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I've cut out a lot of this as now out of date, leaving just the first post and now, by special request from SWW, here is a weblink and a chart.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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Logically this dilution would more than double the number of shares so I can see it sliding to 82p (or 72/92) if the proposal is passed, if it isn't passed then I suppose projects will stop and the only solution would be a takeover. Please tell me I'm wrong as I bought at a much higher price! ther was no inkling of a huge chash call to more than double the Capital. Anyone know what the NAV is?

rpaco - 04 Oct 2006 10:33 - 279 of 281
A huge dilution like this sould surely dilute the SP by a half. Time to buy, dump or what?

Take it from me that you do not chase the sp of a share down with the intention of decreasing you average.

I sold a long time ago as this was obviously going to happen and I said so.

Whether you hold or sell has to be a personal choice.

I will add that the next most obvious thing to occur is a share consolidation to reduce the amount of paper flying around.

Rpaco

"ther was no inkling of a huge chash call to more than double the Capital. "

What about the second paragraph of the Interim Results, released 29th August?

"The capital expenditure programme for the EOV project totals US$90 million and further funding for the project will be required before oil production comes on stream at the end Q1 2007. The Company continues to review options for sources of funding for the final phase of the project, including project finance, trade finance and/or further new equity. "

That, plus the fact they only had $607,000 cash versus $50 millions' worth of creditors on the balance sheet, ought to have set alarm bells ringing. I believe I discussed this in detail on this very thread a couple of weeks ago, but as usual, nobody paid any attention.

As far as the NAV is concerned, total net assets were approx 70 mil when the results were released. I know that the market cap is less than half of this, but until the fundraising issue was resolved, there was never going to be more than a gambler's hope of catching this falling knife without getting one's fingers cut.

My sympathies to anyone who's lost money on this one, but it was all on the cards and/or in the fundamentals for anyone who cared to do their homework.

i have not checked in full the latest news but that does not bother me as i remain invested. not selling any of my fao share. in this case i knew the risk level is very high but to win one must accept to lose too. the transition of fao is not easy plus the oil price falling, that's ok. the delution is not a surprise, FAO has been honest about it but at this stage please do your homework before investing. in my view the best outcome will be for the sp to hit the lowest level, clear all the mess and restart afresh. Best luck to fao.

rpco
yes on this occasion, the shorters are laughing all the way to the bank. however for those investors who bought fao but control their risk by buying a traditional put options in fao or another put to reduce the risk that's not bad. the loss is just the inverse of the win and one can not always win or expect to win at all times. It is to early to underestimate FAO. best luck to myself

Doh!

rapco
doh!

None of the brokers I have used do put options.

I do trade covered warrants and listed CFDs though and do use puts by that means. Though obviously these are issued on only relatively few equities.

Which broker do you use, because I am having problems with Barclays CW prices staying frozen through highs for up to an hour while I see the live price on the SG site move me into unreachable profit.

georgetrio - you must have more money than sense. As for the following tripe:

control their risk by buying a traditional put options in fao or another put to reduce the risk that's not bad

You're full of it!

;-0

big al

Just because there is risk, it does not need to be risky. sometimes strange things do happen but understanding is the solvent of all. every investor has a plan, and i have my plan in this sweet and sour game. people should follow their own plan. Keep your sense to yourself.

un point de vue est un point d'aveuglement. Blaise Pascal.

Go a hatful blind, Georgetrio!!!

Georgetrio,

Mais que fait-on des petits poissons qui ne volent pas comme il fallait?

soul traders
cheers, give them a chance to grow their wings. it takes time.
seriously, for those who bought FAO at its peak, i can not blame them for being angry. My plan with FAO is to buy more anytime the sp is falling because there will be consolidation but only between 0.01p to 3p. i am buying lot by lot instead of in one go because the company is in transition ie high risk.
best luck. laisser les petit poissons grandir, faut pas les tuer.

you got some seo as well????????

Stockdog

Go a hatful blind, Stockdog!!!

maddoctor

No, i don't have SEO but i have another dangerously high risk which is BLL. And I am not selling any of my BLL.

georg , just jesting , same chart , same fund raising issues - funds or bust?

maddoctor

you are the doctor may be you can help. i think in this case patience is required as we have a new management trying to clear the mess of the previous one. at this stage those whose don't like dangerous game should stay away till the knife reach the ground. The best thing is for the sp to hit the ground and restart afresh but it will not go bust.

georgetrio So which broker?