Member Info for okenia

If you want to know what the company is doing I would suggest: - look at the roadshow presentation, on their website. It talks about some deals being looked at, although for obvious commercial reasons they're not going to disclose the full details of them before the ink is dried on the deal. - look at the interview with Spencer today (link in an earlier post). He explains what they are doing and their acquisition DD strategy, amongst other things. Spencer did the IPO for Saffron Energy, btw, and is a key player in the paperwork for ukla - look at the text article on Proactive (all these things are linked-out on both the Pembridge website and their Twitter feed, which I'm sure you follow). That goes into quite some details as to how the deals will be funded and the forward growth. I'll put the text of that article into another post if you've temporarily mislaid your bookmark to their website or Twitter account. - Price sensitive information is in the RNSes. These are by their nature somewhat dry and terse, but the interviews help out the meat in the bones. There's plenty of information out there, go look at it.

Lotto - it wouldn't make sense to raise £10m now. The more they execute and deliver, the higher the SP and cheaper the equity funding. Just-enough now, and then in the future it will hopefully be on better terms (ie the higher the SP the less dilution per £million raised).

The stated aim is to fund the bulk of the acquisition costs with debt (plus maybe some shares in the co). That is the PE model and of course minimises dilution to shareholders. It's the buy-to-let model we've discussed. Given the removal of the need to raise £6m (which would be a lot of dilution irrespective of the issue price) I'd personally like to see them raise 'just enough' and get going with debt-based acquisitions. As the SP re-rates then if they need to issue shares to asset vendors that again will be less dilutive to us. It'll be listing and fundraise, followed by acquisitions over the next year or more. Certainly the aspiration is high as to scale - DL grew his last fund (sold to RAB) from a few million to £500m. None of this team are here to piddle around in a few millions.

The rns says Ntog control the votes of those shares (by extension Snead is still beneficial owner). Most likely is Snead requisitioned under Ntog's instruction. The "checking with our lawyers" is a standard delaying tactic. A company should not try to wriggle out of holding a GM called by shareholders - the board should remember who owns the company - even if there is animosity to the individual concerned. Tut tut.

No I didn't swear, the ********** is V ox markets

Ntog have been approached by ex-directors and brokers to somehow 'sort magp out' - that was in the ********** podcast Ntog have RNSes saying then now control the voting over > 10% of magp shares (that's enough to be able to call a GM) Magp has RNSed to say they have received a requisition for a general meeting - requisitioners not named - with regard to somehow changing the magp board of directors (details not revealed) It requires a Mento in a Coke Bottle level of rocket science to deduce the requisitioner

Of course some oilers (probably quite rightly) threw in the towel and changed direction to a completely different field (Forte Energy > Bos Global software for eg) There's an argument for merging the oil assets into one co, and doing something v different with the other - a new direction as you say. I can't say I'm wildly optimistic we'll see $100/bbl oil in the near term, after all.

The slight niggle with that story is the price of oil during those periods. Oilers are heavily geared to the PoO. If you can lift oil at $40/bbl and sell at $50, that's ten dollar profit. Sell at $60 and your profit doubles. In 1999 oil was languishing at around $15/bbl but was up at $30 in 2003. Five years later it was up at $90. The doubling and trebling of the oil price in those two intervals respectively will have added very significantly to those uplifts in valuation. The question for MAGP is how much of an uplift in the oil price is needed going forward, given the production costs (at the operational level) together with the corporate overheads (unavoidably high as a percent of the mcap given various AIM plc fixed costs).

One thing to bear in mind is that MAGP and NTOG both suffer from having a small mcap. Both are AIM listed which automatically brings a wall of pretty fixed plc costs: NOMAD, broker, PR, legal, listing, audit, etc. Plus whatever fees the board take. This can easily run into several hundred thousand pounds even before you start with the board. Most of these fees are fixed or quasi - fixed irrespective of your mcap. A nanocap with even decent cash revenue for its size will struggle to be cashflow positive at a plc level because of these headwinds. A well being profitable at $40/bbl is meaningless if the plc still loses money due to these overheads at the corporate level. There is thus a strong argument for merging companies with similar businesses (e.g. Area of activity, geographical location etc) where it might be plausible to have a single board and plc running all of the assets. You immediately make the whole thing more attractive and economic because you lose one set of costs. And as I said, for something of this market cap, these costs are very material. What one could imagine then is a business merger (done as an all-paper transaction), with everyone (ntog and magp shareholders) ending up with a proportional interest in the merged NewCo. That would then leave one of the companies as a clean shell which could be handed to someone else to take in a new direction (and would of course have value). So for example MAGP shareholders would end up with a proportional share of the (enlarged merged) NewCo - ignoring your management preferences, that could be roughly status quo. But they uniquely they would also retain their shares in MAGP which would now start a new life as a shell. Two companies for the price of one, if you would. Shells can be lucrative *if* they are done right and the correct management team parachuted in. At the end of the day any deal will need approval by both sets of shareholders, so it would have to be something that works for both sides. To me the most sensible would be some paper based deal so that magp shareholders still retain their current exposure to these assets and the future upside they expect. The focus can then be on making the combined corporate overheads more efficient than the current sum-of-parts.

