Philvb
7 years ago
so the shares from the private placement @ 0,03 , are given free . Sadly there are people who has not the patience to wait for the test drilling result @ the end of September . With the new contractor are they also cutting in the costs . Last sell @ 0,03 17 k . all other trades @ 0,035 . The good thing is that you can buy now very low ( almost @ the private placement price ) and also the board has many shares from the private placement , and I don't see they gone sell now @ these low price .
jojoba
13 years ago
I am very surprised SNV is trading above 7 cents. They must have a big audience given the last week volumes. My question is why are they buying?
The way I see it now is: no news lately, no drilling plans in sight without a partner, no partner yet, more expenses, less money.
And still the share price went up. What am I missing?
Any opinions? MHT, SimplyTheFact, anybody else? Thank you.
jojoba
13 years ago
The reply doesn't say anything, poor guy has nothing to comment on even if he want because they dont have all permits required, not much money left, there is not farm-in/out candidates right now, driller is not signing.
WHY THE DRILLER IS NOT SIGNING? AT LEAST THAT REASON SHOULD BE TOLD TO EXISTING SHAREHOLDERS!
Half a cent ladies and gentlemen, half a cent.
SimplyTheFacts
13 years ago
You did not ask the right questions and he gave you no answers.
1- Why is the drilling contractor not signing on? What exactly are the further clarifications and assurances the drillers need that we have been unable to provide?
2- Does our provincial agreement need approval from the oil ministry of Iraq or government in general?
3-We are running out of money and cannot drill without a farm-in agreement. What can you possibly offer a company to get them to agree to a farm-in deal with you, without giving out the entire farm?
4- The land use permit for the civil works (roads, etc.) has not even been issued yet, and your current farm-in negotiations failed. Wouldn't this mean that even if you find another company to agree to a farm-in agreement and get the civil works permits issued, we are looking at late spring 2012 for drilling?
5- We can't build the topping facility (running out of time and money), as mentioned in our agreement with the provincial government. Wouldn't that be a breach of our contract agreement? Even if they do accept an extension, wouldn't a new agreement need to be drawn and signed?
petit homme
13 years ago
Response from Dale
Yesterday I sent Dale an email, venting about recent blogs, I asked him for some encouraging thoughts on development with SNV. I am including his response.
Please feel welcome to fill in the blanks.
Dale wrote...
Our company policy is that we do not comment on rumours, including from bulletin boards.
We continue to hold our exclusive license over 24,000 square kilometres in the Salah ad Din Province and have an excellent relationship with the provincial government. Our license is highly prospective as confirmed by our prospective resource report (P50 5.2 billion barrels recoverable) and contingent resource report (P50 141 million barrels recoverable at the North Salah ad Din prospect). As publicly disclosed, we are pursuing a farmout transaction. This is an ongoing process and one should expect that we would be having active discussions in pursuit of the farmout. Of course there are alternatives, but there has been no change with respect to having our preferred drilling contractor sign a final agreement. Management is as committed, vested and invested as ever and expect that progress on the farmout and drilling contract will be important steps to creating significant shareholder value. Contrary to your statements below, there have been no demotions and only one our directors receives consulting fees.
My response in part:
Thank you Dale for the clarifications you provided and responding to my email so promptly.
I can understand the company’s policy on not responding to rumours or blogs, but any communication is always welcome in times of stress.
With all the expected delivery dates of various projects overextended, the downfall of SNV from $0.46 to $0.07 in less than a year,and the lack of news explaining the delays, are reasons enough to send investors speculating negatively about management’s responsibilities going awry. The current situation is tenuous to say the least.
I still wish to find some good news under the Christmas tree.
SimplyTheFacts
13 years ago
What a complete and total disaster! Let me translate some of what was sugarcoated:
1-Drilling:
The driller does not accept our provincial agreement and is not drilling, we are looking for some other company.
2-Permits & Approvals
The land use permit for the civil works (i.e. roads, etc.) apparently has not been issued. Because we are not drilling anytime soon, most definitely not this year, if ever.
3-Farm In:
Farm in negotiations were unsuccessful because the only valuable thing we had to negotiate with, our Provincial Agreement, is not even accepted by the driller. We are currently doing our best to find another sucker, to give us a ton of money and are throwing the 3 months out there so our shareholders don't all rush to the exit door together...
4-Topping facility
Is not going to be built in time because we have no money and will run out of what we have in 3 months... this development would be a breach of contract in our Provincial agreement...
Seriously, what a complete disaster!! All they had to do was license their technology to other companies with heavy oil fields, sit back and collect the money!
