Petrel Resources Investors - PET

Petrel Resources Investors - PET

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Stock Name Stock Symbol Market Stock Type
Petrel Resources Plc PET London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 1.775 08:00:00
Open Price Low Price High Price Close Price Previous Close
1.775 1.775 1.775 1.775 1.775
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Industry Sector
OIL & GAS PRODUCERS

Top Investor Posts

DateSubject
28/7/2021
15:51
f31: Sorry all for the late posting of this AGM update – I just didn’t have an opportunity earlier. Apart from myself there were 2 other shareholders at the meeting (both against the Tamraz option) I had a 2-way strategy for the meeting: 1* - To explore how strong Petrel’s realistic chances are outside the Tamraz offer 2* - To explore what exactly is holding the Board and the Nomad back on the RNGG offer 1* - To explore how strong Petrel’s realistic chances are outside the Tamraz option * Has any meaningful progress been made since the last AGM towards potential projects in either Iraq or Ghana ? *A t the time of last year's AGM we were not on Iraq's list of "Qualified Companies" Are we meanwhile on that list ? * Are there currently any deciding negotiations ongoing with other investors outside Tamraz ? David really had nothing much more to offer than that the cycle will turn in our favour, i.e. that say within a year demand will outnumber supply with subsequent higher oil prices, which in turn would raise the demand for farm-in license opportunities. And that we had already submitted a proposal to the Iraqi Oil Ministry etc. etc. David does not see why we wouldn’t be given the Qualified Company status My take on this: That proposal had already been submitted at the time of last year’s AGM, so nothing recent there. And it is nice to hear that David expects this Qualified Company status, but effectively this confirms that up to this moment anyway we still are not on that list. Perhaps that is due to Iraqi stand still, I don’t know – nevertheless: it is clear that there has been no progress on that front either over the last 12 months. No indication or feeling either that any meaningful progress has been made in Iraq or Ghana since last year, which unfortunately supports our expectation that most likely Petrel must have little own realistic chances. If that expectation would be correct, this then leaves the option of other Investors (other than Tamraz) as the only remaining alternative to realize contracts and shareholder value. But the Board made it quite clear that the 32K shares under injunction and having “unknown owners” is a real stand-in-the-way for other investors – in fact a showstopper. I asked what was going to happen with these shares if not resolved by Tamraz, if there was any time-limit, could we theoretically be having an AGM in 5 years’ time with these shares still under injunction? John’s answer was basically that this was a possible scenario, which is why they have requested Tamraz multiple times to resolve that issue. My conclusion: no progress on either Iraq or Ghana or with any alternative investor, and realistically this won’t change much as we are simply too small for getting an own contract, and the injuncted shares block the investors route. So that leaves part 2 of my AGM meeting strategy: 2* - To explore what exactly is holding back the Board and the Nomad on the RNGG offer First to note: From the very start, when even just slightly considering the possible option to somehow “force” the Board to accept the RNGG offer e.g. via a General Meeting vote, we realized already that before such drastic action could be set in motion, we first needed to get adequate advice on what the potential consequences might be. Including potential unforeseen consequences – because our group doesn’t have the overall knowledge to be completely aware of potential dangers following such action. First investigating those potential dangers before putting wheels in motion was also a promise to poll-participants that voted in favour, but highlighted “to be careful” – such as Holdingtight and Malc5 The above note is the reason why we specifically asked in yesterday’s meeting: ‘* What exactly is unlawful or not acceptable to the Board or to the Nomad, in relation to the RNGG offer ? Unfortunately for all shareholders that hoped (like me) that such a vote could potentially realize their preferred “Tamraz option”: This is NOT the case – and pursuing this avenue in full would trigger a suspension from the Stock Exchange !! This is the technical explanation on the above: Within the offer we would acquire the RNGG deal for 29% of Petrel (shares) – about 2 million pounds That is immediate suspension! Because when we acquire an Asset, the stock exchange performs a Class Test, which includes looking at the amount of money we are spending on the Asset. When the Asset costs £2 million worth of Petrel shares, this is then compared to Petrel’s Balance Sheet, which has only 1 million Euro, so the transaction is bigger than Petrel – which is therefore technically a Reverse Take Over The shares are then immediately suspended – until a re-listing document is produced. But the fundamental requirement of a re-listing document, is proof of funds: Before the suspension can be lifted, the company must prove to the Stock Exchange that it has enough money, in this case enough money to cover the cost of developing the new Asset for at least the initial 18 months, which is let’s just say around $7 million (based on Tamraz’ estimate of $4 million in the first year) I obviously brought up that within the offer Petrel gets a “free carry” (so no costs for Petrel). But free carry would only be a valid argument if Tamraz can prove he has the funds to carry the costs. I then brought up the famous Rothschild letter, but although this letter reassures Petrel very convincingly that funding should be well within reach – it simply is not a hard-fact guarantee to satisfy the exchange rules. The rules require that the cash is there, or at the very minimum is absolutely guaranteed for instant access. I absolutely have no doubts at all that the above explanations by Jim are genuine and correct. I also had a lengthy private chat with Jim after the meeting, and not only do I have no doubt on the above technical obstructions to accept the Tamraz offer as-is, I also have no doubt that the Board indeed has no own discretion in complying with those rules. Where does this leave us? I personally don’t see any own-initiative contract coming to Petrel any time soon (apart from the fact that we are simply too small – Iraq just can’t get its act together), while other investors are also unlikely to come in due to the injuncted shares. And it turned out we can also not somehow “force” the Board to accept the RNGG offer. Altogether that leaves the situation where only Tamraz can break the stalemate by “finding”; the money for either funding the RNGG exploration costs for at least the first 18 months, and/or to resolve their dispute with EYCP. We’ll give it one last effort to appeal to Tamraz Group to somehow “find” that money – should be possible with all their connections with high level earners – but after that I am afraid there is nothing much more we can do from the shareholders side. We shouldn’t be over optimistic on the outcome of that last effort (if “finding”; money was simple enough we wouldn’t have been in stalemate for so long already), therefore I’m afraid we’ll be back in the waiting room for quite some time to come yet.
21/7/2021
15:17
f31: To keep you all in the loop - via the mail below, the Roger Tamraz Q&A's were sent to the Board today Frans 13:10 (2 hours ago) to Jim, David, John Dear Board Members, As already referred to in my (unanswered) follow-up mail of 28th June to David: To learn more about the RNGG opportunity offered to Petrel, we have also reached out to Roger Tamraz with a set of questions on RNGG. As we would like to further discuss this opportunity with you during the AGM next Tuesday, we considered it appropriate to already forward Roger's answers to you. Please find the Q&a's below. Best Regards, Frans ---------- Forwarded message --------- From: Michel Fayad Date: Thu, 1 Jul 2021 at 13:32 Subject: Fwd: Questions on RNGG for Roger Tamraz To: Frans ---------- Forwarded message --------- From: Roger Tamraz Date: Thu, Jul 1, 2021 at 1:56 PM Subject: Re: Questions on RNGG for Roger Tamraz To: Michel Fayad See below in red 1. Can you please expand on the quality and exploration potential of these RNGG fields, and as well on the importance and potential value of the licenses for Petrel? RNGG has two potential giants: North Donskoy (Block size 2123 sqkm) and Gashunsky (Block size 1,835 sqkm). There are 9.1 billion barrels of oil equivalent (mostly gas: 7.4 billion barrels of oil equivalent) prospective resources. This is currently 80% owned by my private company, Netoil Limited. It could obviously bring potential value to Petrel Resources PLC which is still kind of shell company. 2. David Horgan informed shareholders, that “the RNGG exploration proposal made industry sense, but passage of title seems conditional on funding, which the Tamraz Group has, so far, been unable to deliver”. In fact, on various occasions during discussions with the Board, we were informed “they have no Cash” It is therefore understandable that many shareholders have unfortunately started to get some doubts on the financial possibilities of your Group. From this angle: · Is the passage of Title for these 2 licenses indeed conditional on funding? · If so, could you please describe how much funding will be required, for what purpose the funding is required, and importantly - how have you planned to ensure the funding? · Do you foresee any difficulty within this funding planning? · Do you foresee any difficulty towards the funding for continued future work on these projects? I don’t want to argue with David Horgan but our title is clear which is not the case for Petrel’s titles in Ghana or Iraq. I offered to the Board of Petrel to get a free carried interest in RNGG and disclosed to them a support letter from Rothschild. Only $4 million funding is required this year. By 2025, $20 million is required (including the initial $4 million). A lot of investors have already showed their interest to join this venture. 3. Please describe the possible dilutions shareholders could face, and if there are any steps you can take to limit these. I did not request for a reverse takeover. I only requested for 29.99% in total for my group. 4. It is our understanding that you have acquired 80% of RNGG, the current holder of the 2 licenses. · Is PET being offered the full 80% of the licences? · If 100% is not being offered, please describe what will happen to the balance? I have already answered this question in my previous answers. For the balance, it will either remain private or be put in other public companies. Plus some investors want to acquire stakes from Netoil Limited. 5. Have drilling targets already been identified, or would you have to undertake an exploration programme? When would you expect such exploration/drilling programme to start? This year, we intend to prepare the exploration drilling project plans and drilling project based on the corresponding comprehensive seismic geology research, and any other similar activities decided. 6. Can you please tell us why you think these substantial licences have not been developed before? Before the 2008 financial crisis, these licences attracted major oil companies. Then the problems between Russia and the West discouraged a lot of potential players. 7. Do the licenses fall within a safe-enough business environment, e.g. do you have any worries about possible corruption or similar in these areas? I know well Russia and am not worried. 8. If the Board would accept the RNGG proposal, could you please expand on your strategy for Petrel? · Will your Group take control of Petrel? · Will you personally be actively involved in Petrel – e.g. will you become a Board member? · Would you still plan to also bring other future Assets to Petrel – if so, is there any possibility you could expand on potential future Assets for Petrel? My intention is to develop Petrel. All is open but the first step is an agreement with Petrel’s board. 9. Shareholders have continually been frustrated with a lack of communication from their Board. If you obtain control, what practice would you implement to update shareholders on business developments concerning Petrel? I believe this interview is an answer to your question. 10. If the Board would accept your RNGG proposal, where do you see Petrel’s future share-price potential? I hope it can go back where it was at Christmas 2019 (25p if I recall) and even more.
