Wednesday, 25 September 2013

#SLE What next for San Leon? acreage on the moon?

San Leon announced another purchase of acreage today - this time in Turkey. Seems there is no end to the thousands and thousands of kilometers of acreage that they will keep acquiring.

First there was the giving up of their 30% stake in Barryroe (Doh!) which has proven to be a monster field - just before the monster was confirmed, but at least they retained a 4.5% revenue day....Rodney.

Then they purchased Realm energy, secured more acreage in Spain, purchased Aurelian oil and gas, more acreage in Poland and more acreage in Morocco and of course don't forget Albania. 

SAN LEON Share Graph
They certainly have plenty of the "E"xploration for an E&P company. The problem is they don't have any "P"roduction which when times are tough and markets are not easy is kind of a pretty big flaw in the business model. And so the shares keep on rising, from 385,000,000 shares in May 2010, to over 2.5 BILLION shares by the time this latest acquisition is completed. Their revenue for the last year of trading - a massive, whopping, exciting 1.3m Euros. I think the balance between exploration and production is a big wonky.

So my humble advice to the board of San Leon is, if possible, can you deliver some production in the near future, so the share price can recover from today's low of 5p, which is 86% down on where it was 3 years ago.

Which is kind of what you are meant to do as a BoD - create shareholder value, not the biggest land owners in the western world - or on the moon? 

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