Member Info for Strongman

david.sefton @ aaog. com

Washer, no they have not closed the first one, as the second was a add on to the original short. I make it around 5.8m shares they have sold down to get the price to print 6.315 (same as your calcs). They may have got around 800k back from the open market Friday, but they still require a buy or return of stock of 5m.

For shareholders, get the popcorn ready, as next week is about to get exciting, Sandabel have dumped their load last week and can not effect the share price anymore. What will the company do for its shareholders is the question here. No action and some holders will be very disappointed. Imagine how many good shareholders had margin calls and forced sells on that manipulated drop in share price last week. They will not be happy or deserving of Sandabels actions.

Sandabel have been caught with a finger in the till, perhaps they could not get borrow from a market maker, and had to borrow via short stocks, hence the idiocy act. I can see a short squeeze here on Sandabel if DS does the right thing. Not only a short squeeze but a squeeze at a time when the rig is drilling again - ouch, that will hurt.

I am still trying to get my head around this, not that I do not understand it, which I do. But why have Sandabel done such a blatant and foolish act (openly declared short).

Normal CLN or death spiral is simple, CLN operator will forward sell first conversion higher and convert back first time. They will do this borrow of forward sells only once and only on first conversion. As it is a simple promise to borrow on a T3 - T10 it is not a short and would not be declarable to the market, so in essence they can do this in the shadows and legally. Once they have done first conversion and gathered the shares, they then simply repeat the process over and over again, hence each conversion is lower as they sell into the markets. They make money on each conversion and the final tranche conversion will be the lowest of the lot. Hence the nickname death spiral for a CLN facility. Look back over companies that have provided CLN, and you will not see a short position declared, it simply does not happen that publicly. No CLN provider will want to declare a short position prior to conversion where they are aware that the lower share price will mean more shares on conversion. The wrath of existing shareholders and the board will follow if they did this openly.

Therefore I cannot believe Sandabel stupidity here. The company do a draw down, and Sandabel open a high short the very same day. Due to regulatory rules, they have to make a full declaration of the short (a few days after though). They then have the audacity to increase that short a day after opening it. They do all this and for what, short dump at 7.10 area to trigger and forced low bid of 6.315. I guess the greed got to them and they went for the profit on a short and profit on a conversion, rather then just borrow forward sell shares from market makers like normal.

This action is now getting a back lash, make no mistake they have already sold 3.6% of the company, hence the recent falls. This mean we floored on Friday and expected rise started late Friday with a very odd 100k batch buy backs, which I now think are the shorts starting to close sub 7's. Next week will now be very interesting, what will David Sexton do as chairman of the company and actually supporter of this CLN deal right up to Friday saying Sandabel were supportive and not selling etc. Personally I would be very happy to see him give back the £1m, close the facility and say goodbye to Sandabel. Other then that, if he does not do it, make Sandabel convert at spot price of 10.139, then cancel the facility. It will all depend on the T+C's, has the company put it in a clause to not short, or was it a gentleman agreement only. Either way Sandabel have broken one of them, and we should not do any more business with this outfit.

For shareholders, get the popcorn ready, as next week is about to get exciting, Sandabel have dumped their load last week and can not effect the share price anymore. What will the company do for its sharehol

It happened on FRR a month ago, the share price went from 0.25 to 0.40's immediately. This puts ordinary shareholders in a strong position next week. Lets face it, Sandabel in theory have already dumped 3.6% of stock they don't even own, that is almost half the stock they would have got on conversion.

Right off out for the evening, catch you folks tomorrow.

Nice one Washers, I was typing up the post before I read your reply. Normal clause is a no shorting clause in one of these type of CLN's which are focused on a conversion price set via a three day low bid average. I hope DS put it in there in writing, if not, and he was going with a gentleman agreement only, then I am afraid he was not market savy to do so.

Whatever the outcome, the dismissal of the remaining CLN with this type of lender is a must IMO.

I have already received a email back from DS:

''I have just seen this and am looking into it urgently''

David

Now gentleman, do not be afraid to voice your anger or discontent here. As shareholders we have just seen the worst share price of the year, and we now know it is all and only due to Sandabel shorting the share. I am very surprised they have done this myself, the normal code of the CLN's are to simply forward sell the stock and replenish with conversion. Here we have Sandabels trying to make money from a share price decline via a short, whilst also gaining a few million shares as a bonus of driving down the share price at the same time for conversion. This is pure greed imo, it is certainly not supportive.

If I was DS, I would do a conversion at spot price of 10.139 for the £1m drawn down, citing the blatant manipulation Sandabel have done to try and achieve a lower conversion price, at the dilution of normal shareholders. I would then cancel the remaining facility, as washer said earlier, a simple no warrants placing after the rise in share price will be much better. This news alone will please the market.

I would say we will now start on the front foot Monday, with a chance that perhaps no conversion will take place and CLN provider will be made to get several million shares from the open market to close position.

Sandabel have hurt shareholders and sentiment by their actions last week, therefor shareholders have the right to voice dissatisfaction and action from our board. Write the email, it takes 5 minutes, you will be surprised what a collective voice can do to right a wrong here.

I will be buying more Monday, now I know the only reason for the fall was a short position of several million shares!!!

