Orca Energy Group

[cybercanuck]

$5.49

Chart

Comment?

[cybercanuck]

We have a new name ... Orca Energy Group 

All of the stock at $5.50 was cleared out

We're still sitting with a Kilimanjaro -sized mountain of cash with an embarrassingly small dividend  

Q2 due out in a couple of weeks

They may pay off the IFC loan which would leave us untethered 

There are at least half a dozen projects they could be working on so lets hope we hear something more profound rather than just a change of name.

Comment?

On Thursday, July 30, 2020 at 1:41:06 PM UTC-4 cybercanuck wrote:

$5.49

Chart

Comment?

[MP]

Ask back to $5.40. My bitterness towards this company has become unhealthy. 

[Cal Neman]

We are committed to helping the country meet its long-term energy requirements and we believe that we are well placed to achieve the same goal in other parts of Africa.” Nigel

Comment?

[MP]

Have you kept an eye on Aminex cc? They pre-paid the capital gain and have to yet to get the sign off for their farm out. 

[cybercanuck]

Orca said they were interested in duplicating in " other parts " of Africa

[MP]

They did. Do they realize that shareholders have seen little appreciation in the value of their "ownership" in project numero uno. 

Maybe duplicating is not the right word to be used. 

[cybercanuck]

What " other parts " of Africa?

[cybercanuck]

There are at least half a dozen projects this company could be working on.

You 'd wonder why they aren't issuing those preferred shares by offering them  to some institutional investor 

Make them convertible  @ $8.25  with a decent coupon

Comment?

[MP]

How much more patience do you have on this one cc? 

[Cal Neman]

i think I asked this same Q about 2 years ago and MP you told me it wont be long ha ha

[MP]

FML. lol

I've managed to sale about 30% of my position in the past few months. If there was liquidity I would sale the balance and move on. 

[cybercanuck]

Q2

Last year it was Aug 14th

[MP]

big block at $5.65

[cybercanuck]

block  ????

Bid $5.60

Ask $5.92

They ought to reintroduce the NCIB

$6.50 upper limit this time instead of $5.50

Comment?

On Friday, August 7, 2020 at 4:31:19 PM UTC-4 MP wrote:

big block at $5.65

[MP]

It was removed at close but it 48K shares at $5.65.

Date of annual meeting has been set to September 17th, 2020. 

Location yet to be announced. 

[Cal Neman]

I saw the big block yesterday as well.They probably pulled it at the end of the day.

Now, the question is, why was it there all day and why was it pulled after the close? Any theories cc?

[cybercanuck]

The stock price has flat-lined at $5.50 

If there was some kind of transaction involving the shares, you'd  want to keep the share price steady for 30 days  

Lets hope its a merger transaction or business combination with another company resulting in asset and / or jurisdiction diversification and a larger more liquid market for the equity of the  combined company.

Comment?

[cybercanuck]

                                                           Business deal                                           Merger Prospect

                                                            of some kind

Barrick                                   Three mines near Lake Victoria                                  0%

                                                 They need power

SDX                                                 10%                                                                       10%

TPDC                                     Creating an equity % can't hurt                                      ?

COPL                                                 10%                                                                > 10% if they are comfortable 

                                                                                                                                      with Nigeria

Sound                                      They need Orca's cash flow                                  20%

Tullow                                   A threesome Swala / Tullow / Orca                          20%

IFC                                         Debt exchanged for                                                      0%

                                               a convertible preferred    

PetroNor                               Prospective synergies                                                 40%

Fairfax Africa                       Could evolve                                                                10% 

                                                into a royalty trust

Africa Energy                        Lots of synergies                                                        60%   

Africa  Oil                               Lundin Group                                                             70%      

                                                 Kenya requires power

                                                 South Africa requires power

Comment?

[Cal Neman]

cc - your flat lining theory makes sense.  It has been about a month at this price.

Then the news release that said this:

[cybercanuck]

re: Sept 17th  AGM

Is that a webinar format?

Well, its a new moon which is a good sign for a new beginning.

We could certainly use a new beginning here with this company

[Cal Neman]

here's hoping they announce something major before then

[cybercanuck]

Both Kenya and South Africa have severe power shortage issues

both are geographic areas that Lundin's Africa Oil has interests

Comment?

[cybercanuck]

If they have a webinar and questions are allowed ...   

