Headlines
- In Brief:
- Mayan Energy (LON:MYN) (0.68p) – Problem Shared, Problem Doubled
- Rose Petroleum (LON:ROSE) (3.90p) – Maiden CPR
- TomCo Energy (LON:TOM) (6p) – Next Step Completed, but What’s the Plan?
In Brief
- Mayan Energy (LON:MYN) (0.68p) – Problem Shared, Problem Doubled: The announcement made by the Company earlier this week, that Eddie Gonzalez will be combining his CEO role at with an advisory role at Petroteq with regards to “..strategy, dealing with the growing global interest in the Asphalt Ridge project, operational activities and the identification of new opportunities” continues to amaze us with its flagrant disregard for creating value for Mayan Energy shareholders. Just so we are clear, Mayan shareholders have to be content with (i) the investment in Petroteq (Asphalt Ridge’s title holder) coming via a vehicle (Deloro) established by the management team while the management team were engaged by Mayan, on the basis (we assume) to act in the best interests of shareholders; (ii) pay 50% of Deloro’s funding obligation receiving only 17.6% of the share capital; and (iii) the CEO assisting Petroteq to find new opportunities. We tend to believe that the CEO role for any company is difficult enough for small companies in the oil & gas space, but when you are tasked with generating value for shareholders, it needs to be a full-time role and shareholders have a right to expect their management team to be fully committed to generating value for them. Consequently, we find the appointment of Gonzalez to the board of Petroteq with a specific brief to “identify new opportunities” is, at best, a disregard for the Mayan shareholders, and at worst, a dereliction of one of his central roles in his position Mayan CEO. In this respect, we believe that the CEO has declared his intention to not serve Mayan shareholders fully and that Mayan’s board, in accepting this arrangement, are tainted with the same brush. Given that the shareholders of any company have a right to expect that their management team will serve the Company’s needs, we believe that Mayan’s board are no longer suitable to lead Mayan Energy and shareholders should replace them en masse.
- Rose Petroleum (LON:ROSE) (3.90p) – Maiden CPR: Today’s news should roundly support the share price, especially as the Contingent Resources have been classified as “awaiting development,” which means that according to the competent person, they are commercially viable Resources. To migrate these into reserves, the Company will have to outline a development plan, at which point the proportion of the currently identified Contingent Resources that are economically recoverable will be reclassified as Reserves. What the Company needs to do next is outline its development plan, with particular emphasis on the expected cash flow. While we have no doubt that once the development plan has been matured, that the Company will be seeking additional funds to meet initial requirements, we would like to better understand the point at which the Company reaches the all-important self-sustaining cash flow.
- TomCo Energy (LON:TOM) (6p) – Next Step Completed, but What’s the Plan?: Today’s announcement re-emphasises the fact that management is focused on the testing of the TurboShale technology, which is a positive. However, what is required next from the management team is an outline of what the test programme will look like and what results it will deliver. That way, both the management and the Company’s owners can understand exactly the gap between the current understanding and future commerciality.
We may provide a further update on one, or all, of the stories above later today. However, if there is anything that you would like to discuss, please feel free to contact us.