swe overview - 02 november 2013 , page-8

Thanks PP.!

I loved all the way till the final part. I again repeat, I wish Swala Management does not accept any Takeover offer at least till they drill and prove their resources. Africa Oil shares were in mid-high 20c not too long ago and had many bids for themselves but decided against it and proving everyone that it was the right call. I say this because I believe success with current Swala Management is more than anyone who takes over. There are many companies which had good potential being spoiled by new Management after M/A.

Probability of Swala success increases with every seismic results, nearby area drilling updates, EARS geology, active bidding for other high potential targets in future, quality partners with proven past successes (Tullow and Otto) and many other reasons based not just on myth or hype but facts released to Market till date.

This is what I wish and would like to see in next 2 years which could turn company in to multi-bagger,

Complete 2-D seismic planned for this year and acquire 3-D seismic next year in potential targets which has more probability for hydrocarbon traps based on 2-D processing. Since 12B is operated by Tullow, Swala cannot define the terms and can target K-K and Pangani licenses. From 2-D seismic released till date, I am sure we have at least one commercial basin in K-K license and would love to be drilled before 2H 2015. If 3-D seismic turns good with CPR pointing to commercial success, I am sure Otto will help Swala to get the plans forward as they are cashed up with Galoc II success in Philippines.

Choose a target in the basin which has high potential with best commercial results possible based on 3-D seismic. Arrange Finance for drilling (debt would be good rather than share dilution) and drill the well. Prove the resources and take it to Production to start generating revenues and self-sustain financially. Once Swala starts generating revenues and have positive cash flow and can self-fund for drill targets and Production, I am sure Sky is the limit for them for the resources they possess.

Start drilling other targets based on 3-D results available and grow strong in 1-P and 2-P reserves which would increase MC of the company.

Increase the resource base by bidding for other licenses which Management considers to have high potential in future.

I understand this is not so simple to achieve but not impossible. For those who believe in Swala story, I am sure they already invested in it to the maximum limit and I am quite confident to say their portfolio would be +ve for years to come (possibly with multi-bagging returns by EOY 2016).