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I intend to raise the issue about the lack of representation for shareholders and the protection of shareholder interests with regard to funding arrangements for an appeal. A certain amount of transparency is needed on the funding issue including any exisiting terms that may or may not mean that Calunius is obligated to fund on the same terms as previously.
Due to the delay in commenting and other factors such as the blatant injustive of the split panel decision, I am quietly confident Oxus will appeal. If that is taken as a likely prospect then the main questions of significance for shareholders are :- a) Is Calunius and / or its subisiary Gretton obligated to fund under the current contract? b) If not what will be the funding arrangement and will the funders increase their potential won % to a massive extent to the detriment of shareholders?. c) Who is liasing with the administrators to protect shareholder interests. Shareholders can't take it for granted that Stead will because he had a mysterious deal that remained undisclosed. He didn't take a salary and he didn't receive shares but he didn't disclose what it was. Perhaps it is a win % and if so he would not necessarily be aligned with shareholders. Likewise for RAB they might be invited to participate in funding an appeal and aligned interests with shareholders can't be taken for granted.. Shareholders need to make sure they are not squeezed out from the potential benefits of an appeal.
Oldernotwiser, that's a good point about the tax rebate not being in contention. It looks highly possible that the Uzbels were simply withholding in lieu of the amount they wanted to claim in the UK courts. The arbitration merely stated they didn't have jurisdiction over that so it wasn't a win by Calunius in knocking it aside, however, administration has done that. So Oxus has no liabilities of significance aside from, potentially, Calunius. On the face of it then they appear not to have met any standard litigation funding criteria that warrants payment. It's important that the administrator clarifies that point at an early stage and also clarifies if a decision on whether to try and get the French courts to set aside has been made. I also hope he will ensure that shareholders get to see the full arbitration award document.
Using working days that would take the appeal deadline to approximately 10th feb.
Almost inevitably the appeal date deadline will be calculated by using "working days" - holidays and weekends will not apply. The hope is that OXS and legal advisors / legal funders are working on something viable and will use the maximum time to formulate an appeal. If so, I suspect the legal funding package would be revised more favourably towards a legal funder. If no appeal tten clearly shareholders should get something on the basis it's illegal to trade whilst insolvent and will be due some or all of the tax rebate due. Unfortunately OXS haven't withheld the material information shareholders should receive in order to determine how much. None of us know whether a tax rebate qualifies Calunius for reimbursement of their costs etc. Surely Oxus have an obligation to be very clear on this in the next RNS. Am obligaton to reveal material facts to shareholders must override the confidentiality clauses in the Calunius contract. It looks like a simple sum of the tax 'adjustment' reimbursement plus interest to 2010 less an amount due to Calunius. Plus an amount for the value of a tax shell with substantive tax losses. I think OXS have about £180m of tax losses but how much per share that is worth within a cash shell I have no idea. Money week ran an article suggesting that the pound could reach parity with the dollar. Any move in that direction also increases the amount per share to be returned. Lots of unknowns that should be clarified soon and it remains to be seen if OXS a) appeals b) goes down the tax loss cash shell route - c) Shead feels like using any remaining cash to go for a bombed out mining play in a territory that isn't going to steal the investment and abuse the human rights of employers.
Should read of course, $6.15m - not pounds.
Good post wraith. We do need clarification of how much if any is due to Calunius. I might be wrong but I think the arbitration costs have been paid, or predominantly paid, as the process has gone on. So, if Calunius were just to get the £6.15 plus costs since June 2015 back then Oxus should be left with up to £4m. Obviously much more if Calunius don't get anything. That should be sufficient to launch an appeal to get the decision set aside. Were Calunius not to get anything and Oxus were to get $14m then it's game on and either an appeal, distribution of up to 1.4p a share or, as I'd favour, the company invests wisely or iists as a tax shell awaiting a reverse takeover from someone to use the tax losses. I hope Oxus will update on four things. The likely cash position post any Calunius and other liabilities claim. Whether we wil see the full decision and, if not, why not. Whether there will be an action in the French courts to get the decision set aside. Further information on the retained deficit. I wouldn't hold out much hope on this unless the decision is set aside but OXS even had their oil rig nicked without compensation. It' things like this that makes the decision hard to fathom. I wouldn't want to over state the 'hope factor' prospects but there is at least a glimmer of hope for some return. We await to hear from Oxus the extent, if any.
