Member Info for Spikeyj

cheers guys.

i'm sure the sheikh will be doing his best
to maximise the return that he personally
will get out of adme & the funding that it
will need. but you & i may have a slightly
different view about how much his own
interests match those of small pis in adme.

gl.

no doubt i am spartacus as well?

it is not the sheikh who needs the financing, it is adme.

ah, google tells me you probably
mean the 'cours connu' thang.

hi jake, apologies for my ignorance,
what do you mean, the 'French' issue?

hopefully for shareholders,
many, many, many barrels.

people generally tend to ask for what they think they can get,
i.e. what the market will bear. - rich business people are not
usually in the habit of charging less than other people will
pay, simply because they have quite a lot of money already.

so unless shakey is treating adme as a charity/pity case, he
will seek the best deal he can to maximise his own profits.

anyone thinking of investing money in adme who looks at
their accounts will know that adme doesn't have a choice
about raising new money, because it will go bust if it doesn't.

so prospective new investors will know that they have got
adme over a barrel and can drive a hard bargain, since the
company can't afford to walk away & say, oh, we've decided
that we don't need to raise any additional funding after all.

(... it's a bit like haggling in a souk ... if the stall holder knows
that the customer really wants/needs the item, they will keep
the price high. the best price only really comes if the stall
holder perceives that the prospective customer is about
to walk away with no-deal unless the price is improved.

i do think that having the sheikh on board makes it genuinely
less likely that adme will go bust. he is very well connected. &
that will increase the chances of finding funding. but it will cost.

lol, nope, not buying back in (- unless it becomes
much clearer how the company's balance sheet
is going to be repaired, and at what cost - ) but
the company has to be better off without stefan...

i do not believe the sheikh has got involved
to hand out free money to pis for the sake
it, so if he puts in additional capital he will
demand a hefty price for doing so (and the
company RNS makes it clear they are aiming
for additional *equity* fundraise, not debt)

but i am sure that the sheikh understands the
oil business way more than stefan ever did,
& his RNSs will probably be more credible.

(me, i found it hard to believe much stefan said after
that business where he claimed to have found an
$18m buyer for aje, or whatever the exact figure was,
just before MXO did a major placing with the 'buyer'
then mysteriously melted away without paying up.)

bermondsey, or unless they agreed to give him a golden handshake goodbye
which was conditionally linked to reducing or exiting his ADME shareholding?

they stopped him from taking the company for umpteen extra shares on his way out,
which was undoubtedly a good thing from a shareholder perspective (- the idea that
stefan et al needed their management 'incentivised' by the award of free extra options
up to a possible 10% of share float was truly outrageous, but he didn't get away with it).

the idea that stefan is selling because he is very strapped for cash seems very, very
implausible unless he is eating platinum dust sprinkled on his cornflakes very am.

- over the 5 years he has been running mxo/adme, his total renumeration has been in
the region of a million pounds, excluding any extra cash that he might have earned
from 'consultancy' fees or similar that shareholders have not seen, any share of that
£1million 'first oil' payment cornhill were promised, & any other side-deals around.

he's done very, very well out of mxo, but ran the company into the ground to
the point where it has been bordering on insolvency & the sheikh was able to
demand a large stake plus control for a relatively small amount of cash input.

didn't rob terry used to run some kind of health club?
(you know, that country one he built on sandy subsoil.)

perhaps whet could strengthen its board of directors by
bringing a safe, trustworthy pair of hands like rob on board.

and then they would be well positioned for striking a tough
deal with woody as a distressed seller, to pick up his stake in
that v. interesting company, industrial heat. (for some reason,
industrial heat strikes me as a real whetstone kind of asset.)

also to put it in context, it's not like those concerns about
whether the company can continue as a viable going
concern have only just arisen. ... before the sheikh came
on board, the MXO share price had fallen to all time lows
as there was already serious concern at that point that
the company was going to go bust, because stefan et al were
struggling to persuade anyone to put up more money. that is
why sheikhy was able to pick up his significant stake so cheap.

it's a bit more specific to adme and its current finances.
adme is running on very low cash, and although it was
definitely good news for the company to get the sheikh
on board and move to get shot of stefan, they haven't
done anything yet which shores up the cash shortfall.
(the new money put in by the sheikh was only a small
amount which running costs will have eaten already.)

from the auditor's notes:

"Key Audit Matter
As at the year end the Group has net current liabilities of £1,198,000 indicating that the Group has insufficient cash reserves to meet its current obligations as they fall due.

