Member Info for Peterashbeck

Dan, the RNS did state that NHNL was a subsidiary and it has never been corrected.

Even if you look further down your post it says: “Post period, we acquired a controlling interest in a Risk Sharing Agreement (RSA) for the development of the large-scale Barracuda Field.” This absolutely backs up what they said before. The have a controlling interest in in the RSA because they control KONH who in turn control NHNL.

Except they don’t because it was all untrue…

Think about it for a moment. If what you are saying is correct then:

1) If KONH was only created as an SPV for the transaction then why did ADME pay $800,000 for shares in it?

2) If KONH was only created as an SPV for the transaction then we know that the maximum amount of money that could ever have been paid to NHNL is $250,000 as the other $550,000 was issued in shares to Calabar Capital Limited. I would also be very surprised if the $250k didn’t also end up in the same place but supposing it hasn’t then the $250k could have gone to NHNL. However, what would this buy them? Absolutely nothing.

We know that NHNL were demanding a payment of $1.75million from KONH in July 2021. We also know that they have asked for a $20 million payment for a 42% stake in the company from Zenith. Even if the $250k was paid to NHNL (and I am 99.9% certain it wasn’t) then it would not have bought them anything.

So now, by your own rationale, we have a company that when it set up “could therefore have owned nothing” and was then provided with nothing to close the deal. It still doesn’t work.

So whatever way you break this up then KONH and ADM have not acquired anything. Either KONH were meant to own NHNL and they didn’t or they were meant to buy it and they didn’t.

Whatever way it ends up AMD own nothing because KONH have paid for nothing. They have simple received some money from ADME and moves this into a completely different corporate entity…

Dan it is true that ADM never bought a direct interest in NHNL but they did buy 51% of KONH and then described in their March 23rd RNS that: ““KONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141”

Given that the definition of the word "subsidiary" in business is "a corporation or company owned by another corporation that controls at least a majority of the shares. " then by acquiring 51% of KONH (and amusingly making it a subsidiary itself) ADME were purchasing the majority of NHNL, just in an indirect manner.

So this is the issue. In announcing that NNHL was a subsidiary of KONH they used a word with a very specific meaning and NHNL have just provided the documentation to show that the statement was not true.

I cannot understand how anybody can see this any differently. It is the crux of the whole matter and will be very easy to prove if any money changed hands or not. However, it is already clear that KONH and ADM did not pay NHNL any cash as neither of them had any and no payment was ever announced.

The whole thing stinks.

Well this fits into the concerns that I had about the claim in ADME’s claim in their March 23rd RNS that ““KONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141”

As I have mentioned on numerous occasions, the old NHNL website always claimed that they were a 100% Nigerian owned company. In addition to this, Nigerian law would not have allowed NHNL to be majority owned by a non-Nigerian company so this inconsistency was always a huge red-flag that something was not quite correct with this whole deal.

NHNL have now gone public with the fact that they never sold any of their shares to KONH and have published the confirmation from the company secretary that there are only two shareholders in NHNL and that neither of them are KONH. This confirmation leaves ADME in a very awkward situation as it basically appears that they spent $250,000 in cash and $550,000 in shares to acquire 51% of a company that was completely valueless. This can only have happened for one of two reasons:

1) They were duped by KONH when they invested in the company and genuinely believed that KONH did own NHNL. But this begs the question of can they not have done proper due diligence when they were handing over that kind of money? Though, as tresha99 has pointed out the BoD do seem to have form for a history of poor DD.

2) That ADME acquired 51% of KONH knowing that they did not own NHNL and were therefore party to defrauding shareholders.

I find it almost impossible to believe that number 2 can be true. Awful and incompetent as our BoD can be they are not out-and-out criminals. But in the case that option 1 is true then they have handed $800,000 to a company that was completely valueless. You couldn’t make it up – it is like they got an email from a Nigerian “Prince” in a 419 scam and fell for it. Surely they must have asked to see copies of contracts etc.

However, regardless of the fact that ADME may have been duped by KONH back in March they have (according to the NHNL website) known that KONH had no ownership of NHNL and yet they have continued to hide this from shareholders. They have not mentioned it in the annual report and they did not mention it when they were raising money. In fact, it seems that any information literally has to be forced out of the company by AIM regulation.

