I believe most of the points in there are old fun and that the new management wants to fix whatever they can in relation to these points at a later time.
Though I do admit that there might be risks involved here, I believe with the low share price the risks are already included in the price. I would be surprised if they loose any of their licences because it would set the host government many years back. A new licence holder would most definitively have to do new seismic and so on... It would probably take 2-3 years before there would be drilled a well on them. If the APCL management can come to them with a group of majors and say that if you give us a minimal extension we will drill as soon as possible they would accept that.
And for Timis. He is the owner of Timis Corp? The one that got 400M USD for the two licences right north of Senegal ROP... I would not put too much weight on him being a holder here. He only owns 26% I believe and he probably has some people on the board but I know that there was management changes due to a stockholders revolt a few years ago and that his men was replaced.
The intercompany loans are also from that time before the management change so I probably would be safe to say that it probably is a thing of past. They are however obliged to have it in their report.
And for the debt I believe that it is debt owned to the governments and that they are negotiating these. They have been in the two past yearly accounts and the company is still not bankcrupt(?). If it was really pressing debt then someone would have filed those papers already.
Now for the fundamental. If they get partners in and cash and promises to drill ASAP in Gambia, I believe they will still be the licence holder in the future. And seeing the people that come streaming in from big companies and who shows up in the linkedIn account of the people responsible for the farmouts I believe there to be quite a huge interest in these licences.
So. Yes high risk. But the reward...
It will be too late to buy cheap when the farmouts are done, that is for sure. You can either take the chance now before that happens or wait until they announce the farmouts and buy then, though I would expect the share price to rise from 3 NOK to more than 10NOK on the right deal...
We will see what happends. I have a target price of 10NOK the 30.06.2016 and 100NOK the 31.12.2017.
AOQ Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
