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Just to add if they do not raise the finance in time for OPL 310 they can sell it and it is on their books at 117 million dollars! That would not be such a terrible outcome not as lucrative as moving it forward but still lucrative considering our current panic sold market cap!
Yes liquid, same company. Looks like they started implementation in October 2019 and are now live with the finance and asset management system. Not bad 3 months to map, migrate the data and go live.
I think Lek were on the verge of turning the corner, getting everything in place for the next stage of the journey. This Qatar deal has really put them on the back foot and with the information leaking out it seems there was real intent to take them for the full 10 million and then leave them with no way of moving OPL 310 forward.
Looks like fate was on their side as the December lifting was delayed and the QIA contacted just in time prior to Lek getting their funds and paying the full 10 million.
The Nigeria oil is extremely dirty in terms of corruption it is evident that opl 310 is a monster and they do not want Lek to progress it and benefit from it based on my research.
However I think lek have sufficient resources and access to short term financing to salvage the situation on a temporary basis. This will buy them enough time to find a farm in partner for opl 310 and then repay any bridging finance they may get now to make the payments in Feb.
There is still the oml 11 expansion MOU which should be sealed any day now and I believe that is the main reason the infor finance and asset management systems were implemented.
If they can move these 2 projects forward as was the original plan then we should see a decent recovery in the share price.
Even if they achieve all of the above in the next few weeks I still believe another Nigerian oil company more aligned to the political elite will snap Lek up on the cheap before they realise their true potential. I AM PUTTING MY MONEY ON SEPLAT but could be proven wrong time will tell.
All down to the next few RNS announcements.
GL All after the last 2 weeks we are going to need it!
Omitc
Welcome Bride, let us all work together to share news positive or negative. There has to be a way forward.
System.
https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.prnewswire.com/news-releases/lekoil-selects-infor-and-progressive-tsl-to-support-expansion-300989216.html&ved=0ahUKEwjf-rqwyJLnAhVLa8AKHYYXDekQxfQBCEswBw&usg=AOvVaw10hkCsYYHOGfmsVNh7GEIg
Get ready for OML 11 expansion?
from the like of Seplat...but lets see what the BOD come up with..
bodes well for a positive update this week. OPL 310 cost 117 million to date according to their last accounts so if they raise some form of funding even bridge financing until a farm in partner is found then all is not lost.
They funds from the lifting in JAN, they can raise short term finance they have options to keep this alive. Worse cast they decide to sell I doubt they will want less than 117 million for the asset.
OML 11 news also due...
It was a 600k mistake not a 10 million mistake...so the over reaction and panic selling will be corrected over the coming week and news will give us proper direction.
but the assets are there...the production is there and the potential to recover a few hundred million barrels of oil is there!
No RNS so far, so thinking simmonds and hawkins doing a detailed job to get to the bottom of this...next steps will be extremely important...
I expect News next week on several fronts...but if they can complete the investigation as quickly as they did with the calcification and restoration, then I believe a bid from SEPLAT or another Nigerian oil company will come..the current CEO and BOD will have a hard time moving the company forward due to damage to their reputation....absolute laughing stock right now who will take them seriously.
The recovery is based on the value of their assets and the potential should they gain the funds to unlock them also Simmods and Hawkins on board is also a boost.
Strongly feel a take over is coming but that is my hunch based on the information out there in the public domain.
their competitors. the more I look at the value of their assets the more I see a decent recovery and more likely a take over once the dust has settled.
If you look at what Seplat have done over the last five years with their assets and what Lek Oil have done then it is clear the LEKOIL CEO and management have not preformed well.
What has happened over the last 2 weeks has basically weakened the CEO and Leks position, for all the talk of Norton Rose taking the blame, they will not take all the blame as the buck stops with the CEO and BOD.
There are a number of options going forward (to recover the share price value) but for me the best are:
1. Sign a new funding deal/Sack the CEO and and others involved in sanctioning the deal/Replace NOMAD and Legal counsel
2. Sell OPL 310 at a decent price/ Sack CEO etc/ Move forward other assets (OML 11 MOU STILL TO BE SEALED)
3. Sell the whole company or get taken over by the likes of SEPPLAT ( who I am sure are circling like a vulture)
Which ever way they go, somebody will have to take the fall and I hope it is the CEO! The 70% fall is more to do with sentiment/embarrassment and trust than the asset value or the potential asset value which is currently between 23p and 2.39p.