19/7/2021
20:20
kdickson: And exile, here's the long answer to your burning question. I wouldn't want you thinking I was trying to ignore you now ;) ------------------- Firstly, from The Currency article May 2020: The affidavit outlined Fayad’s version of events and his investor group’s response to the letter they received from Petrel’s solicitors on January 7, seeking “a full and detailed explanation in respect of the sale of the sold shares in breach of the lock-in deed”. Fayad testified that the investors entered into a term sheet for the MLA [KD: Margin Lending Agreement] with EYCP LLC, a lender registered in the US state of Delaware, and its Cayman-based agent SRT Capital SPC Ltd on November 19, 2019 – two days before Petrel’s EGM approved the reverse takeover. This was updated on December 9 with “minor changes” to the MLA agreement. [KD: Note that the Lebanese banking crisis had just happened and the CP's funds were locked in...and still are]. Tamraz, Fayad and their co-investors were to borrow £3.15 million from EYCP and provide 37.3 million shares as security for the loan. These were the shares acquired by Tamraz, Fayad and Mehraik in August under the first phase of the deal, representing a 25 per cent stake in Petrel at that point. Crucially, Fayad insists that “the capital shares would not be at risk until monies were advanced under the MLA,” which he says never happened. On affidavit, Fayad acknowledged his group’s shortcomings when entering the loan agreement: “In order to save on the cost of entering the MLA, the MLA borrowers (including myself) did not take any legal advice, in any jurisdiction, on the contents of the MLA and instead relied upon the party broking the transaction (Oscar Olu-Williams) and representations made to us by the lender during the course of the negotiations.” Fayad told The Currency that he and his partners trusted Olu-Williams’s experience. “He is well-known on the market and has managed IPOs,” he said. Fayad added that the British broker introduced them to Bulent Toros, a Turkish national representing EYCP and SRT Capital. Unfamiliar with AIM market practices, by December 23, Fayad and his associates had placed the security in the custody of Deutsche Bank, which in turn outsourced the holding of the shares to Chase Nominees Ltd, a London unit of JP Morgan Chase. All parties present in court on Friday agreed that Chase Nominees, a defendant in the case because it had become the legal owner of the shares, had followed instructions and not committed any wrongdoing. “Neither myself nor the other investors were aware that pledging shares might constitute a breach of the lock-in deed as none of the investors are experienced investors in the AIM market and are unfamiliar with market practices of that market,” Fayad testified. “We assumed that it was only the sale of the shares on the market that was prohibited.” Fayad said that the borrowers then received a notice of default from their lender on January 3, stating that three clauses in the MLA had been breached: • The 30-day average trading volume in Petrel shares was not to fall below 75 per cent below that on a reference “day of exchange” set at the date of the MLA. Judging by the high trading volume recorded at the end of November around the time of the EGM, this clause set the bar high. By early January, EYCP notified the Tamraz group that volume had fallen too low and they were in default. “My understand of the reasoning for this is that over the Christmas period, trading levels reduce dramatically as a result of the holiday season,” Fayad said on affidavit. • EYCP also notified the investors that the shares were not freely tradeable without a volume restriction, unlike agreed under the MLA. “I consider that this is evidence that the lender was seeking to trade the shares prior to the notice of default,” Fayad testified. • The MLA also “provided that the shares were not subject to any lock-up or prior encumbrance,” and the lender cited the existence of the lock-in deed as another default trigger. Petrel alerted the stock exchange on January 8 at 7am that around four million locked-in shares had already been traded over a number of days. Fayad testified that his lender had started to sell the shares “immediately after sending the letter, possibly even before”. As soon as he found this out, he said he instructed Deutsche Bank to stop any further sales. “I, nor either of the other investors, gave, or had any intention to give, any instruction to dispose of any further shares in Petrel,” Fayad’s affidavit quotes from a letter sent to Petrel. Petrel’s barrister Gary McCarthy told the court that if what Fayad said was correct, “it appears that the lender has not advanced any money and is now demanding £1.5 million sterling for breach of agreement in circumstances where they haven’t paid any money on foot of it, and they have got the benefit of $770,000 worth of shares which they traded as a collateral.” --------------- Secondly from another poster on this forum back in Feb: "...has anyone considered that the problem of the shares ownership may require court action (not inside Eire but in the Cayman Islands or New York). If so that isn't going to be settled anytime soon. Google "SRT Capital SPC Ltd judgement" and you will find a similar instance in the past of a collateral loan where the parties couldn't agree, that one was heard in New York. SRT Capital have brought cases in the Cayman Islands as well, but not London or Eire as far as I can tell... ...Until I did research I thought it odd that the concert party would loan shares as collateral to borrow cash...but I find that using shares as collateral is quite common, it appears to be SRT Capital's business and they have been around a while..." ---------- My note: So, in summary, EYCP took the CP to court (in New York sometime in 2019) in breach of contract which EYCP had 'manufactured' to almost certainly fail. So, not only have the CP lost their shares, they are also being sued (I seem to recall for something lke $1.5m?). The CP are the victims. The US court case is ongoing and very, very slow. EYCP (and their agent SRT) have a longstanding track record of pulling similar stunts. There are, and have been, multiple court cases involving them (e.g. Morgan Stanley, Soleil Capital Ltd, Pious Capital Ltd, etc). It appears to be their 'modus operandi'.
17/7/2021
06:58
the diddymen: kd, you will see that I rarely use 'will' in isolation - you miss the key words 'it is far from a given that they will'. As far as my position, years ago I was looking for speculative opportunities in minor oil companies. PET came across my radar and the narrative looked good at first sight. The more I dug the more I realised that the Teeling/Horgan operation was closer to a lifestyle company than a genuine investment. Nothing I have seen since has told me anything otherwise. In my opinion apart from its listing and tax losses, the company has no assets that a liquidator would recognise. As a going concern I reckon that the value of those assets (excluding the narrative) is 1.2 to 1.5p per share. Roger made the point when he said that PET was effectively a shell company. In terms of what shareholders should do, I reiterate my position - salvage what you can by selling first. Don't wait. Why? Firstly the Teeling/Horgan days are close to an end. Even if they ever had any intention of increasing shareholder wealth, how are they credibly going to raise any money to achieve it now. Horgan was a bit early on the 'honest failure' phrase some years back and he was put in his place very quickly by Teeling. Nothing has happened since and the phrase is more appropriate than ever, except that I would contend with the word honest. Secondly the 'SAG' look on Roger and the CP as a white knight. The SAG could be useful to Roger at the moment, but if a deal were done they would quickly become irrelevant. I am still not certain why Roger needs a listed vehicle - I can guess, but indirectly that is not the sort of vehicle that London needs listed on one of its markets. For every debit that the CP introduces there will be a credit on the balance sheet, and retention of the listing will be difficult to achieve. Should the unlikely happen it would be very interesting to see if Beaumont Cornish remain as NOMAD. kd the only reason that I have remained watching PET is because it was also a vehicle used by vaguely organised private investors to scam other investors. A few investors have made a fortune on PET and the naive have paid. Over the last decade and more I have watched scammers ruin people's lives and F66 is right. Divorce, repossession and possibly death. Go and ask David about McClelland. That the share is moribund, it is no longer any use to the scammers. The only other beneficiaries of this saga will be the directors. Back in 2008 or so I posted the remuneration of all the directors. Even then it was a nice little earner. I do not know your entry price, but I would grab 2.4p and try and work it to recover what I could. If you follow my posts you will see that I have made my first foray back into the markets after many years, XTR. It is a gamble, but some times you can get better odds by shopping around.
