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Mayan Energy the dog has a new trick but it makes no sense at all - coke & hookers better value

By Tom Winnifrith, The Sheriff of AIM | Tuesday 27 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.


Another day and another director walks, a new strategy is adopted and yet more confetti is issued by AIM casino uber dog Mayan Energy (MYN), formally the hound known as Northcote Energy. But this latest move just makes no sense at all. Let me explain with a little bit of help from a friend....

The City's No 1 oil analyst Zak "The Knife" Phillips is actually rather kind (for him) as he notes:

Mayan Energy All Change… Again: With another funding announcement comes another change in direction. The company has gone from Shoats Creek (under the name Northcote Energy), to “remediation services” in Mexico (MX Oil), to participation in the Mexican liberalisation of the oil and gas segment (Mayan Energy) to now investment in the Georgian upstream segment via an investment in Block Energy.

We have history with the Company, having been roundly and aggressively criticised for questioning the valuation of its assets, and today is no different. The £90,000 investment for 1.68% equity values the company at £5.4million. However, the previous closing price values the company at £3.6 million, which means Mayan’s investment has been conducted at a 50% premium, which given the fact that the equity interest hardly provides it with a controlling stake is somewhat rich.

It would appear that irrespective of the management or name, the same problems persist, that the management team are squandering value. We believe that investors are well advised to stay clear until a cohesive programme and plan is presented.

Ends.

The knife is too kind. Block Energy is itself a dog. It was formally Goldcrest Resources a creation of infamous Gavin Burnell of Globo and Magnolia Petroleum infamy. Natch Gavin and his various vehicles got a stack of low cost equity, Gavin got his director fees as did some of his cronies and the company pissed all the cash it had away looking for gold in Bongo Bongo land. I will give Burnell credit, his companies all find different ways of destroying value: fraud, buying crap US oil assets, finding no gold in Africa, take your pick, but for shareholders the ending is always the same.

Burnell left last year to concentrate on his other business interests ( helping the SFO as it looks into Globo?) and a new management team is now banging on about oil in Georgia. The company is cash strapped, the shares are illiquid and trade on the NEXT lobster pot.

So Mayan gets to issue new confetti at a whopping 36% discount to raise cash so that it can provide loan notes which can never be repaid and buy Block shares it can never sell at a massive premium to the current share price and an even bigger one to fair value. What could possibly go wrong? What a fucking genius strategy*. 

It goes without saying that Mayan is a worthless piece of excrement and that you should sell your shares and - as noted earlier on Strat Aero HERE "But the really smart move is just to sell and use the cash to invest in a good company. Or on a night of coke and hookers. Investing in Strat ends up with the same result as splashing your cash on coke and hookers, That is to say you never see your money again but which is more fun? " What is true for the Strat Aero POS is true for the Mayan POS as well.

*For the avoidance of doubt, if any Bulletin Board Morons are reading, that is irony.


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