Firstly, I’m not sure what is actually going on here. Whilst I do not necessarily agree with the MART theory proposed by Bejeezus, something is going on. I called IR yesterday and JM was downstairs in a meeting. BB advised the PP will close, just one participant dragging their feet still. MIRA were adamant the remaining funds will come in. Truth? I can only say what was said.
And why shouldn’t it close? Are capital markets really so bad that we cannot close $5m. Throw in these defaults from our Nigerian partners, when Mira’s lawyers advise there is no basis for such a default notice to MIRA in the terms of the JOA and this 100% in my opinion starts to smell pretty funky, between the linked Nigerian Management between Equinox, Associated and Dansaki. Has the price been driven down purely through management ineptitude, or is there something more to this going on?
I could understand this all coming to nothing, if we had nothing. But this is just absolutely not the case, there are a lot of positives, we have oil and plenty of it:
- Shallow off-shore, best place to be in Nigeria. Clear route to market.
- Approx $33m raised and spent on re-entry drilling, modelling with Schlumberger and updated resource estimates, feed etc for TSB-1
- The re-entry was a success. Oil was light and high quality sampled.
- Damaged bore and limited reservoirs still looking to produce 2,500bopd with gas uplift on TSB-1.
- The field data indicated the whole TSB complex was charged with oil in multiple stacked reservoirs.
- Barrels recoverable grew from a pre-entry 8.67mmbo to 31.22mmbo 2C. An increase of 260%. Net to MIRA 16.859mmbo 2C.
- Feed and permitting would allow 2C to move to 2P RESERVES.
- We have a lot of JM insider buying, insider PP participation of over $3m and other insider loans & debentures (Nubia, directors and spouse) to the company, some converted to stock already at much higher prices than now. Some serious skin is in the game here for the insiders, they seemingly would lose heavily if this failed. I think our chairman has +13%.
- Management options are mostly at much, much higher prices than the current one .
- Back in 2012 we being over subscribed for financings, well the oil didn’t go anywhere, so what gives?
- The market values us at under $7m but the NPV10 for this is $672m on the basis of net 16.8mmbo net to MIRA (54%) over 20 years. Extrapolated from last MIRA cashflow data before presentation was pulled. I have included it below on the basis of $250m capex in total. It reads very positively.
- We supposedly had Nigerian debt financing in the bag months ago.
- Why remove the fact sheet and presentation, the first places investors go for information??
As you can probably tell I’m getting pretty frustrated here, when the value is almost slapping me in the face, but something stinks about the whole conduct of management here and things seem to move at a glacial pace. There imo is absolutely no valid reason for me not to make a good profit here, unless something rather unsavoury is going on here contrary to the interests of the owners of the company!!!!!!
This is why I hang on here, the asset is a fine one, the barriers are to market are very low and the current valuation should have a massive upside attached. That said the management are making this very difficult indeed for the small guy, as none of us know what the f’eck is going on really.
GLTA
NPV10 extrapolated from pulled corporate presentation cash flow (Dec 2012).
| Discount Rate | 10% | | P50 Recoverable Resources | Net Present Value | | | 672.3 |
| | | | | | | | | | | |
| Yr | BOPD | 100% Prod'n (mbbo) | 54% Net Prodn (mbbo) | PPB ($) | Net Revenue ($000) | Capex ($000) | Opex ($000) | Aband- on ($000) | Net Cash Flow ($000) | NPV of Cashflow ($000) |
| 0 | | | | | | -250,000 | | | -250,000 | -250,000 |
| 1 | 13,341 | 4,869 | 2,629 | 115.41 | 287,689 | | -47,331 | | 240,358 | 218,508 |
| 2 | 11,359 | 4,146 | 2,239 | 113.58 | 241,063 | | -40,299 | | 200,764 | 165,921 |
| 3 | 9,644 | 3,520 | 1,901 | 106.95 | 192,714 | | -34,213 | | 158,501 | 119,084 |
| 4 | 8,195 | 2,991 | 1,615 | 101.56 | 155,515 | | -29,075 | | 126,441 | 86,361 |
| 5 | 6,975 | 2,546 | 1,375 | 114.66 | 149,443 | | -24,747 | | 124,696 | 77,426 |
| 6 | 5,908 | 2,156 | 1,164 | 108.61 | 119,898 | | -20,961 | | 98,938 | 55,848 |
| 7 | 5,031 | 1,836 | 992 | 110.24 | 103,639 | | -17,850 | | 85,789 | 44,023 |
| 8 | 4,269 | 1,558 | 841 | 111.89 | 89,253 | | -15,146 | | 74,107 | 34,571 |
| 9 | 3,621 | 1,322 | 714 | 113.57 | 76,842 | | -12,847 | | 63,995 | 27,140 |
| 10 | 3,087 | 1,127 | 609 | 115.27 | 66,499 | | -10,954 | | 55,545 | 21,415 |
| 11 | 2,630 | 960 | 518 | 117.00 | 57,497 | | -9,331 | | 48,166 | 16,882 |
| 12 | 2,249 | 821 | 443 | 118.76 | 49,904 | | -7,979 | | 41,925 | 13,359 |
| 13 | 1,906 | 696 | 376 | 120.54 | 42,925 | | -6,762 | | 36,164 | 10,475 |
| 14 | 1,601 | 584 | 316 | 122.35 | 36,599 | | -5,680 | | 30,919 | 8,142 |
| 15 | 1,372 | 501 | 270 | 124.18 | 31,840 | | -4,868 | | 26,971 | 6,457 |
| 16 | 1,182 | 431 | 233 | 126.04 | 27,828 | | -4,192 | | 23,636 | 5,144 |
| 17 | 991 | 362 | 195 | 127.93 | 23,690 | | -3,516 | | 20,174 | 3,991 |
| 18 | 839 | 306 | 165 | 129.85 | 20,346 | | -2,975 | | 17,371 | 3,124 |
| 19 | 724 | 264 | 143 | 131.80 | 17,835 | | -2,569 | | 15,266 | 2,496 |
| 20 | 610 | 223 | 120 | 133.78 | 15,245 | | -2,164 | -400 | 12,681 | 1,885 |
| | | 31,220 | 16,859 | | | | | | 1,252,406 | 672,252 |