Member Info for StoneFold

Sorry forget that - it is not a new buy, just a re-naming of an old holding.

"Share Transfer from the Strode Trust into the name of KC Spencer"

https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/PAF/13836225.html
19-10-2018

The Chairman bought 3,000,000 PAF shares on 17-10-2018 at 1.75 ZAR ( = 9.29 pence) per share.

Bounty bounced out of another asset today, which indicates a shortage of spare cash in general rather than a specific dislike of Kiliwani.

https://www.asx.com.au/asx/share-price-research/company/BUY
15-10-2018

If SOLO could use a similar funding plan as in todays PXOG RNS then.

Unsecured loan notes worth £12.0m issued on 01-12-2018 (used to pay in full estimated costs for drill + test CH1, 3d , JV pipeline). Which would enable production to start.

The first year is interest payments only at the rate of 10% pa, which would be paid from SOLO's existing cash.
01-06-2019 Interest payment £0.6m
01-12-2019 Interest payment £0.6m

Then year two and three would be interest and capital repayments.

01-06-2020 Interest payment £0.6m + capital repayment £3.0m [ would need to sell some UKOG shares to raise £1.8m ]

01-12-2020 Interest payment £0.45m + capital repayment £3.0m [ would need to sell remaining UKOG shares to raise £2.45m + would need further £1.0m from production revenue ]

01-06-2021 Interest payment £0.3m + capital repayment £3.0m [ would need £3.3m from production revenue ]

01-12-2021 Interest payment £0.15m + capital repayment £3.0m =loan now fully repaid. [ would need £3.15m from production revenue ]

Total interest paid £2.7m.

I have ignored the 99,000,000 warrants which could be exercised at 4p which would raise £3.96m. Warrants would expire 01-12-2020.

This financing plan would work if UKOG shares could be sold at 1.92p each as required. If UKOG shares rise in price at more than 10% pa then SOLO would benefit from holding onto them for as long as possible, and would be less dependant on early production revenue.

If instead of the JV paying for the pipeline, it is mainly paid for by the Government then the funds required drops from £12.0m to £6.0m.

On the plus side, SOLO have shown with a token sale that UKOG shares are liquid enough that they can sell 12,700,000 of them in two days and raise £0.25m or so.
That may help demonstrate to a bank/lender that SOLO could make loan interest payments and so secure a finance facility for their share of the Ruvuma costs while they wait for it to reach the first revenue stage.

Hopefully they will delay selling further UKOG shares, until Horse Hill and other Weald discoveries are more advanced in understanding and value.

No impact in the short term.
PAF's existing licences are still at the 26% minimum level as they were at 15-12-2017
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/PAF/13467058.html
so they won't have to take any action whilst the existing licences remain valid.

When the licenses need to be renewed then PAF would need to top up from 26% to 30%.

If PAF sold the licenses then they or the new owner would need to top up from 26% to 30%.

If PAF applied for a new licence or bought a licence from another company then that new subsidiary company (containing only that new licence) would need to start at 30%.

====
That would encourage development of prospects on existing licences.

Good news for Weald oilers including UKOG
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/ANGS/13812773.html
02-10-2018

".......Angus Energy Plc (LSE:ANGS), a leading UK conventional oil and gas production and development company, is pleased to announce the completion of the 7-day flow test programme for the horizontal well, Balcombe-2z.

The test utilised Nitrogen and coiled tubing to clean and prime the well which when removed allowed a natural flow at 853 bopd equivalent, not including 22.5% water. A second flow period was undertaken with the well flowing naturally at 1,587 bopd equivalent, not including 6.6% water.

The Balcombe-2z well produces from a single Micrite Layer, just one of the Kimmeridge Micrite Layers. During the initial flow period, the well slugged at up to 3,000 barrels per day which had to be reduced as it exceeded separator operating capacity. Duration of the test runs were limited. .............."

https://www.dailyfx.com/crude-oil

Sorry you are correct, I was viewing the carry as separate payments direct from the Zubairs, but it does make sense to show the carry as being handled by ARA. So divide ARA's spend figures by three to get the estimated figures for SOLO's spend.

The estimated figures for spending in the presentation are strange.
If the ARA Petroleum Tanzania Ltd figures are suppose to represent their 50% responsibility, then they should be twice the figures for AEX (which has 25%).

But they are approx. three times the AEX figures, are AEX assuming SOLO will sell their 25% to ARA, or are they just lazy?.

=====

https://www.investegate.co.uk/aim/rns/aim-notice---01-10-2018/201810010800014050C/
01-10-2018

"AIM NOTICE
01/10/2018 - 08:00
The London Stock Exchange admits the following securities to trading on AIM: ....."

".... UK OIL & GAS PLC

328,858,149
ORDINARY SHARES OF 0.01P EACH, FULLY PAID
(B9MRZS4)(GB00B9MRZS43 ...."

So that gives SOLO a couple of days to sent a holdings form to UKOG if they are still above the 3% threshold.

They haven't done the EWT on the two Kimmeridge layers yet.
They haven't drilled and flow tested horizontal sidetrack HH-1z, HH-2, HH-3, HH-4, HH-5 or HH-6 yet.

What the actual production peak flow for the six wells will be is completely unknown.

The pre-planning document's guide figure for peak production possibly being briefly in excess of 500 tonnes of petroleum (mainly crude oil but also gas) per day, is purely to categorise the scale of the proposed development.

Once this estimated scale is declared then the planners know which boxes to tick, which level of environmental assessment is required and so on. It means that the planning process can start. If further down the road it is found that the likely production figures will be different, then a revised planning application could be submitted.