Buy at 1 cent? why? It sounds like they are going out of business!
All the above in my opinion only,
Simply
PS. Thanks small_timer for the information
small_timer
13 years ago
SNV share price descent....
I agree that the share price should drop. Whether or not it hits 1 cent in 3 months - who knows.
Meanwhile, with all of the uncertainty with Sonoro and the cone of silence firmly in place, it seems to make sense to unload. If things start to look better in the coming months, it would be nice to re-enter at a lower price.
Having said all of that, I think a farm in is possible - but even if it does happen, I believe it would happen at a lower share price.
small_timer
13 years ago
Discussion with Dale .....
I had a chat with Dale a few days ago about SNV. General discussions were as follows:
1) Drilling
- As we know, the preferred driller has asked a number of questions about the provincial permits & approvals that Sonoro has obtained. The preferred driller does a lot of work for the majors in Iraq and they are trying to avoid falling out of favor with the federal government.
- In order to avoid having all eggs in one basket, Sonoro has been discussing the drilling contract with another drilling contractor in order to have a back up plan.
2) Permits & Approvals
- The land use permit for the civil works (i.e. roads, etc.) apparently has not been issued.
3) Farm In
- Sonoro was working through an agreement with a third party for a farm in deal, but, unfortunately it did not result in an agreement.
- Sonoro is now working with an intermediary to solicit bids for a farm in agreement. Their estimate is 3 months (staring now-ish) to go through the process, get bids, and negotiate an agreement with the preferred proponent.
4) Post Drilling
- Assuming a farm in deal is done, and the exploration wells find oil, then the wells will be used to produce oil for revenue. Having said that, the produced oil will be sold at a big discount because it is heavy and because it will be trucked.
- The topping facility needs to be in place and operational in 12 months according to the development permit with the province. It takes about 12 months from purchase to installation & commissioning. So, they need to buy it now - but there is no money at the moment.
- With respect to the topping facility, Dale tells me that the province is on side with Sonoro and that an extension to the timeline can be obtained without any problems.
Well, that is all i have for now. I really find the cone of silence around Sonoro quite frustrating. They could be putting out news releases to at least tell us what is going on.
Anyways, sounds like this is still a risky adventure.
SimplyTheFacts
13 years ago
OT: "what else are you investing on? "
Well, I'm mostly a Gold and Silver investor, with some coking coal and aluminum.
NGD, RIC, EDR, FVI, GCE, CMK, ORT...
I would like to add to the positions above, but am somewhat reluctant with the European doomsday hovering above us... Patiently waiting for a mini crash... maybe to start this Wed or Thurs??
What about you, what are you considering for investment? Maybe we should use "Private messaging" not to get the good folks on this board upset with our OT talk...
Simply
jojoba
13 years ago
SimplyTheFacts, same like you, I decided not to average down. It is very risky at this point, and management is too quiet lately.
The Albanian JV delays made me sell everything for a spectacular profit a few months ago at .36 to .40 after loaded big (really big!) at .07 - .11 when they had a small number of shares and great (but delayed unfortunately) prospect with the Sonic Reactor.
I only have now a 100,000 shares position 50% in the red, and even if it goes to 0 it will only make a small dent in my profit from SNV.
I am now in knowing all the risks, the bad records of Sonoro management with Sonoro's projects, the HUGE number of shares, the good records of Wadsworth with Bankers, and hope for a news of any kind like start drilling or beginning of a farm-in or farm-out or any other deal, while I am ready with my finger on the sell button to end my involvement with SNV at first pop above 20 cents (30 cents would be preferable). I give it by December 22, or I'll sell it at any price.
I wish you all well.
SimplyTheFact, what else are you investing on?
SimplyTheFacts
13 years ago
Hi jojoba:
For what it's worth I decided not to average down. I spent sometime the other day and went back to the beginning of this forum and read the enthusiastic posts by TenaciousD, MHT, and InterestedParty99... Tenacious, our board moderator is gone, IP99 no longer posts and MHT is rarely present... that by itself tells me something.
Then I read a good post by InterestedParty99 on January 15, 2010:
"Why has it taken so long to make the first deal and show results to clients and investors? Results like this would have a substantial impact to the stock and the ability of the company to raise funds and limit dilution.
Some Background:
- Sonic has run test batches through their machine to prove it works on
different types of heavy oil almost 15 months ago (Oct. 29th, 2008).
...
LET'S GET MOVING ON A DEAL ALREADY!!!