Freudian slip ... I hope not ... Plant and machinery might be more valuable than my typo of 'paint'.
So the slim hopes are : 1) Recovery for palnt and machinery. 2) Judicial review. Why the two others in the panel aside form Lalonde chose to absolve the Uzbeks (with their 50% in AGF) of any liability for the failure to push through with funding to progress the case is hard to understand. I hope this sets a legal anomaly that could be challenged, that is, JV state company partners have no liability when projects don't progress. Straw clutching though.
Onion, quite a decent attempt at a prolonged wind-up. On the off chance you genuinely hold these views may I suggest Afghanistan as a good location? Just make sure you relocate to the Taliban strongholds though as, sadly for you, they do allow education for women in the capital. The burqa would also meet your modest dress requirement. Quite right to look for a different country though as the Slavery Abolition Act came into force here in 1833 in case you missed it ... Regarding Oxus, I think those that have spoken to Richard Wilkins and have asked the right questions have established he thinks a couple of months fits in with 'very near future' and that takes us up to about the middle of next week. It's not in his control though and I have no doubt he is honest and genuine and his views have been accurately reflected here. All good banter petty to pass the time and don't take anything I say too seriously. No offence intended. In case you are offended at my tongue in cheek comments, I won't ask if you meant you were a porter rather than a reporter :-) Sorry, I couldn't resist! Thanks for covering your conversation with RW even if the incisive questioning you anticipated delivering deserted you on the day. A good read though and well done for making the call.
Quite a few shares being bought at 11.7p or just under and I picked up a few more oday. CRA's recruitment page shows that CET are gearing up for the ENI & U.S. DGC trials so cash resources must be comfortable and in-line with year end management projections. The old CRA broker notes cited a few examples of companies (like Wood Group) buying O&G pumps and other IP protected innovations for figures ranging from £350m to well over £1b so it just needs the DGC to show what it is anticipated it will do to get your £1 per share pricer more blinker. It's been a long journey but CRA looks a very professional company these days. It's also no longer a one-trick pony so I don't care if it is the DGC, IGC, offshore platform compressor or heat transfer technology that produces the results. Companies like CRA used to be valued on DCF valuations and if there is any sign of imminent commercialisation then the stock should have a significant re-rating. One small field could produce an order of 100 DGC's with an estimated minimum £500k net profit per DGC then £1per share would look cheap. They still have to do it of course but as I say CRA is no longer a one trick pony. The market had rated some tech companies like Nanoco in advance of sales. I am hoping investors begin to pick up up that CRA is going to have high value commercial products in (for products of this ilk) the reasonably near-term. With two trials coming around January next year then side-line interest can switch to a market stampede as the herd tries to take a position. Management seem to under-promise and over-deliver but inherited the opposite from previous management and I am sure that legacy has a drag on the share price.
Just to clarify, CRA's compressor is solely for extracting more gas in depleted wells, it's not for oil wells and the acronym DGC stands for Downhole Gas Compressor. It's not surprising that you weren't aware as CRA are not the best at PR hence I think it is a bit 'under the radar'. The good news though is that are countless compressors for oil wells but no competition for Corac for gas and the DGC has over 15 years of development with countless patents. Initially it will, if successful in field trials, be applied to onshore gas wells but it could be used offshore as well. There is a chance that the DGC could be purchased by the likes of Baker Hughes, the U.S. trialist or another service company. Some of the older broker notes pick up on this prospect and cite sales prices for similar novel products in the same sector of £350m plus. That would mean over £1 a share for CRA and the Company could still progress the IGC and on-platform compressor that also have large and lucrative markets. Most shareholders will hope though that the DGC is able to reach its full value and potential within Corac.