08/7/2021
11:48
kdickson: Here you go Pete... f31 5 Jul '21 - 18:28 - 19435 of 19494 DEAR FRANS, THANK YOU FOR YOUR QUESTIONS, WHICH I ANSWER DIRECTLY. BUT FIRST, THESE ARE THE FACTS: 5.25 MILLION PETREL SHARES BELONGING TO ROGER TAMRAZ, MICHEL FAYAD AND A NOW DECEASED COLLEAGUE, WERE BEING SOLD WHILE PUNTERS WERE BUYING IN LATE 2019 / EARLY 2020. THE PLEDGING AND SALE OF THESE SHARES WAS IN BREACH OF A STAND-STILL CONTRACT, STOCK MARKET RULES AND COMPANY LAW (SINCE MICHEL FAYAD WAS THEN A DIRECTOR, AND ROGER TAMRAZ WAS A SHADOW DIRECTOR), AND APPARENTLY ALSO A BREACH OF INSIDER DEALING RULES. THE TAMRAZ GROUP HAS NEVER PRODUCED A SATISFACTORY EXPLANATION OF HOW THIS HAPPENED. THEY APPARENTLY CANNOT PROVIDE EVIDENCE EXPLAINING HOW THESE SHARES WERE SOLD, WHO AUTHORISED THE SALE, HOW MUCH PROFIT THEY MADE, AND WHERE THE MONEY WENT. THE ONLY REASON WHY MORE SHARES WERE NOT SOLD IS THAT PETREL RESOURCES PLC APPLIED FOR AND WAS AWARDED AN INJUNCTION TO HALT THE UNLAWFUL SALES. THE TAMRAZ GROUP HAS FAILED TO PROVE WHO OWNS THE >20% OF PETREL RESOURCES PLC SHARES THAT REMAIN INJUNCTED BY THE HIGH COURT. HOW, IN SUCH CIRCUMSTANCES, DO YOU PROPOSE THAT PETREL DOES CORPORATE DEALS WITH PARTIES THAT ARE IN BREACH OF STOCK EXCHANGE RULES, AND INSIDER DEALING LAWS, AS WELL AS THE COMPANIES ACTS? DAVID Dear John, David, Jim, Please regard this letter as a formal approach to the Board. The letter represents: 59 shareholders with a combined total of 28,946,351 shares, i.e. 23.2% of shares in circulation when taking shares under injunction out of the equation. Details are available upon request. We are writing to you before the upcoming AGM with the below set of questions, because Petrel has failed to create lasting shareholder value in the twenty-five years under your stewardship. Additionally, one and half years of negotiations with Tamraz Group have failed to produce a resolution. BY “LASTING SHAREHOLDER VALUE”, YOU MEAN THE CURRENT SHARE PRICE? AS A LONG-STANDING INVESTOR IN EXPLORATION SHARES, YOU KNOW THAT NATURAL RESOURCES ARE HIGHLY CYCLICAL. SINCE EXPLORATION BUDGETS WERE SLASHED AFTER 2014, FARM-INS BY MAJORS HAVE BEEN RARE, AND EXPLORERS ARE FRIENDLESS IN RECENT YEARS. SUCH DEPRESSIONS OCCURRED MANY TIMES PREVIOUSLY (E.G. 1990 – 1994 AND 1997 – 2003), AND WILL AGAIN. MANY INVESTORS PROFITED GREATLY FROM PETREL RESOURCES PLC (AND OTHER 162 GROUP COMPANIES), AND WILL AGAIN. THE OBJECTIVE IS TO BUILD AN OIL & GAS PRODUCER. THE PROBLEM OVER MANY YEARS WAS IN SECURING ADEQUATE FUNDING FOR RISKY LOCATIONS. THE 2019 STRATEGY WITH THE TAMRAZ GROUP SEEMED OFFER A SOLUTION TO THE CAPITAL ISSUE. AT FIRST THINGS WENT SMOOTHLY, BUT THEN THE TAMRAZ GROUP BREACHED THEIR LOCK-IN AGREEMENT, LEADING TO THE UNLAWFUL SALE OF 5.25 MILLION SHARES. AS OF JUNE 2021, THE TAMRAZ GROUP HAS STILL NOT RESOLVED THIS ISSUE. PROMISES OF CREDIBLE DEALS IN LIBYA AND IRAQ WERE NOT DELIVERED ON. PROPOSALS FOR MOZAMBIQUE, MAURETANIA, ETC. DID NOT STAND UP TO BASIC ANALYSIS, MUCH LESS DUE DILIGENCE. A RUSSIAN GAS EXPLORATION PROPOSAL MADE MORE INDUSTRY SENSE, BUT PASSAGE OF TITLE SEEMS CONDITIONAL ON FUNDING, WHICH THE TAMRAZ GROUP HAS, SO FAR, BEEN UNABLE TO DELIVER. SHOULD THIS CHANGE, THIS PROJECT WOULD BE OF INTEREST (SUBJECT TO DUE DILIGENCE AND REGULATORY APPROVALS) TO PETREL. REGARDING NEGOTIATIONS WITH THE TAMRAZ GROUP, THE ONLY REASON WHY THESE HAVE, SO FAR, “FAILED TO PRODUCE A RESOLUTION” IS BECAUSE THE COUNTER-PARTY HAS SO FAR FAILED TO PRODUCE ANY WORTHWHILE PROJECT WITH ESTABLISHED LEGAL TITLE OR FINANCE. NO LISTED COMPANY CAN SURRENDER CONTROL ON FOOT OF AN UNSUBSTANTIATED PROMISE, NOR WOULD THE NOMAD OR STOCK EXCHANGE PERMIT THIS. DIRECTORS CANNOT, I REPEAT CANNOT AGREE SUCH A DEAL OR RECOMMEND IT TO SHAREHOLDERS. REMEMBER THAT THE TAMRAZ GROUP PLEDGED CIRCA 37.25 MILLION SHARES TO A LENDER (EYCP) IN BREACH OF A STAND-STILL AGREEMENT. 5.25 MILLION OF THESE SHARES WERE SOLD BEFORE PETREL RESOURCES PLC OBTAINED AN INJUNCTION TO HALT THESE UNLAWFUL SALES. SINCE THEN, WE HAVE REPEATEDLY ASKED THE TAMRAZ GROUP TO RESOLVE THE EYCP SITUATION, WHICH (THEY SAY) CAN BE DONE WITH C. $250K. THE REMAINING 32 MILLION SHARES ARE WORTH AT LEAST $1.1 MILLION (£800K), YET THE TAMRAZ GROUP SEEM UNABLE OR UNWILLING TO RELEASE THEM AT A COST OF ONLY $250K? HOW DOES THIS STRENGTHEN CONFIDENCE IN THEIR FINANCING CLOUT? John was very clear at last year’s AGM: “if within twelve months we had not made progress, we would be going backwards”. It certainly feels that this is happening. EXPLORERS DO WELL IN BULLISH TIMES AND STRUGGLE IN DOWNTURNS. WE MAINLY RELY ON FARM-OUTS TO MAJORS, WITH SPECULATIVE FUNDING COMING FROM A LIMITED NUMBER OF INSTITUTIONS AND PRIVATE INVESTORS. THESE SOURCES LARGELY DRIED-UP WITH THE 2014 OIL PRICE WAR. POLITICIANS AND NGOS DEMAND THAT “FOSSIL FUELS REMAIN IN THE GROUND”. C-19 CUT OIL DEMAND BY 10% IN 2020 – THE PREVIOUS WORST FALL WAS BY 2.9 MILLION BARRELS DAILY IN THE 4TH QUARTER OF 2009. THIS IS A COLD MARKET FOR OIL & GAS EXPLORERS. HOWEVER, THE BUSINESS CYCLE HAS NOT BEEN CANCELLED: THE OIL PRICE HAS NOW RECOVERED TO $75, AND OIL DEMAND IS NOW ONLY C.3% BELOW THE PRE-C-19 LEVEL. EXPLORATION BUDGETS HAVE NOT YET RECOVERED, AND FOSSIL FUELS ARE UNPOPULAR, BUT THIS WILL CHANGE WITH THE BUSINESS CYCLE. CRITICS HAVE BEEN PREDICTING ‘THE END OF OIL’ SINCE THE 1850S. At last year’s AGM, shareholders felt encouraged because of the Board’s comments concerning the possibilities of getting a contract in Iraq on our own accord, and David’s “odds on – sooner than you think” appraisal on that possibility. However, John made it very clear in this year’s Chairman’s statement that Iraq has not moved forward, and that the Ghana saga shows no sign of being finalised. AN EXPLORATION AND DEVELOPMENT PROPOSAL HAS BEEN MADE, AS PROMISED, TO THE IRAQI MINISTRY OF OIL. FOR BEST RESULTS, WE NEED ATTRACTIVE FISCAL TERMS TO FUND AND ATTRACT PARTNERS. PETREL IS RE-BUILDING ITS IRAQI TEAM, AND IS READY TO START WORK AS SOON AS CONTRACTS ARE APPROVED. Also last year there was still a sense of hope that over the next twelve months, Petrel would ultimately reach an agreement with Tamraz, given the totally unsatisfactory current situation in relation to every aspect of the TG shareholding. Now we learn that you want to ‘move on’. We appreciate that the first tranche of shares was paid for, but the resulting massive dilution has still not bought any real benefit. Unfortunately, no progress whatsoever has been made on any of the above and there is no indication that we will see any improvement in the near future. Your immediate plans to persevere with Iraq is questionable without the full support of Tamraz Group. Indeed, it is puzzling that you now want to open immediate conversations with other groups, when Tamraz Group is on your doorstep trying to do a deal with you. WE WOULD