Tethys Share Discussion Threads

[che7win] 05/12/2016 17:40

Casual,
I can relate to your frustration.

I think the 40% possible dilution with the warrants is a tragic, management should have done some kind of fundraising long ago, but they have fallen at each hurdle.

My concern among other things was the licence stipulations required - they needed to spend $7m on drilling, Klymene fitted that bill. I guess there was plenty of opportunity for authorities to remove the licence, but latest results includes penalties, they need to stop faffing around for one last chance to recovery the severity of losses to shareholders. Next time I won't be so loyal (I hope), or trusting.

[casual47] 05/12/2016 17:03

Hguess, seeing as May and Wells were key players in blocking the Nostrum deal and instead chose to make the Olisol deal happen I indeed have little confidence in them.

As I have mentioned before, I hold nearly 2 million shares. Offloading these in the current illiquid market doesn't make much sense & I have some hope that the share price will go up from here allowing me to exit or at least reduce my holding.

I think all posters here are holding......it's not like we have much of a choice!

But it's not because we are "trapped" that we can't question the actions our BOD are taking, or try to understand why they are taking them.

I didn't realise this BB was now a cult where only happy clappy is allowed.

[hguess16] 05/12/2016 16:32

Casual,
During the last three years, poor management of resources by Robson and his disciples, followed by naive finance decisions using short term loans to fund operations and a lack of proper due diligence on potential partners, has placed Tethys in the emergency ward on a life support machine!.
In come the Kumars !.
I have no alternative but to put my faith in the new team of Wells and May in order to get us PI's out of this mess. Wells and May have decided to let the Kumars come in and support them financially and use their knowledge and experience to get its business back on the road again.
Your view that Tethys should have struck a better deal and that you have little knowledge of the Kumars credibility suggests that you have little confidence in Wells and May. Perhaps it may be time for you to consider exiting TPL at any price right now!.
I have decided to hold on and see what unfolds with the new team backed by the Kumars !.

[casual47] 05/12/2016 14:37

Yes, that is the problem, compared to the Luna Gold deal (as I understand it from what you posted): the Kumars have only given enough money for TPL to keep going for an extra couple of months or so. TPL has $51 million liabilities which become due over the next 11 months. TPL urgently needs capex funding to drill additional wells, estimated at $7 / $15 million, depending on where they start. All this is a big ask from two investors of whom nothing is really known.

>>Anyway, hope we get good news regarding the EGG court case soon.

I sent an email to TPL earlier asking about it, will post reply if I get it.

[benandemmiboo] 05/12/2016 14:29

Luna Gold's warrants to Pacific (and to Sandstorm, the other lender) were issued all at once.

Pacific and Sandstorm both invested far more than the Kumars did, and the situation is different in that the P/S investment immediately delayed any doomsday scenario for Luna for about two years. The Kumars, from appearances, invested at a time when there remains some uncertainty re: Tethys; however, if they achieve their objectives, and provide Tethys with some temporary respite from financial worries, then I see no reason the PPS won't do very well (or exceptionally well, if oil enters a sort of bull market).

Anyway, hope we get good news regarding the EGG court case soon.

[casual47] 05/12/2016 13:52

Thanks Ben. Do you know if Luna Park issued those warrants in one go to one investor or had those warrants accumulated over time? I agree there is still potential. EDIT: I would be less concerned about the warrants if the Kumars actually committed to investment in the company. All we have so far is a measly $700K from each and some words about what TPL is expecting to achieve with their help. That's a whole different scenario from giving warrants to a known investment company with known bags of money behind them.

Hguess -

I have no reason to have confidence in the Kumars because TPL did not provide us with anything concrete to show that they can deliver for us.

We don't know what alternatives there are. What we do know is that over the last couple of years TPL have negotiated progressively worse deals. Literally every deal ended up being worse than the previous one. We know Pope was behind blocking at least one of those deals (NOG), and perhaps it was with good reason, but after all the recent BOD changes they have been the only constant factor in all of this and all they have to show for it is an ever worsening situation.

[hguess16] 05/12/2016 13:35

Casual, I understand the difference between warrants, options and stocks.
The key point I am making is, " Do you have confidence in the Kumars to deliver on their promises unlike the previous lot" ?.

Tethys has no one else waiting in the wings !. There was no alternative !.
What would you have done if you were in charge ?.
Sold 181m shares at what price ?. at 2p ?. when the current price is 1.25p ?.

[benandemmiboo] 05/12/2016 13:30

As an fyi, Luna Gold is one company which issued warrants far exceeding their then-share count. If all their outstanding warrants would be exercised, their share count would triple, and Pacific (the main financier) would hold over 80 percent of their shares.
They came to this deal at a time when they needed either a lender to bail them out, or they were heading to bankruptcy (just as Tethys most likely was in November). The company (Pacific Gold?) who invested in Luna in May 2015 did so at 10 cents per share and 12.5 cents (warrant price) when their stock price was 15 cents. The PPS dropped to 2 cents by end of Dec 2015 before hitting 35 cents at some point this summer. (If you ignore the recent 1:10 reverse split, the PPS has now dropped 50 percent from its high.)

