Hi everyone. I started this thread as FDC - but the copmpany recently changed its name to First Africa Oil (FAO). For completeness (nay, posterity) I've copied the original thread here - only three posts, two by me. So, as you can see I haven't given up trying to let you know about this very interesting prospect in W. Africa on and off shore.

Recently there has been a good deal of very heavy buying and selling since the reverse takeover on 7th Feb by Canadian Minerals comapny Energem's oil interests of FAO, in particular the following RNS on 15th Feb:-

The Company was notified on 14 February 2005 by RAB Capital ("RAB") that, following an
acquisition of 144,930,638 ordinary shares of 0.1p each ("Ordinary Shares") on 8
February 2005, RAB currently holds a total of 144,930,638 Ordinary Shares
representing 9.76 per cent. of the Company's issued Ordinary Share capital.

Now RAB has significant positions in FOGL and FGML and I believe many other similar oils/minerals co's and is no fool when it comes to taking large chunks of highly speculative early ventures.

I've cut out a lot of this as now out of date, leaving just the first post and now, by special request from SWW, here is a weblink and a chart.

Good luck.

Stock Dog

http://www.firstafricaoil.com/index.asp



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2517 GEORGE
goog morning george

- G Hall Director................2028798..........0.09%

- P Foulger.....Director.........3000000..........0.83%

- A Reynolds...Director.........8500000..........2.49%

BIGGEST HOLDERS ARE:

CAPITAL GROUP COMPANIES.....282713582....10.57%

FIDELITY INTERNATIONAL LIMITED................9.45%

MERRILL LYNCH INVESTMENTS MANAGERS...158745813..........6.83%

georgetrio

http://www.firstafricaoil.com/UserFiles/File/Reports/Placing_Presentation_May_06.pdf

East Orovinyare Exploitation Permit
PSC Summary
PSC effective date: -16 Feb. 2004
Duration: -10 yrs + 5yrs + 5yrs
Royalty:- 5% of production up to 10,000 b/d -8% of production between 10,000-20,000 b/d
Production Sharing: -State share = 32% of profit oil up to 10,000 b/d-State share = 40% of profit oil10,000-30,000 b/d
Cost Recovery:-Up to 75% of net production
State Participation:-7.5% upon production

The figures dont look too good with a very heavy cost for recovery, plus there are a heck of a lot of shares in issue.

As I understand it, any profit from EVO is to service the loans, development and exploration of other ventures.

The return to the shareholder is nil till they find or develop something else, or do I have this wrong?

Good luck with it though.

IN the SHARE MAG dated 02-08March 2006 issue9
On page 18&19 The title of the topic is:

NEW CHANCES TO GET RICH
In total the mag selected 50 companies including FAO, BLR and SEY.
Here is the whole list:
AFR, AEX, AST, BLR, BLVN, COIL, CDL, CSH, CHP, COP, DES, DGO, EDR, EEN, EME, EEL, EOG, FPM, FAO, FEP, GPC, GED, GOIL, GKP, GPX, HDY, IEC, IOG, JKX, MXP, MOG, MDL, MRS, MRP, NPE, NOP, PRE, PCI, PVR, ROS, RPT, RKH, SQZ, SBE, SEY, TAG, TXO, VOG, WAM, WNL.
THE MAG PUT IT LIKE THIS:
The bare truth is, however, that the world today is more DESPERATE than ever for new sources of oil and natural gas and small cap firms are queuing up to strike it lucky. With strong oil price..... underpinning confidence, there is still a very real chance you can back an explorer that gets lucky.

IN my view there many hidden values in FAO at this stage as the share has been OVERSOLD BIG TIME. However with a production of a minimum of 8000bopd coming very shortly, investors will wake up.
What will happen if FAO make a very excellent production acquisition?
Remember FAO is focusing on Africa where the cost is low.
The currency in Gabon is CFA not Sterling pound and 1=900cfa.
Yes there are many shares, YES FAO is lost making now but it has OIL which is the most important thing and will be producing and that's not the end, it must mature through acquisition or by finding more oil. Again this is a very good start and I will support FAO.

georgetrio

could do with some good news, lets hope FAO does well , had a small holding in AEN , bad news !!

Smiler
keep smiling whether you are winning or losing because life is a smile.
I think, when the last seller reach the exit, then everybody will agree that FAO
has be OVERSOLD. i bought more yesterday at 2.65p but if it drops to 2p i will buy more. At this early stage it was easy for FAO but those who cry will be comforted. best luck

georgetrio

I was smiling right untill they suspended trading on AEN !! NEVER mind still plenty of opportunities around, might need a sub !!!