BE DELIGHTED TO PROCEED WITH THE TAMRAZ GROUP, SUBJECT TO LAW, IF THEY DELIVER SOMETHING REAL. SO FAR, THERE HAS BEEN NO CREDIBLE, “BANKABLE̶1; DEAL ON OFFER FROM THE TAMRAZ GROUP. THERE HAVE BEEN EXCUSES, AND PROMISES, BUT NOTHING CONCRETE SO FAR. THIS COULD CHANGE, AND WE HOPE IT DOES. THE PETREL BOARD WILL NOT OBSTRUCT THE DELIVERY OF SHAREHOLDER VALUE. WE HAVE, HOWEVER, ALSO HAD APPROACHES FROM OTHER, WELL-FINANCED GROUPS WHOM WE HAVE KNOWN FOR YEARS. THESE MAY OR MAY NOT LEAD TO A REPORTABLE OFFER. BUT FINANCE, AT LEAST, DOES NOT SEEM TO BE AN OBSTACLE FOR THOSE OTHER GROUPS EXPRESSING INTEREST. TALK IS CHEAP, BUT THE TEST IS DO THEY PRODUCE CASH AND VALUABLE PROJECTS. WE ENCOURAGE SUCH INITIATIVES, BUT THE 32 MILLION SHARES STUCK IN LIMBO ARE OBVIOUSLY AN ISSUE FOR NEW SHAREHOLDERS. WE CONTINUE TO URGE THE TAMRAZ GROUP TO RESOLVE THEIR DISPUTE WITH EYCP TO RELEASE THESE SHARES. Considering Petrel’s long unsuccessful history, of some twenty-five years, shareholders now have strong doubts on the chances of any future success on Petrel’s own accord. With time running out both for Petrel as well as for oil dominance itself, we increasingly feel that some form of agreement now has to be reached with Tamraz Group. DO YOU PROPOSE GIVING NEW SHARES FOR NO VALUE? HOW WOULD THAT BE IN THE INTERESTS OF SHAREHOLDERS? WHAT BOARD WOULD AGREE, OR NOMINATED ADVISER WOULD ENDORSE SUCH A DEAL? FOR ANOTHER BULL RUN IN OIL & GAS EXPLORATION SHARES, THE SECTOR WILL HAVE TO COME BACK INTO FAVOUR. BUT THIS IS TRUE FOR ALL EXPLORERS. Given that you have turned down several offers from Tamraz Group to try and reach some form of resolution, we feel that the Board now needs to facilitate a full-on and dedicated AGM discussion on the Board’s thoughts and decisions in relation to the Tamraz Group situation. WHAT CREDIBLE OFFERS HAVE BEEN REJECTED? WE ARE AWARE OF NONE, WITH REQUISITE TITLE AND FINANCE. Saying that you want to open discussions with other groups, feels like you are continuing to kick the can down the road, rather than resolve your issues with Tamraz Group. HOW DO YOU PROPOSE WE RESOLVE OUR ISSUES WITH THE TAMRAZ GROUP, IF THEY HAVE NO TITLE OR MONEY? DO YOU SUGGEST THAT WE GIVE THEM FREE SHARES? HOW WOULD THAT BENEFIT US SHAREHOLDERS? REMEMBER THAT THEY PLEDGED MOST OF THEIR EXISTING SHARES, IN BREACH OF A LOCK-IN AGREEMENT. WHY WOULD THEY NOT REPEAT SUCH BEHAVIOUR? We feel that as shareholders we are now entitled to a better understanding of the Board’s decisions concerning Tamraz Group. Especially because we cannot understand why possible offers have been turned down, despite what must now be an almost hopeless situation for Petrel’s shareholders if no agreement should be reached. Finding another group to salvage what is left of Petrel does not seem reasonable at this point in time. IN ORDER TO MAXIMISE THE CHANCES OF DELIVERING DEALS AND FUNDS THAT WILL BENEFIT ALL SHAREHOLDERS, WE HAVE BEEN DIPLOMATIC. WE DID NOT WANT TO PROVOKE UNNECESSARY DISQUIET OR RUFFLE FEATHERS. HOWEVER, WE MUST OBEY COMPANY LAW AND STOCK EXCHANGE RULES. THE NOMAD AND AUTHORITIES HAVE BEEN FULLY INFORMED THROUGHOUT, AND ARE SUPPORTIVE. I WISH THAT REAL, VALUABLE DEALS, AND/OR CASH HAD BEEN OFFERED. BUT SADLY THEY HAVE NOT. THIS MIGHT CHANGE, WITH IMPROVING MARKETS. Therefore, please regard this letter as a formal request to facilitate a forthright discussion at this year’s AGM, where we would like to discuss your answers to the following questions: 1. From this year’s Chairman’s statement, it is clear that you feel Petrel should team up with anyone but Tamraz Group. What makes you think they will be more successful than Tamraz? IT IS NOT TRUE THAT THE PETREL BOARD ARE AGAINST THE TAMRAZ GROUP. OUR RELATIONS ARE CORDIAL. WE UNDERSTAND THAT THEY HAVE ALSO BEEN IMPACTED BY RECENT EVENTS. I ADMIRE ROGER’S HISTORIC ACHIEVEMENTS, AND HOPE THAT HIS NETWORK WILL EVENTUALLY DELIVER FOR PETREL. BUT IT HAS NOT DELIVERED SO FAR. PETREL WOULD WELCOME A SENSIBLE DEAL: IT WOULD SOLVE MANY PROBLEMS, ESPECIALLY THE 32 MILLION SHARES WHICH WERE BOUGHT BY THE TAMRAZ GROUP, AND REMAIN IN LIMBO. IN THE MEANTIME, WE ARE ENCOURAGING ALTERNATIVE INITIATIVES. AT LEAST ONE OF THE ALTERNATIVE APPROACHES INVOLVES A MUCH LARGER GROUP, WITH SUBSTANTIAL PRODUCTION AND CASH FLOW. THESE ARE PRINCIPALS, RATHER THAN BROKERS. 2. As there has been no lasting shareholder value created in the last twenty-five years, how do our prospects in Iraq differ from all previous years? Can you please explain what the opportunities are, and how realistic they are? PETREL SIGNED AN EXPLORATION AND DEVELOPMENT CONTRACT WITH THE IRAQI MINISTRY OF OIL, SUBJECT TO RATIFICATION. IT ALSO SIGNED AN EPC-CONTRACT WITH THE IRAQI MINISTRY OF OIL, BROUGHT IN PARTNERS AS REQUESTED BY SCOP, AND COMPLETED PETREL’S OBLIGATIONS UNDER THE CONTRACT. PETREL SIGNED AND COMPLETED A TECHNICAL COOPERATION AGREEMENT WITH THE IRAQI MINISTRY OF OIL, HAVING BROUGHT IN ITOCHU AS A 50% PARTNER. ALL THIS WAS DONE AT A MODEST COST AND WITHOUT BREACHING ETHICAL GUIDELINES. BP TOLD US THAT THEIR YEARLY IRAQI SECURITY COST WAS GREATER THAN PETREL’S ENTIRE CORPORATE OVERHEAD. WHAT OTHER JUNIOR COMPANY HAS ACHIEVED THIS? WE BET ON THE IRAQI PLAY AND CAN ONLY WORK WITH THE TITLE AND FISCAL TERMS THAT ARE AVAILABLE. THE IRAQI GOVERNMENT HAS UNDERTAKEN REFORMS TO MAKE CONTRACTS MORE ATTRACTIVE, BUT THEY HAVE BEEN SLOW TO DELIVER. I HAVE PERSONALLY PUT MY LIFE ON THE LINE FOR PETREL SHAREHOLDERS. HOW MANY CAN SAY THIS? I CARRY PHYSICAL SCARS EARNED ON OPERATIONS. AN IRAQI CLIENT HAS DIED, AND CONTRACTORS SERIOUSLY INJURED. IF YOU LOOK AT THE SHARE PRICE GRAPH SINCE PETREL LISTED, IN 2000, YOU WILL SEE MANY OPPORTUNITIES TO CRYSTALLISE PROFITS AT HIGH PRICES AND LIQUIDITY. WHY WOULD THESE PROFIT OPPORTUNITIES NOT RECUR? 3. Last year you said the focus was once again on Iraq and that you expected to enter into re-qualification discussions with the appropriate decision-makers at the Ministry of Oil. The £250,000 raised last May was to support this purpose. However, it is now clear that you have been unable to move forward on this front. Therefore, what will change, so that you can play a part in finding new discoveries of oil and gas? THE CONSTRAINT HAS BEEN THE IRAQI AUTHORITIES’ PRIOR RELIANCE ON TECHNICAL SERVICE AGREEMENTS WITH PROBLEMATIC FISCAL TERMS. THE CURRENT GOVERNMENT HAS ACKNOWLEDGED THIS PROBLEM, THOUGH IT HAS BEEN SLOW TO IMPLEMENT THE REQUIRED REFORMS. 4. If we do not have any prospects of getting a deal within the next twelve months, what will happen to Petrel? Shareholders do not want to face another dilution. THE BOARD WILL DO WHAT IS IN THE BEST, LONG-TERM INTEREST OF SHAREHOLDERS, AS REQUIRED UNDER LAW. THE WORLD IS FULL OF OPPORTUNITIES. 