I mention all of the above just to suggest the share price of Tethys still, when judged against other commodity stocks in similar situations, has the potential to make a significant jump its current PPS this coming year (even with all the warrants exercised) as long as they can fix the Kazakhstan mess and as long as they pay off/renegotiate/extend loans whereby bankruptcy won't always be right around the corner.

[casual47] 05/12/2016 12:57

Hguess,

1. You didn't reply to the points I was making
2. Your response is to something I didn't even say, curious that.
3. You still seem to not understand what warrants are for or how they work
4. If you look back you can see TPL having given plenty of warrants before, at exercise prices that were never reached by the share price ....I think you are clinging to straws here, you certainly don't seem to be willing to deal with the issues right in front of you.

[hguess16] 05/12/2016 12:51

"If the Kumars really wanted to invest they could have just agreed an additional larger placing with TPL and ..... buy up to 180m shares "
At what price ?. At 1.593 cents per share ?.
Is that what you are saying ?.
I think that a warrant exercise price is a bet by the Kumars over a 3 year period at
3.1 cents per shatre expecting the share price to exceed the current low market price!.
I certainly would not agree to the Kumars taking 181m shares at 1.593 cents !.
So you would rather give the Kumars 181m shares at 1.593 cents per share ?.
Your suggestion makes no sense !.

[casual47] 05/12/2016 11:05

1. I didn't quote you, I responded to a claim you made.

2. The claim you made leaves no room for interpretation: [QUOTE] "If the Tethys share price does not rise above 3.1 cents or 2.48p within the 3 year period, the warrants expire." [END QUOTE], this is clearly untrue.

3. TPL did not explain why they are issuing warrants the equivalent of 30% of the company. So nobody can understand, even you. We can only try to understand, which I have been doing.

4. Name me one company which deemed it reasonable to issue warrants that represent 30% of the company. Again, you don't seem to understand what it is I have an issue with.

5. The $5-odd million they will potentially raise from the warrants will do nothing to fix the $51 million current liabilities they have. Note the word "current", as in "must be settled within the next 12 months from when Q3 was published"

6. Warrants have ZERO influence on share price while share price is below exercise price. However, they CAN act as a drag on share price once share price goes above exercise price, especially when the pending warrants represent such a huge % of the company. Think about it.

7. TPL conceding such a huge number of warrants (which is potentially unprecedented for a London/Toronto listed company), and having attached to it the "gun against the head" clause if shareholders don't agree to it, is a sign of WEAKNESS of the BOD and not a sign of Kumars being friendly/supportive.

8. If the Kumars really wanted to invest they could just have agreed an additional larger placing with TPL and have signed a binding contract with TPL to buy up to 180 million shares. They didn't. They insisted on warrants, and even on doubling the warrants initially agreed and communicated via RNS. Why? Warrants carry 0% risk to the Kumars, and 100% risk to TPL. 0% risk because if TPL goes t1ts up then Kumars can just walk away. 100% risk because: 1. if shareholders don't agree TPL need to IMMEDIATELY pay the Kumars (for doing what exactly???) and 2. If TPL are relying on Kumars to inject further money via Warrants they have zero certainty they will as warrants are OPTIONS, not a legally binding contract.

[hguess16] 05/12/2016 10:38

Casual,
You are deliberately misquoting me for your own spurious reasons in trying to justify
your rejection of the Kumars wish to take up the warrants.
I never said that the Kumars will not exercise when the share price is lower than the exercise price. All I said was that the warrants expire at the end of the 3 year period.
Just like your Cayman " obsession" loan, you try to undermine the issue of warrants to the Kumars by not understanding why Tethys agreed to the increase in the number of warrants issued to the Kumars.
It is simple !. Warrants are less costly than short term high interest loans and provide an upside to the warrant holder if the share price exceeds the exercise price.
Tethys is currently immersed in short term loans incl your Cayman obsession.
Hence Tethys and the Kumars agreed on Warrants !.

[casual47] 05/12/2016 10:27

Thanks N74. Are the Kaz/KASE restrictions triggered no matter what or just for e.g. holdings that go above 30%?

It was pretty odd for TPL to suddenly come up with these two individual investors but perhaps there is a motivation behind it if treating the two shareholders as non-related means they can each remain under e.g. TSX and KASE thresholds of 20%

[naimanka74] 05/12/2016 10:19

"I don't know why the Olisol deal was subject to such restrictions but I wonder if the warrants are a way to circumvent these restrictions?

Anyone with actual knowledge rather than wishful thinking got any feedback on this?"

Once exercised the KASE ruling applies (as it's new shares being issued and Kazakhstan is their main place of business, perhaps arguable with no gas sales but…), looking back on Tethys under Robson they never did this, so the company is exposed historically.

