Member Info for vike1

The valuation is difficult due to the complexity of the development and the time it’ll take to get to a return.
If the buyer spends $40m (USD) to buy the asset, and another $35m to build, that’s -$75m out of pocket before a single dollar comes in. That will eliminate many buyers for a frontier market asset (including WEN, btw).

Receiving CF from 140mmscf/d production will take time. Any M&A team will model it better, but assumptions will include:

- Volumes based on a multi-well development, with several more drills needed. Est time for that?
- Infrastructure/pipelines will take 18-24 months post drilling. An EPS will mitigate a bit, though we don’t know flow rates
- TPDC will surely then take up their 20% of revenues (as is their legal right), reducing the buyer’s holding from 25% to 20%
- With natural gas prices plummeting, and an aggressive govt approach to IOCs, there's not guarantee we'll continue to get $3/mmscf going forward
- Infrastructure, if built by TPDC, will get charged back to us. If on us, who knows the costs.

In short, it’s $75m out the door in the near term. Who knows how long to start getting it back. Add the country risk, and the multiples go down fast.

It’s an awkward size – too small for the majors, and too big for the runts on AIM. It’ll take a Zubair Corp, or perhaps a Private Equity shop with no short-term demands from shareholders, to be interesting. Either way, we won’t get anything close to FV.

The real value here is 5+ years out, when we can enjoy a nice annuity over the next 25 years at minimal cost plus new exploration opportunities. Only IMO of course.

It's a great reference point, and a ****tonne of dough. Of course, this latest group won't care what previous mgmt burned through, but important nonetheless.

I'd be surprised to see that much cash flow our way upon a sale, at least not before completing CH1 drill (which would add another GBP5-7m to our bill). That multiple vs. expected future cash flow from the field don't add up.

BD, I recall you did an interesting back of envelope calculation of what SOLO has spent on Ruvuma so far. I think it's nearing about $15m or so. Now they're proposing chucking more cash at the project, with possibly no end in sight. It'll be interesting to keep an eye on those numbers to see just how above or below water this investment ends up.

Can't bare to consider returns from a 'risk weighted' perspective.

Thanks BD and CP for taking the time to push these issues with the board and sharing back with us.

If anyone from the company or PR teams are paying attention here, it would be preferable in future to get ahead of these messages by engaging more openly with owners of the company. Big promises two years ago were made on this exact point, and here we are with no comms, confusion over strategy, a delayed AGM and no annual accounts.

CEOs of both aex and wen and already suggested this is happening, like it or not.

If solo sells their stake to newco they could take a mix of cash and shares (to benefit from drilling upside). It’s straight out of the Gneiss playbook.

AEX is years away from cash flow (even with KS1) and are desperate for it. WEN has no growth, and the operator of Mnazi Bay has confirmed no appetite for near term exploration. No one is going to pay cash for anything in this market.

Where that leaves SOLO is interesting bc their holding could be sold to AEXWEN ‘newco’. The $35m credit line could still be applied to costs, just used up more quickly. Mnazi Bay cf to cover the rest in due course.

I doubt WEN are looking at solo’s stake. $15-20m cash payout plus the cost development (another $20-30m) would be too rich for them. See a non-cash merger with AEX more likely.

They're looking at inorganic growth, but only within Tanzania. Interpret that as you will.

More churn needed from Majedie before we can see where our natural sp should be. Each 1% = 35m sells. With no buyers right now (why would there be?), would like to see us buoy well clear of 1p+ on natural trading. Outside of any other newsflow of course

I should bl**dy hope so! They announced a formal sale process of their TZ assets on March 2, and have then conveniently forgotten about it. They don't have the Dyas deal to work through, or any other operations to bother about, and yet they can't pull together an Annual Report within 8 months of year-end? It should be a grade school exercise, since nothing happened in those 12 months.

Too busy waiting for that white knight to come galloping around the corner I suppose.

I'm invested in another company in the US, looking for gas, which just operates in a different world. Permit to drill issued on May 15, rig sourced on May 27, well spudded on June 17, reached target of 2354 ft by June 22, rig now mobilized to next prospect.

It doesn't need to be this agonizing!

Oh FFS. What this says is they have no money to fund the drill. It also says dilution is coming. Probably lots of it. Take off the rose tinted glasses.

When is this meeting? It's meant to be held within 6 months of year-end. No exceptions being made for COVID as far as I know, and min 3 weeks notice period needed. Anyone have Brian Cassidy's email?

Leo and team have way too many shares to simply throw a tantrum and walk away from the company. He'll be forced to negotiate something new for his own sake if not PIs. No doubt he can do better than this!

By far the shakiest I've seen Koot. He was also nonsensical at times. CERP standing still? Don't we have a 'transformational' appraisal well coming up next month? Been negotiating with BPC for over a month? Does he mean when BPC's share price was 1.3p, or nearly a third of it's deal announcement price? No clue or opinion on whether BPC will farm down it's holding? *******s.

We all know AIM shares are for risk takers, but this feels like at best wilfull blindness, and at worst, stock market manipulation.

The well is ‘funded’ via convertible loans from a Bahamian investor. There is almost no cash.

The ONLY way this deal is digestible to me is if BPC can farm down a chunk of the asset. Way too expensive and risky for a minnow like them.

There are lots of deals to be made right now. I always took Koots to be more the hammer than the nail. Small but clever. But was wrong. A life buoy for BPC, which they'll need because their funding strategy, via messy convertible loans, is pure trash.

This will be a NO vote from me. Partner, pricing, and timing is just off. Way off.

This is a dog's breakfast of a deal. Why spend all that time re-positioning only to sell low to a sinkhole of a company like BPC. He then sacks his mgmt team and take a seat on the board. Reputation shot.

I can confirm it doesn’t matter whether it’s a buy or a sell. That labelling is nonsense.