5. Please clarify why you have not been able to resolve your dispute with the Tamraz Group. We understand that they have made a number of offers, which you have declined because they lacked title or were just ideas. However, their last offer had title, but looks like to have been declined this time because of lack of funding. Could you not have accepted this offer and e.g. farmed out the licences? IF YOU REFER TO THE RUSSIAN GAS EXPLORATION PROJECT, THERE WAS NO PROPER TITLE WITH REQUISITE FUNDING FOR THE 3 YEAR WORK PROGRAMME. HOW COULD WE UNDERTAKE DRILLING WELLS WITHOUT FUNDING? THE CURRENT OWNERS HAVE BEEN SEEKING PARTNERS OR FUNDING SINCE AT LEAST 2013. IF THEY COULD NOT FARM OUT WHY WOULD THE TAMRAZ GROUP? NO NOMAD WOULD HAVE APPROVED SUCH A PROPOSAL. NO ALTERNATIVE NOMAD WAS SUGGESTED. THE FARM-IN MARKET IS CURRENTLY ALMOST NON-EXISTENT – CERTAINLY WITHOUT PROPER TITLE. 6. Last year John thought that Tamraz Group would be able to sort out the share fiasco by this year’s AGM. This clearly has not happened, so how do you think this dispute will be settled? ISN’T THE ECONOMIC SOLUTION FOR THE TAMRAZ GROUP TO RESOLVE THEIR DIFFERENCES WITH EYCP, REFUND PETREL FOR ITS LOSS AND EXPENSES, AND RECOVER THE SHARES? WHY DO YOU THINK THIS HAS NOT YET HAPPENED? 7. If you are unable to get a deal over the line on your own, would it not be better to now accept an offer from Tamraz Group, especially because they have contacts that you ‘can only dream of’? WOULD YOU TRANSFER YOUR SHARES FOR NO CONSIDERATION OTHER THAN PROMISES? HOW WOULD YOU PERSUADE THE NOMAD AND STOCK EXCHANGE? WOULD YOU SURRENDER THE STOCK MARKET LISTING? Why seek another group whilst still trying to resolve the issue of the missing 32 million shares? Why risk losing the leverage this gives you when negotiating with Tamraz? In the BOD's view, what exactly is the danger for shareholders if Tamraz Group would take over control? What exactly do we still have left to lose? THE TAMRAZ GROUP SEEM UNABLE OR UNWILLING, AFTER 18 MONTHS, TO RESOLVE THEIR ISSUES WITH EYCP. THE SUGGESTION THAT PETREL WOULD UNILATERALLY LIFT THE INJUNCTION, OR GRANT FREE, EXTRA SHARES TO THE TAMRAZ GROUP, WOULD NOT BE IN THE INTERESTS OF SHAREHOLDERS, AND PROBABLY NOT LAWFUL. NONE OF THIS CLOSES OFF OTHER, ATTRACTIVE AVENUES: AS ALWAYS, THE BOARD WILL SUPPORT A LAWFUL DEAL WITH DEMONSTRATED VALUABLE TITLE. 8. If there are no immediate prospects, then would it not be prudent to now allow Tamraz Group to now try and secure our future and protect our investments? HOW CAN THE TAMRAZ GROUP SECURE OUR FUTURE, WHEN THEY HAVE BEEN UNABLE TO RECOVER THE 32 MILLION SHARES, OR PRODUCE CASH OR ANY PROJECT WITH DEMONSTRABLE VALUE? THE BOARD WILL SUPPORT A LAWFUL DEAL WITH DEMONSTRATED VALUABLE TITLE. 9. A chance of success via Tamraz Group, is better than nothing. Would you be prepared to facilitate a shareholders’ vote on whether to accept an offer from Tamraz Group? THE BOARD WILL SUPPORT A LAWFUL (ALSO ACCEPTABLE TO THE NOMAD) DEAL WITH DEMONSTRATED VALUABLE TITLE. THE SHAREHOLDERS WILL VOTE ON ANY MAJOR PROPOSAL. I am sure you will agree that your shareholders have been extremely loyal during all those 25 years, even when faced with significant personal financial loss. SPECULATIVE SHARES ARE INTRINSICALLY RISKY. PRUDENT SHAREHOLDERS CAN RECOVER THEIR INITIAL INVESTMENT BY BOOKING SOME PROFIT DURING BOOMS. When you have asked for your shareholders’ support, it has been freely given. It is our view that shareholders have earned the right, particularly in the last eighteen months, to have an honest and forthright discussion on our future prospects. May we please receive your answers before the AGM, so that we can fully engage with you on that occasion and hopefully better understand your motivations. On behalf of all signatories to this letter, Kind Regards, Frans
05/7/2021
18:28
f31: DEAR FRANS, THANK YOU FOR YOUR QUESTIONS, WHICH I ANSWER DIRECTLY. BUT FIRST, THESE ARE THE FACTS: 5.25 MILLION PETREL SHARES BELONGING TO ROGER TAMRAZ, MICHEL FAYAD AND A NOW DECEASED COLLEAGUE, WERE BEING SOLD WHILE PUNTERS WERE BUYING IN LATE 2019 / EARLY 2020. THE PLEDGING AND SALE OF THESE SHARES WAS IN BREACH OF A STAND-STILL CONTRACT, STOCK MARKET RULES AND COMPANY LAW (SINCE MICHEL FAYAD WAS THEN A DIRECTOR, AND ROGER TAMRAZ WAS A SHADOW DIRECTOR), AND APPARENTLY ALSO A BREACH OF INSIDER DEALING RULES. THE TAMRAZ GROUP HAS NEVER PRODUCED A SATISFACTORY EXPLANATION OF HOW THIS HAPPENED. THEY APPARENTLY CANNOT PROVIDE EVIDENCE EXPLAINING HOW THESE SHARES WERE SOLD, WHO AUTHORISED THE SALE, HOW MUCH PROFIT THEY MADE, AND WHERE THE MONEY WENT. THE ONLY REASON WHY MORE SHARES WERE NOT SOLD IS THAT PETREL RESOURCES PLC APPLIED FOR AND WAS AWARDED AN INJUNCTION TO HALT THE UNLAWFUL SALES. THE TAMRAZ GROUP HAS FAILED TO PROVE WHO OWNS THE >20% OF PETREL RESOURCES PLC SHARES THAT REMAIN INJUNCTED BY THE HIGH COURT. HOW, IN SUCH CIRCUMSTANCES, DO YOU PROPOSE THAT PETREL DOES CORPORATE DEALS WITH PARTIES THAT ARE IN BREACH OF STOCK EXCHANGE RULES, AND INSIDER DEALING LAWS, AS WELL AS THE COMPANIES ACTS? DAVID Dear John, David, Jim, Please regard this letter as a formal approach to the Board. The letter represents: 59 shareholders with a combined total of 28,946,351 shares, i.e. 23.2% of shares in circulation when taking shares under injunction out of the equation. Details are available upon request. We are writing to you before the upcoming AGM with the below set of questions, because Petrel has failed to create lasting shareholder value in the twenty-five years under your stewardship. Additionally, one and half years of negotiations with Tamraz Group have failed to produce a resolution. BY “LASTING SHAREHOLDER VALUE”, YOU MEAN THE CURRENT SHARE PRICE? AS A LONG-STANDING INVESTOR IN EXPLORATION SHARES, YOU KNOW THAT NATURAL RESOURCES ARE HIGHLY CYCLICAL. SINCE EXPLORATION BUDGETS WERE SLASHED AFTER 2014, FARM-INS BY MAJORS HAVE BEEN RARE, AND EXPLORERS ARE FRIENDLESS IN RECENT YEARS. SUCH DEPRESSIONS OCCURRED MANY TIMES PREVIOUSLY (E.G. 1990 – 1994 AND 1997 – 2003), AND WILL AGAIN. MANY INVESTORS PROFITED GREATLY FROM PETREL RESOURCES PLC (AND OTHER 162 GROUP COMPANIES), AND WILL AGAIN. THE OBJECTIVE IS TO BUILD AN OIL & GAS PRODUCER. THE PROBLEM OVER MANY YEARS WAS IN SECURING ADEQUATE FUNDING FOR RISKY LOCATIONS. THE 2019 STRATEGY WITH THE TAMRAZ GROUP SEEMED OFFER A SOLUTION TO THE CAPITAL ISSUE. AT FIRST THINGS WENT SMOOTHLY, BUT THEN THE TAMRAZ GROUP BREACHED THEIR LOCK-IN AGREEMENT, LEADING TO THE UNLAWFUL SALE OF 5.25 MILLION SHARES. AS OF JUNE 2021, THE TAMRAZ GROUP HAS STILL NOT RESOLVED THIS ISSUE. PROMISES OF CREDIBLE DEALS IN LIBYA AND IRAQ WERE NOT DELIVERED ON. PROPOSALS FOR MOZAMBIQUE, MAURETANIA, ETC. DID NOT STAND UP TO BASIC ANALYSIS, MUCH LESS DUE DILIGENCE. A RUSSIAN GAS EXPLORATION PROPOSAL MADE MORE INDUSTRY SENSE, BUT PASSAGE OF TITLE SEEMS CONDITIONAL ON FUNDING, WHICH THE TAMRAZ GROUP HAS, SO FAR, BEEN UNABLE TO DELIVER. SHOULD THIS CHANGE, THIS PROJECT WOULD BE OF INTEREST (SUBJECT TO DUE DILIGENCE AND REGULATORY APPROVALS) TO PETREL. REGARDING NEGOTIATIONS WITH THE TAMRAZ GROUP, THE ONLY REASON WHY THESE HAVE, SO FAR, “FAILED TO PRODUCE A RESOLUTION” IS BECAUSE THE COUNTER-PARTY HAS SO FAR FAILED TO PRODUCE ANY WORTHWHILE PROJECT WITH ESTABLISHED LEGAL TITLE OR FINANCE. NO LISTED COMPANY CAN SURRENDER CONTROL ON FOOT OF AN UNSUBSTANTIATED PROMISE, NOR WOULD THE NOMAD OR STOCK EXCHANGE PERMIT THIS. DIRECTORS CANNOT, I REPEAT CANNOT AGREE SUCH A DEAL OR RECOMMEND IT TO SHAREHOLDERS. REMEMBER THAT THE TAMRAZ GROUP PLEDGED CIRCA 37.25 MILLION SHARES TO A LENDER (EYCP) IN BREACH OF A STAND-STILL AGREEMENT. 