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Tincan what would be your definition of 'glory'? Unfortunately we'll never see the 'glory' days back as I remember them, when we were pushing and briefly exceeding the magic £1 mark. I'm thinking 'bust' has about an 85% chance of happening. If we can get back to Sound's own target valuation of 6.5p then I'll be able to recoup just over half of my current unrealised loss. I guess compared to going bust, 6.5p would represent 'glory' for me. Albeit 'glory' in the loosest possible interpretation of the word!
Sharetrader123 - You mentioned that long term holders may be blinded by bitterness. You also mention that new investors should look at Sound with a fresh pair of eyes and not be blighted by the failings of the previous board.
Some genuine questions -
Would you expect any LTHs to be anything other than bitter?
Would you expect any LTHs to be confidently adding more money, even at these prices, seeing as most have already lost 95%+?
Do you accept that the vast majority of LTHs will never see their money back because there is about a 0% chance that Sound will ever reach anything close what was previously considered a 'good' entry point?
Do you appreciate that James Parsons 'said all the right things' throughout his time as CEO in terms of talking up the company's prospects and there is every chance that GL is now saying 'all the right things' to convince people a recovery is only a matter of time?
Do you realise that before Parsons, Gerry Orbell had overseen a calamitous period where Sound Oil (as it was known then) was burning cash like it was going out of fashion with zero reward?
What makes you think GL can rescue Sound from this position without any money and with a huge debt looming which is impossible to repay?
What exactly is it about GL that you think should inspire new investors to part with their cash?
Not trying to be provocative or anything, just interested to understand your optimism. You may not enjoy reading ps2's analysis of the figures, but can you clearly explain exactly where he is wrong on those fundamentals about the bottom line valuation of the company?
For what it's worth I do actually think GL seems more competent and genuine than his predecessors, maybe Sound would have been a success with him in charge from the beginning. But the damage has been done in my opinion and any chance of substantial growth from this position is unlikely to materialise. Hope I'm wrong (again).
My instincts tell me that this will spell the end of Sound Energy once and for all. Just when you think things are beginning to look more positive and there is a light at the end of an extremely distant tunnel opening, not only is the tax issue not resolved, but the Moroccan tax authorities have doubled down and discovered (somehow) that Sound owe far more money than anyone thought possible. It's amazing that a company who have never generated any revenue whatsoever could be liable for such a huge sum of money.
Can't help thinking there is something going on here that we don't know about. Something even GL, MS etc don't know about. Maybe Elon Musk was right and this is all just a big simulation. I'm firmly back in the ultra negative camp after this news - the whole tax issue sounds like a total load of nonsense of course, but that is irrelevant for all the wrong reasons. Although I try to remind myself never to be surprised by total government incompetence, I'm beginning to once again believe that a mysterious force is determined to end Sound Energy once and for all. I previously thought this force was the bond holders (in order to take full control of the assets), but now I don't know who is 'truly' behind this. Whoever it may be, they seem utterly disinterested in the fact that such huge sums cannot realistically be paid. It's just not feasible, so insolvency is the only option remaining.
The good news is that I have been completely wrong about virtually everything to do with this company for the past five years or so. Therefore you can probably dismiss this post as the ramblings of a bitter fool who has grown accustomed to nothing but despair.
Overall I'm pleased with what GL said during the interview. The company is no doubt in a much better position than it was only a month or two ago. However being in a better position than 'about to go bust' is as low a bar as it is possible from which to improve/recover.
PS has every right to post opinions on here. Would PS have preferred to have sold at the current price/3p recently as opposed to the ~1p when s/he actually did sell? Well obviously. But it is entirely possible for someone to have sold while still holding a negative opinion about a company, albeit while that company's prospects have improved from the previous ultra negative position. If you don't like what PS has to say or don't want to listen than simply use that block function. If you want him/her to stop posting negativity about Sound, then just refute the numbers s/he has produced which detail future revenue/cash flow limitations. If you can prove PS's actual research/figures/projections are nonsense, then do it. Expose his/her claims as being totally unfounded. Should not be difficult if s/he is completely wrong about the very difficult road still ahead. For what it's worth I personally think Sound's share price still has a decent chance of more recovery, largely driven by sentiment and renewed optimism. Also hoping GL has some pleasant surprises along the way to boost things further.