They have not closed Washers. They have borrowed shares to get the short on 20 and 21st November. They then dumped them into the market in strategic dumps to force the share price down. But this is where they have a advantage, they obviously intent to return the borrowed shares via the conversion shares they will receive from the company next week. A perfect close as they do not have a need to buy back on the open market. The only spanner in the works is if AAOG said, sorry you have broken a clause and there will be no conversion. Then Sandabel plans hits a brick wall, and they are forced to go open market to buy back 3.6% to return the borrowed shares to lender.

It is a perfect short, simply borrow, dump, lock in the lower conversion, so you are not only making profit on the short, but also getting a lot more shares back from the lower manipulated conversion.

Sandabel went short on the stock on the 19th November (declared next day on the 20th). That was on the day the company had the draw down of £1m.

Sefton should stop the conversion and force Sandabel to close this short by buying back on the open market. Then you will see a huge rise.

Mind you I would laugh if Sefton gets the hump here with Sandabel, cancels the draw down and conversion and facility. How will Sandabel close then, open market buy back is the only way. Now that would be some payback to Sandabel.

I am stunned but not surprised to see that short report from Sandabel. Not forward selling but just as bad, by shorting the stock down to gain a lower conversion price. That means they are not supportive, Sefton at fault here as well, should have had a stipulation in the CLN rules to say no shorting of the stock allowed by Sandabel.

Someone need to bring this to the attention of Sefton, so he can stop anymore conversions or draw downs in the future.

Yes risk is always on the high side on a new well, although in this case it is firmly mitigated on risk to reward as well. With 90% and 60% COS on R1/2 and Menjo respectively, I think investor have a better then fair chance of hitting oil in both these zones. NPV of 6.00 for R zones and 17.30 for Mengo make it all the mouth watering when you can load sub 7.00 this week just gone.

Yes as per normal a few old shareholders have probably moved on, frustrated with delays/CLN facility, but they are replaced with fresh money investors. I was in the LGO era, when their Goudron field (very similar to Tilapia) came good from its three zones with similar COS. The new wells came in above expectations and it moved the share price up from 0.75 to 7.00 in a matter of a month. Unfortunate for them the GOR in the wells declined, it was like a shaken bottle of pop, when you open it booms out and after it goes flat, So they suffered big declines in pressure after a month or two. The pattern is similar here, but less GOR at Tilapia will see these wells perform with minimal decline rates IMO. What is the same pattern though is frustrated shareholders left that one at the lows, only to see the share explode up on what they expect it would do all along, when the well finally came in. Patience is the biggest weapon if you are investing in this sector, you have to be prepared to see the well through.

Both R zones and Mengo are that close, as the market celebrates the first RNS, it will still have momentum for the next one a few days later. I have traded in and out of this stock in the past, made a few pounds along the way. But now is the time to take position and hold for the results of both these zones. I am personally hoping that the results of both these zones are positive, which will lead to a much higher share price, which then leads to a option for me to have a certain number of free shares for the third zone.

The last two weeks have been frustrating, not only with the drill rig and stoppage, but markets in general. I do believe we left all that behind at 16.30pm yesterday, and can now look to a more normal book and ascending price all the way to R1/2 and Mengo results.

Oilers having a tough time at the moment, but the markets looking for a winner here, and I am sure this will oblige in December.

After the turbulence of the CLN's, which along with a period of stoppage, has allowed a few bears to make money in the last two weeks. We can now, after that pain, say we have the cash in the bank to see out this drilling and more. I am guessing SMP will give a major monetary discount to the next drill to compensate for the rig issues on this hole.

A TR-1 after conversion will tell a story here. If there is one, then Sandabel are good guys, if there is not one, then they have had Sefton over. These CLN providers are here to make money, I hope Sandabel are supportive as Sefton says.

As for PI's, we should be comfortable after a hard couple of weeks. The CLN shares are either flushed through or will be held, so no more pressure on the rise going into drill results.

I am happy to have added a few this week at unexpected prices, now looking forward to making more money on those cheaper load ups.

Only if they own the shares after conversion. If they have borrowed the shares to forward sell (up for debate), then they will simply send those conversion shares back to lender. So they will not own the shares and no TR-1 required.

Yep around 15m, but I think its either flushed through forward already (not really into believing what they are telling Sefton) or they will hold just like us PI's for the bigger prize here on the oil shows in December. If they hold they will TR-1, if they have forward sold and there is no TR-1, then its confirmed they did forward sell before and the game is up on all that protect sp they have said. That is because if they forward sell, all they do is give back the shares to lender (probably market maker) on issue from conversion. Which then means they do not hold the stock after. If this is the case and they are found out, Sefton should not use them again and cancel the rest of the facility. Of course if there is a TR-1, then they can be trusted to keep their word.

Todays low bid can be used up to Wednesday, when they refer back to the last three days lowest bid on conversion. For example they ask for conversion Wednesday (day of notice to company), they then look at Today, Monday and Tuesday to get the lowest bid price for conversion. That is anytime up to Wednesday of course to lock in these last two day lows etc.

Well know more next week, have a good evening all.

They can have 6.315 low bid from today if they want, which I guess they will take with open hands. Conversion Monday to Wednesday looks to be on for them on the three day rule.

Yes good finish actually, printed a day high of 6.90 into close. Roll on next week, imo the worst is over.

7.05 ask

IMO a delayed sell order of around 5m or more for the last three days will show at some point.