http://www.investegate.co.uk/Article.aspx?id=200906300700147342U
Intention to place 116,330,998 new Ordinary Shares at Stg6p per share to raise Stg£6.98 million (approximately US$11.45 million) before expenses (the 'Placing');
Intention to conduct a non-underwritten Open Offer to qualifying shareholders of up to 30,266,841 Ordinary Shares on the basis of 1 new Ordinary Share for every 8 existing Ordinary Shares held on a record date (to be determined) at Stg6p per share to raise up to Stg£1.82 million (approximately US$3 million) before expenses (the 'Open Offer')
2007 warrants to be extended for 12 months to August 2010
6p, ouch , but that's the $14m for Ruvuma sorted. It had to be done...
manzanilla
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Aminex PLC is engaged in the exploration for, and the development and production of oil and gas reserves. Its principal area of activities includes the United States, East Africa, North Africa and North Korea. Its segments include Producing Oil and Gas Properties, Exploration Activities and Oilfield Services and Supplies. The Company's licenses in Tanzania include Nyuni PSA, Kiliwani North and Ruvuma PSA. During the year ended December 31, 2010, it drilled three wells, one in Tanzania and two in the United States. As of December 31, 2010, the Company held leases at Shoats Creek covering approximately 2,100 acres. Aminex Oilfield Services & Supply Company (AMOSSCO), its wholly owned subsidiary, provides logistics services to oil industry and sources oilfield equipment and consumables to international oil companies. In March 2012, it announced that Aminex USA, Inc. its subsidiary, completed agreements to sell leases and other assets consisting of the Somerset Field in Texas. more »
145 Posts on this Thread show/hide all
Darron
So might AEX back out of the placing if they negotiate a suitable farm-out?
It has to be said that management here are developing an awfully bad habit, given that they appear to have a number of relatively attractive assets, of shafting non-insto shareholders.
Cheers, Martin
and if they don't farm down and Ruvuma fails ????
db
of shafting non-insto shareholders.
????
This is the only co. I have ever held that DOES include non-insto shareholders. Warrants and options last time (ok it went against us, but an extra 12 months to play with now). And if I am reading it correctly non-instos get the chance of 1 for 8 held at 6pps.
I'm afraid its typical of most small explo companies. PI's gradually get diluted away. Even if the big one comes in, dilution is so much that PIs never really see the benefit they hoped.
At least AEX have kindly arranged for the share price to fall relentlessly, allowing PIs the opportunity to buy at a cheaper price subsequently than the institutions.
I have been losing faith In Brian Hall for some time and now regret not biting the bullet long ago. Whether or not the drilling succeeds the only guaranteed winners here are Mr Hall and co. This placing leaves a bitter taste in my mouth because the overinflated salary packages have eaten the Pis cash and we have been diluted as a result. I have seen little in the management to suggest they are looking after anyone but themselves first and foremost.
I feel like I've been mugged.
I don't feel shafted. I feel that we now have a chance to move forward again. Surely the company raising funds to continue with its operations is good for all shareholders?
Regards
Impvesta
The open offer is a bit of a help and I would expect to take up the right on my shares. However, overall, this is still highly dilutional.
Clearly, you are a lot closer than me to the details of AEX's situation and no doubt have a much clearer picture of the practical options that have been open to AEX over the last couple of years. However, viewed from 50,000 ft, there has been considerable destruction of shareholder value, which has either been bad luck or bad management or a bit of both?
Or as per Stemis's post, despite their assets, their lack of cash flow, etc., puts them in an exceptionally weak negotiating position
But doesn't the placing and open offer mean they can now farm down without being in the position of distressed seller and do a deal from a much stronger negotiating position?
Or as per Stemis's post, despite their assets, their lack of cash flow, etc., puts them in an exceptionally weak negotiating position
I don't think that's quite what I said
SteMis
My apologies. Point taken.
Worth reminding what precisely Ruvuma is worth.