The dividend  ( $0.06  ) is a point of contention  and embarrassment considering the Kilimanjaro -sized mountain of cash  

I'd like to ask a question about the dividend

Need your help ... how should it be structured?

a) very gentle? 

b) subtle but implied innuendo?

c) blunt?

d) aggressive?

e) obnoxious?

[Cal Neman]

my choice  -b

[Cal Neman]

they will tell you the reason its so ridiculously puny is because they have to pay off the IFC loan

why pay it off now unless and why the low dividend

Is it because they are about to do an acquisition?  If we do not find out soon enough ie during or shortly after the AGM, then it may be time to be a bit blunt after the - we after all deserve it as they have very little skin in the game

[cybercanuck]

The current bid is $5.10  the ask is $5.92

The trading liquidity is just gawd awful

They really don't have much choice but to  restart a new NCIB

Comment?

[Cal Neman]

Trading liquidity is awful,but the NCIB would make it worse would it not?

[cybercanuck]

Update

Comment?

On Thursday, July 30, 2020 at 1:41:06 PM UTC-4 cybercanuck wrote:

$5.49

Chart

Comment?

[cybercanuck]

$106.1 million in cash / bonds as of June 30th

Probably US $110 million by now = ~ CDN $5.70 cash / sh

Comment?

[cybercanuck]

"  we will continue to develop the Songo Songo field with our partner, the Tanzania Petroleum Development Corporation, to fuel economic growth and prosperity in country. "  1. NF

NF calls TPDC  our "partner " .... hmmmm

[cybercanuck]

"  the Company has engaged Canaccord Genuity Limited ("Canaccord") and Investec Bank plc ("Investec") to provide advisory and corporate broking services. As part of the mandate, Canaccord and Investec will introduce Orca to respective institutional investor bases, particularly in Europe and Africa. " 1. Orca

" institutional investor bases " .... really? .... huh!

Comment

[MP]

"The compressors are scheduled to be operational by the end of Q2 2022. " That is a lot of money to spend with only a few years left to the license. 

The update has more or less all the information expected from the Q2 report and no movement on the share price. So no movement expected for the near future. 

[cybercanuck]

"  Despite the lower demand for gas from the power sector, TANESCO has continued to pay back its arrears during the first six months of the year. " 1.Orca

Cash continues to increase and the Tanesco receivables are getting paid down 

Comment?

[MP]

That is very good. The company needs to get rid of those A's. 

No major investor will want to invest in this company where they have no say. 

[cybercanuck]

$5.70 / sh in cash and add the increasing cash flow

A dividend of $0.06   .... cough, cough  ... what a joke. 

If they are serious about wanting  to attract " Institutional " interest, that divvie is going to have to increase substantially. 

Comment?.

[Cal Neman]

they got to be hoarding that cash for some reason which hopefully becomes clear in the not too distant future. Key word "hopefully"

[cybercanuck]

Canaccord Genuity  on the "BUY" side 

Haven't seen that in a while 

These are the folks that are supposed to be finding the "institutional investors" 

This is going to feel rather strange since Orca has been orphaned for such a long period of time.

Comment?

[cybercanuck]

Mr Miller was right about this one

Chart

Comment?

[cybercanuck]

"  The review will also incorporate the latest trends in pressure measurements to allow a full re-assessment on the contingent and prospective resource potential and associated economics of drilling and developing the natural gas in the areas known as Songo Songo North and Songo Songo West. " 1. Orca

huh!

That's still a possibility???????

Comment?

[Cal Neman]

remember they have a new partner -TPDC

[Cal Neman]

Nice to see Cannacord front running and buying stock.

Looks like they may be succeeding in getting institutional partners soon.

I wonder if one of their requirements would be to only have one set of share classes - the B shares and that might also be worked on?

[MP]

They say cash is king. 

The company has many avenues they can consider...especially with such a small float. They could buy a company for shares..hell could probably buy a few companies. 

[cybercanuck]

Orca's gas production can stay stable to the end of license but when Tanesco requires more gas production,  then there is going to have to be a deal signed with TPDC.... and they certainly will require more gas production.  

What is stopping TPDC from taking Swala's place?

Make TPDC a true equity partner.

Comment?

[cybercanuck]

Class A

Bid  $33.40

Comment?

