Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
Maybe some RKH has also been involved with Bowleven?
Its a long story, as always with Oil Companies, but the previous board of that Company were burning through cash pretty merrily, but were fortunate to farm down some of their interest to Lukoil before the great oil price meltdown.
Then on a subsidiary opportunity in the same region, the board carried on burning cash, with no development and a major cost overrun on drilling through a poorly performing rig supplier (sounding familiar).
The board was stacked with a panoply of Non-execs, and established execs.
Cameroon, is the region they are operating in, so everything took an age to work its way through labyrinthine Govt processes, with plenty of obstacles raised by self-serving interests of bureaucrats.
The oil price tanked, and although technically the Company was not producing, it started to stir up more discontent with the performance of the board, and its costs, and habit of burning cash with no positives to offer.
Its still had a fair chunk of change because of the farm-out, but then an outside investor starting buying up the shares, reaching the point where it forced the company to hold an EGM to vote on getting rid of members of the board.
I guess the low share price, the value of the remaining cash made it a game worth playing.
To cut the tale short, they turfed off members of the board, and appointed a new CEO, and went into cash preservation mode. In fact noting nothing was happening they returned 15p of cash per share back to shareholders (and of course itself), preserving a low cash profile for the next stage of development to flourish.
Boards by their nature are instruments of self-preservation. The old saying that Turkeys don't vote for Christmas is true.
For the RKH board all their strategies have not won their shareholders any real benefit. As always this is mixture of good luck/bad luck, but we have to remember that no matter what a board gets a monetary dividend every year in their salaries, and sees cash flow issues less as a project issue, rather than threatening their futures. Most of them have no cost options, so there is generally zero exposure to risk, apart from their salaries not continuing.
At the end of the day, as small shareholders we do not have individual clout to influence board behaviour, other than buy or sell. Institutional shareholders will take a philosophical view, unless there is obvious bad practice.
Small non-producing oil companies are inherently risky. Shareholders rights are really buy/sell.
Maybe some RKH has also been involved with Bowleven?
Its a long story, as always with Oil Companies, but the previous board of that Company were burning through cash pretty merrily, but were fortunate to farm down some of their interest to Lukoil before the great oil price meltdown.
Then on a subsidiary opportunity in the same region, the board carried on burning cash, with no development and a major cost overrun on drilling through a poorly performing rig supplier (sounding familiar).
The board was stacked with a panoply of Non-execs, and established execs.
Cameroon, is the region they are operating in, so everything took an age to work its way through labyrinthine Govt processes, with plenty of obstacles raised by self-serving interests of bureaucrats.
The oil price tanked, and although technically the Company was not producing, it started to stir up more discontent with the performance of the board, and its costs, and habit of burning cash with no positives to offer.
Its still had a fair chunk of change because of the farm-out, but then an outside investor starting buying up the shares, reaching the point where it forced the company to hold an EGM to vote on getting rid of members of the board.
I guess the low share price, the value of the remaining cash made it a game worth playing.
To cut the tale short, they turfed off members of the board, and appointed a new CEO, and went into cash preservation mode. In fact noting nothing was happening they returned 15p of cash per share back to shareholders (and of course itself), preserving a low cash profile for the next stage of development to flourish.
Boards by their nature are instruments of self-preservation. The old saying that Turkeys don't vote for Christmas is true.
For the RKH board all their strategies have not won their shareholders any real benefit. As always this is mixture of good luck/bad luck, but we have to remember that no matter what a board gets a monetary dividend every year in their salaries, and sees cash flow issues less as a project issue, rather than threatening their futures. Most of them have no cost options, so there is generally zero exposure to risk, apart from their salaries not continuing.
At the end of the day, as small shareholders we do not have individual clout to influence board behaviour, other than buy or sell. Institutional shareholders will take a philosophical view, unless there is obvious bad practice.
Small non-producing oil companies are inherently risky. Shareholders rights are really buy/sell.
Maybe some RKH has also been involved with Bowleven?
Its a long story, as always with Oil Companies, but the previous board of that Company were burning through cash pretty merrily, but were fortunate to farm down some of their interest to Lukoil before the great oil price meltdown.
Then on a subsidiary opportunity in the same region, the board carried on burning cash, with no development and a major cost overrun on drilling through a poorly performing rig supplier (sounding familiar).
The board was stacked with a panoply of Non-execs, and established execs.
Cameroon, is the region they are operating in, so everything took an age to work its way through labyrinthine Govt processes, with plenty of obstacles raised by self-serving interests of bureaucrats.
The oil price tanked, and although technically the Company was not producing, it started to stir up more discontent with the performance of the board, and its costs, and habit of burning cash with no positives to offer.
Its still had a fair chunk of change because of the farm-out, but then an outside investor starting buying up the shares, reaching the point where it forced the company to hold an EGM to vote on getting rid of members of the board.
I guess the low share price, the value of the remaining cash made it a game worth playing.
