Member Info for MudPump

Quite worrying that 9 million shares are described as "peanuts". At AC's valuation of 20p/share that would be over $ 2 million dollars. For what? A "shed with a Norwegian flag", an introduction to a few more Norwegian investors (those that didn't notice ZEN listing on their own stock exchange), and a bit of warmth towards AC's potential bid for clapped out offshore assets which he knows nothing about and which, if it's like the UK, already have some specialised private equity groups chasing after them.....

Looks as if T.Boone Cattaneo's gaze is going way past Azerbaijan, and he envisages ZEN as a junk bond-fuelled acquirer of rock bottom-priced proven onshore barrels. The EMTN programme is a statement of intent, and IF he has the contacts to place the notes in the right hands and IF he gets the right operational teams in place and IF he compartmentalises so that a sour bet doesn't blow up the house and IF the oil price holds or strengthens, then the returns could be monumental. Place your bets.......

The logic for this proposed deal is certainly not obvious, and the stated reasons don't make sense.
The tax credits don't mean anything since ZEN is not a Norwegian company.
There is no reason I can see why Nordic is a better vehicle for acquisition than ZEN.
The idea of bidding for Norwegian acreage is laughable.
Establishing a presence in Norway and accessing the Norwegian investor base was done (expensively) via the Norwegian listing.
The idea that the Nordic investor base will funnel money to ZEN seems unlikely given that the two major investors on the shareholder list are in fact Canadian, and the rest look like Mom & Pop retail punters. The company seems to have stopped operations in 2008/9 because it could not raise any money over the last 10 years of trying, which suggests the existing investor base is hardly rolling in free funds.
The idea that the licences are be quickly flipped for a gain seems unlikely given that presumably the management have spent the last 10 years trying to do that without success.
So what on earth is AC up to?
The only explanations I can think of are:
1. He sees it as a cheap option on a resurgence of oil prices and activity in Canada (a bet which any investor could make without the help of AC by trawling through the junk on TSE exchange)
2. He wants or needs to add the theoretical value of the assets on the balance sheet of Nordic to the theoretical value of the AZ assets already on the ZEN balance sheet in order to keep the eurobond rating of B+ or move it higher.

The share price is around 3p because the company keeps issuing shares around 3p.......

Many thanks for your interpretation,as ever. A new well (ie ZEN-1) is a commitment within the REDPSA I think, so will have to be drilled at some point. But I suppose SOCAR are happy that some progress is finally being made so are likely to be flexible.

Will not state current production rate, says it is improving, but talks a lot about unpredictable and challenging reservoirs, just employed an external reservoir specialist to help. I would guess PH in some trouble for over optimistic FCF predictions in previous interviews.

I guess it's stuck because ZEN have stopped paying for the moment, and are putting every penny into C37. Still, BLOE have shown what success at one well can do for a company; if the "new structure" is oil-charged I don't suppose fund raising will be too difficult in the future.

RNS 23 November 2018: "....The Company expects the A-100 workover rig to be deployed in operations by the close of 2018....."
Anyone have any news on this?

I'm not sure that yet another general presentation (biggest oil field in Azer blah blah unique in owning our own rig blah blah) will achieve very much. What might change the perception of ZEN would be a presentation by one of the geologists - if I recall they have an apparently respected Italian, and an Azer lady who has been writing papers on the deep potential of Muradkhanli. The worry about ZEN has always been that they are long on bull and short on technical skills - if they want to raise money at decent levels from serious investors they need to change that.

If BLOE raise £12m they could buy ZEN, almost next door....

I believe one new well ie Zen-1, is a commitment well

BP bought into 61% of SW Gobustan in Sept 2018 - 600km2 onshore concession about 50 km from Muradkhanli (other owners are Vitol and Socar ). Mature, producing 50bopd. Will drill an explo well in 2H2019. Looks like a similar play, but Zen market cap is under £10m so success might have more effect on the share price than over at BP.....

Gizzy, many thanks for your reply. That is interesting, but doesn't explain why he is not currently buying given his characterisation of the company as essentially a free option (other than the tiny employee share purchase scheme). I understand he might feel over-exposed to the company since his job depends on it, but, given his background, you would expect him to have some spare cash and/or access to easy credit, and yet he holds back from adding to his position. I just find it odd, and slightly disconcerting......

Good presentation by Baay, and a compelling case for undervaluation.........except for the fact that he only owns around 1 mil. shares. Why is he not buying?

I wonder how they feel about that.......

It doesn't say how much this renegotiation cost them, but anything is better than being forced to issue 80 million shares at 1p or whatever in the death spiral disaster this convertible could have led to, so fantastic news.

The cost of the Norway listing was way in excess of any obvious benefit. Logically it must be related to the eurobond issue or some other planned debt financing; doesn't make any sense at all otherwise.

Hi Mud, the assets they have are thanks to AC securing them, and the decent equipment arriving is his doing also. He tried a strategy of cheap workovers using ex-pats which didn't work, but he didn't continue banging his head against that wall and drive the company into the ground, he saw it wasn't working and changed tack, dumped the old crew and brought in the rig, and hasn't diluted the original shareholders out of existence or fatally damaged the balance sheet in doing so. We're now at the beginning of the new strategy - it's taken some time, but nothing extraordinary to anyone with experience of the business. Of course it might fail, but there is a decent chance, with our own rig operating continuously for the next 8 months, that we end the year with a significant uplift in production and the chance of a lot more to come.. In that scenario AC will look like an excellent manager and the share price will be at a different level for sure. I hope we can look forward to some of your drive-by reports in the near future.....

Tiburn, in a word.......tax

The A100 has certainly been a long time coming, the most recent presentation gave early march as the new delivery date. Given the change in strategy from a focus on workovers perhaps not so serious, the A80 seems to have done the prep work required. It will be interesting to see what is planned for it when it finally arrives - whether they'll have another go at the Z's or that'll need the 260 - although the implication in the last presentation was they'll give up on the old Z well bores and drill instead.