Well the writing is on the wall now. If everything that has been said on the NHNL website is true then the company must surely be heading for suspension.

ocelot - exactly. If companies had to respond to every rumour about them on twitter then they would spend their whole time issuing RNS releases about gossip. If there is a major rise then fair enough, but standard trading movements I don't think warrant an RNS. That said, there are other companies that point-blank refuse to release an RNS even when they really should so it's hard to know what the actual rules are.

Also, at what point does an enquiry of interest in purchasing an asset become actual “news” that should be announced to the market anyway? Surely it can only be when a formal offer is made/mou signed etc? Presumably this is exactly what AIM companies have nomads - in order to ensure that they release news when they are meant to. I bet without the nomad insisting that most companies would never tell investors anything.

I think that HITS does have a point, we do need to be careful not to get too excited by unsubstantiated rumours of takeover values. However equally we need to be careful to ignore those who claim that Saltfleetby will fail on no evidence either

At the moment it looks to me like Saltfleetby will be worth a very large amount of money to Angus over the long term and although there is no evidence for this current rumour I do think that it is entirely possible that there will be approaches by other entities to purchase it as time goes by.

A year ago, Saltfleetby was valued in excess of £12 million. We know this because Aleph et al loaned the company this money secured against it. Relaistically, this also means that the valuation that Aleph really put on the property was somewhere between £18 and £24 million as they would not lend against 100% of the asset value.

Now a large amount of work has gone into the project and it is much closer to delivering production, the value of the asset has clearly gone up and it will rise further still once production commences and up again once a successful sidetrack is completed.

The advantage that Angus have is that the longer that they wait the more any buyer is going to have to pay to acquire their share of Saltfleetby from them. Conversely anybody who does want to acquire it would be best advised to do it earlier while there is still an element of risk rather than wait and pay a premium when the risk has gone. But once the risk has gone and the sidetrack is completed up to 10 mmscf/d why would Angus want to sell it anyway? It would be generating them £13 million per annum by 2022 with all the debt already paid and at this point it would clearly take a really big offer to be worthwhile selling for.

Whether the rumour is true or not, I can totally see why another entity would see good value in acquiring 100% of Saltfleetby for £40 million. However, I am not sure that this would represent good value for Angus compared to what they could generate if they did not sell.

Oh, and they also said that: "If a Nomad resigns, then a specific announcement is required" so there need be no more speculation on this matter.

Cairn are definitely still in place as the nomad and an RNS would need to be released if they are not.

Yes ADME do definitely still have a nomad as I have had an email response from the nomad this morning confirming that this is the case. They explained that yesterday's announcement was a non-regulatory announcement, and it is therefore customary that the Nomad’s details are removed.

So 100% Cairn ARE still the company nomad. This is straight from the horse's mouth.

Another good spot Spikeyj - so at the moment we are in limbo. I will let the board know if I receive a reply from Jo Turner confirming if Cairn are still the company Nomad.

Can someone email the company and see what they have to say about this please. I would, but they never reply to me.

That is indeed a very good spot Dan. It is interesting that Cairn were mentioned in the RNS on the 29th November but have not been mentioned this morning. It seems a bit coincidental to be an error.

I finally got a reply to one of my emails from Jo Turner at Cairn on the 29th but I have not received any reply from him to the email that I sent yesterday. The trouble is that they are so bad at replying anyway it really means nothing on its own.

I will send him another email asking if Cairn have resigned, but I won't hold my breath for a response.

That said, as I have posted further down, I think that Angus would make more money by seeing through Saltfleetby to the end rather than selling it for £14 million now. Once they have paid of the debt then at 10mmscf/d they would be generating a revenue of approx. £26 million per annum by 2023 of which the Angus’ share would be £13 million per annum. This is enough to fund many new projects and purchases and would have the advantage of being a recurring revenue rather than just a one-off windfall.

For some reason a bunch of the posts from earlier about the takeover rumours seem to have disappeared. It really irritates me when this happens. Clearly somebody complained about it which does lend credence to EchDeltas claims of groups of individuals who are not keen for the share price here to go up. I had previous ignored these accusations as nonsense but it is strange that someone has clearly complained about the speculation. Would anyone like to own up to it being them and explain their reasoning?