To cut the tale short, they turfed off members of the board, and appointed a new CEO, and went into cash preservation mode. In fact noting nothing was happening they returned 15p of cash per share back to shareholders (and of course itself), preserving a low cash profile for the next stage of development to flourish.
Boards by their nature are instruments of self-preservation. The old saying that Turkeys don't vote for Christmas is true.
For the RKH board all their strategies have not won their shareholders any real benefit. As always this is mixture of good luck/bad luck, but we have to remember that no matter what a board gets a monetary dividend every year in their salaries, and sees cash flow issues less as a project issue, rather than threatening their futures. Most of them have no cost options, so there is generally zero exposure to risk, apart from their salaries not continuing.
At the end of the day, as small shareholders we do not have individual clout to influence board behaviour, other than buy or sell. Institutional shareholders will take a philosophical view, unless there is obvious bad practice.
Small non-producing oil companies are inherently risky. Shareholders rights are really buy/sell.
Yes, oil production is another 3.5 years after sanction...so don't be buying too quickly into the low shareprice argument, I would say, although specific news can move the share price, it can just as quickly lapse back, and if you are not a trader, you may miss the moment!
Just replying to myself (first sign of madness!!), and having reviewed the RKH accounts, this is what it says:
'As a result of the Tax Settlement Deed the outstanding tax liability was confirmed at ?64.4 million and payable on the first royalty payment date on Sea Lion. Currently the first royalty payment date is anticipated to occur within six months of first oil production which itself is estimated to occur approximately three and a half years after project sanction. As such the tax liability has been reclassified as non-current and discounted at 15. The tax liability has been revised downwards in the year ended 31 December 201 to to 59.6 million, due to the full benefit of the exploration carry being received from Premier on the 2015/16 drilling campaign and the
Falkland Islands Commissioner of Taxation agreeing to reduce the liability on that basis in line with the terms of the Tax settlement'
RKH has a deferred tax payment on the farm out of their interests in RKH due to FIG.
I think this must feature on the balance sheet as a future liability. Its been so long I can't recall the details now, but one of my few remaining brain cells suggests that the FIG postponed the payment until production?
If RKH were to be involved in any further farm down, FIG may ask for some or all of the deferred tax.
I wonder if they would ask from some contribution arising from a MOG settlement. The FIG did not prohibit future acquisitions, but they may be wary of how long the RKH balance sheet can weather the interminable wait for production of SL, and MOG was effectively purchased using the proceeds of the PMO farm out.
My guess is that FIG will let the tax roll, as long as there is some semblance of a prospect of SL development, and no rash acts by RKH
There may be good times down the road in a few years, but the immediate future is looking like a bit of a slog.
Of course, my decision may be the inflexion point for an upward rally, but a bit tired of the number of headwinds IQE seems to suffer.
Unfortunately RKH & FI has been a benighted story of woe from the early days. The politics of the area has always been fraught, and the Kirchner regime made it a lot tougher. Then there was the Desire Oil pre-history, and the whole oil to water story, at a time of $100 per barrel oil. FOGL in the South became a disaster area due to a cra**y rig.. RKH decided to diversify its assets by buying into the Med. It ultimately walked onto a punch on the nose, withe Italy, and its Egyptian oil assets are on an ongoing knife edge of whether it will be paid in a faintly timely manner. PMO farmed in, and in due course the depressed price of oil rendered them impotent financially, and close to a death spiral insolvency, so that the one piece of Gold in the whole saga, Sealion worldclass discoveries suddenly turned to base metal.RKH acquired the assets of FOGL and diluted the bejasus out of the RKH shareholders. It remains to be seen whether the base metal can be re-cast back to its burnished gold status.But at least the board members have not had to make a single sacrifice, so that's a good thing surely :-)
Paypoint announced that they were going to change their dividend policy to a quarterly payment. I think this starts in 2020?
I suspect they are trying to smooth out their shareprice variables, which are thrown out on the basis of when divids are paid. Also they may prefer investors to see their share as a sort of bank account interest bearing i.e useful for retired investors looking for regular income. Whether this will have the effect that they are hoping for, who knows?
Last year Tracsis announced its trading update on Feb 20th.
Nothing so far. Some allowance has to be made for new CEO, but should be something out shortly
The lawyers are thinking . This is great, I am being paid to pretend to be listening to this old twaddle. Its been a thin month up to now. I wonder whether by looking interested, he might ramble on for a few hours. Could be worth a couple of grand of fees!
Witness. This is great! Whenever, I talk the wife, kids, grandkids, and blokes down the pub, about my career, and conspiracy theories, they normally seem to slink away. I even caught one of the grandkids behind my back doing the he's mad sign behind my back, and doing an exaggerated yawn to his mother, when I saw his reflection in the mirror.
Now they won't be laughing, with all these professional people in their black robes listening hanging onto to my every word. Glad I bought that old RAF blazer down the Charity shop.
Thanks Grewber for the link. Obviously to some extent BP are talking their own book. But it really does tell you from the horse's mouth what's needed to meet oil demand for the next 20-30 years.
