RE:?
Hi,
I do not agree with that opinion, i will be holding for now. No reason to sell at 3c, i'm staying on this horse. Maybe i am a fool, but here is my logic:
1) The asset has value way above the current mkt cap. The oil is light and sweet and it doesn't take a genius to see there is probably lots of it, way over current reporting imo. There is near 500ft of oil and gas pay on the logs. The oil sampled is the same as that at Cross River a number of kms away. We have oil, so this is absolutley not exploration, if the economics stack up (and i think they do re; my won NPVs) then money will come to develop.
2) Even the single well solution presented in the latest NI51, valued us NPV10 at $61m, based on a 20 year production of ONLY 1.2m barrels in total net. Even 1/2 this value would see us back at 19c, that is a good potentail profit from my average, even on a very low base case.
3) This single well solution (latest NI51-101) is based on a work-over of $2m on TSB-1, well within the $5m sought. The very max production required here is 958bopd. So this could be the next step, without looking for the full $100m debt. We tested TSB-1 up to 500bopd, Schlumberger modeled 2,500bopd with comingled oil and gas from U$ & U7. This model is not from some shady, fly by night operation.
4) Bank Finance is supposed to be already organised, i've been advised this numerous times.
5) The Mgt has skin in the game, major skin in the game. They are not looking imo to just skim this off in fees etc as that can never recoup their personal investment. Their losses would be many, many, many times the magnitude of mine.
6) This is an investment as part of a much larger junior portfolio. Not all of my junior picks will make it and a % are 'expected' to fail. I have not yet decided which way I think this will ultimately go, so will hold.
7) IMO something is going on here behind the scenes. Cavanagh gone, can never get hold og More. Asibelua in charge, all operations now to be run out of Nigeria. IR do not have a scooby about what is going on. Others think this is related to a T/O i do not, more to do with Asibleua running the show imo with his own people likely.
8) Asibelua holds over 20%. He has the money, contacts and i am very sure the influence in Country to move this on, but hey this is Nigeria, i so am sure it takes more time than in London or Toronto. All the Nigerian companies are linked in some way from my research ie; Equinox, Associated and Dansaki, shared mgt past/present, all working in the same social circles, thick as thieves the lot of them. Was the default notice to drive price down further?
I'm not qaulified to provide investment advice, so everyone has to follow their own strategy, i have sold out of too many before in fear to see them rise from the ashes. Or not and I lose the lot here, which I am prepared for also. Something is going on anyway good or bad and yes the risk is large here. The Management have not performed, so if past perfomance indicates the future, we are in big trouble, so we need management changes also. Agreed More to go, in fact Cavanagh said More was going just before he resigned, so maybe both to go and Nigerians running the show in Country, sounds a better state of affairs to me.
We need a bit of luck also.
Mark.