[hguess16] 05/12/2016 08:46

Why warrants ?.
Extracted from comments on warrants !.
Warrants enable additional participation in the company's growth while it also causes dilution, as a company is obligated to issue new stock, when the warrants are exercised.
Warrants may also bring down the cost of financing and provide additional capital if the stock does well.
If the Tethys share price does not rise above 3.1 cents or 2.48p within the 3 year
period, the warrants expire.

To summarise, the Kumars are expecting the share price to rise above the exercise price of 2.48p within the 3 year period. The Kumars are in the money if the share price exceeds the exercise price of 2.48p !.
Tethys benefits via the support of the Kumars, and improved financing !.

[dorset64] 04/12/2016 23:24

casual473 Dec '16 - 16:53 - 12672 of 12685 0 0

Also, while I assume that the Kumars WILL immediately take up their warrants, ....there is no guarantee that they will as the warrants remain exercisable for three years.

==========================================

You're even arguing with yourself now Casual437 !!

[seroserio] 04/12/2016 17:13

Doesn't this share make you long for a company that's straightforward like a shop that sells pies or TVs or clothes? :-)

[casual47] 04/12/2016 13:14

I think the answer may be: as the Kumars are regarded as non-related parties they will only have up to 20% shareholding each. Which may be the reason why they don't trigger any restrictions?

Still doesn't explain why they chose to give them such an extraordinary amount of warrants.

[casual47] 04/12/2016 12:49

The Olisol deal was contingent on Kaz approval, also, at least 20% of the to be issued Olisol shares had to be listed on Kaz stock exchange.

I don't know why the Olisol deal was subject to such restrictions but I wonder if the warrants are a way to circumvent these restrictions?

Anyone with actual knowledge rather than wishful thinking got any feedback on this?

[naimanka74] 04/12/2016 12:36

It takes about 4 weeks for a PIF, so by the EGM it will ok for them to convert the lot, I expect they will baring any surprises. I see "by coincidence" they are both using the same lawyers, how convenient.


I know exactly what I would do, however I think not for here.


Sell on Monday....common sense says yes but....I am not sure....in a strange way I am tempted to buy more, will see a shrink Monday !

[hguess16] 04/12/2016 09:10

As I see it, there is no alternative but to grit one's teeth and face up to the critical financial position that Tethys is faced with.
The company, faced with short term debts and serious local difficulties,had no alternative but to accept a dollop of cash from the Kumars which would provide it with some respite.
As the current share price was ridiculously low, the Kumars stepped in when no one else was willing to come forward.
ICA and EGG, who are currently the only customers for Tethys products, decide to go on strike for spurious reasons at the instigation of Abramov, who has failed to capture Tethys, his trophy, and hence put Tethys in a bind in the short term.
In come the Kumars, who see a great opportunity to team up with the new team, Wells and May. In the final negotiations, the Kumars realise that more cash would be welcome by Tethys, which is in the emergency ward right now !.
So they double up on their bet and agree to subscribe 96m each rather than 44m of the warraants at the same 3.1p.
This provides Tethys with much needed cash of $7.4m (1.4m + 5.9) which could be a backstop used to pay off the amounts due to Oliosl ( W/C) if necessary and the Kumar assisted bank loan ( assumed $10m) could be used to pay Cayman with some left over to start drilling the shallow gas wells.
I am hoping that EGG and ICA will come back soon as consumers for Tethys oil and gas products.
The Kumars ( IMO) have decided invest in Tethys and its new team because they see an excellent opportunity to align its interests with Wells and his team and hopefully make a bundle in the process.
I do hope things do not go pear shaped. I am staying on for the ride as there is no alternative!.

[1399peter] 04/12/2016 07:25

Casual

I appreciate that but doesn't this vote only allow them to exercise the 12m and isn't it saying approval will need to be gained each time and only allow more if they don't cross the 10% threshold, or am I missing something here.

Edit: Mind you I also think it's a ridiculous amount of warrants, and potentially something that could drag on the share price if things ever get going in the right direction.

[hguess16] 03/12/2016 19:39

Casual,
Let me remind you that the reason why the Tethys share price failed to pick up on the Oilosl deal was because they kept on delaying the take-up and it became clear that they lacked the cash to complete or they deliberately prevaricated hoping to take control via the back door. Abramov,as Chairman at the May 15 AGm, agreed to abide by the resolutions and then welched on the deal by trying to use working capital to contribute to the 181m shares. Skripka, the disciple, who committed to arranging the
bank loan then failed to deliver !.
Somehow, I feel that the Kumars are more confident about keeping their promise.
Hence their wish to more than double their warrants entitlement.
Anyway, the proof of the pudding is in its consumption.
As regards your concern about the Cayman loan, I am hoping that the Kumars help in
restructuring the finances of Tethys should help to solve that issue.

[neilyb675] 03/12/2016 19:34

expensive life support BUT if it means TPL survival then surely that is better than going to the wall ?

What is the alternative ?

For sure the Kumars have been in the background for some time - and no doubt Olisol were aware of them, prior to the dirty tricks campaign. The trigger for the DT campaign was when the Kumars came to the forefront of the funding circle.