If anything it makes a very positive case for PMO and RKH. But the problem for a macro view, is that it doesn't always percolate down to the micro level targets in which you are interested. At least there is a steady environment for oil prices as we speak, so that is helping on predicability of cash flows.
If it hadn't been for their large indebtedness PMO would itself have been a target for acquisition by now, I suspect. They are still treading a fine line of solvency, but hopefully have been through the worst. Another big lump off their indebtedness by selling their Mexico interests would be a very positive boost for RKH.
There seems to be a steady increase in the share price over the last week. Welcome news.
I confess, I am not sure whether this follows institutions buying or selling some of their holdings (at a guess, selling)?
Interesting piece by Bill Browder in the FT twitter stream. Browder (promoter of the Magnitsky Act) says that PDVSA are trying to dodge US sanctions by receiving payments through Gazprom accounts.
I wonder if the US will start to extend sanctions if that sort of deal gets their attention.
By the way, Browder wrote a great book called : Red Notice. An almost thriller like true story of his time in Russia as a Financier, post Glasnost, descending into the depths when his lawyer friend Magnitsky was beaten to death in a Russian gaol, for resisting corrruption. Recommended reading
His campaigning against Putin and his cronies resulted in the Magnitsky Act, which allows sanctions to be held against key people guilty of corruption but sheltered by their Govts.
I don't think insulting each other is very helpful way of encouraging investment chat. Also, I find it boring to tune in just see playground insults flying about.
I think as long-term holder with many a dream of FI riches shattered by events, it is legitimate to put forward a view that this could all come to nothing. Admittedly, other than as a counter to over-enthusiasm it doesn't add a great deal to the weight of knowledge on this BB, but still, its fair comment, as long as it is not endlessly paraded as superiority.
To long term holders of this share, if you haven't traded through the highs and lows, has been a financial disappointment, and maybe worse, for many participants. I suspect many of them lurk sensibly in the background of these discussions. You would have been far better to put them in other opportunities with dividend earning potential etc.
However, it remains grimly fascinating waiting to see if RKH will progress.
I looked at board pay in the remuneration section of the account, some time ago, and I recall seeing that the CEO is only eligible for certain bonuses if they have a shareholding at a specific level.
I guess this was instituted to ensure that the executive has some skin in the game, as well as getting rewards from the Company.
I would have to revisit that to establish what level of holding is required, but it may have been the motivation for the CEO. Of course buying shares at the most effective price is always a sensible course of action. So she may have scored twice in making her recent purchases
Having been a long term investor in the Company I want it to do well, and appreciate that the price of oil is a significant factor in that aim.
Running parallel to that however, I also have concerns that a higher oil price fuels the military agenda of the likes of Russia. Russia is a relatively spender on military aims (admittedly the USA is no slouch). Its a Govt that has invented many enemies to justify its capability. This is part of the Putin world view. He pines for the days of the USSR, and doesn't seem to acknowledge that former satelites, which were taken by Soviet force, feel obligated to form alliances to prevent a reoccurence of Russia's aggressiveness. These satelites are now independent countries, and don't fancy the Gulag mentality of the Govt in Russia. So they distance themselves from Russia, and in seeking military alliances for defence, they remake themselves as potential enemies, and Russia makes out that those helping to defend former Soviet satelites as the 'old' enemies. This justifies a more aggresive military Russian stance, and is a convenient deflection from the wide spread corruption of the Russian Govt. The last thing Russia wants is a genuine democracy because of the rampant theft and cronyism surrounding Govt appointments.
So for those reasons too high price for oil is not in Europe's interests, because Putin is likely to feel more desperate to rig the system as he grows older, and his patronage and ambitions are linked to oil & gas revenues.
That said, I would like to see RKH do well and develop Sealion, as that will not only benefit shareholders but also give us another stake in the energy security game.
Who remembers the days, it seems not so long ago, that it hit 21p ish!A retrace would be nice :-) as long as it doesn't take economic chaos to do it, as I hold these as a bit of a hedge.Tried to buy these when they were falling from their earlier highs, and found all I was doing was catching falling knives. My small comfort is I averaged down somewhat. Always got the impression is that this is a generally well managed company. The problem is that operating in SA you are never short of political headwinds. I really hope SA finds some stability, and builds on it for the sake of the people. One party States have a limited effective economic life span in my view. No shortage of examples in that department!GLA
Hi GE17
Interesting news. They seem to try for an approximate multiple of 7x on their purchases. Given their own multiple of circa 23 (according to Stockopedia analysis), that should (assuming no future profit warnings!) give a healthy £1m NPBT addition to the bottomline. All things being equal that would justfiy assuming no further organic growth another 50p-£1 per share for this year.
If we also get some good contract news, as you suggest, that provides a good following wind for the new CEO.
Hi GE17
I agree the possibility is that JM feels he is less suited to or driven by detailed operational management. Of course that is a crucial part of managing a growing business, which becomes more onerous as its grows.
You sound very informed about some of the Tracsis opportunities, so good to hear they are in a decent starting position for some future upside.