Anyway, regardless of whey they disappeared there were some interesting posts that were up there. So to discuss the hypotehetical situation where Angus were to be offered £14 million for their share of Saltfleetby then this would mean that the buyer was willing to pay £28 million plus £12 million debt.

At 10 mmscf/d we know that even with the hedge Saltfleetby would be generating £2.5 million per month and pre-hedge it would be generating £1.5 million per month at 5mmscf/d so this would mean that it would generate £20 million in 2021 alone and then another £26 million in 2022. So if a buyer were to purchase 100% of SFB for £40 million then it would take less than a 2 year payback even with the hedge in place which is perfectly workable.

Of course, if 100% of the asset was sold and the debt was paid back then it is entirely possible that the hedge would no longer be in place for the new owner. In this case they would be looking at generating over £60 million in 2021-2022 and that is at conservative oil prices.

I can see why a buyer would like the deal. Angus have done the hard slow work in getting Saltfleetby through to production. If somebody with deep pockets came in now and could get rid of the hedge then £40 million would be a cheap price to pay to get hold of it.

Balancedviewer – I agree with what you suggest and would far prefer that Angus held on to Saltfleetby as opposed to selling it. There is huge value in Saltfleetby and we would be far better in holding onto the asset and generating money out of it over the forthcoming few years than cashing in for £14 million now even if that did give them the required funding for Lidsey and geothermal projects.

By my calculations, even with the hedge still in place I would expect that Saltfleetby would generate between £17 million to £20 million by the end of 2022 dependent on whether they get first gas in April or June. This would obviously pay off all of the debt in 2022 alone and would mean that there would be a revenue of approx. £26 million per annum coming in of which Angus’ share would be £13 million per annum. This is enough to fund Lidsey and geothermal easily, even if it delays both by a year or so.

However, the important thing about this rumour IMO is (if it is true) is that it shows the value that others in the industry place on Saltfleetby. There are many on these boards who want us to think that it is not going to work but then there are others out there who would spend £40 million on it in order to make even more money. It just confirms everything that I have been saying during these last few months and shows how valuable Saltfleetby is going to be.

Tom Winnifrith has posted this tweet earlier today:
https://twitter.com/TomWinnifrith/status/1464211264624893959

Does anyone pay for share prophets and could tell me what the full article says?

I'm sorry for the typo in the previous thread title.

Tom Winnifrith has posted this tweet earlier today:
https://twitter.com/TomWinnifrith/status/1464211264624893959

Does anyone pay for share prophets and could tell me what the full article says?

It’s possible that any one of them could be the con artist isn't it?

NHNL could not have any rights to OML141 and have conned KONH into paying them some money into buying a share of these non-existent rights. They definitely wouldn’t be the first Nigerian fraudsters.

KOHN could have lied about being the parent company of NHNL (and by Nigerian law they could not) and could then conned ADM into paying them for 51% of a company that does not have any rights to OML141. We also definitely know that they received cash and shares from ADM.

ADM could have known that they held no legal stake in OML141 and conned investors like monecor in the last fundraising, but then ADM were the ones who handed over the money to another entity so in the classic con-circumstance ADM look like the victim.

I know what I think and IMO the key to all of this is the question of the subsidiary that was not legally allowed to exist and the fact that KONH were the ones who received the money.

But it could all be a simple and straightforward business disagreement. None of us know the truth and all of us can just come up with theories. In the end the truth will out, but who knows how long that will take.

My gut feeling, for what it is worth, is that ADM's takeover of KONH was legitimate and NHNL do legitimately have the Risk Sharing Agreement for Barracuda.

Where I think that there is an issue is that KONH may never have had any rights or contract with NHNL. After all, ADM announced that NHNL was a subsidiary of KONH when this is not legally possible under Nigerian law.

What seems most likely to me is that ADM did not do proper due diligence on KONH before they bought 51% of the company and it has now turned out that KONH have no rights to NHNL. Like I said before the key red flag is the labelling of NHNL as a subsidiary of a UK company when this would not be allowed under Nigerian law.

Obviously, these are only my suppositions on this and I have no definitive way of knowing but it feels like the case.

