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New World Oil & Gas; overwhelming victory for shareholders

By Ben Turney | Thursday 19 November 2015


Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


So there we have it. Adam Reynolds and Nick Lee have received an overwhelming mandate to transform New World Oil & Gas (NEW). Both men got elected to the board with over 99% of votes cast. This represents a great victory for shareholders and goes to show that positive, organised shareholder activism on AIM can work.

None of this would have been possible were it not for the dedication and commitment of the members of NWOGaction, the New World action group. As cofounders of the group, Gary and I have received a lot of congratulations this morning, but the truth is we just had a role to play. We could not have achieved what we have, without the steadfast support of New World’s shareholders. At times the 42 members of NWOGaction were in possession of price sensitive information, but this did not leak. Everyone involved held the line admirably. They should feel rightly proud this morning and hopefully will see their perseverance richly rewarded next year.

After all the ups and downs of the last seven months, today’s announcement from New World is welcome confirmation that the company has a bright future. Unlike the Room Service episode, which saw that company fail just over a decade ago in similar circumstances to this summer’s forward selling controversy, New World is recapitalised, can count on strong shareholder support and has a reinvigorated board of directors.

As of writing, New World’s share price is down 18% 0.875p. This isn’t surprising. Just over a month ago the company’s stock traded at or below 0.055p. Today it hit 0.12p. Profit taking on confirmation of Reynolds and Lee’s appointments was all too predictable, however the real fireworks will likely come over the coming months.

I’ve made the point a few times recently that unlike the other turnaround success stories Reynolds and Lee have been involved in, this time they are moving into a company with a sizeable war chest, relative to the market cap, and emphatic shareholder support. Once the two men have sorted out whatever mess the old directors left behind them, they will then be able to focus on bringing in a new team and project.

That is when I expect we will see New World’s share price go on its next run higher. Once the current selling has finished, the company’s shares will largely be held by people anticipating the next move up on deal speculation. This is how this market works and New World now has most of the ingredients in place that make it an attractive proposition. Yes it is risky and yes we don’t yet know what the old board has got up to, but barring anything criminal the company will be in fine health as it moves into 2016.

Personally, I cannot wait to find out what Reynolds has in store for New World. He has the opportunity to bring something substantial into this business. With the run he has been on over 2015, he already had the team, contacts and reputation. Now he has the vehicle and the money.

Everything is falling into place.


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Comments

6 comments

  1. Well done Ben and Gary. Really good stuff.

    What is your view of the current cash balance? Tom mentioned a figure in the bearcast yesterday (cant remember exactly what he said) that didn’t sound like a ‘sizeable warchest’.

    Cheers

  2. Congrats to you and your members on your hard fought victory for ALL share holders . This is one shareholder victory that truly is transforming . I note Toms negative piece on the price in yesterdays bear cast . I would have expected him to be more congratulatory rather than try to kick chucks out of the SP from the off . A bit of jealousy me thinks ;-) . That was a bit churlish Tom . I did not hear you broadcasting how over valued OPTI had become and the fact that since 100p it has fallen back a massive 30% . Still very over valued at that mind ………… worth about 38p until any deal is done and announced. Any way folk are piling into NEW as I type this watching L2 at 10.38 today . As for Premethia ………. only worth 10p until the court case . I told Tom trainspotting was the way to go and not collecting stamps ………. but he did not listen and the stamps bit back like “Jaw“s one , two and three !


  3. DUCK AND DIVE

    Bravo! Vive la révolution! The toast is: Brave New World!


  4. Drunken Sailor

    It was good to see a proper disclosure on past companies. Normally new directors just list all the companies they have to under the rules and it is up to individuals to look up which ones failed in what timescales in relation to the director’s involvement and how badly investors and creditors got burned. It is clear not every turnaround has worked out, but then you would not expect it to.

    Good luck going forward – I assume the other useless members of the old board will get their P45s too shortly.

  5. @CPPH – Thank you. Re. the cash balance I am expecting >£2.5million, but have no particular insight other than what has been announced. Also I said “sizeable war chest, relative to the market cap”

    @wildrides – No one does churlish as well as Winnifrith. All he said to me yesterday was “I hope you’ve taken out a short in New World”. His only words on the subject. Miserable sod! :-)

    @ Duck and Dive – Thank you

    @Drunken Sailor – I like the disclosure too. Only a very small handful of people ever become successful without having tasted failure along the way. What I particularly like about these two is they are in their professional prime, heaps of experience, energetic and plenty of recent success

  6. Ben, how do you fancy getting involved with shareholder action over at SER? We could do with someone who has been in charge of an action group and seen action happen!


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