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JMumbo, no you are not missing anything. I know they hold 500,000 shares each, which represents just 0.2% of the issued share capital. That's hardly skin in the game. To be really committed to this business and its success I would expect them to invest something like a £1m each for a shareholding of over 5% each. Then they would realy be committed and have their own money at risk, like shareholders. After all they are earning £600,000 between the three of them for years to come.

reach, no I haven't found charts of mcap. I did what you said in your post.

I think the problem has been with directors who have over-reached the company. By that I mean thay have spent money too fast for things that could have waited. I am thinking here of the two US acquisiitons in Marken. The spend was the cost of the acquisitions and the subsequent losses/negative cash flow. They spent money they did not have. It could have waited.

Also, the directors have no shareholdings themselves and the three of them pay themsleves £600,000 pa. So theyhave had no downside from their actions. £600,000 is too much for a company in development. They have share options that are way out of the money. I would be very angry if they awarded themselves more at the current price. They need to show commitment to the business and buy significant shares in the market. My goodness having earned £600,000 pa they can afford it. Also, I am so against share options for free. If they want to be in the same position as shareholders then they should buy the shares with their own money. I would have nothing against then awarding share options in relation to their purchases..

Having said all that I do like the markets they are in, the technology and the deals/JDAs signed. Woodford is a godsend for a potential buyer. I've taken a small stake and have a limit order in. We will see.

But please directors of Xeros, buy substantial shareholdings. If you don't why shold we?

the problem is that Woodford has to sell the shares. Time is not on his side. Like so many other companies that have been in this situation they have the choice of being screwed by a buyer for the whole holding or trying to sell in the market to insitutional or private investors. Why should anyone buy his shares, unless at a bargain price, when investors know the company has said it will make another fund raising later this year. So that's probably another 150m shares to be issued. More than Woodford's 102m shareholding.

I just wish the directors had more financial nouse in managing their fund raisings. But they haven't and this is the opportunity as the demand for their technology is there, its essential and its huge.

Yes 300p with far fewer shares in issue, so its meaningless. We need to look at the market cap then and now.

Just seen this post elsewhere.

"Facts from webinar tell us that Alkaid oil in place of 900mmbo with a recovery factor of around 15% in heart of reervoir. That gives recoverable oil of 135mmbo. The NPV yield at 10% discount is given as $7/12 with $10 due to the better quality oil. That gives a value of $1350m. With 454.3m shares in issue and $/£ rate of 1.27 this gives us a per share value of 228p.

Why don't they just sell Alkaid for $10 or so a barrel and then we will all be happy?"

"The Group has now come to a crossroads in its development where the total debt position will be difficult, if not impossible, to service without assistance from our senior lenders and mezzanine debt lenders."

I think this is saying a lower level of debt is required.

"Both the senior lenders and mezzanine debt holders accommodated the Group's request, and successive standstill agreements through to 31 May 2019 have been agreed to allow a constructive dialogue to occur. Whilst negotiations with all lenders are ongoing, the Board is confident of achieving a positive result that will provide business continuity, viability and future growth."

To me this says the odds are on achieving the required lower level of debt. The question is what level of debt is viable for the company?

What level of debt

Lee, I'm not so sure that the finance terms will be coming soon. If it was a simple refinance then yes terms might be announced by end of May. If the terms were simple then I would have expected to have heard by now. No, it looks like a more fundamental refinancing is being sought and this may take longer. IMO it's not certain agreement will be reached, so it remains a two way bet - no agreement or a good refinance. A little bit like Brexit! Well not really - Brexit is no deal or Mays bad deal.

By the way do get out and vote for our democracy tomorrow. How much longer do the establishment think they can ignore voters and continue to do what suits them.

Once again Darren Brown has acted impeccably with the RNS coming out on the due date. This follows on from excellent quarterly progress, with a good report on issues and their solutions by the company. Just enough improvement in results to keep the banks on their toes.

At first reading of today’s RNS my reaction is that the banks have dug in and are not going to accept a haircut. They see no time pressure on them to do so. But I suspect the banks’ negotiations with our two major shareholders are, to say the least, difficult. From their previous agreement with the company, they seem prepared to give more time but want to de-risk the loan by getting a chunk of money upfront. This is clearly not possible. Some sort of compromise is likely, I think.

IMO the key influence is DB. Certainly, the banks will be impressed and confident that whatever is agreed, he will deliver it. Is his previous RNS he said Directors are confident the agreement will be signed. I have confidence in him and expect resolution of the borrowings soon.

This agreement to the standstill by the banks and mezzanine lenders is very, very significant IMO.

I should think that Darren Brown has told the banks and other lenders the level of borrowing that are sustainable for the company, probably around half of the current borrowings. This is the sort of open communication a man like him would use. If this is so, then agreement to the standstill implies that the lenders recognise that this level of borrowings is realistic and that they hope to negotiate this upwards somewhat.

If this is in fact the case, then we can expect refinancing of the borrowings at around half of the current level.

I fully accept this is a hypothesis but if I was not fully loaded, I would be buying now.

Ally/david, that's what I thought. I have subsequently heard that all wells in Alaska are drilled with an oil based mud for the reasons you stated Ally. Why on earth did 88E use a water based mud? In view of the logs and the problems caused by a water based mud, 88E should have flow tested this well. Did the Aussies run out of money for flow testing?

