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Mayan Energy - CEO walks but the lunatics still run the asylum

By Tom Winnifrith | Friday 5 October 2018


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.


For reasons not explained the CEO of Mayan Energy (MYN) has quit with immediate effect. The City's No 1 oil analyst Zac Phillips thinks this is a good move, although probably a prelude to yet another bailout placing. But his report is still damning and is below. 

Mayan Energy (0.32p) – The Lunatics Still Run the Asylum: 

Today’s news regarding the departure of Eddie Gonzalez is probably good news, and could potentially be one step towards unlocking the potential value within the Company. However, the question remains as to why Gonzalez is jumping. Given that Gonzalez has a role with Petroteq, the owner of Asphalt Ridge, and is a beneficiary of the project via his carried interest in Deloro, we believe that this is a step in the right direction. However, the incoming CEO elect, Charlie Woods, is also a beneficiary of Mayan’s investment in Deloro.

It bears remembering that Deloro is (to quote the RNS of the time) a “newly formed "specific purpose investment vehicle," which means that it post-dates the managements’ appointment, specifically when Gonzalez was CEO of Mayan, and Woods the Chairman. Given that Woods will remain, we do not think that Mayan’s shareholders will benefit from this change as it will be a case of more of the same.

What is required is a clean sweep of management, a renegotiation of the Deloro agreement that adequately reflects the risks and rewards that are borne by Mayan’s shareholders, and clear forward plan. On this last point, it could be that Gonzalez’s departure is what permits the Company to come to the market for a fundraising. If Deloro is the intended investment vehicle, the equity must redress the past imbalance and reflect the actual cash investment made. Despite the departure of Gonzalez, the lunatics still run the Mayan asylum.


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