It’s hotting up over in North Africa and I mean literally ‘hotting up’. Sound Energy (LON:SOU) behind the scenes are cock ‘o’ hoop and believe that their Moroccan gas play could deliver near term up to 4 trillion cubic feet of gas (TCF) with a major rerate of their share-price on the horizon. Long term this could end up multipules of 4 TCF. That is to say 10 Trillion Cubic feet+ (plus) which equates to a share price in excess of £10 per share on a net present value (NPV).
News has reached the ‘Danosphere’ that their Nomad has asked the Company to keep a firm grip on news flow and remain as tight lipped as possible. Interest in Sound Energy has been coming in from large financial institutions as well as 2 major oil companies. So much so that the Moroccan Ministry of Resources has placed a gendarme outpost on the direct access, and only road, that leads to the Tendrara drill site/s. That means that the Government of Morocco are all too aware of the Tendrara potential and are moving quietly to protect the National Interest with major oil company’s sniffing around.
Investors should also be aware that sources, and they are proven, believe that the company will be through the salt cap and into the Tagi gas reservoir within the next 7 days. It isn’t a question of rolling the dice for gas at this stage as it is 99% certain that another Gas Discovery will be announced. That discovery will be disclosed to be flowing at significantly higher rates than TE6, on or after clean up. Then it’s on to TE8. Currently there are over 100 employees on site in Morocco. It’s getting busy, very busy.
I’d expect news some where over the next 7-10 days via an ‘RNS drop’ announcing that hydrocarbons i.e. Gas has once again been ‘Discovered’ and that the Tagi gas reservoir has been breached.
In the words of their CEO ‘Jimbo’ Parsons “Tendrara really could be a super giant gas field” .
A major indication of just how Sound Oil (LON: SOU) see their future dropped today via an RNS. A predatory takeover paper offer for the distressed and shockingly managed (into the dirt) Antrim Energy (LON: AEY). You’ll all know that I am a big believer with a large personal stake in the Company. I have skin in the game. I keep telling investors that the SOU story is one of success upon success, since the boy Parsons, took the helm he and the team have turned them into one of the best AIM oiler plays of recent years. Cornerstone investors, producing assets, cash in the bank, big exploration play and a flagship gas discovery (Nervesa) about to come on stream. Not forgetting that they’ve admitted they are in talks with a Global International Oil & Gas Company regarding a Major farm-in which could lead to a creeping full blown takeover at many times their current SP.
You’ll all recall that Antrim were at one point capitalised at £250,000,000 with solid production from their Causeway asset. The board ran up huge debts on Causeway, broke all their banking covenants, Credit Suisse called in the debt and hey presto the Canadian based Board flogged Causeway in a forced firesale. To cut a long story short Antrim ended up losing Causeway for a pittance so that the Board could keep lining their own pockets. Antrim are now basically a one asset operation quasi shell valued at approx. £5 million. 90p to 3p what a ‘performance!’ If only the Sound Oil team had been in charge then I can guarantee that Antrim share-holders would be sitting pretty on a hefty value accretive investment many, many times its current value. Instead of holding crabs.
This is a great deal for Antrim shareholders as they get access to a balanced portfolio in Italy, production and exploration; Good management, cost synergies (Out goes the failed BOD Hooray!) and a credible growth story with a possible take out of many multiplies of the current SOU share-price; 10.75p. How does 60p ‘sound’ to Antrim energy share-holders? Because folks that’s what the potential gain is on Sound oil. The Offer for each Antrim share, 0.3198 new Sound Oil ordinary shares values each Antrim share at 3.44p. This values the entire issued share capital of Antrim at £6.35M.
+ Takeover of Antrim!
As for Sound they pick up a high potential exploration asset in Ireland (diversifies pre Badile outcome) and over £10M in cash, all for just over £6M worth of paper (about 13% of the enlarged company). It’s a win, win deal for ALL stakeholders.
Take a good look at Antrim’s management. Over the past 2 stretch, they’ve done nothing but destroy value for their shareholders through miss-management. When a Company are trading below cash value after running the sp into the dirt, then you know that it has failed miserably. President and Chief Executive Stephen Greer, ‘resigned’ his position then immediately ‘assumed’ the role of Chairman of the Board of Directors. (Stephen Greed!) Here’s a question for AEY shareholders. How much cash did Gree(r)d get from AEY upon his resignation? Was it 1 years’ salary? 2? 3? Because I can tell you this he got a hefty settlement! Now he gets another chunk of the Antrim cash as the Chairman! What an absolute disgrace.
The Antrim Corporate troughers whose egos destroyed Antrim, have failed to respond to the Sound Oil offer, are the very same who f**ked up the Company for their own shareholders. While raking in millions upon millions in fees for themselves. They live in Canada! They’re detached from their own share-holder base. Proven corporate failures only interested in lining their pockets with what little money is left.
The combination of Sound Oil and Antrim as an entity will have a nice balance of assets, be focused entirely on Europe while being well funded and should be interesting to institutions given the increased scale. It’s a win, win deal for all stake-holders. Consolidation is in the air I expect that Antrim are not the only company that Sound are targeting. There’s more to come. Watch this space.
