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SBP,
Tha's true. It gives rise to a further observation. EOI now has no "members". I would imagine that is not allowed under NF corporate law.
They have (or some of them) been sild for suitable consideration to new members (though the public filing of NF private companies is such that we will not know).
In the alternative I guess they could become "limited by guarantee" if there is an equivalent structure in NF.
Thanks Harry, bit of a typo for me on respondents. Monday morning ?
I have a suspision the claim may be pretty much settled.
The reasoning is thin, but I fail to see how divestment would qualify on its own for Nuog to become a cash shell given the ongoing litigation against EOI could give rise to liabilities in the future.
Harry, what are s tour view on Nuog escaping the potential liabilities on a claim. Whilst there is nowno connection between EOI and Nuog since the events giving rise to the action occured during Nuogs tenure might they still be joined as respondents ?
The donation should generate an additional loss of 19% of the 270k carrying value.
Frankly zero seems like a fair price to realise
AP90,
The losses in EOI will be gone yes. But they were only about 1.5m.
Nuog are stitting on 8.3m of tax they can potentially reclaim.
It is now a shell, I guess my question of "how does it become a shell" is answered.
I am slightly surprised it didn't needa vote, but since it was of solely nominal value I guess it was unnecessary.
Apologies yet again for the awful set of typos. Combination of poor text to speech. Small keyboard big fingers and some complex visual issues.
AP90,
I think that it is reasonable to say that:-
- Whilst the pkacing is done by the existant nuog it is organised by C4. The incoming funders appear to have been i troduced solely by C4.
- We have no idea how much of the likely net 450k will actually go on unpaid bills. Some of which will be salaries. By my estimates they ran of of money in September. The outgoung board are quite lkely owed money and there coud easily be additional liabilities to HMRC, rent etc.
- Going forwards Scotton and Jackson and accomodation would appear to be all that is left to be paid. Plus whatever the incoming directors which to offer themselves incompensation and cross chareged services relayed to asset acquisition and due digence.
- Historical cash burn has been in the region of 200k monthly. Incoming funding would run out rapidly at that rate. However it may, hopefully will, be the case that costs going forwards will be considerably reduced extending the length of time it lasts for.
If is reasonable to say that incoming funding will run out fairly quickly. External professional fees could easily eat it up very quickly indeed unless they have some way of deferring these.
The question is whether C4 believe the incoming residual funds are enough to get the RTO implemented, or whether it is simply enough to get to a position of greater clarity. The RNS doesn't really give much of a clue. Half a million doesn't got very far in oil/gas due diligence. I know what charges rates are in my industry at all levels, I believe they are similar in Oil-gas. Half a million would keep a 6 man team going for about 4 months.
The placing money will surely have run out by spring latest.
framboise,
The timetable is in the circular on the website. The circular has been sent to "shareholders". If your shates are held in a nominee account - highly likely - then it is the nominee who will have been notified.
They don't have to inform you - though will usually flag on you your platform a corporate action.
So, ring them and ask them how they are dealing with it so you can get a letter of representation ir similar from them if you intend to vote in person.
It should be exactly the same process for you as the last GM.
Barry,
A reverse stick split (consolidation) won't really have any real impact on the overall valuation.
If they did, say, 1000-1 then the SP would go from 0.05p to 50p. But everybody would hold only 1000th of the shares they did previously.
It may have some effect in that quoted spread would probably reduce in percentage terms which may improve liquidity. It may also appear on more peoples "radar". But of itself is unlikely to make any difference.
I brought shoal point into the mix simply to illustrate 2 things:-
1. They, like everybody, have a substantial disparity between their assets and market cap. This being an issue with your view of nuog.
2. They were, until recently, a bit of a basket case. They had no money and no exploitable asset (they could do nothing with 1070). They were able to salvage this by gaining the kansas asset and exploiting it with cash from dilution. That's a similar position to nuog at the moment.
Barry,
I told you the number of shares currently in issue.
I also pointed rhe disparity between shoals assets and it market cap. That is simply the hope value that their shareholders currently place on their prospects of profitably exploting those assets. Perhaps people have overestimated that. Perhaps underestimated it. Time will tell.
In nuogs case it does indeed have little at this moment in time. It currently has little value. Just some hope value that the new team will gain control of some that can be successfully exploited.
You believe that there is no chance of it. The market (rightly or wrongly) disagrees and believes there is some chance.
