Last 3 months have been nothing short of a nightmare for many of the share holders of Swala. For Long-term holders, we have seen a paper loss of close to 60% and that rings alarm bells in the night.
After a long time, decided to talk with our CEO, David Mestres Ridge as I was not comfortable with the turn of events in last two quarters and poorly timed announcements. I feel more comfortable after the discussion and still believe Swala Management is one of the best strengths we have got and time will prove it. Some points from discussions,
1. Why did Management choose Finance Facility using convertible notes ?
We considered all options and decided it is better to use Convertible notes rather than raising Capital below 10 cents. We could retire Con.Notes if we can arrange for a better farm down and believe in same.
2. Does Management really care for Share holders and Share Price, as Finance Facility will result in more dilution ? (it was a hard question to ask. Though, I was confident in Swala Management, wanted to have view of our CEO)
Management hold close to 50 million shares and that is one-third of issued capital. So, we very much care for Share Price and Share holders. Current Market is very hard for Oilers and much harder for Junior Oilers but we are confident of a better future
[My View] I remember, our director Mr. Ernest Massawe acquired 1 million shares at 26 cents in May 2014 and ~2.4 million shares at 22 cents in August 2014. Management have invested their hard earned money in Company and they truly believe in future of Swala Energy. This alone gives more confidence in addition to other criteria that made me to invest in Swala.
3. We had series of bad news last year. What steps are taken to improve share price ?
I have to disagree that we had a series of bad news last year. Last disappointment was Eyasi last January which we did not have control over the decision. We remain comfortable with developments in respect of this license (SWEet surprise that can be expected in 2015 .?). We have identified Kito prospect for drilling in Kilombero basin, identified structures in Pangani basin and evaluating drill prospects, identified AHero prospect with 44mmbls 2C and have identified 10 leads & prospects in 12B. Have secured license in new Frontier of Zambia in EARS region. We are committed to drilling 3 exciting prospects in 2015 in much successful EARS region. We believe, 2015 work programme and drill campaign will help in share price appreciation.
I use to wonder at times, whether I have made wrong decision to invest in Swala as they do not have any proven resources, do not generate any revenue, do not have cash to explore new frontiers and have to farm-out or raise Capital to drill/explore. But, going through the assets, history of Management team, path followed by Swala and its resemblance to Africa Oil, their capability to make successful Farm-outs, upcoming 3 drill campaign in 2015 (especially with Tullow in 12B and 'string of pearls' in Kilombero basin) assures me Swala could be one of the best investment decisions I ever made and short term pain would be long forgotten if our drill campaign is successful.
Junior Oilers are always a risky investment as Commercial Oil discovery would push SP to dollars and if they fail could very well trade less than a cent. I believe, Swala provides a better Risk-Reward opportunity and their strategy to go for a 3 drill campaign in same year will yield rich returns for long term holders. All it takes is one commercial oil discovery to change Future of the company and I strongly believe, Swala will hit black gold in their drilling campaign. Good luck to all, stay strong. Hope is good as long as facts are there to support it, keep hoping
These are my opinions only, please DYOR.!
SWE Price at posting:
11.0¢ Sentiment: Buy Disclosure: Held
