It has been a bad week for us and Eyasi termination was the worst possible news I least expected. Though, Swala is under-valued at current price, loss of Eyasi would be huge if our legal challenge fails (chance of failure is high). I have little hope of getting Eyasi awarded after this decision from TPDC. We need answers for below questions from our Management,
1. Who was our joint bidding partner ?
2. If it was PuraVida, why did PVD announce they never had any interest in Eyasi block and why Swala did not respond to it ? If it was not PVD, then who was the joint partner ?
3. What are the terms between joint bidding partners, Swala/JV and TPDC ?
4. What are the options available to Swala Management for legal actions and what is the time-frame we are looking at ?
5. What was the reason behind JV pulling out at the last moment from such a lucrative on-shore license and why it was not made public to share-holders (Personally, I feel something is very wrong and played to the hands of Oil Majors) ?
6. Did Swala discuss joint bidding terms (withdrawal of interest from one of the bidding parties) with TPDC ? If yes, why TPDC creating a scene at the last moment ? If no, then why it was not discussed ?
7. Who was the second best bidder for Eyasi ?
Even though K-K/Pangani in Tanzania and 12B in Kenya are highly prospective licenses, Eyasi was the best among them and anyone who has followed research papers closely can conclude that. Eyasi lies in the TRUE RIFT and probability of Oil success is more. I understand it is very challenging to get hotly contested license where most of the Majors would be interested to explore, but why give a chance to TPDC to act against awarding the license. If I am in Swala Management, I would be questioning joint bidding partner first before TPDC as this situation would not have come if they did not pullout. If they are not ready to participate, then why bother to bid ? Reason behind pull out should be made public and legal action should be taken against joint bidding partner.
It would be a huge setback if we lose Eyasi as it not only ends up in losing the most prospective license but also leads to a fragile relation between Swala and TPDC which might affect listing in Dar Es Salaam and future license awards. Hope, we can sort this issue with TPDC in an amicable way which would be WIN-WIN for all parties concerned. I believe in Swala Management as they have created VALUE FOR SHAREHOLDERS MONEY in the past and stage is set with Swala to deliver big in the future.
Negative news aside, Good luck to all Long-term holders. With or Without Eyasi, Swala is worth much more than current SP. Wait for 2-D seismic in 12B and decide for yourself. Be patient, we will be rewarded in future.!
SWE Price at posting:
31.0¢ Sentiment: LT Buy Disclosure: Held
