Bowleven Share Discussion Threads

[warbaby43] 21/2/2017 16:41

"They are activist shareholders why would they not sell quickly, they want to come in and make a good return in a relatively short period of time and on to the next one."

Well, why would they settle for merely a good return when a massive one awaits also in "a relatively short period of time"

As for "If that is not their intention then let them clearly and definitivley state that what their plan is, they have opportunity and so far have declined to elaborate further" you do not appear to have read their Open Letter in which they could not be more clear and definitive. Here it is:



As for this incessant repetition of short termism, I would simply point out that their Eurohypo succesful battle and litigation was fought out with Commerzbank over years not months to the great benefit to themselves and fellow bondholders.

[durby] 21/2/2017 14:54

Putting trust aside, if I compare the strategy proposed by current BoD and by CoC, to me CoC's strategy makes good business sense.

If it was my business and my money running on it, I would do exactly what CoC is proposing especially with just $95m left.

[benjimun] 21/2/2017 14:35

Durby,
Your first post above does you know credit, 'half a rain cell' just unnecessary.
Your posts to a degree do show that the BLVN BOD are not to be trusted but neither are COC! I suspect that KH days might be numbered and that might not be a bad thing, with a new CEO we might have s chnace of developing the Etinde asset to appraisal/sale and company windown at a decent price.

[benjimun] 21/2/2017 14:29

Warbaby,
submitted too early. cont..
If COC can double their money quickly they will do it! What is logical to you to maximise returns in the longer term to you and their objectives might be entirely different.
It is looking increasingly likely that appraisal drilling will not occur for sometime as alternative monetisation avenues are now being explored. COC want maximum bang for their buck and the opportunity cost of their capital( if indeed it is there money) being tied up for many years before appraisal will be taken into consideration.

I would not blame them in the slightest, my goals are long term, I am patient.
The BOD have my support at this time.

[benjimun] 21/2/2017 14:16

Warbaby,
They are activist shareholders why would they not sell quickly, they want to come in and make a good return in a relatively short period of time and on to the next one. They have no experience in running an oil firm why would they want the aggrevation of dealing with the the JV partners and Cameroon Govt, they are simply fish out of water.

Example:
If I offered you one million pounds today or the possibility of £5m in 2022 with the possibility of lots of hard work and political risk included in that wait.(these are arbitrary figures by the way). They will take the money and run.

If that is not their intention then let them clearly and definitivley state that what their plan is, they have opportunity and so far have declined to elaborate further.
I want Etinde appraised, we as shareholders can then see true value in the share price if it is sold or if BLVN decide to continue as an exploration company, with Etinde earing underpinning the exploration sode of the business, we can then decide whether to support the BOD whoever is in charge with that strategy or exit.

[durby] 21/2/2017 14:14

On more important matters, these articles and my revealing posts from yesterday clearly shows why the current board are not to be trusted. Their days are numbered! What you need to think about is what are you going to do with your shares when KH and buddies are gone.

[gark] 21/2/2017 14:09

Still heading lower, hopefully yesterday was not the high.

[benjimun] 21/2/2017 13:58

Wow durby just who is paying you :-), glad to see you are being more polite than the other thread you have been kicked off from.
We will not need to develop Etinde as it will be sold once it has been appraised. However if the more recent muted gas sales linkup/offtake takes off the this will be self financing!
Simply put I am happy to hold long term with risk of capital loss for a significant return as oppossed to a 50% return quickly which I think the COC outcome will be.

Briand2, COC is very slim on detail we need definitive answers on their proposal.
If COC want my support they need to clearly define under what circumstances they will sell Etinde. I would epect them to hold Etinde till appraisal unless an offer comes in which recognises the value of Etinde ie 2TCF at a fair price waiving the long term earnings potential and possibility of even higher reserves.

[leedskier] 21/2/2017 13:51

Someone is buying shares @1250 & @2500 a time, and maybe in even in multiples of that.

[warbaby43] 21/2/2017 13:47

With regard to the repeated allegations of "cash stripping" "asset stripping" "quick buck break up firesale" a response might be why on earth would COC want to do that bearing in mind a) they wouldn't need to and b) the prize that awaits them by following exactly the plan they have laid out.

Consider:

Currently COC hold 52m shares and are likely by 10th March to be up to 60m equating to c18.75%. Given that at least two thirds of these will have been acquired at the early to mid twenties pence their average will be not more than 28p so we get 60m x £.28 = £16,800,000 cost.

