Fracking company admits its investors may be losing patience
#Fracking company admits its investors may be losing patience
Cuadrilla may not be prepared to wait much longer. “If we get a negative decision this week, we would have little alternative than to walk away,” Mr Egan said.
We have proven that there is gas and that it will flow. In the three years we have been doing tests, they have drilled 60,000 wells in the US. We don’t have infinite patience and our investors don’t have infinite patience.
Did any of you watch “Secret State” last month where the Energy Corp CEO sulkily threatened to throw his toys out of the cot and decamp to Poland is he didn’t get his own way.
We are getting a bit depressed watching life imitating art so frequently these days.
How many of us would be sorry to see Mr Egan carry out his threat I wonder? How many of us would chip in to help buy his plane ticket?
As to the growing reluctance of investors to part with cash to fund the fracking goldrush , we note from The Irish Times that Irish oil exploration company, US Oil Gas plc (USOP) blame their recent and very serious financial woes on “wholly untrue” defamatory postings between November 8th and 22nd, including postings claiming the firm’s drilling project in Nevada, US, was a “scam” by “liars”.
The market capitalisation of US Oil Gas plc (USOP) on November 5th was some £173 million, when the share price was £4.15, and is now £41.6 million with a share price of £1, the court heard.
(USOP are a Dublin based company and the report is from an Irish newspaper, so we assume these valuations are in old style Irish £ here. It may of course be in UK £ – but it’s pretty immaterial – what is important is the scale of the loss of confidence)
In an affidavit, Brian McDonnell, chief executive of USOP, said
The gist of most of the statements was that he and USOP were engaged in a fraudulent attempt to induce investors to buy shares in a “sham” company. To suggest without any evidence and falsely he was a “fraudster” and “ponzi” scheme creator was defamatory per se.
Now, we would never suggest such a thing here at Refracktion, indeed we had never even heard of USOP before yesterday, so we couldn’t and would not wish to comment in any meaningful way on the financial affairs of his company.
We can’t help noticing though that the New York Times quoted an unnamed official from IHS Drilling Data, a research company that specializes in energy issues, as saying that:
The word in the world of the independents is that the shale plays are just giant Ponzi schemes and the economics just don’t work
We wait with bated breath to see whether USOP will sue the New York Times as well, as it would be reasonable to assume that its articles have rather more influence on investor’s confidence than a couple of protesters on Facebook!
Of course looking at this another way “Fracking company admits that protesters’ efforts on line have a huge impact on their economic viability” is an encouraging message for us all to hear !
Going back to Mr Egan, we can’t help feeling that this is just a bit of theatre designed to let Mr Osborne wring his hands in public and say “Look people , I really had no choice, as they said they’d take their ball away if I didn’t let them win”.