The board have been very active. They've assembled a top-notch team of a calibre I've not seen on AIM before (hence why they're fleeing the swamp for more respectable environs). They've been busy fundraising from HNWI and other big investors. They've tidied the asset base up by disposing (at a small profit) of the Bots licence (I expect US lithium to rapidly follow suit). They've generated a pipeline of potential acquisitions (all listed on the roadshow presentation). All in a very short period of time since the new CEO took over. Once transferred to the main market (which will then release those funds) I expect acquisitions to be made very swiftly. And then the fun starts as they assemble and deploy their turn-around teams - this is where they will add value and what will hopefully enable them to make these acquisitions at conpetitive prices even before they do the turn-around. Double whammy. As for MMs exploiting this share, I disagree. There's been enough panic already that has shaken out the nervous holders (the 'we're going to suspend' rns did that very effectively - look at the SP chart). The sellers have dried up and if the MMs do want to create liquidity - ie make a market, which is of course their job - then in my view the most likely option is for them to exploit any bit of pre-suspension good news to drive a momentum 'relief rally'. But you're of course welcome to your opinion.

I can think of at least one recent example where the entire board (NEDs included) was ousted. Generally you either (a) ask for seat on board and then drive change - the typical hedge fund activism approach. Or (b) oust the entire board and parachute new people in. Depends if you want to seize control. Obviously any directorate change needs SH approval and support (hence GM).

You'd have to check the Mems and Arts, but it's usually a minimum of a 5% or 10% holding to be in a position to force an EGM. Ntog control the voting on over 10% of the shares so I'd say it was pretty much a dead cert it's them acting via Snead's holding. At least, if they wanted to they could as they control enough shares.

Suspension nerves are already baked into the price. Scroll back and look at the SP action when the RNS regarding the move to the standard list occurred. That flushed out nervous hands and now selling has essentially dried up, leaving PERE in the hands of those of us happy with the risk / reward at this mcap. The MMs now need to try a different game. A positive update on progress faced with a share that moves strongly on even a small amount of buying at the moment, coupld lead the MMs to aggressively uptick this to generate a momentum play to attract that sort of trader. So I'd side with those looking to the next week or so for a potential good news ("relief rally" if you must) surge upwards. As always, time will tell.

Thanks Mithun.

I'm travelling so haven't been able to hear the podcast - does she mentioned the NTOG share purchase at all?

"Its up to our own CEO to issue MAGP RNSs surely" Correct but there's no suggestion that NTOG are issuing MAGP RNSes (they can't) The 4031G RNS was correctly issued by NTOG, from their RNS account, and is on the London Stock Exchange (and Investegate) as an NTOG RNS. It is very clearly labelled as an NTOG RNS. It was written by NTOG and details a commercial transaction that NTOG did that requires NTOG to notify the market of because of its scale. It's an NTOG RNS, not a MAGP RNS. http://www.investegate.co.uk/nostra-terra-o--38-g-co--ntog-/rns/acquisition-of-interest-in-magnolia-petroleum-plc/201705261315014031G/ The fact that LSE (this website) can't work out which bulletin board to put which RNS under is not NTOG's fault. This website does occasionally have (cough) 'issues'. I suggest you email London South East admin and tell them of their error and get the RNS moved over to the correct feed. This happens all the time on LSE. What you also should be asking is why MAGP has not issued any RNS to comment on the NTOG deal. Even if just as a courtesy so that MAGP shareholders find out about the NTOG deal. Even better, some context / comments / response would be appreciated by MAGP shareholders (the 90%), that is very true.

Lotto - as far as I understand it the fundraise and transfer to the main market will co-occur, because the fundraise will be dependent on a successful listing (no-one will give money except under the condition that the do move), plus there will need to be a GM to approve share issuance etc etc. The acquisitions will come after all that has been sorted out. List transfer and fundraise first, then get going with acquisitions. Acquisitions aren't needed for the transfer, this isn't a RTO, it's just a shift between segments of the LSE.

What's the back story with Gavin and Stacey? (sorry, Thomas ...) How did they leave and is there any reason to think they might be disgruntled? Any possibility Gavin and Stacey, plus Snead, are looking to mount a boardroom coup and get back in, with NTOG's help? (I don't know the history here so forgive me for questions that are naive and off the mark)

My best guess (to answer your question) is a bit of back and fro-ing with UKLA and then July, based on UKLA's published turnaround times (10 days followed by 2 x 5 days for an application to transfer). Unlike a commercial negotiation with a partner in a RTO, it's basically just paperwork between PERE and UKLA.

Cop - PERE aren't planning on doing a RTO so there wouldn't therefore be that long suspension. FBDU have been suspended 11 months, yes? It's the usual issue that once you start a RTO (and if you can't fully disclose) you suspend. PERE aren't doing that, they're just shifting to the standard list. That's a couple of months max assuming the paperwork doesn't throw anything untoward up (which it shouldn't as they're already LSE listed).