Then making the assumption that New BLVN will inherit $90m in cash (considering what Billy is spending in his desperate attempt to cling on, $93.5m it certainly won't be) a reasonable expectation would be that the new BoD decide to prudently bank $40m to cover G&A (down to a more sensible "$1-2m pa) and ongoing costs to fundamentally exit Bomono, settle redundancies and pay any 20% dues on progress towards Etinde fruition and then return the remaining $50m to shareholders which, with their 18.75% would give COC $9.375m. Call that $9.3m and effectively they will have acquired their stake at $7.5m and, coincidentally, we will had had returned c12.5p per share

So why on earth would they need to risk reputational damage by indulging in any "cash stripping" subterfuge?

Then to switch to the prize that they so obviously believe awaits them by seeing their Etinde plan followed and here again their interest aligns precisely with ours.

Etinde appraisal wells might indeed not be drilled this year and nor might the path(s) to gas monetisation be finally established, but both these events will happen within three three years and, most likely, within two. Especially then, if the appraisal drilling meets with its expected success, the prize for both COC and ourselves following FID will be to hand - the offer for sale of a cleaned up company with shed loads of carried forward losses and a single asset of 20% of an early monetised Etinde.

From what has been posted on here over the months most would seem to believe that for such a Bowleven £1 per share ($400m with 320m shares or $375m if by then down to 300m shares) would be a reasonable expectation. If so, that would be giving back to COC, before costs, £60m (or $75m) so why on earth would they want to pursue firesales or any other quick buck course when such a huge prize awaits within so short a timeframe. To engage in any of these alleged firesales etc would seem plain daft to me, folks.

Those wishing to stick with an unreformed Billy and pursue more Bomono drilling along with G&A justifying acquisitions are very welcome to do so.

[benjimun] 21/2/2017 13:32

Indeed winnet that is absoutely barking.

[durby] 21/2/2017 13:17

The true cost of Bowleven’s board over 10 years

Source - www.bowlevenholders.net/2017/02/21/true-cost-bowlevens-board-10-years/

On Friday Bowleven’s board issued a rebuttal to Crown Ocean’s damning open letter to shareholders. The board focussed on ten issues it believes Crown Ocean has misrepresented, with the chief complaint being how much the directors have earned. Crown Ocean claims “The Board were awarded remuneration totalling US$44 million over ten years.” Bowleven’s board tells us “The correct figure is US$33 million”. Who is right?

If you go through Bowleven’s annual reports for the last 10 years and add up the total cash remuneration to the board, the total figure comes out as just over $33.31million.

One interesting point to note is that in 2008 Bowleven restated board cash remuneration for 2007 to $2.966milllion, up from the $1.537million originally reported. This looks like an appalling set of errors to have made in audited accounts, but it was 10 years ago and is unlikely to have much bearing on the vote at the AGM. (Though for the record, in the original 2007 report Kevin Hart was reported to have earned $188,000, only for it then to turn out he actually earned $368,000 – did he not read the original annual report?!)

Based on these figures it appears at first glance that Bowleven’s report is more accurate, so how might Crown Ocean have arrived at the $44million figure?

Reading through the figures and it looks like Crown Ocean has also included share based compensation and social security costs.

For the full years from 2007 to 2016, Bowleven’s board received a total of $7.396million in share-based payments. It is perhaps reflective of the current board’s attitude towards shareholders that it did not include these payments in its calculation. After all these directors appear to have cared so little about share price performance over the years, why would they believe the generous piles of shares they awarded to themselves would have any value?

This leaves social security costs. Over the last 10 years Bowleven has paid $3,290million in remuneration-related tax.

Taking into account all the employment costs of Bowleven’s board over the last decade and the directors cost the company $44million. Crown Ocean’s figure is correct. Arguing over whether this amount is technically “remuneration” is ridiculous. This is what the directors cost the company, while destroying shareholder value. They have to go.

[benjimun] 21/2/2017 13:01

Winnet,
Your post regarding the valuation of BLVN is pretty much where I am at.
We have yet to appraise Etinde it is clear there is potential for a massive re-rate.
NA/Lukoil know it is massive and most conservative expectation are a rerate to 2 TCF, and it's likely to be more, neck on block I think there will be more than x2 appraisal wells.
You use $2 a barrel, we sold to lukoil/Newage at that price to get them onboard.
Would we not accrue greate value than that on the remaining 20%, why not $5 a barrell, what are typical values for a takeout on a non distressed seller and at $2TCF what value would you assign to BLVN?

My fear is that COC will take charge, sell etinde at paenuts make a nice quick buck then miraculously drilling begins post haste and we see the truth worth of etinde and everyone making out like bandits except us. I am happy to wait till 2022 etc if that is what required.

