Fri Dec 07, 2018 3:05 pm
You are welcome guys, we are all in this together.
Answers to you questions as below. Of course my views are just that. I held of a week incase Range had an AGM RNA to release.
Sorry for the typos in advance.
Range side were -
Eva, Nick, Kerry Gu, Yan Liu (CEO)
Douglas Field (Chief petroleum engineer), Sara Kelly (Joint company secretary), Theo (Group financial controller).
- Out of interest did you get an impression of overall competence from the board...good at what they do but victims of some wrong decisions and circumstance....or did they fall into the nice but dim category?
I got the impression that they were defeated and deflated, very low energy somber affair.
I liked Yan Liu I thought he presented well and despite the odd language issue did give sincere answers when asked very direct questions. Otherwise skirted around
then with long answers that were non answers.
His presentation however showed how little there was actually going on with Range, they simply don't have the money for big drills and appear to be treading water until Q3, certainly until a refinancing is done they wont do much.
It felt like this time as there was no glory to be had, so he'd been pushed forward to face the music whilst the others looked on in silence hoping to avoid having a light shone on them. It's tough at the top huh? The presentation talked about everything but the shareprice, no graph at all and no real mention of shareholder value etc There was nothing really to boast about other then the $1 million dollars earned by RRSDL. Everything was "improved" or being worked on. Actual victories seemed few and far between. Jam as always in the distant horizon, but this time they weren't able to offer 1k bopd timeframe, having been stung by past promises too many times.
I think sincere efforts were made in certain areas but as always leave you wondering why didn't you (Range) know that before? For example RRDSL - I asked if they would concerned if they had over paid for it now with hindsight - a long answer from Yan with no actual direct answer. But with reasons why RRDSL drilling services was difficult to win contracts for/use ie two long time rival companies on the island dominating the contract wins - but Range would have known about them before hand right? A low level of skill amongst the team there - again, Range would know that as it was their team they'd know it
better then most, so hire better people then? A lack of the teams understanding of the requirements from Range ie storage/volume of water required etc.
These are reasons but would a competent company not be able to resolve them quickly? or bring in experts (Landocean?!) to do so quickly.
Reasons for lack of oil production were sadly again things that have been talked about for a long time - difficult environment in T&T of oil pressure, lack of storage facilities, Petrotrin, lack of skill, spare parts etc. The same things that have been forwarded for many years. Should we conclude that Range don't learn from past mistakes or cant overcome them then? and the asset is actually crap and incapable of producing anything meaningful no matter which approach is taken?
- Was there any rationale given for the purchase of a further share of the shambles in Georgia
From memory I think the answer was that it was a very minimal cost purchase (Phil please correct me if wrong).
-or any explanation for not asking for the return of the £3m ‘goodwill’ (FFS!) payment to LO that we were told was available at call, rather than raising at 0.011?
That was asked by and I've honestly forgotten the answer now. One of the shareholders asked the specific question why decimate the sp with the last dilution when you could have used that money. I think the answer was along the lines of strategy or something (sorry I forgot - Phil?)
Below are my views. Please taken them as just that. I'm posting them openly as I don't believe in ramping or leaving out negative views. The sp is already beyond a joke as is the volume traded. So me posting my views is neither here nor there.
My personal thoughts are that this company is actually in big trouble, whilst the debt is unsecured and having a while before it is to be paid off. They have very little they will be doing prior to negotiations in order to preserve cash. Any drills they do do are just contributing to keeping the lights on. Eventually they will run out of time and or cash. It all hinges on the renegotiation and as they were already suggesting all options will be looked it, it doesn't necessarily mean a win for long term shareholders. LO are the lenders and the people holding the cards for renegotiation. Kerry said Range losing out was always a loss for Land Ocean, they do not want to see Range fail, it would be a failure for them too. But how far would LO go to keep the lth shareholder happy?
With the sp where it is, if they exchange debt for shares then long termers will be diluted to hell. Pretty much killing their investment dead. Yan said he was in at 0.8 so would be effected himself, but 0.8 seems a million miles away at this stage and really he's a Range salaried man so would that would soften the blow with possibilities to be rewarded further down the line.
The sp is where it is as Range have (in their own words) failed to deliver on their promises and put very little effort into pr. PR will remain at this level until it can be a justifiable expense (ie something to crow about, which itself wont happen till the loan deal is refinanced).
Whilst Yan thanked me for coming and that it was great to see me again. My response that this would probably be the last time as I suspect there would not be another AGM in London in 2 years time as there wouldn't be a Range then. This was greeted by a nervous laugh which pretty much summed up the whole meeting. I suspect Range already know what's in future for the shareholders and if we start seeing people exit then it's curtains, if they stay then it's probably further dilution to keep things going. Either way I don't expect to see any meaningful return from my decimated investment. I suspect the fat lady is warming up in the wings.