5.25 MILLION OF THESE SHARES WERE SOLD BEFORE PETREL RESOURCES PLC OBTAINED AN INJUNCTION TO HALT THESE UNLAWFUL SALES. SINCE THEN, WE HAVE REPEATEDLY ASKED THE TAMRAZ GROUP TO RESOLVE THE EYCP SITUATION, WHICH (THEY SAY) CAN BE DONE WITH C. $250K. THE REMAINING 32 MILLION SHARES ARE WORTH AT LEAST $1.1 MILLION (£800K), YET THE TAMRAZ GROUP SEEM UNABLE OR UNWILLING TO RELEASE THEM AT A COST OF ONLY $250K? HOW DOES THIS STRENGTHEN CONFIDENCE IN THEIR FINANCING CLOUT? John was very clear at last year’s AGM: “if within twelve months we had not made progress, we would be going backwards”. It certainly feels that this is happening. EXPLORERS DO WELL IN BULLISH TIMES AND STRUGGLE IN DOWNTURNS. WE MAINLY RELY ON FARM-OUTS TO MAJORS, WITH SPECULATIVE FUNDING COMING FROM A LIMITED NUMBER OF INSTITUTIONS AND PRIVATE INVESTORS. THESE SOURCES LARGELY DRIED-UP WITH THE 2014 OIL PRICE WAR. POLITICIANS AND NGOS DEMAND THAT “FOSSIL FUELS REMAIN IN THE GROUND”. C-19 CUT OIL DEMAND BY 10% IN 2020 – THE PREVIOUS WORST FALL WAS BY 2.9 MILLION BARRELS DAILY IN THE 4TH QUARTER OF 2009. THIS IS A COLD MARKET FOR OIL & GAS EXPLORERS. HOWEVER, THE BUSINESS CYCLE HAS NOT BEEN CANCELLED: THE OIL PRICE HAS NOW RECOVERED TO $75, AND OIL DEMAND IS NOW ONLY C.3% BELOW THE PRE-C-19 LEVEL. EXPLORATION BUDGETS HAVE NOT YET RECOVERED, AND FOSSIL FUELS ARE UNPOPULAR, BUT THIS WILL CHANGE WITH THE BUSINESS CYCLE. CRITICS HAVE BEEN PREDICTING ‘THE END OF OIL’ SINCE THE 1850S. At last year’s AGM, shareholders felt encouraged because of the Board’s comments concerning the possibilities of getting a contract in Iraq on our own accord, and David’s “odds on – sooner than you think” appraisal on that possibility. However, John made it very clear in this year’s Chairman’s statement that Iraq has not moved forward, and that the Ghana saga shows no sign of being finalised. AN EXPLORATION AND DEVELOPMENT PROPOSAL HAS BEEN MADE, AS PROMISED, TO THE IRAQI MINISTRY OF OIL. FOR BEST RESULTS, WE NEED ATTRACTIVE FISCAL TERMS TO FUND AND ATTRACT PARTNERS. PETREL IS RE-BUILDING ITS IRAQI TEAM, AND IS READY TO START WORK AS SOON AS CONTRACTS ARE APPROVED. Also last year there was still a sense of hope that over the next twelve months, Petrel would ultimately reach an agreement with Tamraz, given the totally unsatisfactory current situation in relation to every aspect of the TG shareholding. Now we learn that you want to ‘move on’. We appreciate that the first tranche of shares was paid for, but the resulting massive dilution has still not bought any real benefit. Unfortunately, no progress whatsoever has been made on any of the above and there is no indication that we will see any improvement in the near future. Your immediate plans to persevere with Iraq is questionable without the full support of Tamraz Group. Indeed, it is puzzling that you now want to open immediate conversations with other groups, when Tamraz Group is on your doorstep trying to do a deal with you. WE WOULD BE DELIGHTED TO PROCEED WITH THE TAMRAZ GROUP, SUBJECT TO LAW, IF THEY DELIVER SOMETHING REAL. SO FAR, THERE HAS BEEN NO CREDIBLE, “BANKABLE̶1; DEAL ON OFFER FROM THE TAMRAZ GROUP. THERE HAVE BEEN EXCUSES, AND PROMISES, BUT NOTHING CONCRETE SO FAR. THIS COULD CHANGE, AND WE HOPE IT DOES. THE PETREL BOARD WILL NOT OBSTRUCT THE DELIVERY OF SHAREHOLDER VALUE. WE HAVE, HOWEVER, ALSO HAD APPROACHES FROM OTHER, WELL-FINANCED GROUPS WHOM WE HAVE KNOWN FOR YEARS. THESE MAY OR MAY NOT LEAD TO A REPORTABLE OFFER. BUT FINANCE, AT LEAST, DOES NOT SEEM TO BE AN OBSTACLE FOR THOSE OTHER GROUPS EXPRESSING INTEREST. TALK IS CHEAP, BUT THE TEST IS DO THEY PRODUCE CASH AND VALUABLE PROJECTS. WE ENCOURAGE SUCH INITIATIVES, BUT THE 32 MILLION SHARES STUCK IN LIMBO ARE OBVIOUSLY AN ISSUE FOR NEW SHAREHOLDERS. WE CONTINUE TO URGE THE TAMRAZ GROUP TO RESOLVE THEIR DISPUTE WITH EYCP TO RELEASE THESE SHARES. Considering Petrel’s long unsuccessful history, of some twenty-five years, shareholders now have strong doubts on the chances of any future success on Petrel’s own accord. With time running out both for Petrel as well as for oil dominance itself, we increasingly feel that some form of agreement now has to be reached with Tamraz Group. DO YOU PROPOSE GIVING NEW SHARES FOR NO VALUE? HOW WOULD THAT BE IN THE INTERESTS OF SHAREHOLDERS? WHAT BOARD WOULD AGREE, OR NOMINATED ADVISER WOULD ENDORSE SUCH A DEAL? FOR ANOTHER BULL RUN IN OIL & GAS EXPLORATION SHARES, THE SECTOR WILL HAVE TO COME BACK INTO FAVOUR. BUT THIS IS TRUE FOR ALL EXPLORERS. Given that you have turned down several offers from Tamraz Group to try and reach some form of resolution, we feel that the Board now needs to facilitate a full-on and dedicated AGM discussion on the Board’s thoughts and decisions in relation to the Tamraz Group situation. WHAT CREDIBLE OFFERS HAVE BEEN REJECTED? WE ARE AWARE OF NONE, WITH REQUISITE TITLE AND FINANCE. Saying that you want to open discussions with other groups, feels like you are continuing to kick the can down the road, rather than resolve your issues with Tamraz Group. HOW DO YOU PROPOSE WE RESOLVE OUR ISSUES WITH THE TAMRAZ GROUP, IF THEY HAVE NO TITLE OR MONEY? DO YOU SUGGEST THAT WE GIVE THEM FREE SHARES? HOW WOULD THAT BENEFIT US SHAREHOLDERS? REMEMBER THAT THEY PLEDGED MOST OF THEIR EXISTING SHARES, IN BREACH OF A LOCK-IN AGREEMENT. WHY WOULD THEY NOT REPEAT SUCH BEHAVIOUR? We feel that as shareholders we are now entitled to a better understanding of the Board’s decisions concerning Tamraz Group. Especially because we cannot understand why possible offers have been turned down, despite what must now be an almost hopeless situation for Petrel’s shareholders if no agreement should be reached. Finding another group to salvage what is left of Petrel does not seem reasonable at this point in time. IN ORDER TO MAXIMISE THE CHANCES OF DELIVERING DEALS AND FUNDS THAT WILL BENEFIT ALL SHAREHOLDERS, WE HAVE BEEN DIPLOMATIC. WE DID NOT WANT TO PROVOKE UNNECESSARY DISQUIET OR RUFFLE FEATHERS. HOWEVER, WE MUST OBEY COMPANY LAW AND STOCK EXCHANGE RULES. THE NOMAD AND AUTHORITIES HAVE BEEN FULLY INFORMED THROUGHOUT, AND ARE