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Board does anyone have any gut feeling as to when we might see some activity taking place. Do people think it will be before the end of the first half of this year? We seem to have been waiting for some time now and with new management in place I'm thinking things will move along more quickly - just wondering what other people think?
Atb,
Northern
All things point to us having entered a super cycle where oil supply is squeezed and demand growing . Hence the race to $65. McDade has been on ‘gardening leave’ since December 2019 . He has had all that time to seek other ‘west African production’ . I believe he couldn’t take the sterling job until now due to gardening leave and I’m very impressed how he even convinced ( or the stars aligned for) Kroupeev ( Waterford) and Belyav ( Mistyvale) to sell out and at 15 p .
I believe McDade is relishing this sterling opportunity . It is his chance to show the world how he can move the value needle. Aidan Heavy left him a royal mess in 2017 and it was hard to unwind that mess with limited oil prices and difficulties in Kenya and Uganda . However the shackles are off now with oil price at $65 , cash of $42.9 million , the support of cornerstone investors who were able to spend £14.7 million buying out the Russians ,a good contact base in the industry including lenders who’s leverage could benefit us big time and crucially the current valuation of the company of £37 million comprises £31 million cash and ONLY £4 million for management team ( assuming carried Somaliland asset was worth roughly £1 p or £2 million , as It seems from the trades on LSE that the Russians got a penny above cash for their shares (Somaliland).
This £4 million current valuation for management is astoundingly low and offers new buyers a cheap way into essentially still a cash shell , but intriguingly run by Tullow Oils top two executives from 2017 to 2019, skilled oil men who’ve been oil engineers in west Africa for 20 years plus . For all of their gestation of Tullow , Tullow was a $2-$3 billion capitalised company with assets totalling $6 billion !
Assets totalling $6 billion !
I think the first deal will come quick - a guy like McDade who presented many an analyst day , knows which oil fields in which countries will present the most value . He knows time is not on his side due to oil price rising and I think he is already making offers as we speak .
There’s a myriad of press releases to come :
1. Formal appointments of McDade and Cloke
2 . Share purchases of both men
3. TR1s for new major shareholders - who are these guys that bought out the Russians for £14-£15 million ? Do they have more to invest in the market ?
4. First asset acquisition - will it include debt ? I hope it does as in a rising market it is very good for shareholders leverage
When you look at the KISTos plc valuation of £61 million ( and it was much higher) which has NO assets and £34 million cash , meaning management team Andrew Austin is valued at £27 million !!!!
Compared to McDade and Cloke’s current look through valuation of £4-£5 million !!!!!!!!!!
Is Andrew Austin worth 7 times McDade and Cloke ? No bloody way ! Something has got to give and I suspect we will see a plethora of KIST shareholders come into this shell to bring this experienced management team valu
Very encouraging and knowledgeable post rifteastafrica. The future is now starting to look much more interesting with Sterling Energy.
Atb,
Northern