RE:RE:RE:RE:WE KNOW WHY ALLEN, VP IR AND BIG RECO S/HAREHOLDER LEFT - This is where I agree with Mr. Fishy, we should be discussing the facts and possibilities and not take "sides" based on emotions towards this stock. Remember the stock doesn't love you.
That being said, I've went through documentation on Sedar concerning ROE.
ROE is not in good shape. It has high debt and is obliged to pay royaltee fees for it's Mexican Chiapas project, which it doensn't have the money for, nor the prospect of generating revenue.
In dec/2020 and Mar/2021 they had to issue shares, just to pay for these royaltees.
The farm-out license greatly benefited ROE shareholders, because they were now exposed to a high-potential project, which of course attracts investors and generated liquidity for the company.
So, to my opinion, ROE paid 100k cash and issued 30M shares (valued at 0,04 CAD at that moment) to RECO for the license option with the main reason to boost ROE stock price.
Remember, up until this point, nobody knows what they are going to find in the Kavango Basin.
That's when they start seeing the first results, indicating large pay zones of gas and oil, which I assume is legit and not a lie as Veryfishy insinuates.
My opinion is that Mr. Steinke is not an idiot and knows things could still go bad for the kavango basin (like: 2nd and 3rd well show no results), but now he is presented with a great opportunity.
==> Get rid of the cr*ppy company and secure cash for it's debt payments AND return the whole property to RECO.
I wouldn't be surprised if they sold a large portion of their 30M shares, which would generate enough capital for years of royalte payments + extra cash in case further drilling is required.
I an agreement is closed, he doens't have to worry about ROE's debt anymore and if everthing goes well will be able sell all of the assets and debts from both companies to a major.
I agree it will dilute the stock a bit and he gets paid a lot for this transaction, but he is also the one who takes the most risk, spends the most time and has the connections and experience to make this deal happen.
So I think that this deal was in large for his personal interest, but in no way signals bad news coming our way about the project.
Moreover, my point of view is that this deal would show very very high confidence that they are sitting on something major and they are preparing for cashing in on it big time via though negotations.
GLTA