Today's update by Victoria Oil & Gas (VOG) on the Gas Supply & Operations Update. It never ceases to amaze me why there are such delays and why they aren't pointed out immediately. So VOG are producing 4 scuffs (mmscf/d) a day. Its better than I envisaged, it's not where they were meant to be, depending on which forecasts/target's you read. VOG, have now had experience of operating in Cameroon for how long? Yet there appears to be an incapability to forecast an accurate level of production, parts or activity.
For the company it's a positive they've contracted the pipe laying and trenching out on a fixed priced contract. It would be wise of the company to monitor the quality of this work as its well-known in certain countries to mean quality/workmanship is at the lower end of achievement levels. If there is an issue with the work at a later date, there will only be certain people to blame if QA isn't part of the contract/due diligence. Ian can regale people with his "fixed priced" house build a few years back, which was "quality second to none!"
Hopefully parties can feel my despondence with the management here, history has demonstrated their activities/decisions based on their achievements. The Wouri River crossing is delayed with commissioning and engineers not likely to start until "next" week. The rest of the RNS is "about evaluating this, exploring that and considering this. The disappointment for VOG is that it strangely sounds like the past.
VOG could learn a thing or two about Investor Relations, for which they clearly haven't learnt from the past. If they do wish to contact me to discuss this, I'll endeavour to be chirpy and upbeat! However from a financial perspective, save for any extraordinary costs, VOG are now near as damn it at break-even for cashflow by my calculations. For those wondering why I hold, sometimes the assets are better than the management. The company still has a lot to learn about the market and perhaps if VOG get an experienced AIM'er involved they'd actually benefit. So, for the time being I continue to hold, how the market takes today's news is anyone's guess, it's a positive but muted RNS's with significant amounts of jam, its more than likely to tank as parties realise VOG is further away than they realised (again).
In the interest of balance, and unusal for me, the video for VOG which doesn't put the main issues to VOG that have caused the slide in the SP and the 'error's todate. Save of course for mentioning they have been over-confident.
Centamin Egypt Q2 Preliminary Production Results come in very positive. Egypt is going through a period of change and as such, its unlikely for there to be any subsidies and a "greater" commercial market for operations. The benefit for holders (excluding the geopolitical issues) is CEY is very profitable even allowing for no subsidies.
CEY, assuming parties know that NH4NO3 (Ammonium Nitrate) can be used as an explosive and not to fertilise Sukari, are applying/discussing with the Government to increase the use of NH4NO3 to expand open pit mining.
With the Stage 4 plant expansion on track, albeit reduced grades below ground, its likely save for any further legal issues and disagreements on explosives, that CEY will maintain 420K ounces per annum. The 450K target is a positive in the management ambitions but one can't help but wonder if its achievable. Any dividend news is very unlikely until the 'legal' issues have been cleared away. With more clarity CEY's likely to get rerated...for the long-term investors what more could one want? Save for a dividend which won't be far away! Target Price now looking, as stability comes to the region and the legal threats being dealt with of a minimum of eighty pence (80p).
To the (e)xcitement of XEL, the Directors have put their hands in their pockets for 78,000 shares. One would have got even more excited had the Chairman Mr Timothy S. Jones not flipped 25% of his options to cover their costs albeit is forgiven as I think his salary was around £45K last year...(willing to be corrected). Can XEL surprise us all before the end of quarter.
No time sadly for Providence Resources (PVR) albeit the news of delays doesn't bode well for the SP, in addition to a potential "large" seller there as well. (D if you wish to post the link).
For those interested in the social elements, last night involved an amazing curry assisted with a 'polite' amount of alcohol haha.
Atb Fraser
Fraser- yes, agreed re VOG- they did say on 4/4/14 that the river crossing was all in house and in hand and commencing May 2014, with a 40 day period to cross, so Im now cross that they didn't see fit to RNS the delay and sub contract. Investor Relations seems to be as confused as the Brazilian defence was last night. The rest of the RNS is fairly positive, the Dangote date is closer than I had figured, but can we trust any of these dates based on the river incident above?? The ACTIS power station deals are key here, an extra 10 scuffs re 2 stations (why mention 3 and then quote for 2???) would see production motor ahead but I guess we cant expect anything here until 2015 at the earliest. I agree re the sub contract move, if contracts overrun (which they do on a regular basis) this could push the contractor to cut corners and bodge- does VOG have a QS supervising these sub contract? I hope so but doubt it- Perhaps Ian can find a gap in his non blogging day to pop down and see if they are behaving, whilst rebuilding his house by the sound of it too. The market got ahead of itself but I will also hold VOG as the "2 steps forward, 1 step back" approach is still making progress. Perhaps VOG can adopt this as their company slogan- free of charge guys :-)))
ReplyDeleteRe CEY- yes one of my long longs, nice costs (not quoted this RNS, which would have even better) and delivering re the build out of the mine, which seems bottomless at present. The court case is due up again in 9/14 I believe, maybe this time it will be swept aside after the legal changes. Lets see.
Re MWA- nothing really new in that RNS, but progress has been made and the PE ratio of between 1 and 2 at the start of 2014 didn't make sense so the mkt is in catch up mode today. 3.5p is my fair value level here and as usual Im long.
Re PVR- oh dear, oh dear, not their fault but they do seem to acting like the Brazilian keeper -- sorry about the footie analogies--- they need to get that farm out done before the share price drops into the penny share range. I know farm outs have got longer and longer but surely they have had a credible offer by now?? It would transform their balance sheet and the downwards pressure wont stop until they have something positive to say.
Cheers. The Leggie
PVR update- yes- the major holder and founder (Sir Anthony O Reilly) is looking for cash and his court case indicates he is v keen to sell assets at a reasonable price. He holds 15.4% here and the mkt cap of £81m isn't what he wants for his stake, or part at least. My fair value alarms went berserk when the share price hit £1.25 earlier so I did add at this level. My guess is that this is the nadir or close to it, the farm out must be as close as he has promised, the court postponement will focus the mind and the next 6 months will be pivotal here. Not for widows/orphans but I am now tied to the PVR mast and hoping they sign the deal before the waters rise too far :-)) I would love to know if he did turn down a $1bn deal last year but Im aware the asset needs further assessment (which should have been down pre farm out) but the current price seems to discount too much bad news and that's when I like to buy.
ReplyDeleteCheers. The Leggie
Just been advised that the video wasn't showing. Whether that was for certain individuals or all I don't know. So please consider this an edited post with the video inserted, content has not changed. Atb Fraser (out on the gin).
ReplyDelete