SUPPORTIVE. I WISH THAT REAL, VALUABLE DEALS, AND/OR CASH HAD BEEN OFFERED. BUT SADLY THEY HAVE NOT. THIS MIGHT CHANGE, WITH IMPROVING MARKETS. Therefore, please regard this letter as a formal request to facilitate a forthright discussion at this year’s AGM, where we would like to discuss your answers to the following questions: 1. From this year’s Chairman’s statement, it is clear that you feel Petrel should team up with anyone but Tamraz Group. What makes you think they will be more successful than Tamraz? IT IS NOT TRUE THAT THE PETREL BOARD ARE AGAINST THE TAMRAZ GROUP. OUR RELATIONS ARE CORDIAL. WE UNDERSTAND THAT THEY HAVE ALSO BEEN IMPACTED BY RECENT EVENTS. I ADMIRE ROGER’S HISTORIC ACHIEVEMENTS, AND HOPE THAT HIS NETWORK WILL EVENTUALLY DELIVER FOR PETREL. BUT IT HAS NOT DELIVERED SO FAR. PETREL WOULD WELCOME A SENSIBLE DEAL: IT WOULD SOLVE MANY PROBLEMS, ESPECIALLY THE 32 MILLION SHARES WHICH WERE BOUGHT BY THE TAMRAZ GROUP, AND REMAIN IN LIMBO. IN THE MEANTIME, WE ARE ENCOURAGING ALTERNATIVE INITIATIVES. AT LEAST ONE OF THE ALTERNATIVE APPROACHES INVOLVES A MUCH LARGER GROUP, WITH SUBSTANTIAL PRODUCTION AND CASH FLOW. THESE ARE PRINCIPALS, RATHER THAN BROKERS. 2. As there has been no lasting shareholder value created in the last twenty-five years, how do our prospects in Iraq differ from all previous years? Can you please explain what the opportunities are, and how realistic they are? PETREL SIGNED AN EXPLORATION AND DEVELOPMENT CONTRACT WITH THE IRAQI MINISTRY OF OIL, SUBJECT TO RATIFICATION. IT ALSO SIGNED AN EPC-CONTRACT WITH THE IRAQI MINISTRY OF OIL, BROUGHT IN PARTNERS AS REQUESTED BY SCOP, AND COMPLETED PETREL’S OBLIGATIONS UNDER THE CONTRACT. PETREL SIGNED AND COMPLETED A TECHNICAL COOPERATION AGREEMENT WITH THE IRAQI MINISTRY OF OIL, HAVING BROUGHT IN ITOCHU AS A 50% PARTNER. ALL THIS WAS DONE AT A MODEST COST AND WITHOUT BREACHING ETHICAL GUIDELINES. BP TOLD US THAT THEIR YEARLY IRAQI SECURITY COST WAS GREATER THAN PETREL’S ENTIRE CORPORATE OVERHEAD. WHAT OTHER JUNIOR COMPANY HAS ACHIEVED THIS? WE BET ON THE IRAQI PLAY AND CAN ONLY WORK WITH THE TITLE AND FISCAL TERMS THAT ARE AVAILABLE. THE IRAQI GOVERNMENT HAS UNDERTAKEN REFORMS TO MAKE CONTRACTS MORE ATTRACTIVE, BUT THEY HAVE BEEN SLOW TO DELIVER. I HAVE PERSONALLY PUT MY LIFE ON THE LINE FOR PETREL SHAREHOLDERS. HOW MANY CAN SAY THIS? I CARRY PHYSICAL SCARS EARNED ON OPERATIONS. AN IRAQI CLIENT HAS DIED, AND CONTRACTORS SERIOUSLY INJURED. IF YOU LOOK AT THE SHARE PRICE GRAPH SINCE PETREL LISTED, IN 2000, YOU WILL SEE MANY OPPORTUNITIES TO CRYSTALLISE PROFITS AT HIGH PRICES AND LIQUIDITY. WHY WOULD THESE PROFIT OPPORTUNITIES NOT RECUR? 3. Last year you said the focus was once again on Iraq and that you expected to enter into re-qualification discussions with the appropriate decision-makers at the Ministry of Oil. The £250,000 raised last May was to support this purpose. However, it is now clear that you have been unable to move forward on this front. Therefore, what will change, so that you can play a part in finding new discoveries of oil and gas? THE CONSTRAINT HAS BEEN THE IRAQI AUTHORITIES’ PRIOR RELIANCE ON TECHNICAL SERVICE AGREEMENTS WITH PROBLEMATIC FISCAL TERMS. THE CURRENT GOVERNMENT HAS ACKNOWLEDGED THIS PROBLEM, THOUGH IT HAS BEEN SLOW TO IMPLEMENT THE REQUIRED REFORMS. 4. If we do not have any prospects of getting a deal within the next twelve months, what will happen to Petrel? Shareholders do not want to face another dilution. THE BOARD WILL DO WHAT IS IN THE BEST, LONG-TERM INTEREST OF SHAREHOLDERS, AS REQUIRED UNDER LAW. THE WORLD IS FULL OF OPPORTUNITIES. 5. Please clarify why you have not been able to resolve your dispute with the Tamraz Group. We understand that they have made a number of offers, which you have declined because they lacked title or were just ideas. However, their last offer had title, but looks like to have been declined this time because of lack of funding. Could you not have accepted this offer and e.g. farmed out the licences? IF YOU REFER TO THE RUSSIAN GAS EXPLORATION PROJECT, THERE WAS NO PROPER TITLE WITH REQUISITE FUNDING FOR THE 3 YEAR WORK PROGRAMME. HOW COULD WE UNDERTAKE DRILLING WELLS WITHOUT FUNDING? THE CURRENT OWNERS HAVE BEEN SEEKING PARTNERS OR FUNDING SINCE AT LEAST 2013. IF THEY COULD NOT FARM OUT WHY WOULD THE TAMRAZ GROUP? NO NOMAD WOULD HAVE APPROVED SUCH A PROPOSAL. NO ALTERNATIVE NOMAD WAS SUGGESTED. THE FARM-IN MARKET IS CURRENTLY ALMOST NON-EXISTENT – CERTAINLY WITHOUT PROPER TITLE. 6. Last year John thought that Tamraz Group would be able to sort out the share fiasco by this year’s AGM. This clearly has not happened, so how do you think this dispute will be settled? ISN’T THE ECONOMIC SOLUTION FOR THE TAMRAZ GROUP TO RESOLVE THEIR DIFFERENCES WITH EYCP, REFUND PETREL FOR ITS LOSS AND EXPENSES, AND RECOVER THE SHARES? WHY DO YOU THINK THIS HAS NOT YET HAPPENED? 7. If you are unable to get a deal over the line on your own, would it not be better to now accept an offer from Tamraz Group, especially because they have contacts that you ‘can only dream of’? WOULD YOU TRANSFER YOUR SHARES FOR NO CONSIDERATION OTHER THAN PROMISES? HOW WOULD YOU PERSUADE THE NOMAD AND STOCK EXCHANGE? WOULD YOU SURRENDER THE STOCK MARKET LISTING? Why seek another group whilst still trying to resolve the issue of the missing 32 million shares? Why risk losing the leverage this gives you when negotiating with Tamraz? In the BOD's view, what exactly is the danger for shareholders if Tamraz Group would take over control? What exactly do we still have left to lose? THE TAMRAZ GROUP SEEM UNABLE OR UNWILLING, AFTER 18 MONTHS, TO RESOLVE THEIR ISSUES WITH EYCP. THE SUGGESTION THAT PETREL WOULD UNILATERALLY LIFT THE INJUNCTION, OR GRANT FREE, EXTRA SHARES TO THE TAMRAZ GROUP, WOULD NOT BE IN THE INTERESTS OF SHAREHOLDERS, AND PROBABLY NOT LAWFUL. NONE OF THIS CLOSES OFF OTHER, ATTRACTIVE AVENUES: AS ALWAYS, THE BOARD WILL SUPPORT A LAWFUL DEAL WITH DEMONSTRATED VALUABLE TITLE. 8. If there are no immediate prospects, then would it not be prudent to now allow Tamraz Group to now try and secure our future and protect our investments? HOW CAN THE TAMRAZ GROUP SECURE OUR FUTURE, WHEN THEY HAVE BEEN UNABLE TO RECOVER THE 32 MILLION SHARES, OR PRODUCE CASH OR ANY PROJECT WITH DEMONSTRABLE VALUE? THE BOARD WILL SUPPORT A LAWFUL DEAL WITH DEMONSTRATED VALUABLE TITLE. 9. A chance of success via Tamraz Group, is better than nothing. Would you be prepared to facilitate a shareholders’ vote on whether to accept an offer from Tamraz Group? THE BOARD WILL SUPPORT A LAWFUL (ALSO ACCEPTABLE TO THE NOMAD) DEAL WITH DEMONSTRATED VALUABLE TITLE. THE SHAREHOLDERS WILL VOTE ON ANY MAJOR PROPOSAL. I am sure you will agree that your shareholders have been extremely loyal during all those 25 years, even when faced with significant personal financial loss. SPECULATIVE SHARES ARE INTRINSICALLY RISKY. PRUDENT SHAREHOLDERS CAN RECOVER THEIR INITIAL INVESTMENT BY BOOKING SOME PROFIT DURING BOOMS. When you have asked for your shareholders’ support, it has been freely given. It is our view that shareholders have earned the right, particularly in the last eighteen months, to have an honest and forthright discussion on our future prospects. May we please receive your answers before the AGM, so that we can fully engage with you on that occasion and hopefully better understand your motivations. On behalf of all signatories to this letter, Kind Regards, Frans