This is from Tristone's morning O&G note:
Well, that seems pretty reasonable. Subject to what may happen between now and the EGM, I'm certainly of a mind to apply for additional shares of up to double the amount to which I'll be entitled under the Open Offer.
Now, don't all rush!
Man |Siarad
From what I can see here we will go from about 242million shares in issue to 389million a further 60% dilution. One annoying thing here is that the open offer only seems to be 1:8 so even if take up PIs will be diluted (although there is an option to oversubscribe). Have I misunderstood this?
Moving out the date on the warrants potentially makes dilution worse.
On the plus side at a 1:8 at 6p it isn't going to cost very much for PI's to stay in the game and if Mikindani comes in that will be worth 24p/share. So I guess one way of looking at it is paying 1/8 * 6p = 0.75p per share to fund a potential 24p/share (unrisked) even risked that is 1.8p/share. However these numbers are probably pre-diultion so need to be scaled down to 1.125 and 15p respectively. So from a purely arithmetic point of view one should probably take up the offer and stay in the game.
Log
Right, finally at the desk and since my dealing screens are on the fritzz, Ive got a few minutes to spare so breain dump/stream of couscious (or verbal diarrhoea if you prefer) coming.
The comments below are in part related to what some one (or more than one) may have said above otherwise its just my opinions. Martin (?) I think, made a comment about me probably being better connected to whats been happening (such as the funding issue and Astaire being appointed) and he is probably right. There are a lot of things that I cant comment on to be honest. Neveretheless, these are some thoughts.
Are we "unlucky"?? Yes, Id have to say that we are to a degree. Weve seen the capital markets collapse just at the wrong time for us. This, coupled with the collapse in the POO closed any chance of doing a farm out earlier than now and restricted acess to raising money from any other source. Over that period weve had some good results in the US and KN1 and also picked up very attractive acreage around K. The falls in the Nat Gas price has not helped our US revenues but it is still profitable and there is everylikelyhood that the price of gas will pick up over the coming year as a result of the massive reduction in ccapex that we have seen in the US (read across the utilisation rates for rigs on shore US, especially horizontal rigs). Add to that the fact that a lot fo the new production is from "unconventional" plays with parabolic decline rates and we could well see a spike in the Gas price, especially if economic activity in the Us improves or even a hot summer/cold winter. US gas production for us is still profitable and keeps the lights on. We were certainly unlucky with the Texas City disaster a coule of years ago that shut in production and New Orleans etc but things happen right? On the positive side, the old hands may remember the sale of Vinton Dome (?) that was obliterated shortly afterwards by the hurricanes.
Lets face it, it has been a bloody awful time to be a pure (ish) exploration company needing access to funds. Exploration copanies usually do end up having to multiple funding issues due to the need for development capital etc. Ideally this occurs as discoveries are made pushing up the SP. These are not normal times though.
We didnt want to have to raise cash at these levels. Needs must, however. As the PIS who attended the presentation a few months back will remember, the farm out process had started both at Ruvuma and Shoats Creek. Shoats has no time pressure since the acreage is ours full stop. There is, of course, the commitment on the Ruvuma licene so there was some time pressure, as Johnny T has mentioned. That sort of situation is not ideal when you are trying to negotiate a deal and it is far better, as someone above said, to be able to negotiate from a position of strength. Now we can either drill it ourselves or get a good farm in. Nice position to be in, though I would expect to see a farm in done as a derisking exercise. Remember that it is not jus us who have suffered during the downturn, even the big boys have been cutting capex and thus any interest they may have in new acreage has been limited. Now that the market is picking up, the background is much more favourable for us.
We do still have a very good portfolio of assets. Shoats Creek looks very interesting indeed and relatively low risk (due to the historic wells we have there and the new seismic data). I can see some serious value to come from this area alone. Then there is Alto Loma with more production to come. In many ways Id say that Shoats Creek alone is very attractive and could be a real money spinner following a farm out as it is close to infrastructure and could be producing very quickly. .