As most know we do not give buy, sell or hold recommendations on Guerillainvesting, much preferring for people to research for themselves to make up their own minds. However rules are there to be broken. If confirmation was ever needed for a stock to be in your portfolio then todays RNS was it. Buy SOU up to 16p and hold.
Sound Oil (LON: SOU) have been quietly going about doing the business in Italy. The share price hasn’t really done any thing other than mainly stay static. 10.5/11p. It’s actually maintained a stable holding pattern considering the oil price has plummeted, while news has been sparse. The strength of the Company fundamentally and asset wise is reflected by the stability in the share-price. Every thing is now lined up. Cornerstone investor, two producing assets, cash revenue coming in, Italians (ex-ENI) all in place on the Board, Italian bureaucracy, streamlined, High net worth’s involved, Nervesa about to be drilled, Cash in the bank, basically debt free. Lot of maneuvering has gone on to get Sound oil to this place in time. Lift off is here.
When I say ‘sparse’ I mean the Company are deliberately tight lipped. Always a sign that they’re sat on price sensitive news and don’t want a leak to ‘outside of the tenters’ such as yours truly. A communications lock down means they’re ‘nervous on Nervesa.’
About to go ballistic
There’s a lot of news about to come through as they gear up for what the Company describe as ‘an exciting period of back-to-back drilling’, which commences with site operations at Nervesa in a matter of a few weeks or two. News has reached the blog that all is on track for a major announcement over the coming week/s. Just what that is, isn’t known. But it’s almost certainly good news, bearing in mind that the flagship asset, Nervesa is about to go ‘operational’. Once this is announced then it’s game on for the sp. It will begin to climb. I expect the sp to double in value from where it currently stands. Then we have news on the exploration play that is Badile. A massive gas play that would catapult Sound oil into the arms of a major international oil company, never to be seen again. Gone, taken over for the good of Italy.
I’ve been trying to get an interview with the boy Parsons (CEO), the man’s a difficult fish to land. Particularly as he’s a frequent flyer, flying back and forth across Europe. Last spotted having a cappuccino with an Italian energy minister. We’re not supposed to know that! It’s no wonder that Continental Investment partners (Sounds’ ‘cornerstone Investor’) have agreed to throw more cash into the hat via one of their affiliated partners Greenberry S.A. It’s money for jam for them. They know (Unlike most) that they’re going to get a hefty return on the investment. Nervesa remains a Major project for Sound Oil with an estimated NPV10 of circa US$66,000,000 million (100%). Which will probably rise.
Tight lipped.
I’ve been keeping my eye on Italy news wise. The Italian oil and gas permitting process has now been cleaned up making life a lot easier re’ the permitting process. This was announced back in late August of this year by their Prime Minister.
Remember Nervesa is a huge gas discovery, once it comes on stream the sp should be transformed. It can only go one way. UP↑. Even as the oil price struggles Sound will reap huge benefits from Nervesa which is as those in the know know, gas, which is as those in the know know, highly sought after in Italy. Premium prices being paid.
Not so ‘tight lipped’
According to one recent article “Italy is the new Texas.” With over 40 small to middle oil companies on the verge of unlocking proven oil/gas resources. Sound Oil being one of them mentioned in the same article as? ENI!
For all those familiar with the Sound Oil story here’s a quick update.
There’s a Swiss clock ticking over at Sound Oil (LON: SOU) Hot off the press and following on from the James Parsons & Director Luca Madeddu UK private investor share-holder get together, after their successful presentation at the 67th Oil Barrel, news is coming through on BMD’s black telephone that there’s a secret, yes secret, private international investor presentation in the pipeline (at the request of an Institution) to be held some where in Europe. It’s all very ‘hush, hush’. So keep it quiet. We don’t want questions raised such as? ‘Why are international investors desperate to get there Swiss franc into Sound Oil just before a potential official farm-in RNS? Do we?
These are not UK investors these are Swiss by birth. Are they private Bankers, Chocolatiers’ or makers of Swiss army knives? We don’t know, but what we do know is that It would seem this could be tied to an impending big news release on a potential International Oil Company farming-in to the huge exploration play that is Badile. This farm-in could be a Company Maker and when announced will push Sound oil stock like a juggernaut
It’s hotting up over in North Africa and I mean literally ‘hotting up’. Sound Energy (LON:SOU) behind the scenes are cock ‘o’ hoop and believe that their Moroccan gas play could deliver near term up to 4 trillion cubic feet of gas (TCF) with a major rerate of their share-price on the horizon. Long term this could end up multipules of 4 TCF. That is to say 10 Trillion Cubic feet+ (plus) which equates to a share price in excess of £10 per share on a net present value (NPV).
Investors should also be aware that sources, and they are proven, believe that the company will be through the salt cap and into the Tagi gas reservoir within the next 7 days. It isn’t a question of rolling the dice for gas at this stage as it is 99% certain that another Gas Discovery will be announced. That discovery will be disclosed to be flowing at significantly higher rates than TE6, on or after clean up. Then it’s on to TE8. Currently there are over 100 employees on site in Morocco. It’s getting busy, very busy.
Dan