Winx probably has potential to be economically viable and shold have been flow tested.

gorgeousgeorge, in the past Jay has put the value of oil in the ground at between $5 to $10 per barrell, depending on the current market price of oil..

Ally, to a layman like me it makes sense in Alaska that oil based mud is used for the reason you stated. I'm not talking about Alkaid but Winx.

In the 88Energy RNS of 13th March it said "Provisional petrophysical analysis of the wireline logging program indicates low oil saturations in the primary Nanushuk Topset objectives; testing and fluid sampling indicates that reservoir quality and fluid mobility at this location is insufficient to warrant production testing, despite encouragement from oil shows and logging while drilling (LWD) data"

What type of mud did 88E use in drilling? Could the petrophysical analysis, testing and fluid sampling have been affected by using a water based mud rather than an oil based mud?

Hi marmaris, do you know what type of drilling mud is used in Alaska?

A valuation of $3 per bl is too low IMO. I know this is what was paid in a recent transaction but this was where there is no infrastructure and a huge investment is needed to create it.

Alkaid is close the the existing pipeline and the Dalton Highway and would command a higher valuation.

jgallagh, i think the strength is with the major shareholders so I don't see them taking a haircut on the value of the loans. But I think you could be right in that DB may push for a reduction in interest rates on the short term loans. After all the major shareholders have recruited DB and the risk factor on getting nameplate gold production is much reduced. Surely, with any haircut for the banks major shareholders should show commitment to the business by reducing interest rates.

Seems that the banks have a real problem with this. One way out is for them to sell the loans, in which cae they would have to take a haircut. At least they would get a chunk of money now rather than cintinuing witht he risk, as they see it.

The other option is to change the last loan agreement by getting rid of the conditions precedent and rescheduling the $15.5m due on 31 Mar. But that leaves them at the risk (as they see it) of further upsets to their cash flow.

Either a haircut or reschedlue is OK by me.

Not long now!

Darran Bowden was appointedon 3rd January 2019 and since then:
1. Has appointed a new management team.
2. Conducted the review of historical operational performance versus design and production data previously announced that took only 30 days.
3. Removed the finance director and made an interim appointment on the day the FD left the company.
4. Has agreed with the banks an Amendment to the Senior Lenders' Facility Agreement, which establishes the company's integrity and professionalism thereby setting out the company as one to do business with. This places the decision on fund raising with shareholders who are likley to refuse to put up the funds wanted by the banks. We will probably now see the two major shareholders, bank executives and the company now getting together to find the final solution to loan rescheduling.

It has been indicated that the past deficiencies in production processes have led to inadequate gold recoveries and that this could have been 1000oz per month. If this has already been remedied by Darran Bowden and his new team, the enhanced gold recovery would have virtually a nil cost associated with it. That would be 12,000oz at $1300 for $15.6m additional revenue. No wonder Holzberger was removed.

While the Ruffer overhang must be a burden on the share price, I think the resolution of borrowings is still a key factor. The new agreement with the banks does two things. It shows the professionalism and integrity of the new management, and by default the company. Secondly, it shifts the burden correctly onto shareholders.

From the banks' viewpoint it saves face for the bank executives responsible for the debt as they are shown to have achieved a sound new agreement. Against this the banks have not performed well initially in leaving the door open: in the event of change of ownership it seems the licence reverts to the governement thereby removing the banks' collateral.

Therefore, I think the future is still likely to be determined by major shareholders and managements' short term performance in producing gold and cash flow.

In the current quarter gold production I think could be between 15,000 and 17,500oz. I'm looking for sales revenue between $20m and $25m including gold stock at 31.12.18 as a best case. This is probably not enought to generate the cash flow needed so it will be over to major shareholders IMO.

On the surface it looks as if a fund raising is to take place as a condition precedent to the new agreement. The company has agreed to the amendment to the banks Senior Lenders' Facility Agreement., therby confirming the waiver to 31st March 2019. But whether this happens or not is another matter.

The company is controlled by Mr Candy and Mr Edwards throught the two companies MTL Sarl and Runruno Holdings Ltd. They have financed the company through their equity and band finance. This was done to maximise the returns to all shareholders in the company. They have a shareholders agreement with the company giving them certain rights (I have yet to locate the details of these rights). It is clear to me that these two shareholders will not allow a fund raising that will dilute their holdings, and potential retuns on their equity, by around 90%. This must also be clear to the banks. But institutions have to follow their procedures and bank executives have to cover their backs, even though they may doubt the success of their actions. It is noteworthy that the Finance Director has resigned and will leave hte company at 28th February. So at 31st March the person who handled the agreement will no longer be there.

As other posters have noted, the new management is getting the production to run as planned and this should improve the company's cash position. It remains to be seen if the company will be able to meet the 31st March payment from its cash resources. If if is able to do so, this would lead to the agreement being redefined.

The other issue is about the strength of the banks' security and other options. If the company's shareholders will not want to raise funds by issuing new capital, what can the banks do? I suspect very little but I don't know why. If they had an effective security or viable other options they would have taken that course of action already.

If this analysis is correct, then the future still looks good for shareholders if the major shareholders hold fast and refuse a substantial fund raising. A compromise on the eventual debt refinancing still looks te most likely outcome to me.

What a waste of meney! Our course the company was so flush with cash!!!! It’s typically the sort of thing a consultant would do! I.e. Holzberger, who had little regard to running a cost effective and efficient business.