Every day European oil companies are leaving money on the table settling for less cash due to the quality of their oil. How hard can it be to sell the prospect of a company making more money with limited risk?
Pack the test machine up and use some of that $500,000 to send it to and organization interested in making more money."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45529087
Yes, Oct. 29, 2008 was when they had the heavy oil technology, that was three years ago, and what have they done with it? NOTHING! It doesn't matter who the CEO is and what success they have had in the past IMO, the record here speaks for itself... at least it does for me.
I hope .08 holds here and we don't find ourselves in .07s, because I don't think there is anything under that and selling might pick up as people try to salvage anything they can...
Simply
killawhale
13 years ago
Simply,
I think a lot of us got caught "sipping the cool-aid" as they say on this one. The management team on paper with the potential for large resource recovery made it a very intriguing risk/reward relationship. FWIW, RW was referring to the technical level of the wells saying they were low risk to drill (very shallow) and potential high rewared...not the company itself.Regardless, the fact remains that they have pretty much failed on every operational deadline that they established earlier this year. I don't get mad at myself for investing in this company because at the time we had a lot going for it. But this is the major risk for one of these juniors is the capital requirements and we flat out missed it like so many other juniors do. My only hope (and it is a small one at that) is that we can get a farm in but more importantly that the mgmt was smart enough to lay some solid ground work on Farm in agreements in early/late June which would explain why no insiders have purchased or sold any shares since then...but that could be the cool-aid talking...I have sipped a little to much on this one. I should have seen the writing on the wall in August when there was no news on drilling and Rafuse stepped down from chief geologist role, but I didn't properly factor in the cash burn rate, I still believed in mgmt that we had enough cash for the drilling program. Bottom line is that it was a great opportunity but like so many others, they just couldn't get it done with what they had...hate to sound so pessimistic but I feel optimism in this case lies somewhere between delusion and helplessness. As in the past, I would normally fall back on mgmt and say they have a plan for this....not the case anymore, the risk/reward relationsihp no longer makes sense, its a gamble at this point...if I weren't so under water I would have sold weeks ago...
jojoba
13 years ago
SimplyTheFacts, what a great post!!! The same as you I thought 20 and 15 cents is so cheap, and now I can only hope to sell at 18 cents to break even or 20 cents for a small 10% profit.
According to the initial plan, Sonoro should have had already 3 wells drilled by the end of September.
If you remember Albanian JV, now Iraq seems to look like a deja-vu. Let's just hope this is not Sonoro's thing, to never finalize a project.
SimplyTheFacts
13 years ago
I honestly can't see how a Farm In/Out can be done at this juncture. Western Zagros has established wells, is in Kurdistan (which if you know the area is completely different from the rest of Iraq), market cap of 150 Mil, and accepts 46 Mil for a 20% stake in the company.
Let's see, what do we have at SNV... Market cap of 21 Mil, probably about 3 Mil in the bank, a contract with a provincial government, drilling companies that need confirmation of our permits and approvals or else the job will not be done... Technology that at the end of the day has not really been tested on a grand scale...
We need about ten Mil to drill, after all permits and approvals are granted... What can we do, sell 50% stake in the company for 10 Mil?... Seriously, under these circumstances, would you invest a large sum in this company?
Stock came out of the abyss finally, is this the final dead cat bounce... or contracts are finally signed? We shall know shortly... One thing for me is certain, if the financial markets do a nose dive a la 2008, SNV will find itself under .5 cents easily IMO...
I just kick myself for being so stupid, I had gotten out in the high .30s for all the right reasons, but listened to that interview with the CEO in July/August, just before The drilling contract was supposed to be released, and bought back in at .22 What was it he kept repeating, oh yeah a very low risk high reward play... or something like that...
Simply
killawhale
13 years ago
While I hear you on the frustration part, I remain of the opinion that SNV lies somewhere in between both of your posts. MHT brings up some good points but the I disagree that we are funded well enough to drill. (we had 7 m as of jun 30th probably down to 4-5 million now with estimates of 10 m to drill). I do think that there is still some serious potential here but I am less optimistic based on this last years events. I will say that I also disagree with garbage when you say that they have nothing to show for the 15 m we got in PP. Bottom line is that O&G is an extremely capital intensive industry regardless of where it is, but the fact that SNV is in Iraq only makes it more expensive. These things costs money and lots of it. Especially when you consider all of the factors that go into it. I am not sure how it works in Iraq right now but I imagine there are plenty of holes to jump through and lots of fees and regulations. They have gotten a lot done since then, most importantly in getting an updated resource report. Given that, it does not change the fact that they have literally missed on every single operational deadline. I am still a holder at this point but it is 25% delusion, 25% I just can't force myself to click the sell button down here, and 50% I think they can still get a Farm in...at this point it is a waiting game and I feel lower prices are to come. While my investment never started this way, I guess I am prepared to go down with the ship at this point...
small_timer
13 years ago
MHT - thank you for your insightful post.
