Wildcat Petroleum plc share price, company news, analysis and interviews

Wildcat Petroleum plc (LON:WCAT) Chairman Mandhir Singh caught up with DirectorsTalk for an exclusive interview to discuss the service agreement with the Sudanese government, the Bamboo/Wildcat Oil Field and their share price.

Q1: Mandhir, in the update, you stated that Wildcat Petroleum intends to sign a service agreement with the Sudanese government. Why are you signing a service agreement and not a production sharing agreement?

A1: The Director General in the Ministry of Petroleum, he has the power to award production sharing agreements. The issue at the moment is he has no problem issuing us with a production sharing agreement but other departments in the government have to approve it. Because of the current political situation, that is not practically possible.

So, even though he has no problem issuing us with a production sharing agreement, he practically cannot issue us one.

What he can do, and the department has the autonomy to do, is to award us a service agreement. The oil industry in Sudan is still working as normal so what we’ve agreed to do is to get on the ground, start pumping oil, and when the situation returns back to normal, we’ll just convert the service agreement into a production sharing agreement.

Q2: Can you tell us a little more about the Bamboo Oil Field?

A2: You now have to call it the Wildcat Field. That just understates that eventually we will get these assets under production sharing agreement because the Director General has agreed to change its name.

The Bamboo Field is actually made up of four separate oil fields. The initial oil in place is over 500 million barrels, it used to produce 20,000 barrels and now it only produces 4,000 barrels. The decline is due to the fact that there’s been no investment in the field, there’s been some pilot studies which say you can basically double production by putting head down the pipe. So, if you had 4,000 barrels and we double it up with thermal recovery, that makes about 8,000 barrels, fixing of surface facilities that’s another 2,000 barrels.

So, in the future, we could be up to about 10,000 barrels a day which equals to about $500,000 a day of revenue. We’re quite happy with how things are developing there and it should be a very lucrative contract for us, it should be profitable and money-earning from day one. There’s no upfront cost to us and all the infrastructure and wells are already there, we just need to squeeze more oil out of the wells which is not a difficult situation.

While we’re waiting for a production sharing agreement to actually be awarded, we’ll be on the ground making money.

Q3: Over recent months, the share price seems to have drifted somewhat, do you have any thoughts on that?

A3: Well, I’m not very happy about the share price declining. One thing shareholders have to remember is I own 70& of the shares and last month, I actually topped it up so I’m back to my IPO level so I’m quite happy about how things are going.

What seems to be happening is there’s one or two IPO investors which are determined to sell their shares regardless of the price so they’re causing a share overhang and depressing the price. Hopefully, when the share overhang is taken out of the system, the share price should hopefully start going up again.

Another issue is I think people in the city don’t fully understand the scale and the profitability of this. So, what we intend to do now is to visit investors in city, I’m actually meeting seven of them on Monday, and I should outline to them exactly the share profitability and scale of this project.

I think in the new year, once the deal is bedded down and people see how much money we’re making for every barrel of oil we produce, the share price should eventually bounce back up.  This is an extremely lucrative and money-making low cap operation and once people actually see the figures and how much money we’re making, the share price will bounce up hopefully.

Since the IPO, I haven’t sold a single share, I’ve actually bought even more so I have total faith in the company. Our main objective is to get that first barrel of oil out of the ground and sold and when people see the margin on that then we’ll hopefully see the share price bounce up again.

Wildcat Petroleum plc (LON:WCAT) Chairman Mandhir Singh caught up with DirectorsTalk for an exclusive interview to discuss their office in South Sudan, the political current situation, any knock on effects and when shareholders can expect possible oil contracts.

Q1: First off, how are things progressing and why did you set up a temporary office in South Sudan?

A1: Things are progressing very well in Sudan. Basically, what’s happened is the Oil Ministry has relocated to Port Sudan and we made an announcement last year, I think around October time, that the Direct General was 100% behind Wildcat Petroleum and our target was to produce 100,000 barrels.

So, for the last two months, we’ve been working on solutions of how to get the company onto the ground in Sudan pumping oil.

So, on the suggestion of the Director General, we’ve got access to office facilities in Juba and we would like to thank NYAT Co for providing those to us . Basically, what the Sudanese government is going to do is liaise with the South Sudan government so that we can get access to the oil fields safely, and we can get equipment and personnel there safely.

What we’ll do if fly into Juba, from Juba we’ll catch a plane to the Unity oil field in South Sudan and then it’s an hour’s ride across the border to Heglig where all of the oil assets are based. We’ll use that route until things settle down in Sudan.

Q2: What is the general overall political situation in Sudan?

A2: Things have reached a stalemate but there’s rumours of secret talks in the Middle East and hopefully, there should be a peaceful resolution.

Unfortunately, there’s been a lot of coups and coups attempts in the past but hopefully this will be resolved peacefully and it’ s all contained in Khartoum, it has no effect on the oil industry whatsoever.