Any which way this goes the share price will recover if Simmonds and Hawkins and the wider BOD do the right things!
GL ALL with your recovery strategy.
I think we have had enough surprises..there may be some selling down from Institutions and therefore some TR1 holdings over the next few days but most of those funds will have spoke to LEK by now. Not sure what the next move from LEK is but they have options.
There could be a massive fight going on at the moment between the CEO and the rest of the BOD...time will tell who wins but the odds are against the CEO, unless there is an alternative funding arrangement then there will be a new strategy that will be put in place and hopefully a new CEO/ CFO...
CEO could fight back with a management buy out at a cheap 11/12 p price but who the hell would back him now?
No Opinion
RE: TakeoverToday 11:34
News good drop anytime now
Yoda is that you...
12p to 15p maybe not more than that...
Wait for the RNS... I think what most are thinking and proposing is happening right now behind the scenes...the CEO is either complicit or relied on others and therefore negligent or both, either way he will now go down as one of the most STUPID CEOs in the history of AIM. His position is untenable if this company is to move forward.
Even without OPL 310 ( which they can sell and still get some value) they have 3 other licences to move forward and they also have significant value over and above the current market cap as is and to be unlocked.
If you look at the History this project has been nothing but a drag on the company over the years, with legal disputes, delays and cost to to LEK. The reason they have tried to get it into production is because it was at the time one of the largest discoveries and contains billions of barrels of oil.
Could be the best option to sell, recover funds spent to date plus a premium and pump that money into OML 11 and move forward with OPL 276 and OPL 325.
OML 11 is currently producing about 2302 Barrels net to Lek a day or a about 50 Million Dollars in revenue which they plan to increase this year to 8000 barrels or approx 150 million dollars in revenue.
The company is worth more than the current market cap...but the reputation of the company is now in the gutter it is upto the company to restore the faith as the funding for OPL 310 is not there but the assets and the 50 million dollar revenue is still there.
The company did well to get the clarification out quickly, but there is more to do...Whichever way you spin it, this was a huge mistake and a school boy error at that.
There is value in the current Oil Production and License at OML 11 and with phase 2 about to kick off with major players I expect this to recover based on that alone. I would NOT expect Shell to sign the deal without the CEO departure being the main condition, together with those within the company that sanctioned the deal.
As for OPL 310 they may secure a deal in the next few weeks or be granted an extension to get a deal done but it may just go on the block and be put up for sale. What value the sale is assigned is a guess right now.
At the moment you have to look at the other assets yes OPL 310 is a monster discovery and it will go into production one day but maybe without LEK.
Waiting for the company to get its ship in order over the coming days and then update the market. A placing to save the OPL 310 license may not be feasible based on the fact that they still have to prove funds for the development which is close 40 million dollars in total.
Not hoping for any miracle right now just some decent moves to steady the ship:
1. Remove CEO and certain other Directors
2. Confirm way forward for OPL 310 - Funding Partner/ Extension or Sale
3. Finalize OML 11 MOU and get that 250% production Increase going
4. Focus on the other OPL licenses that have been recently acquired
This not just an explorer it is a producer and therefore there are more options available than people think..For all the conspiracy theorist out there this could have been orchestrated to get the company assets on the cheap but it just seems the CEO and others were so desperate and quite frankly STUPID to get the deal done instead of having to sell the OPL 310 asset that they did not bother to delve just a little deeper.
All will be revealed soon enough.
Everybody is welcome to post their views positive or negative but all speculation until the company gives us direction. There was talk of suspension lasting months etc never happened....now talk of placing...lets see what the company do they have options...
looking at the price action so far a lot have sold, but a lot more have bought either averaging down or taking new postions for a bounce.
After the last 10 days I would expect some positive news from the company to salvage some credibility...also expect the CEO to depart if the SHELL MOU for OML 11 is to be finalized.
ignore the scare tactics...the first business day in Qatar is Sunday, hence LEK were notified yesterday, so LEK need at least 1 working day to get their clarification, they had not choice but to suspend temporarily. I expect the suspension to be lifted shorty as they are already talking to the QIA.
What other drama is going on in the background...is the CEO and other Directors going to be forced to resign over this? What is the plan going forward...those are the real questions that i am asking myself.
its a temporary suspension pending clarification...how long does it take to clarify, when the QIA call you and say we do not know about this loan you have announced!