But I also find PS's comments/analysis about the company fundamentals quite useful. It doesn't even matter if his/her intentions are purely out of bitterness (which I doubt), what matters is whether there is any logic and reason behind his/her arguments based on the numbers. Just a word of warning to the newer Sound shareholders - it is historical fact that the ultra negative posters have been (unfortunately) correct almost 100% of the time since the 2016 heights. The unthinkable has happened time and time again, just when you thought it was impossible to happen yet again. This doesn't mean that we're finished, nor does it mean PS will be proven correct, but you should ignore negative voices on here at your peril.
Sharetrader123 I'm pleased there is a great deal more optimism around this share when we appeared to be completely doomed until this latest mini recovery (or micro recovery if compared to the heights from which we have fallen). But just out of interest, what is materially 'wrong' with ps' observations that a company bringing in less $10m annually, a year or two in the future, with large outstanding debts, will not be valued at close to $300m?
I don't see this as 'negativity' but rather a simple reality. It's possible that GL has a farm in partner lined up at favourable rates to Sound, it's possible there is another surprise waiting for us, but in the absence of anything like that being confirmed (or even rumoured), how did you come up with your 'low teens' share price prediction? I am genuinely curious.
Being miserable has been the default position for many of us long term holders once the 2016 ecstasy started to wear off. Since then the ultra negative posters (don't think ps has always come under that label) have been proven correct time and time again. Far as I can see ps has not been making any sort of outrageous claims, everything he has cautioned us about could easily be proven to be correct in due course. It's up to everyone to make their own risk assessment and the contributions from ps, however negative about Sound's long term prospects, are worth considering before making any decisions in my opinion. Only time will tell but throwing around insults on either side of the debate is pointless and rather tiresome.
This Italfluid report is a huge chunk of long overdue good news, assuming it will be officially communicated and confirmed by Sound shortly.
Special thanks to daveyboy71 with whom I had a respectful back and forth discussion a few weeks ago. I was very close to selling but decided the risk/reward (already lost/not much more to lose) ratio made it worth persevering with my holding due to his snippets of optimism. At the same time I don't think schadenfreude towards those that have sold is particularly helpful. Let's be honest, this report (if confirmed) has come out of the blue when things were looking extremely bleak. We're by no means out of the woods yet but hopefully GL has pulled a rabbit out of the hat and fully restored the faith we all had in him when he took over from the one who shall not be named!
Best of luck to all holders and those who may decide to buy back in for the final twist in the roller coaster.
Good find ericnat17, on the face of it this should boost confidence that we might (finally) be heading in the right direction.
Only part I don't like is that final paragraph "Although the economics of Tendrara and Anchois projects looks tempting, it is not yet clear whether the current operators will be able to finalise the necessary funding required to develop the fields..."
On one hand this suggests that once finance is sorted (bond restructuring, tax issue, capital raised) everything should be in place. On the other hand if those obstacles are insurmountable, then a new operator may be needed to unlock the gas. You'd hope that with production potentially so close, financing would't be too much of an issue. Surely the gas sales will cover everything and more relatively quickly?
I'm preparing for the worst, hoping for the best. Not much else we (LTHs with big paper losses and low value current holdings) can do really. GLA everyone, heaven knows we're long overdue a turnaround in fortunes.
ps200306 Fair play, don't blame you for bailing out considering your position. 8% of that investment is still a substantial amount to risk in anyone's book. On balance I'd say you've made the right choice. I'm also about 90%+ down but the current value of my remaining holdings are not worth enough to get stressed over. All my stress has already been expended with this share, so now I'm basically a spectator hoping for a pleasant surprise. I'd say there is about a 90%+ chance that surprise won't materialise and Sound will be gone by end of Summer. A decade of involvement for nothing other than contributing to JP's retirement fund (and potential legal fees if there is any justice).
