advise on this? Is it possible they will be forced to run the vote again as a formal corporate action?

Perhaps not a crash but at some point I think a major capitulation is on the cards. Still looks far too expensive. Certainly a lot of paper wealth wiped out already in this slow motion phase.

Nicely - ARA have pre emotion rights. They don’t need to bid higher, they can exercise their preemption rights.

Completion of the Asset Purchase Agreement is conditional upon, inter alia, the following conditions precedent (the "Conditions Precedent"):

• written waivers from each of:

o each party to the Ruvuma JOA (other than the Company) of their pre-emption rights in relation to the sale of the Ruvuma Asset; and

o TPDC of their rights of first refusal in relation to the Ruvuma Asset pursuant to Section 86(5) of the Petroleum Act 2015,

(or such pre-emption rights or rights of first refusal in respect of the Proposed Transaction having lapsed or timed-out);

The way I see it everything is just getting dragged down as the US markets continue their crash. Little to do with oil market or ENQ. Could see some temporary dips on big red days but ultimately this share is very attractive with little long term downside risk in my opinion. Great time to buy over the next few months I expect if you can handle a bit of volatility.

I am letting my ISA and SIPP shares ride through. I won’t be opening any spreadbets until the bubbles burst a little more (crypto, tech etc ). Could easily drag ENQ below 20p.

It will be interesting to see the net debt figure in September.

This is how these guys operate highland. Every corporate / operational RNS is completely bamboozling.

There is a similarly named U.K. company. No idea if they are connected.

Given the related party shenanigans here (and in my view a failure to declare such between 2018 and 2021) I would be assuming the worst with regards connections between Fitzpatrick, greenan, EAG, KKV.

Mt - if I thought the BOD were capable or motivated to actually deliver this latest strategy then it might be an OK deal. I don’t think they care about building a business.

I would add that most of these AD businesses seem to be mom and pop operations. Is it a viable business plan to buy these up? Are there economies of scale and benefits of being under a listed company topco?

Given that SCIR have failed to raise debt finance for any more acquisitions I have my doubts that it is a viable business plan.

Highland - you need to subtract at least 10% for Gneiss in my opinion. And be more realistic about the timescales. And apply discounts to the future jam for risk and inflation. It all amounts to G&A costs.

I don’t see deal completing in 2022 or FID in 2023. First gas probably closer to 2026?

I don’t have a big problem with them keeping 50%. Without them there is no business. They have a big incentive to stay and grow the business. Exit for them will likely only come when SCIR decide to buy them out, SCIR go into liquidation, or the EAG gets to a point where it pays dividends.

Of course they will be drawing a salary I expect, so great deal for them from that point of view. Nice safe job, lots of jam tomorrow upside if SCIR can hold up their end.

Market timer - the theory goes that the 2 partners in EAG know the AD business. They bring their knowledge to the company in return for retaining 50% of the company.

For all we know that is fair enough. SCIR were supposed to bring the financing to the party but have failed miserably beyond that piddly initial deal.

I think the SP here may have further to fall. The prolific conversion will be highly dilutive now. And given the way money is spent at this company investors will not attach any value to it (beyond staving off more dilution for a few months). The existing AD plant should be showing a good operating profit, but none of that will be coming back to SCIR as it will be used for G&A in EAG in my opinion.

One AD plant is not a sustainable listed company. A significant amount of cash will likely be needed now but at what cost?

The BOD will never build a viable AD business.

The finance they like to use and costs of obtaining it make any plant or group of plants unviable in my opinion.

At least Rycroft should be headed for the exit now.

Quite obviously 2 thirds of voters had an interest other than the companies share price. Perhaps they have a big position in WEN or AEX. Or a hefty salary / fee to compensate for the SP decline.

If Fitzpatrick voted here then he has voted to get his deal maker fee. Pretty shocking that all this is legal.