It is still early in the guessing game.
--

What is the minimum capacity for a gas to electricity generator?

In MCM's RNS today
http://otp.investis.com/clients/uk/coalofafrica/rns/regulatory-story.aspx?cid=361&newsid=1193001

MCM still owe PAF part of the payment for the coal mine.

$1.9 million deferred consideration due to be settled on 30 June 2019. The amount is interest bearing and may be paid in advance with cash or at due date in shares.

Ibug,
"Do you know how long it takes to drill to 3000ft"

Not very long if they are only "drilling" through air. The well has already been drilled.

5 Minute CEO interview from Business Day TV
https://www.youtube.com/watch?v=64fbGG0t2MA
19-09-2018

Looks like YA knew the rules but chose to break them.
Pity there isn't a StopXam sticker for those that breach financial conduct or market abuse rules, like there is for the few slightly selfish Russian motorists.

https://www.youtube.com/playlist?list=PLDel91cHWOF-cSLh5I56l7fH_b90BYd1o
Young social activists film and confront motorist breaking traffic laws and their sometimes tetchy responses.

Some people looked at the snapshot cash position as at 30-06-2018, but ignored:

The available Revolving credit facility of R485 million = approx. GBP 24.9 million.

The investment of "..Pan African Resources holds 13,064,381 shares in MC Mining Limited (previously known as Coal of Africa Limited). The investment was fair valued at R56.7 million or GBP3.1 million...."

That every week they can push a hypothetical wheelbarrow down to the bank and tip 2 to 3 thousand oz of gold onto the counter top, and ask the teller to credit the USD or Rand equivalent amount to PAF's bank account.

I don't think that cash, cash-flow or access to borrowing is a problem.
---

If there is a good business case for starting a project
The Royal Sheba Project
Evander Mines’ 8 Shaft pillar project
Evander Mines’ Egoli Project
Barberton Mines’ sub-vertical shaft

or a purchasing a new asset (even if that involves borrowing) you can see why they would want to press on.

But there will I hope be a few months gap until a decision is made on whether to proceed on something new. In that time people can see how well the low cost production model works.

With the known bad news out of the way.
Official Full year results, reserves update and guidance on dividend tomorrow.
The algo trader has switched to buy mode today.

https://www.bbc.co.uk/news/world-africa-45559954
18-09-2018

From RNS 15-08-2018

"......In order to provide Shareholders who did not take part in the Placing with an opportunity to participate in the proposed issue of Open Offer Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe at the Issue Price for an aggregate of 52,439,328 Open Offer Shares, to raise up to £1.2 million (before expenses). Qualifying Shareholders have a Basic Entitlement of 1 Open Offer Share for every 9 Existing Ordinary Shares registered in the name of the relevant Qualifying Shareholder on the Record Date.

If any Open Offer Shares are not subscribed for by the Qualifying Shareholders, the Company may allot and issue the Open Offer Shares to the Conditional Placees at any time before the expiry of the 90 day period described in Resolutions 1 and 3 in the Notice of General Meeting set out at the end of the Circular up to the maximum number of Open Offer Shares. The Open Offer is not being underwritten..............."

So if under-subscribed by existing shareholders, any spare open offer shares may in the next couple of months be offered to placees.

Timetable

"........ Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instruction (as appropriate)

11.00 a.m. on 12 September 2018


General Meeting

11.00 a.m. on 13 September 2018


Announcement of the result of the General Meeting and Open Offer

On 13 September 2018


Second Admission and commencement of dealings in the Open Offer Shares

8.00 a.m. on 14 September 2018


Open Offer Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)

As soon as practicable after 8.00 a.m. on 14 September 2018


Expected date of despatch of definitive share certificates for the Open Offer Shares in certificated form (certificated holders only)

No later than 21 September 2018 .........."

"... 8.1 What types of security are usually seen in project finance transactions in your jurisdiction, and are there any notable exclusions, including assets which cannot be secured?

Collateral available in Tanzania includes mortgages over land, fixed charges over assets (including cash at bank), share charges and pledges, assignments by way of security, (including the benefit of contracts and receivables) liens and floating charges (together with security interests) and guarantees. ....."

I am still a supporter of the idea of the UKOG shares being used as "share charge" Collateral for a loan.
The longer SOLO can hang onto the UKOG shares, the more benefit SOLO will gain from the gradual increase in value as various Weald prospects move to production.

IMO
Sell out of one account
12-Sep-18 09:55:39 @2.20 p 350,000

Buy into another account 14 seconds later at a higher price.
12-Sep-18 09:55:53 2.22p 350,000

If both were sells then the price of the second transaction would be the same or lower.

--
I noticed an example of project funding, where Zimbabwe is trying to improve its image as a place to invest.

http://www.miningweekly.com/article/prospect-secures-10m-more-for-zambabwe-project-2018-09-11
11-09-2018
"..... Lithium developer Prospect Resources has secured a $10-million export finance facility from the Reserve Bank of Zimbabwe, which the company said will be used to meet development costs for its Arcadia lithium mine.
The facility, which was issued to Prospect’s Zimbabwean subsidiary, will have a 7.5% interest rate and a capital repayment holiday of 12 months, after which monthly repayments will be made for a period of 24 months. ........"

As Tanzania has a much larger economy than Zimbabwe I wonder if it has similar funding schemes.
Perhaps an up to $15 million facility for (APT + AEX + SOLO) to cover the construction of pipeline from three wells to gas processing plant stage.
To in part support and develop skills and employment in the Tanzanian pipeline construction industry.

There are some restrictions for seeking loans using petroleum licences as a security.
http://www.iflr.com/Article/3646259/2017-Project-Finance-Report-Tanzania.html