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I still expect a deal by Feb 20. Then we can get the sell-on-the-news... :(
Seven deal will close, apparently sooner than I would have predicted a few days ago.
Money needed for "lawyers" means they've got all the ungreased palms accounted for.(which makes me wonder... is it legal for a British company to bribe outside of the UK?)
Money needed for rig deposit is to keep the Chinese from getting all the rigs, which seems like another good sign.
The "binding agreement" on Brexit is that there won't be any Brexit. There will be another vote, in which Stay will win overwhelmingly.
"""$23m is a lot of working capital especially when you expect circa $90m soon for closing the 7E transaction. """
Unless, of course, they do NOT expect that transaction to close.
""" not really the actions of a shareholder."""
Clearly, you are not thinking this through. Some shareholders may try out negatives online to see if they can get reassuring answers. Other shareholders may want the price to drop so they can buy more on the cheap. I personally would have no problem with a 50% drop, as long as there were no fundamental reason for it. Then, I'd just buy a lot more. However, I don't flatter myself by thinking that ANYTHING I say here will affect the share price in either direction.
That's the service that Malcy offers - in return for pies. He's a conduit for companies getting out news - or, perhaps more often, opinions - when companies don't want to be constrained by disclosure rules.
What's the highest wind speed AM can hook up in?
btw... windy.com is a wonderful site for watching the weather. Looks like Tuesday-Wednesday will be OK as long as they can work in 15 knots. Thursday it gets bad again....
Just noticed that Malcy's blog has no mention of Hurricane since November 13. Does that mean they are no longer paying him to put everything they do in the best possible light? If so, I can only see that as a positive...
Of course Faroe is $US-based. But if there's a very sharp and sudden selloff in the Pound - as would happen in the no-deal Brexit scenario - it would take quite a few months for adjustments to be made. At least that would be my supposition.
Of course, if there's another vote and Brexit gets clobbered (both of which I think are the most likely outcomes), then prices may go in the other direction. I suggest this be called the Prodigal Son scenario.
DNO will wait. Right now, the Pound/Krone ratio is 10.84. They will wait until it comes down to about 8, then make a "generous" offer of about 170.
I've been out of touch for a month. Looks like the sp is down another 20%+ and there's no sign of the deal we've been promised for so long. I'm pretty sure that it's all down to trying to pull off a deal in a criminal society. The minister(s) want more than SAVP is willing/able to pay. Maybe that's a good thing, indirectly. The Nigerians are saying "this is a great deal for you, and we want our share."
The oil is there or it isn't. It will flow or it won't. These things will not change in the next three months.
It sometimes looks like management is selling too low, but this has been their MO for some time, and it seems to work for them.
As HUR is one of my biggest positions, I would love to see their fields grow. But fields "shrink", too. Gulf Keystone and Pacific Rubiales are examples of enormous shrinkage.
Mart was the worst example of Nigerian corruption that I've seen, which may only reveal my inexperience. It's true that the CEO was a crook, but you could tell that by watching him for five minutes, and just hope that his crooked interests would remain in line with your own. The real kicker was when it came out that the huge losses they were suffering between wellhead and ship were not due to petty pilferers, but actually because the Nigerians were literally rerouting the pipe to their own "pirate" ships in the harbor. No wonder their production has gone off a cliff... very few competent Westerners are still willing to work with them.
""Do you have experience working in Africa ? Or is your scepticism derived from the online world ?""
Workover, I have done a lot of traveling in Africa, and quite a bit of speculating on companies operating in Africa.
Afren - A money loser run by now-convicted criminals. God only knows what the real facts were about that company,
especially concerning their much-touted Nigerian assets
Caracol - Did well on that, but think I got away with one
Mart (Nigeria) - Did extremely well with that, but was lucky to do so. A good example of just how kleptocratic
the Nigerian establishment can be
Africa Oil - An example of the gulf between oil in the ground and oil reaching market, and an example of how
idiotic African rulers can be
Chariot - Let's not talk about that.
Canadian Overseas - or about that, either
Company X - Another Nigerian fantasy/disaster whose name I've forgotten
SDX - North Africa, so a very different story
Anyway, only the possibility that the deal is being held up by corruption is Nigeria-specific. It's more that junior resource stocks in general (mining as well as O&G) live off optimism of their managements, and speculators
such as myself need to always remind ourselves of that and do our best to make allowances.
Of course, this being a BB, I'll be accused of bashing. I do, however, own a fair amount of the stock, partly because I think that there's a 50% chance of the Nigeria deal going ahead and partly because the Niger assets alone justify owning it. Having followed for several years the story of Africa Oil's stranded assets, maybe I should be more circumspect the latter.....
"""Your post suggests the company is lying"""
I believe I did say I see a 60% chance of success (since amended to 50%).
So what could compose the other 50%?
1. SAVP lying (5%) - I have little experience with these people, and everything they say sounds at least somewhat plausible, so it would be unfair to assign more than a very low possibility to that.
2. SAVP being optimistic (30%) - The most likely, by far. For one thing, it's their JOB to be optimistic. It's OUR "job" - if you could call it that - to be skeptical.
3. SAVP passing on lies from other people (15%) - Company #2 says it expects negotiations to finish in a month, so SAVP passes that along. Minister X says he expects to sign agreement "when it reaches my desk". SAVP passes that along. SAVP is not lying and not doing anything illegal. They're merely failing to exercise skepticism, or, at least, to pass that skeptical outlook along to us. In fairness, they can't exactly say that Minister X is promising to sign but that he's a corrupt scumbag and they don't believe him. They also can't pass along that bribes are being demanded, as a successful outcome would at least imply that those bribes had been paid.
I'll add that it appears to me that corruption is the main holdup.If you're Minister X, you let the foreign suckers get to the edge of an agreement - "extremely close", as they said - then you let them know that "there's just this one little thing". The company goes into negotiation mode, putting out a NR making it clear that things have gone in the wrong direction, trying to get Minister X to come down to something less outrageous.
Years of fairly successfully reading between the lines of resource companies' press releases.
Rule No. 1 - If it isn't good news, it's very probably bad news, even if not immediately evident.
Three weeks ago, they said they were "extremely close" to getting ministerial consent. Now, they don't even have a final deal to take for consent, so they're clearly moving backward. My GUESS is that this NR means they are digging in their heels and refusing to give further concessions/bribes to one or more of the other parties.
Maybe I should have said 50%, as I think it's basically a tossup. Now let's see how that Amdigh-1 well turns out....
I think you know that by "funny" I meant "implausible". It's a three-way (at least) negotiation between Savannah, Seven and the Nigerian government officials who want to line their pockets. Unless Savannah has the other guys over a barrel - and I doubt they do - it's unlikely that they continue to get a sweeter deal.
These delays have me thinking the chance of closure is down to maybe 60%. It would be a shame not to close, but the real upside is in Niger, anyway.
Funny how they keep missing deadlines but the deal keeps getting better.