Also given how slow Sao Tome moves, getting a farm in the EEZ or selling EEZ assets is probably wishful thinking for things to happen soon enough to explore the more interesting and cheaper to develop Kenya assets.
Now the company could have gotten a farmin deal on Kenya perhaps. Certainly, I would have liked to see that because such a news event would have propelled their share price allowing them to raise more money with far less dilution.
Furthermore, when they did do their dilution in the above scenario, they could have offered a stock offering now with a higher buy in price of say 20 cents and made the expiration date long dated.
Furthermore, in an ideal world, SEO could have purchased his shares on the open market and gotten control that way, while boosting the price.
But this is not an ideal world.
Second, ERHC management had to make a decision here. Should they get a farmin now in Kenya and be in a weaker negotiating position and give up more percentages? Or should they instead raise money at this low share price level, do some studies to potentially improve the attractiveness of the Kenya property and be in a better negotiating position?
They decided to do the latter.
That should tell you something, however. It should tell you that management thinks the Kenya blocks are so worth it that they don't want to give up what they believe are valuable percentages.
And you can thank Thuo for that conclusion, most likely.
Krombacher
AI
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