Anglo African Oil & Gas Share Discussion Threads

[themadstork] 28/5/2018 16:19

What's the best case scenario without 103? 200bpd from 101/2 and the company makes a
very small profit with no chance of growth? Even if everything goes perfectly (workovers, oil price, low G&A costs) then in that case the market is not going to ever bid it much higher than current mcap. Collapse to sub 5p on no vote, climb back up to 10p if workovers are fully successful would be my guess.

Also they will almost certainly lose the license if 103 is not drilled, given that drilling that well is central to the new license agreement. In that case it won't really matter how much 101/2 produce.

I guess what it comes down to is, do you want to see 20p+ again? The only way that happens is if 103 is drilled, and the only way 103 is drilled is if the placing goes through.

[bad gateway] 28/5/2018 15:42

No its not beside the point TMS it is the point. 101 and 102 take away the need for emergency funding and the co will not crater on 100% of the revenue from same. You're wrong with your fear mongering and you're also wrong to assume that massive share dilution is the only financing option open to what will soon be a producing co.s shareholders.

[themadstork] 28/5/2018 15:35

101/2 may or may not be enough to sustain the company; that's really beside the point. If they can't fund 103 then the major catalyst will be gone and the share price will crater. Voting it down will not suddenly cause Finncap to be able to get the money in at a higher price than 8p, which itself would be a huge premium following the instant collapse on a 'no' vote.

HM: Sister (or the guy who basically is Sister) is not interested in buying out the company for a premium. He doesn't want to be diluted, he wants the asset back cheaply and he will get it if the company goes bust following a no vote.

[bad gateway] 28/5/2018 15:31

Maybe they already have and we just haven't been told about it? Sefton did say they'd had several funding solutions offered to them.
They're also not broke and will be even less so with the revenue stream of 200-250BPD out of 101 and 102. Remember they've already pulled 85 BPD from 101 they've just kept quiet about it since is all.

[honestmarty] 28/5/2018 14:59

TMS, can answer for himself, but I agree with him that a funding solution is vital.

For Sister to be credible in their opposition they would have to suggest an alternative solution or bid for the company???

Given the price of oil would they be tempted?

10 million quid would easily do it?

If they offered 18p a share for what they don't own, who wouldn't at least consider it?

[bad gateway] 28/5/2018 14:41

"If the placing is voted down then in all likelihood the company will go bust and Sister will be able to get the asset back."

Interesting if slightly hysterical response to the no voters there TMS.
I take it then you believe the co. to be lying through their teeth when they say 101 and 102 will put them into a cash positive position so long as oil stays above the $40-$50 level and that them now being entitled to 100% of the revenue from same til all monies owed are paid won't help them at all?

[honestmarty] 28/5/2018 14:31

Thanks Madstork, every little helps.

[themadstork] 28/5/2018 14:30

Ring your broker and instruct them to vote on your behalf. Some will charge for this - not sure if AJ Bell does - but it should only be £20 or so.

[honestmarty] 28/5/2018 14:09

Any suggestions on quickest way to vote with a nominee account (AJ Bell)?

[thesloth2] 28/5/2018 14:03

Stork. As a LTH and angry as well, you do make a very good point. Voting against
is Turkeys voting for Xmas.

[honestmarty] 28/5/2018 10:34

Even with 160 million shares the potential here is very exciting, the valuation are at an oil price of just 60 dollars.

