Today’s RNS from Andalas Energy & Power (LON: ADL) all but confirms recent speculation that there are ‘issues‘ on the Bunga Mas (BM) transaction. Now the company will spin that it’s not their fault and the renewal of the PSC from the Government Of Indonesia (GOI) is onerous, but surely after all the ‘fookery‘ from the previous miss-management the new team must know that there are always problems when conducting business in Indonesia. It is par for the course. You can’t sign a PSC unless you have the cash or can prove that you can get the cash. The quality of the licence is immaterial.
Bunga Mas is a good asset. It has huge potential to flesh out any small oil minnow with real production. I know this because I have been on site and have had access to all the data available to me at that time. Nothing is set in stone when it comes to O&G, but basic economics and how to do business in-country, in Indonesia has to be learned. By now you’d think that ADL would be past masters at it! Investors need to realise that Bunga Mas will progress at the Indo’ pace not the Nutter BB pace. Andalas are not a one trick pony. Investors should hold for the results of the Colter drill, which is like BM, a potential company maker.
However, credit where credit is due to the Company and their head honcho Simon Gorringe. Who’ve came out and updated the market ‘Pronto’. That may be some what ‘cold comfort’ for shareholders but it does show that being honest, going forward, and updating your investor base in a timely fashion, no matter how unpalatable it may be, is a medicine few like to swallow even when it helps your recovery. So, it’s well done ADL on today’s RNS. Honesty is the best policy.
Now remember, Rome wasn’t built in a day. The Colter drill is on track and hasn’t been valued into the ADL SP. Should that come in then I can see the SP heading way over 2p, maybe even 3p. So it’s not bad news today. It’s as you were and let the Board get on running the company in the correct way. Hold for Colter. Common-Sense!