Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Agreed Lemonade, always interesting to see the bots at work buying or selling...1.5 million scooped up today. What are they thinking and do they dream of electric sheep?
I think you have to take into account the Institutional Investors that backed Lekoil from the IPO most have averaged down in the placings after IPO and prior to getting Otakikpo into podcution...I think they would probably accept 150 million to 200 million pounds which puts us at somewhere between 28p to 38p a share.
Obviously you and I would accept anything around the 18p mark which is 100 million pounds.
There is a lot going on behind the scenes, the assets are valuable, how much value can be achieved is yet to be disclosed.
I have shared my thoughts on Seplat Take Over of Lekoil for a while mainly based on the following press articles:
1. Seplat Take over of fellow Aim listed producer Eland Oil announced on the 15th of October 2019:
https://www.offshore-technology.com/news/seplat-petroleum-eland/
This was based on the synergies and the production Eland had managed to bring online since listing.
2. Less than a month later on the 7th of November 2019 an article was published in the Nigerian press stating Lekoil was panicking about a rumoured take over from Seplat:
https://www.vanguardngr.com/2019/11/lekoil-stakeholders-panic-over-plan-to-covet-assets/
The article is interesting as it slates the CEO and BOD for not achieving the potential of their assets but more importantly the major shareholders are not satisfied with the performance and broken promises...they would rather sell the company at a premium to another company with a decent track record. This is very interesting as if you look at the II holding, they own about 47% of the shares the CEO owns about 7% so half the company is in the hands of major holders. I doubt that the recent QIA debacle has improved their sentiment and therefore I believe they would support an take over if not even solicit one!
3. The news article to further support this theory is a recent article published only last week stating that the Seplat CEO is actively seeking more OIL & Gas assets:
https://nairametrics.com/2020/01/27/seplat-to-acquire-more-oil-gas-assets-after-elands-acquisition/
This article shows real intent by Seplat that they are not finished consolidating their position in the Nigerian Oil & Gas market even after acquiring Eland for 382 Million pounds.
SEPLAT ARE HUNTING and LEKOIL are a VERY VULNERABLE TAKE OVER TARGET and they the CEO and BOD only have themselves to blame they have amazing valuable assets but have not done enough to realize true value!
OMITC
That would value ...
That wave Lekoil at 18.5p excluding everything else...anyone up for that?
After a massive RNS which turned out to be false a tweet of an asset sale is just not going to cut it... but interesting as rumours of competitors circling lekoils assets have been already released in the Nigerian press.
An RNS THAT IS BACKED UP BY ANOTHER RNS FROM THE ORHER PARTY INVOLVED! LOL.
Interesting post from advfn poster corby 04 stating a tweet from oil voice journo focusing on africa sunny law ...allegedly tweeting that Lekoil are is process of a partial asset sale.
Let's see what happens.
Seems to have found a level where buyers and sellers are cancelling out any movement up or down..Next news is important progress on the Otakikkpo - OML 11 expansion MOU. They stated on Monday that they would provide further update shortly...I also find it strange that the CFO announcement has not been made yet even though it is in the public domain.
Could they be lining up these 2 announcements together? Finance for MOU in place and project moving forward and then also announcing new CFO appointment who was instrumental in his short time being at the company assisting to close the finance?
The guy was at Addax for 10 years as the CFO and they have built up an impressive portfolio in that period, he must have some serious connections in the finance world (that are real)...
Waiting for that News as per RNS (expected shortly).
Also keeping in mind based on the news articles in the Nigerian press that companies such as Seplat have a eye on Lekoils assets.
I agree with Alcira on some points they have not maximized their assets like other companies...but they have ways to move forward.
The wording suggests they are in the process of wrapping up the Financing to kick off the expansion project:
Further to the announcement on 1 July 2019, where the Otakikpo JV executed a Memorandum of Understanding ("MOU") with Schlumberger and a subsidiary of a major international oil company, the parties remain aligned and committed to the expansion project which has the potential, subject to satisfaction of the conditions set as previously announced, to increase production on the field up to 20,000 bopd (8,000 bopd net to LOGL). The phased development plan for the project consists of drilling between five (5) and seven (7) new wells as well as the expansion of processing infrastructure which will be financed by a project finance debt facility. A further update on the progress of this project will be provided shortly.
The project finance facility is the final piece of the puzzle...work started last week...news could drop over the coming days..
OMITC
They were supposed to raise the 170 million dollars for Otakikpo OML 11 by the end of 2019. We are 26 days past due on that deadline but taking into consideration that their partner GEIL started work last week...that funding cannot be far off.
Good summary earlier Danker. Good to see a fair few putting in the effort to research and more importantly sharing!