Reasons to buy:
Anglo African Oil and Gas (AAOG) are acquiring Petro Kouilou (PK) an established oil producer in the Republic of Congo.
The Congo has been stable for over 40 years with the development of the oil sector a main reason for this.
The acquisition, for $2.5m cash and £2.5m in shares, results in AAOG owning extensive onshore surface infrastructure and facilities that would cost $15m-$20m to build today. This means the company will need to spend no further capex on top of the funds for the proposed work programme. Discovered oil can be brought on stream almost immediately. Thay have capacity for more than 4000bopd.
Owning PK gives them a 56% stake in the Tilapia Field. The remaining 44% is owned by the SNPC, the national oil company. The field is 1.8km offshore, but is drilled from onshore.
All licences and permits are in place for the current production and proposed work programme. The SNPC have agreed a budget for this and granted the authorisation for its share of the capex (they have to pay the 44%, no free carry).
The company have raised £9m to fund the acquisition plus the work programme. This is a 3 stage play.
Currently produce 38bopd. The initial low risk work programme is expected to increase this number to c.250bopd at a cost of c.$300k. There is very little risk here, the asset is already producing from this horizon (called the R1/R2 sands). At $50 oil, the management estimate 180bopd would see them reach cash flow breakeven.
The asset has previously been drilled to the next horizon, the Mengo Sands. The contingent resource stands at 8.1mboe. The Mengo sands are already prolific producers in the area, but require a one off stimulation to flow the oil. This technology to do this was not available in the area at the time Tilapia was drilled. It is now.
The operations director has significant in country experience with Schlumberger, Baker Hughes and GE Energy and has brought 5 or 6 wells on line from the Mengo in acreage very close to Tilapia over the last 3 to 4 years.
Well cost net to AAOG will be just $3.5m. A successful well increases production to an estimated 750 barrels of oil a day. At $50 oil, this would raise net revenues to around $500k a month, for a $300k profit.
The same well will then continue into the deeper Djeno Sands formation. This again is a prolific producing horizon in neighbouring fields. AAOG’s technical work gives confidence that the presence of hydrocarbons in the Djeno Sands is probable at Tilapia with a prospective resource identified of 58mboe. A success case here transforms the company.
Oil Majors (Eni and Soco) have made significant discoveries in adjacent fields. Assets to the North, South and West of them produce 5000 bopd and upwards from the Djeno Sands.
The market cap of the company at float, with £6.5m of cash for the work programme will be around £12.5m (assuming a £9m raise). Finncap have made some calculations based on various success cases and an oil price starting at $60 for 2017.
Success from the initial workover programme (increase to 185 bopd), to which they attribute a 100% chance of success equates to a £16m valuation for AAOG. Success in the Mengo (increase to 750bopd) rated at a 50% chance, £69m valuation. Success in the Djeno (10000 bopd) rated a 25% chance, £760m valuation.
The company estimate that a single well in the Djeno producing a conservative 2500bopd production number would generate net revenues in excess of $3m a month at $50 oil.
Ultimately a success in the Mengo, which is already proven to be in place, would see a significant amount of profit generated by the company. The company will be run for cash. No interest in buying other exploration assets. 75% of free cash flow is to be paid out in dividends.
If they fail in the Djeno, but the Mengo is successful flowed, they can drill multiple holes in the Mengo horizon, bringing the bopd into the 3000-4000 range.
Management will be awarded options over up to 15% of the company evenly based on achieving 1000bopd, 2500bopd, 3000bopd (for a sustained period). Starting salaries for the 4 directors are £120k each, but this will drop to £60k in the company if certain profit figures are not achieved. It will rise to £180k if oil production is over 10000bopd.

[honestmarty] 27/5/2018 08:54

I think events next Monday and Tuesday will give a clear indication of whether things have changed for the better here.

Approval of the placing needs to be followed immediately by an RNS confirming final drilling contract signing and a drilling schedule update.

Get this away at 7 am next Tuesday the 5th, add in a positive update on workover flowrates,

And bring on the flippers.

[honestmarty] 25/5/2018 16:07

Bidding for 300k at a very healthy premium online.

Even a hint of positive news and this will do very well indeed

[bad gateway] 25/5/2018 16:07

Who told you we're not buying tbb. Just cus we're moaning doesn't mean we can't see the v shape appearing. So we'll whine as much as we like all the way up to 20p and beyond.

honest agreed, you just put it more succinctly.

[honestmarty] 25/5/2018 15:58

Bad gateway, I favour a more devious perspective.

Given the huge sum they raised, I think investors, rightly wanted a lot of equity.

With the share price at 13p, I think they talked it down by flagging the funding issue to lessen the shock of an 8p raise.

[bad gateway] 25/5/2018 15:45

Funny you say that iLeeman as I thought the exact opposite with the recent newsflow.
I thought the pre announcement of the need for a placing allowed the share price to drop that bit more so they could get a lowerprice for Fincaps mates.
They could have got the placing away at 11p if they'd just announced it on the 3rd which would have been 25-30% less dilution instead they gapped the stock down to 10p first with their disastrous (for pi's) warning.

[honestmarty] 25/5/2018 15:42

If it meant raising at 8p instead of the much predicted 5p then well done Mr Berwick.

[ileeman] 25/5/2018 15:30

Very true then dont give deadlines you cannot keep. Clearly the new CEO has known for a while they would be raising money.

Looks like false targets were given to prop the share price up pre raise.

[honestmarty] 25/5/2018 15:21

He has raised another 7.5 million pounds on a company most thought dead and buried. Do you think major investors didn't ask about the new target assets before getting out the cheque books?

The need to sign off the placing before signing off the drilling contract to allow drill mobilization, hence the few weeks of delay. These are the things that happen in the real world, unlike in the fantasy world of the armchair investor.

[ileeman] 25/5/2018 15:14

Such a hurry the first drill deadline has already got taken back a month.

[honestmarty] 25/5/2018 15:11

Aladdin.

I would not be so despairing. I have a strange suspicion that non-organic growth may be surfacing in the not too distant future. Mr Berwick is an able young man, in quite the hurry.

[sleveen] 25/5/2018 14:54

Deja vu, I remember that.

Or do I?

[aladin1033] 25/5/2018 14:51

Marty brokers had mengo success at a npv of 60m that was when oil was 55 dollars so your predictions might be low and you said 20p on mengo and 30p on djeno if djeno comes good surely it will be over a 100m mc either way you are lucky with a low average the most i can pray for is my 24p back