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I've cut out a lot of this as now out of date, leaving just the first post and now, by special request from SWW, here is a weblink and a chart.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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MD, sooner or later the fundamentals catch up with you - such as in the iffy kind of market we're experiencing right now. Add in the time to first production, need to raise more funds before it happens, (they'll need to pay out almost 20 mil to cover current cash burn plus creditors payable within 12 months, which doesn't leave them with much of the $43 mil they raised in June), and you have a lot of downside which has dragged the SP lower.

I agree that this is getting to the point where it looks as if it could be oversold, but to be on the safe side I'd want to know about the terms of any forthcoming fundraisings before committing any cash - (EDIT) they need another $45 mil according to today's RNS, which is a lot of money for a company capitalised at only 60 mil. Probably they'll issue another convertible bond as they might decide that a pure share placing would be too dilutive.

Big Al's view of waiting until the action starts before buying is the safer course at present.

All IMHO; contrary views welcome. I'll stick this on my watchlist, though, as the turnaround could be worth witnessing.

George, "not going to happen" would be a more realistic description, I'm afraid. If this company is remotely ambitious about continuing to develop new oilfields then they'll need all the cash they can get their hands on. It's likely their debt burden will also increase in the near-term as they raise finance for forthcoming oil production (as per my previous post) - which means their flow of free cash is quite possibly going to be more like a trickle for the first couple of years.


Still, WDIK - PDYOR.

just been on the other side and someone has pointed out that the government takes 44.5% of the 7000bpd so looks even less appetising

Yep - I wasn't aware of the exact figure, but some kind of royalty is normal practice. 44.5% is probably the highest I've seen, but I believe even in the good ol' British North Sea, Gordon Brown creams off a 40% royalty.

FYI my fag-packet calculations were done with a post-tax profit figure of 15% of a conservative per-barrel oil price (applied to the whole 7,000 bopd), it takes account of the royalty as well as production costs). Anything more than that and the figures become too fantasaical for my liking.

Maybe I'm thinking too conservatively; I know you'll make up your own mind.

It is not easy for FAO right now but excellent management is the key. Fingers X
Cautious investors will sell at this point. that's ok
Aggresive investors will keep buying, ie myself
Willing investors checking their blood pressure with all these ups&downs.
Very entertaining drama. Enjoy it.

JOHN BENTLEY
New Executive Chairman of FAO as of 1September 2006
He replaced Mr Brian Menell

Mr Bentley, age 58, has over 30years experience in the natural resources business and for the last 12years has worked in the upstream oil&gas industry in Africa. ......he served as CEO of ENERGY AFRICA for five years building it into one of the leading independent upstream companies in Africa with operations in 12 african countries. During this period, the company saw fourfold increase in production and made several important discoveries.
best luck

so you really think that the new CEO has a magic wand?
do you also believe in Peter Pan?

CYNIC,i am so F>>>>> on these!!!

capetown - sorry to but in, but did you not own CSH as well last year and get F>>>>>d there too or was that someone else with a similar name?

If you search you will see I started a thread some while ago, but abandoned it once the details bcame clear as to what they had, where they were going and how they were financing it.

The cash could still do them imo.

Hello, it looks like something is a foot here, down doible figure percentages.

SEAWALKER,only just got in these @2.50,Never owned CSH,

Cant believe they are falling like a stone,

Will hold for the longterm now i guess.

sorry spelt your name incorrectly seawallwalker

Cynic, I believe Peter Pan sits on the board of Stanelco.


As a non-exec, obviously. He also has a position at Euro Home Retail (EHR).


I will keep watching - some of these oilers recover nicely once production occurs, but watch out for sources of dilution including fundraising and joint ventures.

Capetown, commiserations on your loss, but I have to wonder what it was that persuaded you to buy when everything from the chart to the company's financial position to the time to production and the state of the overall market is so bearish.

This stock will doubtless pick up eventually, but like our Loser of the Year SEO, there's no telling how low it will get before that happens.

Suggestion: in May, a number of oilers were valued at around a third of their risked assets (NPV/NAV). Which isn't much. This one could well do something similar, plus there's the problem of its insufficient cash position.

The old adage about not trying to catch a falling knife was probably never more applicable, IMO.

Seawall, good to see you on here. I have a feeling we could exchange some useful correspondence about this one and maybe come up with a winner in due course?

SOUL,i really did think i was buying on low and the price would hit 3p again as it held well on the RNS,having said that it can rocket north as quickly as it has south,

My saving grace for now is that i dont have to sell them,looking aty bthe i mill trades @3.10 couple days ago is scarry!!

capetown

I Know what you mean, I to got in at 2.78 but got some more to day @ 2.00

Guys, I thought I enjoyed a risky stock, but you're frightening the pants off me!! :o)

BTW, Smiler, thanks for your mail - will keep an eye on it as you suggest.

Smiler o,i am thinking of getting more but only @1p,

won't have to wait long looks like!

what's causing this sell off?

only following intermittently since getting out at 3.85 in January.

sd