Ding Ding Round 1 & 2 (In Small Caps) over LGO Vs. MOG

In making a number of assumptions here (not being privy to the full facts), one can only assume that LGO (Leni Gas & Oil) let Mediterranean Oil and Gas Plc Acquire the 10 per cent interest for the Maltese license for $1+$19,050 because LGO didn't value it. Likewise LGO didn't pay their liability of $19,050. 

Now the lesson here from what one can make out is that had LGO paid their liabilities they would have been entitled to further information. In the wording on the 01 August 2012, it is noted that MOG were "pleased to announce that they had acquired' which is consistent with the latter farm in/out with Genel (GENL). 

So not only have we had the excitement of the MOG winning the legal case but some Eastenders type drama with LGO's Legal update considering an appeal. They do not feel it relevant to to inform the market that their first appeal has been already turned down as per MOG's Litigation Update: Court awards MOG indemnity cost. 

So with two companies with a market cap of say £38m between them, one company sort to risk a significant proportion of shareholder funds on litigation circa £1m. The question is, what "prospects of success" [POS] did their Counsel advise? With the full facts and based on the small commentary from the MOG to date surely LGO's POS were not good (30-40% with a guess).

So Round 3, will LGO appeal again or go quiet and focus on what its been trying to do for years in terms of improving shareholder funds (the chart tells a story). Will there be another case in due course seeking damages as a result of the commentary post the acquisition of LGO's 10%? One can hope so to keep the excitement going but very much doubt it.

I wouldn't advise holding your breath for an RNS stating LGO is not considering a further appeal. Parties would have been better going the silent route whereby egos and face could have been purely down to commercial protection of each others shareholders interests.

The share price is likely to follow suit with LGO, albeit with a small holding I am in no rush to depart. MOG's has big exposure with little downside...

All the best, Fraser