The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
Would like to hear more about financing options in the event of a failed FO. ARA/Zubairs would be the only option, but they could do it. As they own 30% of the company, it is firmly in their interest to see this thing drilled. A convertible loan would be out of the question due to ownership rules, but a straight loan is possible if there's appetite.
Talks to finance the future development would then re-open (perhaps more broadly) in the event of a big discovery.
Financing post-drill is what most here wanted anyway. Obvs up to Zubair if they're willing to put $10-15m capital at risk, and if SOLO has funds to pay their share.
The offering should be open to retail investors. It's basically free money for Institutionals. Lazy Lazy Lazy.
If the gov't were to apply rational logic to these proceedings, this farmout would have been signed by the original target date of November 2018. It didn't. Who knows what their agenda is. That said, will stop listing the many risks to the company. Today's half-year report should be enough to scare away most investors anyway.
Brinkmanship is indeed the right word for this situation. My back of mind concern is that TZ has also been getting into the E&P game itself these days, and they many want these licenses to collapse and take back control themselves.
Plan A wasn't working either. Agree re APT, though they will be sensitive not to ruin relations with the govt. They'll hold all the assets, but without any favour from MoE, they'll be worthless anyway.
Also, don't discount the company's ability to change it's mind in two weeks. Esp amongst a bunch of Brits having lived through Brexit for 4 years! There is no further extension until there's another extension.
This new approach may have Santos' fingerprints all over it, as someone who's dealt with difficult governments his whole career. His appointment and the new hard line strategy hardly seems coincidental. A higher stakes approach, but something had to be done, the number of extensions were beyond embarrassing.
FWIW, I agree a merger of sorts is in the cards. Clearly contingent upon signing of the Farmout and CH1 drill date announced. I also think the likely candidate is WEN. Doesn't need to be a straight 50/50 split, that's for the Boards to work through.
Under NewCo, WEN gets free exposure to a high impact pre-paid drill & development programme. AEX gets access to cash and cash flow from existing asset. Both companies are stagnating and need partners. Biggest impediment might be how long it would take MoE to sign it off.
And without this needless distraction, the BOD can go back to not developing a business strategy, not collecting monies owed, and not selling off our unwanted assets. As long as those fees keep rolling in. Over to you, Mr Chairman.
Listen in? No comrade, "the meeting will comprise only the formal votes without any business update or question and answer session. A very limited number of persons from the Company will be present to conduct the meeting such that relevant legal requirements can be satisfied."
The beatings will continue until morale improves.
I think WEN would be happy to be attached to an operator, which if they merge with AEX, would be hooked to ARA. WEN have no operational team. They're basically a bunch of accountants, a few on-ground ambassadors, and a well-paid semi-retired Chairman who lives in Gibraltar. M&P, operator of Manzi Bay, have stated they have no interest in investing in more local exploration anytime soon (have bigger fish to fry), so there is nothing going at WEN, aside from depositing their monthly royalty cheque. Not a bad position to be in I suppose, but boring as h3ll. Ntorya would give them a project to be involved in for the next few years at least, and they would have a chance to strip out their (bloated) SG&A costs.
Bearish on growth prospects elsewhere. Could be they see opps domestically, as WEN has announced (ahem, merger with AEX). Interesting though that a cash rich company such as ORCA has no appetite to grow int'lly when so many O&Gs are on life support. Sounds like a good time to pick up value.
Interesting 'non announcement' from Orca (the other gas producer in TZ) on its change in strategy. Now says it plans to drop plans to expand across Africa, and is staying local to max'ze returns from SS. Also, its CEO is stepping down.
Not unlike WEN, which are both CF positive/ BS rich companies, that seem content to operate as a utility. Not sure what the takeaway is, but both operators have turned bearish about using TZ as a springboard for growth.
https://orcaenergygroup.com/2020/09/16/orca-energy-group-inc-announces-changes-to-its-strategic-direction-and-senior-management-team/
blackgold, yes I'm well aware this is old news. As mentioned, I discussed this with JB in 2018. However, tone and confidence was good ("there is something deeper"), which is not much but is the only thing we can interpret right now. No mention of Kiliwani South.
TWalbyoff, at least when it comes to Ruvuma, costs won't be our problem. Not many explorers can say that.
I'd like to hear more about the KN1 perforation though to reach that deeper target. Seems like a simple enough thing to do. Jay B always said he thought the KN1 drill missed the big pockets by a few feet, and simple perforation could be a game changer.
Filling in the gaps, Ambrose certainly comes across as a likeable chap.
FWIW he seems genuinely baffled as to why it hasn't been signed off yet. He stressed that all discussions with TZ authorities are positive, and that they're fully supportive of the proposal. He also noted the passing of the former President has caused a further s/t delay, in case they were hoping signoff this week. These delays will have no impact on drill date -- still set for Y/E or Q1.
I'm dialling in and will be disappointed if they don't address any Q&A. They asked for questions to be submitted, and I submitted mine. Won't be shocked if they address none of the points, but still disappointed. Amazingly.
Hah, no. Good gig if you can get it I'm sure. Malcy has done a cracking job of branding himself as an industry expertise with inside scoops into the industry. Look at his shameful ramps of all-things James Parsons in recent years. Sound, Coro, Echo. All three of which have lost loads of money for shareholders. Now, as a reward for his pumps, Parsons brings him in as a Board member to his latest con job, AST. He claims independence, yet Malcy's AST post on Friday: "I am increasingly liking this story..." then on Monday gets appointed to the Board. What a joke.