Q3: I was just going to say, what knock on effect does it have?

A3: Well, it’s a bit counterintuitive but political unrest, there’s a 30-year civil war and whatnot, it doesn’t really affect the oil industry because the bottom line is that everyone needs the oil revenues. Actually, since the unrest started on the 15^{th of} April, South Sudan has actually pumped twice as much oil through the pipeline than before the unrest.

The oil fields are located way down in the south, it’s like a world on its own, the pipelines haven’t been attacked, no infrastructure has been attacked, and oil is still flowing to Port Sudan onto the tankers.

The only issue was how to get there safely, and on the advice of the Director General, we’ll go through the south. The North and the South Sudan oil fields used to be on entity anyway so we’ve just taken a bit of a longer route to get access to the oil fields once we sign the oil contracts.

Q4: When can shareholders expect news on possible oil contracts for production?

A4: Wildcat Petroleum’s top priority is to get that first oil barrel out of the ground, through the pipeline onto the tanker and sold.

In June, we announced that we had an investor who’s prepared to invest up to $25 million into production in Sudan under the current circumstances. So, now that the Ministry has relocated to Port Sudan, and is functioning again, we are taking a much more aggressive approach.

I’ll be spending much more time down at the oil fields and top priority is going to be given to get in that first barrel of oil down the pipeline because once we do that, it’s a total gamechanger.

Wildcat Petroleum plc (LON:WCAT) Chairman Mandhir Singh caught up with DirectorsTalk for an exclusive interview to discuss the funding MoU, what this means for Wildcat shareholders and why investors should buy shares in the company.

Q1: Mandhir, obviously some exciting news today, can you just give us some details on whom these third party investors are?

A1: Firstly, this is not exciting news, this is game changing news. And it’s taken me a whole year to negotiate these investors getting behind me.

The investors want to remain anonymous at the moment but their details have been lodged with our financial advisor for the FCA to have a look at. You can make an educated guess who we are dealing with here, super high net worths, family offices, major institutions, sovereign wealth funds, these are big hitters and they’re being advised by a team that have raised billions of dollars for oil companies in the past.

So, that is why it’s taken me a year for them to get behind me, and this is a total game changer. It means we can implement our plans and really scale up once we get going.

Q2: Will this $25 million be enough for your plans in Sudan?

A2: $25 million is hopefully going to the initial amount from these people, it should be enough to secure at least one block and drill a handful of wells. My gut feeling is once they see how much money we start making, significantly more money will be made available. $25 million for this group, it’s pocket change.

Another thing I want to mention, it’s just not $25 million for Sudan, it’s $25 million for other countries as well. So, we’re active in South Sudan, we’re active in Chad so if we can source suitable projects, they’ll give us an initial $25 million for those countries as well so it’s not just Sudan, we can have deals in Sudan, Chad, South Sudan, and we’ll get $25 million for each of those countries. So, it total, we’re talking about $75 million.

These people are used to investing hundreds of millions so once we’re up and running, we get the oil pumping, we expect much more funds from this group and from other groups we’re talking to.

Q3: Does the deal involve investing directly into the assets? If it does, what’s the significance of that work for Wildcat Petroleum shareholders?

A3: The significance is quite massive because it means that I don’t have to go to shareholders asking for large amounts of money constantly. Theoretically, these investors could pay for the production sharing agreement, pay for the production and our shareholders get a free ride, that’s one end of the spectrum.

So, if we require $100 million to buy some oil fields, theoretically, all that money could come from these investors and Wildcat would take its share of the action without having to outlay lots of money. Also, it means we don’t have to borrow money so we don’t have to go into debt which is the big problem with oil companies.

So, hopefully we’ll get major production funded by the third party investors.

Q4: The RNS mentions for the potential for the party to invest in other African countries, how much backing then will this group give you for countries outside of Sudan?

A4: We’ve been in talks for a year, they’re familiar and up to speed with what we are doing in Chad and South Sudan.

This group is quite massive, the people that advise the deals I could dig out, it was in the billions over the years so this is a major group of investors with deep pockets and that is why it took me a year to get them behind me.

Now, they are behind me and once they see the deals coming through and how well I negotiate the deals and how much money everyone’s going to make, I suspect the floodgates will be open and substantial amounts of money will be made available to us.

We’re also getting interest from other groups so watch this space.

Q5: Does this investor group coming aboard at this particular time indicate that there’s a deal close?

A5: No comment.

Q6: In summary then, why should an investor buy shares in Wildcat Petroleum, would you say?

A6: We’ve got access to world class assets, these assets contain billions of barrel and we’ve now got access to world class financing.

We think we can become a mid-tier oil company, there’s nothing stopping us becoming the next Tullow Oil without the downside. In the not too distant future, people will see exactly the scale of what we’ve got planned because people are making the assumption that a lack of news means nothing’s going on.