[MP]

Class B Bid $5.10 lol

[cybercanuck]

Strange 

They are identical in every aspect except the voting part

Class A carries 20 votes and Class B carries 1 vote

On Tuesday, August 11, 2020 at 10:11:53 AM UTC-4 MP wrote:

Class B Bid $5.10 lol

[Cal Neman]

meanwhile the B's do not move - are they not supposed to move in tandem?

[cybercanuck]

Sir

How do you propose to have only one set of shares?

[Cal Neman]

collapse those As

[cybercanuck]

Why would the Estate agree to that?

On Tuesday, August 11, 2020 at 12:26:31 PM UTC-4 cnem...@gmail.com wrote:

collapse those As

[MP]

Convert the A's to B's and pay them a 14% premium in cash from the current B price?

Ya don't think they would agree to that. 

[cybercanuck]

Je ne sais pas

One thing for sure if that happens 

... because control is back where it belongs, the dividend will move up in a quantum leap!

Second thing for sure ... institutional investors will be attracted by that dividend.

[cybercanuck]

My guesstimate is they have about US $110 million in cash / cash equivalent

That's about CDN $147 million

Add the receivables coming in from Tanesco

Add the cash flow 

and we have a whopping dividend of $0.06.. an insult. 

What the hell is this all about?

Comment?

[MP]

These guys don't listen. 

[Cal Neman]

or maybe the A shareholders are stubborn?

[cybercanuck]

Expecting Q2 tomorrow

[cybercanuck]

Bidding $5.50

re: flat - lined at $5.50

If a doctor were to look at this company's EKG, she'd think this patient is dead

Time for a bit of electroshock therapy to revive this patient.

Comment?

[Cal Neman]

another company needing shock treatment is reporting tomorrow -GUD

[cybercanuck]

re SEDAR postings

Such a profound concentration on the name change event

Je ne comprends pas

Its a non event isn't it?

Quadruple the dividend ... now that would be an event!

Comment?

[Cal Neman]

The name change must have been at the suggestion of RBC - they had to justify their consultancy cost, would they not?

I do not think they will be raising their dividend any time soon,but I have been wrong before

[MP]

No kidding. Looks like they had been working on this name change since the fall. You would think their time would be better used working on something a bit more practical. 

[Cal Neman]

so what could they be hoarding the cash for?

[MP]

Q2 to be out August 17th based on the financial calendar. 

Pretty sure the date on the website was previously the 13th. 

[MP]

Q2 out. 

[cybercanuck]

Q2  in US $

Net Income  $0.24 /sh 

Cash Flow   $ 0.51 /sh

Comment?

On Thursday, August 13, 2020 at 6:30:44 PM UTC-4 MP wrote:

Q2 out. 

[MP]

Here is your .06 dividend sir for all your patience. (oh that is in Canadian) 

[cybercanuck]

Those numbers are very good

If production doesn't increase or decrease ... we're easily worth over US !2 by end of license

Not too worried about the compressor expenditures unless they change the PSA  ... and they might 

Those capital costs go into a cost pool and are mostly recovered but the larger cost gas means a smaller profit gas which is split entre TPDC and PAET  ... probably take 9 months to recover it   

With these numbers, Canaccord Genuity shouldn't have a problem attracting a  couple of institutional investors. 

Trying to explain a frugal $0.06 divvie is going to be rather embarrassing

Comment?

[cybercanuck]

$5.58

First time it has closed above $5.50 in a long time.

Comment?

[cybercanuck]

compressiom   "  will allow production volumes to be maintained at 135 MMcfd, with the possibility to expand well deliverability to 172 MMcfd by increasing the amount of gas being delivered through the NNGI. " 

We should be at that top end ... they are still busy with Kinyerezi1 Extension.  The locals are busy working on it .

 Comment?

[cybercanuck]

Can Canaccord Genuity be of any assistance in helping Orca free itself from their " value trap"? 

If so, how?

Comment?

[MP]

Been a value trap for way too long. 

The company had hired RBC not very long ago and absolutely nothing came of it. 

[Cal Neman]

how will institutional investors view the dual share structure?

[cybercanuck]

A MUCH healthier dividend would do the job!

[MP]

cc you really like giving more to CRA don't you?

[cybercanuck]

So, are we at a loss as to what is left to do?

Do they try to pick up another $50 million in a second SIB?.