Barry, in terms of outstanding shares it is really easy to find. Much less time than the time it took you to type it.
However it is, roughly 1.5 bln.
The upcoming placing 1 bln.
The loan conversion adds up to 5 bln.
Yes, the company is about to have substantially no assets and a capitalisation of approx 1 mln (or any other number depending on what the SP does in the meantime).
That reflect peoples hope value overall as to the progress that may be made in the new regime.
By the way Shoal point has a market cap of 8.3 mln. It values its assets at 2.3 mln.
SBP,
I thought that to start with. But I don't think it can (should) be possible.
I they are placing shares forward sold then that should be on extended settlement.
It is only settlement that the new holders gets voting rights.
Given the placing shates do not yet exist the cannot (should not)be voted.
Though I doubt it is the first time should the register be mayerially inaccurate (eg placee forward sells and those are subsequently traded on normal settlement by mm).
SBP,
The fact that I struggle to feel it doesn't meet the description of a cash shell is, frankly, neither here nor there. The nomad does. The company is proceeding on that basis after suitably qualified advice. It may mean there is a transaction of EOI in some way. But it doesn't have to.
How an incoming asset is financed could be in any number of ways. C4 are highly motivated to try and achieve that in the least dilutory manner possible.
They have 6 months. It seems very likely to me that they are quite a long way down the road already. They wont, surely, have gone to the effort of acquiring the debt and structure and raising some finance to then say "right we had better go look for something now".
It would be nice to see further clarity befor the GM vote, that doesn't seem particularly likely.
How it eventually pans out for existing holders is an open question. However it doesn't seem possible for it to be worse than the alternative.
Harry,
My somewhat rambling response failed to post.
I was musing whether C4 would be content with any theoretical risk that an adverse judgement for EOI might in some way flow back to Nuog.
It does seem unlikely given Nuog are not respondents (though that could presumably change). There may be some licence conditions which could become significant. I imagine they could insure against it anyway.
It does seem - to me at least - another reason why C4 may wish to see a seperation between Nuog and EOI.
SBP,
The asset of course is strictly the Nuog shareholding in EOI rather than the underlying licences etc. Though that is probably moot.
I fully accept the assets are fully impaired, and the estimated costs are prepaid. However they are still held for the purpose of trade.
It is entirely possible that the decomm costs exceed or do not reach the amount dues. That forces financial transactions on EII (and by extension Nuog). It also forces physical action.
Whilst it is unlikely the value of the assets may change. Again that forces activity. I cannot see how they are anything other trade assets which preclude it being a shell.
For me, therefore, the question of how it becomes a cash shell remains open. Clearly it does become a cash shell though.
If it does go forward with EOI still as a subsiduary (which is what appears to be the case) it is not a very "clean" shell for them.
Ther was no siggestion in the RNS that Minty was stepping down in any way from Enegi Oil Inc. Hence he is still there.
But yes, what is happening to EOI how is it going to be divested, what is happening to the 1.165m MfDevCo apper to owe Nuog (accrued in their accounts). Will they need shareholder approval to divest EOI. How can it be a shell if they dont.
All are significant totally unanswered questions.
Out of interest L200 was your compensation monetary, late delivery or a combination ?
Fourprinces,
You simply need a decent relationship with a broker, in effect one who will let you go naked short.
You would obviously struggle with any of the popular online brokers. They will only let you sell what they have custody over (even if you you hold them elsewhere).
I am certain that the placing organiser would be happy to introduce participants to a relevant broker.
Jarv55,
C4 can happily announce on their own press release "we intend to transfer ownership of ABC to Nuog in exchange for something". No problem with that all.
What they can't do is RNS that in Nuog name. Nobody at C4 is yet an authorised officer of Nuog.
If Nuog were to want to announce "we are pleadsed to announce the C4 will reverse in xxx" I imagine the Nomad would veto. This is because they are not in a position to actually make it happen.
If C4 did choose to announce with something the Nomad would ok something along the lines of "the board of nuog note with interest the announcement by C4 viz:-
Xxxx ".
If C4 wanted to announce something it will take some cooperation to get the message out.
There is a strong chance the debt from MfDevCo to Nuog is not actually legally collectable. It may well be provision of equity finance, in this case it is a right of the shareholding not a right of Nuog.
There won't be much of a market for the MfDevCo holding.