Just to add, for the DGC it's $1b for just 1% of the market. That 's in a few of the old broker reports and is quite conservative as well as it seems to underestimate the number of wells that the DGC would be suitabe for in the U.S.
Interesting, and at the upper end based on those cost per barrel figures I'd revise Trap's cash pile to about 13p per share year end and a conservative 17p per share mid 2014 without drilling spend. That's based on Athena contributing £2m per month from Jan '14 rather with (as trap anticipate) p4 repaired than the approximate 1.2m current contribution. The only extra expense is the cost they cite of £1m per annum for their new operator responsibilities. There are three DECC drilling commitments for 2014 and Trap will also receive walk-away fees from the operator if these commitments don't proceed. So the two main scenarios for 2014 are - Trap participates in drills primarily funded out of 2014 cash flow and maintains a cash pile of 13p to 15p a share, or the tight rig market / partner lag continues and the cash pile increases towards the year end 19p -20p level or more depending on walk-away fees received from operators of these commitments. Third scenario is a take-over.
Good point about cost of goods. I'd estimate at year end that the difference between sales receipts could benefit Trap's cash pile by a further £3m. That's about the contribution Trap need to rectify the pump 4 issue and get Athena production contributing back up to about £2m per month. So allowing for G&A expenses Trap should be sitting on 11.5p cash with £2m cash flow (1p per share) coming in each month. Revenues from Athena are projected by Trap until 2016 and putting aside the fact they are much more conservative than other Athena stakeholders they have of course raised the prospect of a further Athena drill. If Trap did nothing else but collect Athena profits until 2016 then without upgrades the Company would probably be holding about 30p cash. Obviously they will spend on drills but drills which should be funded out of future cash flow but with the tight rig market it looks like cash will accumulate for a few months. So either (after Athena is back in full production) Trap will continue to accumulate 1p per share cash per month less G&A or participate in drills that can multiply the share price funded out of future cash flow. Trap strikes me as one of those stock market anomalies that has been hit indiscriminately by sector sentiment. As the famous saying goes 'the stock market behaves like a voting machine, but in the long term it acts like a weighing machine.' I suspect a few predators are 'weighing up' Trap. Early offers might get away with 20p but as cash continues to accumulate or other developments accelerate then that figure increases. By mid-year 2014 without drilling and after expenses Trap would be sitting on about 15p -16p a share cash.
The key aspect is cash and liquid assets on the balance sheet. Year end 2012 cash was approximately £9m. June 2013 it was just over £20m ( cash £13m, oil in transit £2.1m plus £5m sale of assets). Add on approx £5m Igas shares and three months of Athena revenues of about £3.6m in total and deduct circa £3m liabilities and the cash / liquid assets position is currently around £25m v £9m end of last year. So trading less than cash / Igas shares with continued cash flow of around £1.2m a month rising to £2m per month when Athena pump 4 is repaired with Athena set to produce, albeit at depleting levels unless drilling increases the reserves, until 2016. Inevitably predators will eye Trap up as a takeover prospect unless the share price starts to reflect the non cash assets such as Athena, major partners and other assets.
PMG paper, the City love Tom Cross and it's surprisingly liquid, but they would have to offer good paper to allow for Trap holders exiting PMG. 3:1 would win the day but I don't think TC would entertain that much dilution. Maybe Cairn, Faroe or Ithaca or even (remote chance at this stage) one of the majors interested in picking up Trap just for the potentially massive offshore fraccing licence.
How to value Trap? 8p / 9p per share cash and increasing 1.5m to 2m per month, 9p for 15% Athena, two major strategic partners, $20m debt facility, other assets with free carry, access to CCG Veritas data. Cash and debt facilities are hard to get in the current climate so I am surprised there hasn't been anywhere bid between 20p to 30p. Any thoughts on who are the likely predators aside from PMG?