Last time there were 18 733 396 Class B's offered.. so there are quite a few stragglers left.

= = = = = =

Its almost two years since the passing of our beloved WDL.  

Not sure how to report this now

In tennis .... we're parked in no man's land

In canoeing .. up the creek without a paddle

This is a really low point for me and our talkative chairman ( sarcasm ) isn't helping whatsoever.

The Class B shareholders feel abandoned, debilitated and defenseless.

Get rid of the Class A shares and we'll quickly show how abandoned , debilitated and defenseless we subordinates really are.     

Comment?

[Cal Neman]

you talk about another SIB and or an NCIB cc, so that would reduce the share count would it not?

Then we are expecting institutional shareholders to buy shares???????  Maybe 50 or 100 shares by them???

[cybercanuck]

re: " maybe 50 or 100 shares by then " ... Jay Lyons owns 50 shares... 50 more than David Ross  

Getting out of this " value trap " is not going to be easy

Canaccord Genuity has its work cut out for it.

There are 26.2 million shares now ... not 35 million anymore    

Original offer was at $8.25 

$8.25 * 35 = $x *  26      

$x = $11

$11 eh?   If someone offered $8.25 , we'd probably jump at it 

There have got to be private equity firms that are capable of seeing an opportunity here.  They don't need money because they can use our own money to buy us out.   Perhaps, firms such as Link 

Comment?

[MP]

cc is that you trying to sell your remaining class A shares for $55? $40 not good enough for you?

[cybercanuck]

No ...but I do know who owns some ..  mine were sold a LONG, LONG  time ago ... no trading liquidity

The Memorandum of Association and Articles of Association...  read it, re read it and re re read it 

and I was,  and still am,  thoroughly convinced you cannot take over the company without dragging the Class B's along 

Perhaps they changed the articles without telling us????

Sort of reminds me when I believe I owned the decisive control block in a proxy battle ... Leigh Instruments ... hearing aids .Very popular with Herb for 15 minutes of fame.

There are only a few thousand Class A left 

They may be planning on doing something with the Class A's  and getting rid of those few non estate  stragglers.  It would simplify things a lot.

My suggestion .. let the company strike a deal with the estate to buy the Class A's  at a premium, convert them to Class B and distribute them to shareholders as a special dividend distribution

 Comment?

[cybercanuck]

How do we get rid of the Class A's? 

[cybercanuck]

Class A   + 47% today

Sheeesh 

[MP]

Bid @ $45.00

[MP]

Might be time to place in a call to Herb to return the favour and see if he has had any discussion with Orca as to the A's.

"Sort of reminds me when I believe I owned the decisive control block in a proxy battle ... Leigh Instruments ... hearing aids .Very popular with Herb for 15 minutes of fame."

[Cal Neman]

now why would institutions want to buy in when the As control all decisions and especially when there are so few shares available on the B side?

[MP]

Precisely why there is no institutions nor has there been. 

Only reason Trapeze held on is most of their shares were free from PAN Ocean. 

[cybercanuck]

How many shares does Trapeze own now?

[cybercanuck]

Generation   ... 2 318 199  Class B

Hillsdale is also there    Link  not many though  281 391

Comment?

[Cal Neman]

what about the shaymar shares?

[cybercanuck]

From my records

4 694 870 Class B

1 741 975  Class A

[cybercanuck]

Orca A

Bid $40.20   300 shares

Can the estate not sell 300 at $40.20???? 

[cybercanuck]

How is Canaccord Genuity coming along wrt Orca?

re: Sept 17th AGM

Do you suppose the Class B's might be invited or is it open only for the Class A's?

No invitation yet!   

Comment?

[MP]

Still waiting. I assume we'll get notice the week prior. Hard to make travel arrangements at this time. lol

[cybercanuck]

MP

Is that yours at $5.65 on the offer?

[cybercanuck]

On the ask

= = = = = = = = = 

Come on Cannaccord Genuity ... do something for us before the AGM in case we need to approve it

 Comment?

[MP]

It is not. 

[cybercanuck]

Wonder if Canaccord Genuity has approached Helios yet?  Link

[cybercanuck]

They sure are waiting a long time to invite us to the mtg

Why is that?

Comment?

[cybercanuck]

Where can we find the research with Canaccord's $8.00 target? 

[cybercanuck]

$5.65 to $8.00 

=  40% 

Comment?