Correction Savannah Petroleum not Savannah Oil...this is the link from 4 days ago stating there are also on the hunt for more nigerian assets...interesting that Lekoils OPL 276 has 2 old discoveries and 2 Gas discoveries...is this company about to be stripped of its assets by the vultures circling above...Seplat, Addax and now Savannah...
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.hellenicshippingnews.com/savannah-petroleum-says-nigerian-gas-purchase-is-just-the-start/&ved=0ahUKEwjwvoSgzaHnAhVIQUEAHbQkCPsQxfQBCCgwAA&usg=AOvVaw0s4HgGJL9GnTB_i5NpEdZO
I think this has been posted already but this is from November 2019 about Seplat and Savanah Oil wanting to takeover Lekoil or some its assets. This was the press release...
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.vanguardngr.com/2019/11/lekoil-stakeholders-panic-over-plan-to-covet-assets/amp/&ved=0ahUKEwjU0ZS1x6HnAhUYE8AKHUb_ATcQyM8BCC0wAQ&usg=AOvVaw1a9W8X5BK3xcHQ4_-EKG8T&cf=1
That combined with the latest press release from seplat wanting to expand through more acquisitions just adds to the speculation that Lekoil is very vulnerable to a takeover...
https://www.google.com/url?sa=t&source=web&rct=j&url=https://leadership.ng/2020/01/26/seplat-to-sustain-more-asset-acquisition-in-oil-industry/&ved=0ahUKEwjPlsqByqHnAhWRlFwKHYFyBZQQxfQBCCgwAA&usg=AOvVaw3J_HZyoaV3VHGaKiltZ3P_
With E_AL interesting inside man take over by Addax, could there be a bidding war ?
Some excellent research going on here.. well done mr beflfort for finding that CFO news. Interesting take on the Addax take over strategy E_AL.
So with Seplat issuing press releases stating they are still focused on acquisitions hot off the heels of fellow aim listed Elland oil acquisition last quarter...could be and interesting week ahead of us.
Expecting news on the following:
1. New CFO appointment (former Addax employee)
2. January oil lift
3. Change in cash and debt balances
4. Otakikpo production update
5. Otakikpo OML 11 mou update - especially after GEIL press releases last week.
6. Progress on the OPL310 QIA investigation
COULD HAVE AT LEAST 3 RNS NEXT WEEK WITH THE ABOVE NEWS THAT IS CLEARLY OUT THERE IN THE PUBLIC DOMAIN.
Well done all for the excellent posts and great research keep it up, appreciated by many even though they may never say.
OMITC
Seplat are hunting...Lekoil look like very vulnerable prey right now...interesting week ahead...news was published Friday 24th of January 2020.
https://www.thisdaylive.com/index.php/2020/01/24/seplat-restates-commitment-to-more-asset-acquisitions-growth/
Agreed Danker, only purchased due to all the other assets and the oil producing Otakikpo - OML 11...not a one trick pony. OPL 310 s truly massive and essentially proven to hold millions of barrels based on the 2013 discovery...not fully appraised so potentially even bigger...just off Lagos and other companies have been eyeing it for years...certainly not made it easy for Lek but they do persevere!
Nigeria and Oil very very dirty and political! Still believe it will be snatched away from Lek but the unseen forces that want it will have to pay better price now! Take over still very possible especially at these prices...which holder would not take 100 million 18p right now even 14p (75 million)...
I should think so Danker, nobody should beat them selves up for buying on the back of the QIA funding RNS...I researched the company well and could see that they were trading at 20% of their NAV with out the Funding News. With the funding News they had the potential to head straight back to 20p range and more....
We all got shafted with the news on the 13th...so the choices were to sell at a 70% loss, hold or average down...I think Baron is experienced enough to not panic sell and average down until the real value is realized.
What was lost fundamentally 600k - so not even dent on the NAV...reputation, confidence and sentiment have been smashed but realistically the company has valuable cash producing assets and the market will price this in soon enough.
KnightRider 1 - Don't forget the secondary market on NEX Exchange some decent sized buys and sell go through there as well...
Last weeks Resistance now Support...this weeks Resistance..next weeks Support? In holding pattern until news...should be an interesting week ahead should see some news on OML 11, January Lifting and any progress on the Investigation.
Based on the PRESS RELEASES from Leks partner this week would not be surprised to see form of update...financing completion due with the MOU JV partners.
The fact that they have all the approvals to start work and have indeed started work makes me think that the financing can not be that far off? The news is out in press releases already and therefore I assume once the financing is sealed we can expect another RNS from Lek OIL in the next few days..
250% uplift in production will mean revenue jumping from the current 50 million dollars in revenue to 175 million dollars, will be a great uplift to the value of the company.
Danker the item missing the news release was the financing completion and that is what Lek is concluding with the help of standard chartered bank. So once that is completed there will an RNS from Lek.