When a company starts making money, serious money, their balance sheet improves, their cash level increases making it,more attractive to the broad investors.
The good sign can be debt burdens reducing rapidly and the company becoming more confident. A company with cash may recruit excellent management because it can afford to pay for those excellent talents. There is also a possibility of
- Excellent joint venture
- near production or productive or highly valued asset acquisitions
- Smart mergers
- bring into production current asset.
I think that's the beauty of small cap high risk and high reward play.
however in this case, the main question is HAVE YOU GOT OIL?
And the answer for FAO is yes. The problems FAO is having now are temporary and they are there to make the company. Maybe it is to early to make such a bold statement but if you look at it with "eagle eyes", you may see the hidden values.
As i said before FAO will not only rise but will jump and soar after the last seller is out. We coming near the concensus indicator. My verdict is FAO is Oversold and this pearl has been put under feet. NOT FAIR, NOT RIGHT. Now can you see the future?

georgetrio------belated thanks for your post No.115.
2517

Looking at my posting n115 on this thead, i noticed that the three institutional investors in FAO have each a holding of more than 5%. which is quite significant.
Any holding above 5% is a serious engagement or a vote of confidence.
One should remember that even GOO which is a very excellent company has one institutional investor in MAN FINANCIAL which holds 4%. FAO is still putting its house in order but has three.
CAPITAL GROUP....10.57%
FIDELITY INTER.....9.45%
MERRILL LYNCH.....6.83%

WHAT DOES STERLING ENERGY (SEY) HAS IN COMMON WITH FIRST AFRICA OIL(FAO)?

- Sterling Energy is Oil lover as First Africa

- Capital Group Companies is a holder in Sterling as in First Africa

in SEY......46622894 shares....3.32%
in First Africa....282713582 shares....10.57%

Very interesting as Capital group must have done its homework before investing in this Oversold FAO.

EXTRACT 1 FROM THE LATEST INTERIM

" In addition to its exploitation permit, the EOV concession also includes an exploration area for which 3-D SEISMIC has been attained and analysed. In its January 2005 report, ECL estimated that the EOV concession prospects have
AN UNRISKED ESTIMATED 421MILLION BARRELS OF OIL IN PLACE (STB).
It is anticipated that FAO will fund its exploration drilling from CASH FLOW after commencement of production at EOV and accordingly the company has progressed plans from drilling prospects pending availability of suitable jack-up drilling rig"

georgetrio----the co has stated that a fund raising will be required until production @ EOV, any ideas when production is scheduled? If it's been mentioned then I have forgotten.
2517

2517george

Production is scheduled in Q1 2007. everything on target. FAO is feeling confident and bold. They have a clear vision and has been honest with the market and i like that. best luck

EXTRACT 2 FROM THE LATEST INTERIM

"As the EOV PROJECT has matured and move quickly toward production, so too has FAO grown into its own. The company's rapid maturation allows it to agree with effect from JUNE 2006 to the early termination of its Services Agreement with former parent company ENERGEM RESOURCES. The result will be reduced OVERHEAD EXPENSES going foward"

georgetrio, what price did you get in at, what's your target price & timeframe? thanks

RAMU
I got in at 3p, never seen any bargain like this in my life. Must be a luckyman.
My target price is 12p within three month or so but that remains to be seen. The key is that when the veil is removed from many investors' face there will be a stampede and the rush to buy. In my view FAO will not only rise but jump and soar like a free bird (IMHO). Management must focus on the business mission or learn something from Gold oil. Let put the past behind us and celebrate the near future production of more than 8000bopd minimum. Once investors realise that there are hidden values here and that risks can be controlled they will come to FAO's Party. Finger X
Best luck to you and to myself.

EXTRACT3 FROM THE LATEST INTERIM

"While progressing toward first Oil and Cash Flow from EOV, First Africa Oil has also made good progress with its EPAEMENO ONSHORE EXPLORATION BLOCK.
The company can.....foc.u.s its energies on the start of Oil Production from our Gabon Asset with future expansion being self-funded from Cash Flow"

please note that there are OFFSHORE ASSET AND ONSHORE ASSET.
best luck. The future looks bright and these are serious matters.
make your own mind up.

georgetrio

Too True,, he who dares......