Third Party litigation funding has its risks as most would acknowledge. When a company tries to fund these matters on their own it creates a situation where even if 'partially positive' shareholders can be held over a barrel. Please see Oxus Plc and Churchill Mining for the differentials...The waiver of part of its award in exchange for prompt payment is disappointing but essential. The company has no choice in this matter due to the need for financing/funding and to pay the Birdsong liability. One hopes due to the substantial discount on the 'likely' returns being further discounted, Birdsong will not require any further premium on this funding. Over to Birdsong for the 'strong-arm' potential but one would assume some 'common-sense' prevailing.
One is unsure from the announcement is whether Rurelec are "only" forgoing the past dividends that should have been paid or whether its a mix of all the dividends and part of the award. Sadly, for those that held blindly to the listing, this does not bode well. I was short for a number of reasoning including the lack of disclosure in the conservative nature of the claim.
For that reason, the company are likely to have near £3M in cash by my estimates post an award...without figures to hand, it's hard to work out the NAV, however 7 pence may seem a little high in the short-term.
Atb Fraser
Fraser- Not sure if you have followed Stans Energy (Toronto listed- V.HRE) but they have won their Moscow arb case against the State of Kyrgyzstan (near Kazakstan but much poorer and they change leaders every 6 months). The share price moved up to 10 Can cents giving them a mkt cap of C$15.7m, and the Moscow court now has 3 months to decide on quantum, with US$117m claimed. They do want to negotiate and get the project delivered as they own a RE reprocessing plant and a number of RE deposits/old mines but I guess a cash settlement is more likely as the Chinese had coveted this project and Stans have had been stonewalled by the various state bodies. They wont get US$117m but it looks good on a risk/reward basis now.
ReplyDeleteCheers. The Leggie
Fraser- Hope you got in re Stans- I added at 14c this afternoon and they are pushing through 20c now. They have had an export licence confirmation from the relevant Russian authority today as well, to add to the good news and Im not tempted to top slice yet, as the risk/reward still looks favourable imo. Famous last words perhaps :-))
ReplyDeleteCheers. The Leggie
doubt it Leggie. F cannot trade that due a couple of his friends - avoids discussing it - congratz on spotting it - back from cameroon via Indo then UK with F in 10 days - feisty action in E&P O&G news due on 3 next week Salamander have 3 poss offerors could see an offer at 185 - f's ocado celebrations this weekend some trade & half - will he be able to post ? Cheers IanH
DeleteIan- Hi- Welcome back to Blighty. Thanks for the heads up re Stans- Im not surprised if Fraser has contacts deep in the Kyrgystani underworld so I wouldn't want him to wake up next to a horses head :-)) He has been enjoying his short plays a bit too much recently to go long on a punt I guess.
ReplyDeleteYes- it seems that every UK small and med cap oiler is in play now- I suppose it sensible when you look at the $100m that some of the offshore wildcat wells cost nowadays. One article described it as Drilling On Wall Street- fairly apt given the number of companies with actual finds that are trading at around cash levels. Fraser wants Afren next, if you can oblige.... then Ophir would suit me..... :-)
Cheers. The Leggie
people involved near to it rather than Kyrg's persona non grata + Afren/Salamander/SQZ/PCI/Bowleven/Ophr all coming soon - f's afren play is 1 4 a book cheers ianh
DeleteIan- wow- that number of deals would wake the mkt up. Some fingers pointing at GNEL after their latest cash raise but the rearrangement of those letters into GLEN may be a clue to another play over the coming months. Plus the Tony Hayward angle.
ReplyDeleteCheers. The Leggie
GLENs been a longtime speculation - price expectations of hlders rules it out on what glen would want to pay - watch GLEN for africa deal soon
Delete