RE: Retest the highs of 1.5p and beyond to 2 to 3p on Ruvuma13 Mar 2021 16:43
RE: mrc
To your point, my opinion on Tanz is all the assets are land locked & should be sold to prevent more capex funding, which can only come from share placings or loans. With the exception of KW1. KW is the only Tanz asset which was cash generative. It has the gas, the infrastructure, the pipelines and a monthly revenue stream from the Tanz Gov. Albeit 6months delayed.
That cash flow would of been able to fund all of Scirocco's commitments but because its no longer producing the only funding source is placings.
Banks are less likely to lend to a company with zero income, only assets. So if they do lend, they get shares. Shares which they sell which hammers the share price for weeks/months until they are out.
My opinion on the HE1 asset is the same. How is it gonna be monetized once the well is drilled?
I have yet to read a Scirocco or HE1 presentation or RNS which details that.
Any value HE1 brought to Scirocco when it listed has been priced in with that blip up to 2.4p. But the market quickly realised it doesn't change much for Scirocco.
A sale or sales would be great. I don't know if Scirocco are going to get their money back - ergo we get our investments back and maybe even little profit.
As I have said, none of these assets are cash generative without further Capex.
If they were all able to produce cash as soon as they were drilled. I think not only would the share price be monsterably higher than where it is but companies would be lining up to pay 10s of millions of pounds for a Farm In or purchase.
Is a company going to buy into Ruvma either to Farm In or purchase, spend £20m, with no timeline for a return on their investment? Maybe another middle eastern company with billions of dollars to spend will because they don't have to worry about income and they can afford wait 10 years for Tanz to build the infrastructure needed. And that Pan Africa pipeline to tie into.
We must remember, Scirocco/Solo didn't start off as a Energy E&P company. It started off as a Loan Shark or VC, however you choose to view it.
It somehow managed to get its finger in so many pies that all needed tending to, but as we have all found out; didn't have the funds to tend those pies without placings. Because none of those investments it made had any route to cash generation for 5-10 years.
So maybe NR's plan was just to keep placing shares & keep investing in non cash generative assets & eventually, when we all are all ready to retire, the company would be worth something.
Sign In
Follow the stocks
