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Magnolia Petroleum - why Rita Whittingham must be fired Part 3 - duping mug punters

By Tom Winnifrith, The Sheriff of AIM | Sunday 18 June 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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.

Earlier today i showed how Magnolia Petroleum (MAGP) has become a gravy train not just for CEO, not so lovely Rita Whittingham, but for her extended family as well. But when the operations are not generating cash how to fund the gravy train? Shimples: pump the stock with misleading RNS statements and do a discounted placing. Rinse and repeat. Want an example (for there are many)? Here goes.

On 10 April 2017, NSLR released an RNS "operations update" HERE to tell everyone how great things are under her leadership.There was a lot of talk about exciting things, including 33 new wells in a play, in her own words “where wells are economic at oil prices around US$40 bbl”. That’s where shareholders money should be spent? Will she make money there? What’s the purpose of investing? 

The wells are horizontal with hyperbolic decline curves. So at least they’ll have a big IP (initial production) figure that makes headlines look good which might fool enough people that they should buy some stock. The pump ahead of the dump.

But if you look back Magnolia has released statements like this many times before. Pretty soon production from such wells tails off badly and the returns become minimal.

The whole existence of Magnolia Petroleum, in it’s current form, is for the sole purpose of Rita keeping her and her family with money coming from the investors in London. Pump, pump, dump. That is the history of Magnolia and that is why you must vote to fire Rita Whittingham at the forthcoming GM

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