No earlybird Osamede was only appointed as a director of KONH on April 13th 2021 which was at the same time the transaction was completed. All the details can be seen here: https://find-and-update.company-information.service.gov.uk/company/13213236/officers but there is nothing untoward about this at all. It would have been unusual for him not to have been appointed a director after ADM had just bought 51% of the company.

There is a lot that appears to be "unusual" about a number of these transactions but from everything I can see the takeover of KONH by ADM was perfectly legitimate and above board.

Dan, it strikes me that if there is any scam going on it is between KOHN and ADM or KOHN and NHNL.

The company that ADM have paid money to is KOHN, so the people behind that entity have come out wealthier to the tune of $250,000 in cash and $550,000 in ADM shares.

KOHN have been the ones who have said that NNHL are a subsidiary of KOHN (as per ADM’s announcement on March 23rd 2021) and this is the key element that makes things suspicious.

1) NHNL claimed on its previous website to be a 100% Nigerian owned company.
2) K.O.N.H. UK Limited is a UK limited company whose details can be found on companies house and of whom Osamede Okhomina is a director.
3) NHNL claim on their current website that the are no longer in business with KOHN.
4) ADM claimed when doing the original Barracuda deal that NHNL is a subsidiary of KONH (as per ADM’s announcement on March 23rd 2021).
5) According to Investopedia a subsidiary is a company that has more than 50% of it’s shares owned by a parent company.
6) Under Nigerian law, companies that are operating in the oil and gas industry must have 51% of their shares owned by Nigerians.

So the big red flag issue here is that K.O.N.H. UK Limited has said that NNHL is a subsidiary when this is not legally possible. The claim that “KONH holds, through its subsidiary Noble Hill - Network Limited ("NHNL"), a 70% indirect interest in the rights, benefits and obligations under the RSA relating to the Barracuda area of OML 141” also does not seem possible because NHNL is not legally allowed to be a subsidiary of a UK company and it is not possible for KONH to own 70% in the rights of any Nigerian oil company due to the 49% rule.

The issue looks to me like a problem whereby ADM have bought into KONH believing that it has rights to OML141 via NHNL, only for it to turn out that this is not the case. Luckily, the $550,000 shares that were issued to Calabar Capital Limited (a company that have two directors in common with K.O.N.H. UK Limited ) have been locked-up until April 2022 so if there has been any misrepresentation going on then it should be possible to recover them .

Obviously, my suppositions here could be wrong and the issue could be wholly the fault with NHNL. However, it is the word “subsidiary” that seems to make everything fall apart. It has a very specific meaning and it is a meaning that is to possible to be applied to KONH and NHNL under Nigreian law.

The only bad point about the whole situation post-RNS is that since ADM did not ever have any direct exchange of money with NHNL then they are reliant on KOHN's contract with NHNL being watertight. As Dan said earlier ADM's interest in NHNL is indirect and therefore not directly in their control. This does lead to the potentially worrying possibility, as suggested by tresha99 that ADM have been duped into paying for a stake in KOHN in order to acquire an interest in NHNL. KOHN do seem like an unnecessary middleman. Why did they not negotiate directly with NHNL like Zenith Energy have claimed that they are doing?

But I will repeat what I said in my last post - although today's announcement has raised a number of questionst he company has at least now communicated with shareholders and to this end we are all better off today than we were yesterday. It is just a shame that it took aim regulation to force them to let shareholders know that their was a dispute about the asset ownership going on.

It seems that all of the emails to aim regulation may finally have had an effect as AMD have finally released an RNS and weirdly enough I see the content as being the first bit of positive news that I have seen in a while regarding Barracuda.

Although the company have now admitted that there is a disagreement between themselves and NHNL, a company that they previously described as a subsidiary of KOHN, then at least they have said that the dispute is without merit and that they still own their interest in NHNL.

Disputes happen, they are relatively normal in business and they usually get sorted out one way or another so I would say that there is probably a decent chance that ADM can now hold onto their share of OML141 if they can fight it in court. The company is certainly in a much better position than they were yesterday morning.

It is amazing how much difference a bit of communication makes. Obviously there are still questions to answer and Spikeyj raises a few of them below but in the circumstances today has actually been a good day. If only they had done this a few months ago.