15/6/2021
23:27
lippe_mk2: Is there a suggestion the "Pond Life" is promoting the French investors proposal of using "their Euronext company" and "their Russian Asset" for the basis of the RTO? I wonder if anyone has done any due diligence on the *underlying basis* that was used by the French investors to acquire control of the "Euronext company". Presumably the same basis used to gain control of the "Russian Asset"..... There are rumours of some shady business dealings going on..... surely news will come out soon. The Pet board might have finally done something right in dumping the French Investors....better late than never. #not-all-dumping-is-bad #norwary-take-white-collar-crime-very-seriously-indeed #what-does-baghdad-think #oh-dear
04/6/2021
16:51
f31: Sorry Sage - but I don't get the reasoning. When the Tamraz Group entered the picture 2nd half 2019, Riadh was that newly appointed director (June 2019) Within that specific timing (all still in perfect harmony), and with their excellent connections (according to John himself), it stands to reason that it was Tamraz Group that helped this re-opening of contact? Why would Total last year put in a good word for Petrel? Note that I'm not the only one to think that with "French investors" John was referring to TG. Even Michel was very surprised today when he noticed that John had referred to them as French investors - they're not French.
04/6/2021
16:17
the sage: I have to disagree with you there, f31. The sentence reads: Activities have languished in the year past but the addition of an Iraqi director, Riadh Mahomud Hameed and the contact of French investors led to a re-opening of contacts. So, if the re-opening of contacts was down to the newly appointed director AND French investors, those French investors can't be the Tamraz group. He would have mentioned them earlier in the report. We know that Total are in negotiations with the Iraqi's.
14/5/2021
11:47
steephill cove: Time: 05/13/2021 12:03:38{Economist: Al Furat News} Saudi businessmen revealed that Saudi companies are close to launching giant investments soon in Iraq in the areas of manufacturing industries, indicating that there are promising opportunities for Saudi products of building materials and food in the Iraqi market.The businessmen explained in a press statement that "some Saudi companies specialized in raising livestock and cows have presented to the Iraqi government the idea of ​​investing 4 million dunums in the Western Desert between Anbar Governorate, passing through the cities of Karbala and Najaf to the Samawah Desert, with a contract extending for more than 50 years to cultivate." agricultural and cattle breeding crops.for his part, Mohammed predicted leader Vice Chamber of Commerce and industry Chairman of Riyadh, to witness the Saudi - Iraqi relations prospects welcome , especially in the field of economic, commercial and investment cooperation, pointing out that the visit of Prince Khalid bin Salman , deputy Minister of Defense, Iraq, come under Continuous integration, communication and coordination between the two countries, pointing out that it is a visit that supports closer relations at all levels, including economic ones.The guide added that "the opportunities for integration between the Kingdom and Iraq are great." Other areas that we will soon see their fruits ... The Iraqi market is large and Saudi products are well received in it. "For his part, Abdullah Al-Melehi, President of {Tamayouz} said: "There are promising opportunities for Saudi products in the Iraqi market, as the Iraqi market is one of the great opportunities for Saudi products. In sharing borders with Saudi Arabia, an opportunity to export the Saudi product with the facilities provided by the Kingdom through The Saudi exports program to open new markets for manufacturers in the Kingdom, in addition to supporting the Kingdom’s government and the leadership’s keenness to build relationships in various fields.Al-Melehi added: “The Iraqi market is promising and there are many export opportunities that national companies can benefit from,â€? adding that “the volume of Saudi non-oil exports to the Republic of Iraq amounted to 2.6 billion riyals ($ 693.3 million) during the past year 2020, while topping the list of the most prominent sectors. The exported building materials activity amounted to 859 million riyals (229 million dollars), and the foodstuff activity with a value of 790 million riyals (210.6 million dollars). "Al-Melehi pointed out that "there is a tendency to offer investments in the oil and gas field to Saudi companies, indicating that discussions are underway with the concerned authorities to clarify investment opportunities, as investors are always looking for specific opportunities or privileges to bring them to the market, especially after the Saudi Export Bank announced granting investors financing for the field." Exports are a factor that attracts investors, "noting that" both Saudi Arabia and the UAE have allocated more than 6 billion dollars to invest in Iraqi lands, strengthen economic relations and create new opportunities for cooperation and partnership. "Al-Melehi explained that "there are Saudi investment projects currently in the Iraqi cities of (Anah) and (Al-Qaim)," indicating that "there are investments that Saudi companies will soon launch in Iraq in the fields of manufacturing, agriculture and various projects, while Saudi investment companies offered specializing in livestock breeding and cows on the Iraqi government 's idea to invest 4 million acres in located between the Anbar province , passing through the cities of Karbala , Western Sahara and Najaf access to the desert of Samawah, a contract extends to more than 50 years for the cultivation of agricultural crops and cattle breeding.He Malihi: "among the investments The Emirati and Saudi companies will implement them by producing some domestic industries in Iraq, as joint factories between Iraq and these two countries will be implemented ... Also one of the most important investment projects is the interest in electric power projects from Saudi Arabia and the United States.Ammar Al-Masoudi
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