Daveyboy71 strictly speaking you are correct in that any 'deal' may need to be approved by us retail shareholders. That's assuming Sound does not go into liquidation before any deal is announced. What would happen if Sound defaulted on the bond payment, effectively ceded control to the bond holders and Sound de-listed, only for a new-co to form between the bond holders, OGIF and a new developer? I'd guess that there would be nothing for us to approve in that deal because Sound would not exist. I am not trying to underplay the influence OGIF have in any potential outcome. Any developer would probably want them on board with their connections etc. But I wouldn't be surprised if a deal between the bond holders and OGIF has already been agreed in principle (off the record). OGIF may not stand in the way or do anything about Sound going bust because once the new-co is formed they will be allocated a greater share of the asset (albeit maybe only an additional 5% or so).
Obviously there is a risk for OGIF having any 'deal' only in principle, non-binding, 'off the books' etc in that without a contract in place they could get stabbed in the back so to speak. This gives me slightly more optimism, but stabbing OGIF in the back is probably not a good idea for any incumbent partner, so all I can do is speculate for now. Wouldn't it be great if all my worrying was totally unfounded and we wake up to a few RNS's in the coming weeks which sorts out everything, from monetising the gas to settling the tax issues to sorting out the bond stuff. I guess we can dream! GLA
Daveyboy71 the presence of OGIF is something you'd hope would work in our favour. But if the bond holders cannot 'seize' the asset, what is the bond secured against? I thought the whole point of the bond was that it was secured against Tendrara so that they can retain something of value if Sound default on the repayments?
One of my worries is that OGIF and the bond holders will reach an agreement where both of their relative interests in Tendrara will increase, with a controlling interest given to a new developer, all at the expense of the current retail shareholders. Do OGIF have any influential power? Yes I'd say so. Do the bond holders have power? Absolutely. Do the lowly retail shareholders have any power? Nope. None whatsoever, despite the best efforts of Trellis and the SAG (I never joined the group but had nothing against them).
True L1onheart. Three weeks for the bond holders to decide if they want the valuable assets for themselves, or if they should share it among the retail shareholders. Hope they are feeling generous. If they intend to keep us retail shareholders involved, you'd think they'd have just agreed to extend the bond repayment by now. But instead they appear to acting exactly how you'd expect them to act (no news/radio silence/counting down the clock) if they were planning to let the repayment schedule lapse, allowing them to sieze the asset for themselves, dispensing with the retail shareholder base. Nothing would give me more pleasure to be completely wrong about these suspicions.
Unfortunately the next bit of news will likely be notice for a winding up of the company, unable to service the bond, so all assets have been seized by the bond holders. Company to be taken private and de-listed. A short period thereafter, all kinds of developments will be happening around Tendrara leading to huge, astronomical profits for those bond holders. Chances are none of those profits will be seen by any current Sound share holder.
Again hope you're right daveyboy71. No point me selling now either. My holdings are only worth a couple thousand at the current price, which I'd rather keep than lose obviously, but I also have a feeling that everything will be sorted out and Sound's prospects will improve dramatically the moment I sell. So I'm not prepared to risk missing out on that either! We're long overdue some good news. Amazing to think that the last bit of truly good news (which significantly boosted the share price) landed when David Cameron was Prime Minister and Barack Obama was President. GLA.
Hope you're right daveyboy71. I don't really know how much influence OGIF have over day to day/month to month running of Sound (if any) or if they have any preference for Sound to continue as the developer for Tendrara. If I was a bond holder who wanted to maxmise my own profits, I'd try and strike a deal with OGIF whereby they retain their 20% (or even increase to 25%), the new operator could then be offered a controlling 51%, the 10% owned by institutions and directors would remain unchanged (although the actual Directorship would obviously change unless a new operator wanted to keep GL and the team), leaving the bond holders with 14% - and of course the current retail Sound holders (us) with 0%.