Egypt - the free carry hasnt cost us anythign and its been disappointing to date. IIRC, there is the prospect of 1 or more wells to come (probably 1 this year?). Shame we havent seen the same success that COP have had in Egypt. C'est La Vie.
Ruvuma and Nyuni (both K and the origianl Nyuni) have great potential value also.
Unlike some other companies I can mention, AEX has always played it very straight with the shareholders, especially the private shareholders. The company has regular presentations for private individuals and Brian has always been very willing to answer PIs questions (where he is able to). Dont go deluging him with emails and phone calls now though or else he will have my guts for garters. The information in the RNSs is always very clear.
Ive always stressed to Brian that maintaining good relations with the private shareholders and treating them fairly is essential, hence the rights issue with the last issue and warrants and the open offer now. It would be so easy to just do what other companies do and "shaft" the shareholders with a big placing but thats wrong IMO. Yes there is an argument for a company to do a placing to ensure that you get the money you want but allowing PIs in is essential IMO. Note of coruse that the issue was oversubscribed. Personally weve taken another $500k of stock and may take more through our open offer entitlement but I do know that there was good demand for the shares since the story is very compelling (see my post above with Tristone's valuation of just Ruvuma). As to the new brokers, I know some have expressed concern re Astaire (Blue Oar as used to be) but they, together with Davy, have worked very hard on this issue and have impressed me. Thats a bit galling since we lost out on an acquisition to Blue Oar's waelth management arm a while back - (bugger!) but credit where credit is due.
As Ive said, it is done now. We have the csh that AEX needs and so Id imaginewe will see progress with a farm out and Ruvuma will be drilled. SC progress will also be very interesting to watch.
Sorry but this post has been interrupted by several phone calls so it may not read that well. I just thought it worthwhile my putting "pen to paper" as it were.
D
In reply to loglorry (post #20)
Log
No, those figures from Tristone are assuming the placing and open are all fully taken up:
not for warrant holders!
More generally (ie not replying to Log), managing a company is always the art of the possible, and since September, small E&P's have had fewer and less attractive options to choose from. That isn't Brian's fault.
db
Darron
Thank you for your extensive reply.
In terms of "We carry a 125 mmb prospect for Mikindani which, assuming both the placing and open offer are fully taken up, is worth at 1.8p/sh (24.8p/sh unrisked) at 50% WI.", presumably we are talking an estimated probability of success on this well of 7.25%?
Also, assuming the well is unsuccessful, when and in what circumstances do you anticipate AEX having to raise more capital?
Hopefully, unlike KN1, the market would view a success at Miindani as a positive that would make future fundraising easier at a higher SP?
Cheers, Martin
In reply to shanklin100 (post #24)
Martin
I think it is pretty safe to say that a discovery on Mikindani would see the shares somewhat higher. Funding form then woudl depend on the terms of the farm in agreed. Personally I would be delighted if we got a 2 for 1 on Mikindani, meaning no commitment in terms of money on drilling. The big question is if there is a farm in for the full licence or just Mikindani and its successor. Thee are so many possible permutations it is difficult to know right now. Obviously a farm in to just the immediate wells would, in the event of a success, mean we could extract a better deal for other acreage (remember Anadarko's comments re their opinion that their licence is like the "Gulf of Mexico").
If we got a deal then, assuming a sale of the Us asset, we could well see some of the cash redeployed in the US to boost our production via the cheap assets now available on the market (as mentioned in recent reports and presentations).
If Mikindani fails, well, it does, again, depend on the terms of the farm in i.e. how much cash we have left and so on. Maybe the cash would then be spent on Nyuni ie appraising the K discovery and getting that on stream and generating income or on work on SSW (or is it WSS (I can never remember).
Again, a farm out of SC could/should/would have a very beneficial impact on the company share price so there are many irons in the fire. At this market cap, its a hell of a lot of assets for not a lot really. Compare it with DPL, £28m market cap with a big problem with the convertible they issued.