[cyan] 21/2/2017 12:41

Sorry briefly posted on the wrong board.

At least Brent is performing ok today at $57.03

[tiler1] 21/2/2017 12:35

Fair enough DP I respect your decision and view point. Best of luck going forward

[cyman] 21/2/2017 12:17

Ok so according to some posters here kh is a crook a liar and a con man! Wow just simply wow where do you guys get this stuff from?Come on even if this was a court evidence of these allegations would be required. What do these accusers know about the coc gang that makes them so perfect?

[sivadnoj] 21/2/2017 11:54

I find it unusual that Hart was the only BLVN board (or staff) member to meet with COC regarding the alleged MBO approach. I would expect at least one other BLVN person present to produce a record of what would have been a significant discussion. My guess is that an informal meeting took place, that COC had a very different view of the purpose of the meeting, that an MBO may have been mentioned as one of a number of different options and that BLVN are now blowing this out of all proportion to suit their own agenda.

[loglorry1] 21/2/2017 11:52

@asdamince it is a risk but don't forget that too would require a shareholder vote and CoC are still in a minority. On the MBO thing you'll just have to decide who to believe because both claims can'e be simultaneously true.

I've emailed Keven Hart on this and he responded saying such a meeting did take place and was minuted. I'm surprised therefore he didn't provide a copy of the minutes of the meeting in writing to me. That would surely have proved that CoC were being economical with the truth.

I can state that Bowleven have made some pretty misleading claims. The fact that KH has spent 85% of his net salary buying BLVN shares for example. This calculation doesn't include a load of shares he sold at over £2. If you take that into account his net buys in cash terms are much much lower.

Log

[hernando2] 21/2/2017 11:48

Here is an open letter from a major investor in Arconic, supporting the activist shareholder Elliot.

This is a fairly common approach in America and COC are doing the same here, and the management here are doing the same as Arctics management.

I hope that Hart and co get shown the door and we shareholders can get some real value as i suspect I will in Arconic.


Lion Point Capital, LP (together with its affiliates, "Lion Point") has been a shareholder in Alcoa (NYSE:AA) since 2015 and we continue to be invested in Arconic Inc. (NYSE:ARNC) ("Arconic", or the "Company") post the spin-off of the primary products businesses. Lion Point believes that the intrinsic value of Arconic materially exceeds the Company's current stock price, and we welcome and support Elliott Management Corporation's ("Elliott") plan to unlock this value.

Lion Point Capital

Over the last couple of years, Lion Point has spent significant time and resources to understand the Company, including evaluating its historical operating performance and competitive position. While we see tremendous value and potential in Arconic's world class assets, the market applies a persistent discount to what our analysis indicates to be fair value, based on both private and public peer valuations.

We believe that the discount and consequent sub-par shareholder returns witnessed overtime are attributed to what objectively (both on a relative and absolute basis) can be described as poor capital allocation, significant and recurring execution missteps, undisciplined spending and miscommunication with the investment community. There is a stark dichotomy between the potential of the underlying assets and the results to date from their management. The burden and cost of this dichotomy have been borne by shareholders.

Lion Point believes that prudent capital allocation, disciplined cost control, focused execution and clear communication about the path forward are key to charting a new course for Arconic, and can drive substantial shareholder returns from here. Lion Point believes that Elliott's plan for value creation can reverse the past and set new Arconic on a better path to creating shareholder value.

Unfortunately, the Company has engaged in a counterproductive (and ill-advised) PR campaign to defend against ideas that can dramatically improve the Company. Shareholders should not bear any longer the burden of such a purpose-defeating and value-destructive distraction, and we recommend that the Board promptly engage with Elliott in discussions to implement a plan to enhance shareholder value - much work lies ahead.

[ramayer] 21/2/2017 11:33

Could Perenco be linked to the VOG rise? If they are lets hope they take us both out asap!!

hxxp://www.perenco.com/cameroon

[donpatrol] 21/2/2017 11:24

You need to consider that Wshak may now be in the pocket of CoC

[asdamince] 21/2/2017 11:15

I still remain concerned about CoC alleged approach for a MBO. Although CoC refute this meeting ever took place, Bowleven have stated via RnS that it did and that CoC were only offering cash value for the buyout. Should we not be concerned that CoC would seek to repeat this process once they have their nominees in place, that way shareholders stand to be excluded from all potential asset values despite having funded the enterprise to date?

I would be interested in Wshak's assessment of whether such discussions did indeed take place and what information he has gleaned to indicate that such action would not be repeated by CoC.