If the bond holders have been holding talks with OGIF and Schlumberger about bringing in new developers to replace Sound, it wouldn't be very difficult to make a compelling case that it would be in all of their best interests given Sound's track record of failure over the past 5 years. So while GL might be able to persuade these other stake holders that Sound are now in the best position to see through development of the Tendrara asset, I think the chances of that happening are fairly slim. The future of Tendrara is probably very bright, very profitable. Unfortunately those profits will likely be realised without Sound and its current retail shareholders. Obviously not everyone has lost out. JP has enjoyed huge profits, set for life and all that now. That's his reward for finding a legal way to commit theft and fraud, or at least a way which carries enough legal ambiguity to ensure he will probably never be convicted for the crimes he has committed.
Are those deals not just 'in principle' at the moment? Nothing binding with penalties for failing to see them through to fruition? If so, it wouldn't be a waste of time to get those agreements in place for whenever the bond holders are ready to dispense of the retail share holders, and either continue with those deals (assuming they can take over that as well as the assets) or at least quickly replicate the deal(s) with new developers. Italfluids won't care if it's Sound or another company - especially if the bond holders can bring in a developer with actual production experience. With all the agreements in place, everything raring to go it seems, and all that is needed is for the bond to be restructured...... Seems to me that's the point. Why restructure a bond keeping over a billion shares in issue when you can just dispense with them and keep an enormous controlling interest for yourself?
As I say I hope I'm wrong, maybe we'll get to the 11th hour and the bond holders will decide they don't want to dispense with us retail share holders and would rather share all the profits with us instead despite no legal requirement to do so. I'll be very grateful to the bond holders if that's what they decide.
May not be Graham's fault. Graham could be making every effort, going above and beyond the responsibilities featured in his job description, we just don't know what he's doing exactly which is part of the problem you highlight ps200306. But no matter what he does everything could ultimately be in vain. It may be impossible for him to save the company because the other parties (bond holders) might simply want the company the fail so they can claim the assets for themselves.
I'm guessing the most persuasive sales person in the world would not be able to convince you to invest money into, say, a company run by JP these days. You'd simply refuse and wait for a better opportunity to arise because you'd see that company as a lost cause in it's present state. My fear is that the bond holders are looking upon Sound with a similar attitude, can't wait for us to fold, then things will start rapidly progressing in my opinion around Tendrara with new developers. If they wanted to save Sound and were acting in genuine good faith, a deal to extend the bond should be very straight forward. There is a reason why there has been next to no progress - I'm guessing because certain parties don't want progress.
Sorry to be so pessimistic, but the good news is that I've been wrong about almost everything Sound related since late 2016 and the beginning of the decline. Wrong to trust JP, wrong to believe we had a super giant field on our hands, wrong to dismiss the tumbling share price, wrong to think Sidi is 'plug and play', wrong to believe a recovery will be immanent, wrong to believe JP when he told us he could 'sell the company tomorrow', and many, many more. I know I'm not the only one to have made these mistakes. They say misery loves company but here's hoping our collective fortunes do a 180 for the first time in 5 years. GLA.
Can anyone suggest any reasons why the bond holders would want to extend the repayment schedule? Unless I am mistaken, if the negotiations to extend fail, then they can take ownership of Tendrara and other Sound assets. Doing this would also dispense with all retail shareholders from the equation. Why would the bond holders not simply wait another few months or so to take full ownership of the current retail share of assets which are worth 100s of millions? Why would they extend the bond, keeping the retail investors on board to progress with the LNG plan? That would slowly monetise Tendrara which would pay back the bond eventually, but why not just take the assets and strike a favourable deal with another developer with resources to aggressively and rapidly go into production coupled with further exploration? Hoping there might be a good reason why they'd want to extend otherwise everything is lost for us investors. Please tell me I'm completely wrong and am missing something here, because I really hope I'm completely wrong.