Well, I can assure shareholders a lot of stuff is going on and we aiming towards the Tullow-type model but without the debt.

So, we’ll see what happens but I’m extremely happy, this is a total game changer for us and once we get the relationship sorted out then investors will see exactly how much money. Companies like Savannah are running around with hundreds of millions of dollars, our deal making ability means we only need a fraction of that amount of money to be on par with these companies.

Time will tell but I’m extremely happy about this backing. This is game changing news and it’s just not Sudan, it’s all the countries in the region; Chad, South Sudan so watch this space.

Wildcat Petroleum plc (LON:WCAT) Chief Executive Officer Mandhir Singh caught up with DirectorsTalk for an exclusive interview to discuss how the conflict in Sudan is affecting the oil industry, probability of securing an oil block, the cost of the assets, and when they expect to sign a deal.

Q1: Mandhir, how is the current conflict in Sudan affecting your efforts to get things done? How is the oil industry been affected there?

A1: The first thing is the conflict isn’t as bad as everyone thinks. We’ve actually got people on the ground in Khartoum and they’ve just reported that the fighting is just centralised in the city centre area.

We see the conflict more as a speed bump than a roadblock. Unfortunately, in the last two years, there’s been about two coups, and this is a way of life out there.

In regard to the actual oil industry, as far as we understand it, the oil industry has not been significantly affected at all. The oil fields are the equivalent in distance from Glasgow to London, they’re way down in the south and usually in these situation, both sides leave the oil industry alone because they need the revenues for their army’s and whatnot.

So, it looks bad on the news but it’s a way of life in these countries and the oil industry is not affected. It’s a slight setback for us because we can’t get out there and do face-to-face negotiations but things have significantly settled down, I think it’s been about 3 weeks since Sudan was mentioned by the BBC.

Hopefully, in the next couple of weeks, it’ll settle down enough for me to fly back out and negotiate a deal.

Q2: What’s the probability of Wildcat Petroleum securing an oil block in Sudan?

A2: The probability I would say is extremely high. We’ve actually opened an office in Khartoum so that gives an indication of how we feel that we can get a block. Also, we’ve got an excellent team out there and they know how to get stuff done in difficult situations and we’ve got excellent relationships with all the people that matter.

In February, I was a guest of honour at the 25^th celebrations for the state oil company Sudapet, and I know the Oil Minister, I know all the people that matter. Basically, getting oil deals done in these countries comes down to relationships between people and we’ve got excellent relationships.

We signed an MoU last year over four blocks, all of these blocks are producing and hopefully this year, once it’s safe to travel out there, we will actually turn the MoU in production sharing agreements.

Q3: In light of Savannah Energy agreeing to pay $1.25 billion for Petronas assets and that’s just across the border in south Sudan, how much do you expect to pay for the assets?

A3: We’ve got a rough idea of how much it’s going to cost but I can assure shareholders that it’s nowhere near close to a billion dollars.

We’re hoping we can get competitively priced blocks, and one part of the political conflict has gone our way is that we are basically the only game in town. So, we’re hoping that we can actually pick up an oil block for a bargain, when things settle down, it’ll basically turn into an arbitrage deal. We pick up something cheap in a distressed state and when things are better, the value of the asset will go up.

So, we are super confident and we’re in constant talks with the ministers and all the people that matter. I think our people have a meeting in Port Sudan next week with some of the people from the oil ministry so we think we can pick it up at a fraction of its true value.

Rest assured. I wont be spending anything like Savannah is spending but we think we can strike a good deal, and time will tell I suppose.

Q4: Speaking of time, when do you expect to sign a deal in Sudan?

A4: Before the fighting started, we were hoping to sign a deal this half of the year, the fighting has significantly decreased so we’ll try to get a deal signed this year.

Ideally, I need to be out there on the ground negotiating the deal but if the situation doesn’t improve significantly, we’ll try to get the deal done remotely, but we do have people on the ground in Khartoum. So, we’ll try to get a deal done over Zoom if we can but if we can’t then I’ll have to fly out there which is the best situation.

We are confident that, in the not too distant future, we will be able to get a deal signed.

Q5: Now, you’ve consistently claimed that your aim is to turn Wildcat Petroleum into a profitable, dividend paying oil company with no debt and have billions of barrels of oil resources, do you think you can achieve that?

A5: I’m 100% we can achieve that, that is how the whole business plan has been developed. I own 70% of the company, I haven’t sold a single share since IPO, and I totally stand behind that statement.

Everything comes down to the deal and I think we can structure a deal and get some partners in which means that we can, at the end of this year, be a producing oil company, profitable, debt-free, and hopefully paying dividends by Christmas. This is my aim.

I stated that was our aim at the beginning of the year, if things significantly improve in Sudan, we’re still on to achieve those aims, and time will tell but I’m supremely confident that we can do what we aim to do this year.