In your comments, you noted that the contract with the driller may be vertically integrated. You went on to say that 'vertically integrated' effectively means that Sonoro could pay the drilling contractor with oil instead of 100% cash. Presumably, this could be a mix of oil and cash.
Given the information that Sonoro has provided in the presentations and news releases, it seems that it should be rather difficult to drill beside the historic 1935 well without striking the oil that was found at that same location in 1935.
By mid-summer Sonoro apparently had about $7 million cash available. My understanding of the current Q3 drilling program is as follows:
- Build about 4 km of road to the drill site.
- Drill 2 wells, with a possible third well to follow.
I would hazard a guess that Sonoro ought to have something like $5 million left. At some point earlier this year there was some information that a single well would cost something like $1-$2 million.
If this is the case, I would think that Sonoro could pay cash to drill one well beside the old 1935 well and build 4 km of road for, lets say, $2.5 million. I can't imagine how it would cost more than $500,000 to build 4 km of dirt road in the desert....
Assuming Sonoro continues with the current burn rate, this might leave them with little to no money by year end. But, with an oil strike at the 1935 well site they should be able to pay the driller with oil in order to do the 2nd well, and possibly the third.
After all, if the estimated flow rate for well one is close to the 500 barrels per day that they have talked about, the drilling could be raking $35,000 a day (assuming $70 oil price). At that rate it should take the driller about 3 months to earn $3 million - a tidy profit/risk premium for drilling the second well and payment via oil.
What do you think? Is my idea as discussed plausible?
Admittedly, I am a new to oil & gas so please poke any and all holes into my idea.
Thanks in advance....
SimplyTheFacts
13 years ago
More answers from SNV...
Hi Dale:
I truly appreciate your prompt response. Three questions:
1- Why is it taking an eternity to sign a contract with a driller. Is it because SNV does not have the money to pay them for their work?
"No, our finances are not related to the signing of the drilling contract. The contractor is seeking confirmation of our permits and approvals. We have provided information and are working with the government to provide comfort."
2- Wouldn't it be better to drill one well, considering SNV's limited resources, get the stock price to rise, and provide better negotiations with the farm-in company?
"Drilling one well is an option. Our preferred option remains to be drilling three wells."
3- Are you currently in discussion with anyone regarding the farm-in, if yes, what stage are you in? Any info regarding the farm-in prospects would be greatly appreciated.
"Yes we are in farmout discussions. The status and parties are confidential and must remain so from a negotiating and securities law perspective."
garbage
13 years ago
With all due respect MHT, I very much value your diligence but you've got this one wrong. Sonoro's management has been pulling the fleece over all of our heads for quite some time. Clearly some people have been privy to the information that the rest of us were not, as evident by the massive and continual dumping that's been occuring and the 8 cents we find ourselves today. Only in the last few days has this info become slightly more public.
SNV is essentially OUT OF MONEY. Pathetically, they cannot even complete the first 3 well drill program. I am absolutely furious and dumbfounded at this turn of events. They raised $15 million for the purpose of drilling, topping facility engineering, and seismic - and here we are, the $15 million has been nearly completely blown and we have accomplished absolutely none of what they set out to accomplish. How an experienced management team mismanaged (blew) this much money without anything to show for it is beyond my comprehension. Two private placements and still not enough money to put a goddamn drill in the ground. I should have recognized there was some fire behind the innocent delays outside of their control they were proclaiming. They have not executed on a single one of their commitments this year.
Unless they pull a rabbit out of their hat and find a way to come up with a lot of financing in very short order, our $1 million per month burn rate, the majority being stuffed into the pockets of "consultants", will leave us completely broke in just a few more months. All without so much as even sticking a single drill in the ground. I hope I'm wrong and that this rabbit shows up, but as each day passes, the rabbit gets one step closer to death, and my money one step closer to zero.
Beyond pathetic really! How badly the retail investor got hosed.
Thanks Wadsworth and company for taking one of the most promising junior resource stories out there that was also freshly flush with cash and turning it into this shell we see in front of us that is flush with nothing more than expensive wallpaper for all to remember what could have and should have been.
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