why i invested with swala ?

Hi Friends,

It has been difficult week for us as a shareholder and share price reflects our mood (being down). But, I would like to take a step back and think why I invested with Swala at first place, what has changed from then to now and my personal view on Swala's future.

Why I invested with Swala ?

1. A Junior explorer with proven Management (Black Merlin Energy) and one of the early movers to hottest exploration area for Oil and Gas (EARS)

2. Passive seismic study carried out in 12B were very encouraging and hydrocarbon modelling predicts up to 22.4 bn stb & 10.7 Tcf could have been expelled of which 10% could be trapped (low estimate). This reminds me of PuraVida Energy where it went from mid 20s to high 80s on good seismic results from Morocco (Toubkal) and Swala could go one step better with 12B (pre-drill) as our license is on-shore

3. Partnership with Tullow is a huge plus as they have been the King of African exploration in recent times and their success rate for Commercial Oil find is great in EARS region so far. Early interest before any seismic and Operator-ship in 12B does send a strong signal to Market on the potential of our license

4. Highly prospective K-K/Pangani license in Tanzania (EARS) covering 5 basins

5. Local business model with influential and skilled people on board (research more on local content model of Swala in Tanzania, Kenya and Zambia)

6. Potential award of Eyasi covering 4 basins each more than double the size of Lokichar basin along EARS (remember we are doing a flashback in this section)

7. Plans to expand land holdings in Africa (Zambia, Mozambique, Malawi, Congo)

8. More similarities with Africa Oil and better placed than any other Junior explorer to replicate success model of AOI

9. A Stock trading below its land holdings value considering deals in the past. You can use Argonaut's report for reference http://swala-energy.com/documents/SWE_TenForThePriceOfOne_Initiation.pdf

10. A Stock I believe to be one of the best multi-baggers in ASX in 3-4 years time because of its fundamentals, assets and Management Team


What has Changed from then to now ?

1. Kilombero basin has emerged as an analogue to Lokichar basin and Albert Graben with very good probability of commercial Oil success (results for other basins are still processed)

2. Kito prospect in Kilombero basin is progressed for 2014 end drill with prospective resources of 12.5/39.3/110.5 mmstb net to Swala on P90/P50/P10 estimates respectively. Considering all factors, defining a Prospective resources in such a short period by itself is an achievement and eagerness of Management to drill the prospect boosts the confidence they have in our licenses. Surprisingly, Kito is one prospect covering small area in a very large basin and chance of finding bigger and better prospects in future is high

3. Out of 5 basins in K-K/Pangani, 3 are believed to be NEOGENE fills (Kilombero, Mvungwe and Moshi) and 2 are Karoo basins (Kilosa, Kidatu). Proven Oil basins in African region are Neogene fills and probability of commercial Oil find in Kilombero, Mvungwe and Moshi basins are VERY GOOD and SP would reflect this when we move towards drill stage

4. Conditional CMSA approval for SOGTL listing and expected to complete listing by March 2014

5. Strong interest to invest in Swala (18% Premium placement in Nov'2013 is just tip of the iceberg)

6. History of Hayaat group, their business model, success story and appointment of Charles Benson as Non-executive director boosts strength to already strong Swala Management. Participation of Renigald Mengi (http://en.wikipedia.org/wiki/Reginald_Mengi) in strategic equity placement would significantly benefit Swala on long-term

7. A major setback of Eyasi termination with TPDC. Though it is bad news, I believe joint partner failed us along with TPDC and it is a wake-up call to our Management. We have to be wise in agreeing to Joint bidding terms and choosing partners in future. Also, it is not the end of Eyasi and Management are trying their level best to convince TPDC to get back Eyasi and as a backup taking legal advises to challenge TPDC's decision.

8. Seismic in 12B is set to start by March 2014 and 700km work program is reduced to more effective 350km program where Tullow and Swala believe they will find commercial OIL

9. Strong cash balance to fund planned activities and plans for non-dilutionary Cash Management (Area of Mutual interest a possibility)

10. Actively engaged to secure more licenses and advance in new country entry

Personal View of Swala's future

Personally, I still believe Swala are the best placed Junior Oil explorer in ASX to replicate success of Africa Oil in East Africa. We have all the right ingredients to be a successful OIL explorer and future Producer with our Good Management and excellent assets. Commercial Oil success in one of our targets alone would make Swala a Market frenzy and probability of success is VERY GOOD considering we have 6 basins (may be more if we get good news with Eyasi) and multiple targets in all the basins. A major advantage for Swala among its peers is our on-shore licenses and this would make all the difference when we near drill stage (exploration drill costs would be significantly less compared to off-shore drilling). I did not get too excited when we hit 40s not long ago and am not worried when we hit mid 20s now as am here for Long-Term and fundamentals of the company has not changed. We have more positive news to come in near term and SP will go on an upward trend shortly but True value of Swala will be realised when we drill our targets. These are my personal views only, please DYOR.!