The Group received a cash advance of £650,000 in the year for future works planned in Grenada which is not going ahead and is repayable on demand."

from RNS: " ... in the short term the Group will require additional funding in order to meet its liabilities as they fall due. Against this background and, as disclosed in the annual report and accounts which will be published shortly, the Directors have a reasonable expectation that the Group has the ability to raise the additional equity finance required in order to continue in operational existence for the foreseeable future and they therefore continue to adopt the going concern basis of accounting in preparing these Financial Statements. However, given the uncertainty surrounding the ability and likely timing of securing such finance the Directors are of the opinion that a material uncertainty exists that may cast doubt on the Group's ability to continue as a going concern."

the use of "in the short term" and "the additional equity finance required"
makes it pretty obvious some kind placing is coming soon, imv, whether that
is plain vanilla or involving convertibles etc. ... the thing that seems rather
less clear, but is very relevant to share price support, is what the total *size*
is of the liabilities which may fall due in the short term. a small placement
of e.g. 200K/300K is neither here nor there, but if they have to pay bigger
chunks, for example if they have to repay all that granada advance money
soon, then it surely makes sense for pis to stay away until a placing is done.

lo & behold, yet more posts deleted, under the header 'whet news.'

including a post from me, where i pointed out that although
whetstone announced on 1st january that it had **agreed** to
invest 681,500 euros to buy just over 10% of NARC, there has
been no announcement at all to confirm that any of those
NARC shares were ever purchased. instead, the may update
from whet now just refers to an **'option'** to invest in NARC.

so did whetstone ever make *any* investment in NARC?

or has that agreement to buy >10% of NARC somehow
morphed into an 'option' where they *might* buy some?

i suggest that if whetstone makes further announcements
about deals it has made or is proposing, pis should be very
careful to distinguish between acquisitions that have been
*completed*, with any verifiable information about how they
are currently performing, versus any deals which are simply
being 'proposed', 'planned', 'going to happen', 'agreed', etc, with
forward looking statements about how those might perform.

especially if any such forward looking announcement were
combined with an attempt to invite punters to invest any
additional money. bear in mind that on may 29th whet said:

".... it may well be we will need to raise funds to make investments ..."

Canoncan: "Its not a problem here anymore because this is no longer a penny oiler."

RNS ".... given the uncertainty surrounding the ability and likely timing of securing such finance the Directors are of the opinion that a material uncertainty exists that may cast doubt on the Group's ability to continue as a going concern. The audit report includes an emphasis of matter in relation to going concern"

caveat emptor. ? the RNS could hardly have given pis
a clearer steer about funding, beyond saying that equity
financing is required to survive short term liabilities, but
the directors aren't sure they can get it? - puts into some
perspective claims from some on this board recently
that the [small] investment from the sheikh means that
no placings will be needed with all being debt funded.

curious, as the RNS clearly states that additional **equity**
finance will be required, in relation to meeting liabilities
that will fall due in **the short term**, wouldn't that get a little
tricky unless the company was able to issue more shares?

also note the phrase

"... additional equity finance required in order to continue in operational existence..."

within the going
concern section

"The partners involved in the OML 113 licence were able to renew the licence for 20 years. The Group has raised equity finance post year end to provide for ongoing working capital and the Directors have prepared cashflow forecasts supporting the use of the going concern basis of accounting. However, in the short term the Group will require additional funding in order to meet its liabilities as they fall due. Against this background and, as disclosed in the annual report and accounts which will be published shortly, the Directors have a reasonable expectation that the Group has the ability to raise the additional equity finance required in order to continue in operational existence for the foreseeable future and they therefore continue to adopt the going concern basis of accounting in preparing these Financial Statements. However, given the uncertainty surrounding the ability and likely timing of securing such finance the Directors are of the opinion that a material uncertainty exists that may cast doubt on the Group's ability to continue as a going concern. The audit report includes an emphasis of matter in relation to going concern."

cadis had it almost right in his post of 14th june.

".... the result of everything Aidan and the team have been up to over the last few months"

(just substitute the word 'years' for the word 'months'.)

hi addicknt.

some family related matters have had to claim
my attention rather heavily ( - and still do...), so
financial issues are fairly low down my agenda,
with portfolio etc placed into a low maintenance
mode, and no trading activity. but i've continued to
glance in on what has been happening here ('tho
imo most of the game was over once nex said no).

and imo it seems like it has been playing out
pretty much as the sceptics thought it would.

[btw, i am mildly curious whether whet did actually
make any investment into narc. - they announced
that they had reached terms on an agreement to
invest, but i don't think that there was any statement
confirming that any money was actually handed over.]