dctiffield
21 Nov 2019
Is Larry Bottomley the right man to lead Chariot? There is no doubt that finding oil in frontier regions is very difficult and you can’t expect every drill to turn up trumps, or every forth drill for that matter. On top of that, the hydrocarbon industry is out of favour due to global warming concerns, so I understand the relatively unpopularity of oil shares and certainly explorers. However, there are very clear reasons for why I am unhappy with LB being at the helm. Firstly, I continued to invest with CHAR because of the stated strategy which was to drill partnered. This was flagrantly ditched without communication or consent by the leadership. This was a massive gamble that failed and ripped a significant amount of cash and credibility from the business. There should have been consequences, there were none other than a negative impact shareholders had to bare. Secondly, the geo-team has remained unchanged, despite multiple failures, if anything all we have heard about is how wonderful and highly regarded they are by the industry. I see this as weak leadership and over-complacency and chumminess within the team. This is not the behaviour of a company stretching every sinew to get a win on behalf of its backers and shareholders. Thirdly, any significant IIs have been lost during LB’s tenure and have not been replaced. This is a major concern, as it shows the deep lack of confidence LB has managed to inspire in those that can really shift the SP. Fourthly, LB is clearly operationally focused and seems to have little flair for deal making or shareholder comms. Fair enough when really pushed, he pumps out a few decent videos, but this communication is never sustained, which would indicate he’s really not that interested or bothered about shareholder relations. Mostly we hear about how ‘cheaply and safely’ the well was drilled, as if the shareholders really care about that as a priority. That’s what a dyed in the wool ops man would say, not a CEO. Regarding Lixus, due to the regular torpedos in confidence and dilution, we have sustained with LB at the helm, I’m really not certain of the veracity of the quality of the opportunity. Those in the know could perceive Lixus as a pile of dressed up rubbish, hence the lack of take up across the board. Those not in the know (us lot), could be led into thinking that it’s a great opportunity, if not a slam dunk, as it appears to tick so many boxes. If I activate the cynical part of my mind, Lixus could be a perfect candidate for extending the lifestyle business that CHAR seems to be becoming and keep the can tantalisingly kicked just out of reach for the next few years. I really don’t like to think like that, but LB has a genius for inspiring suspicion and distrust. He looks credible, but his track record and the distrust he creates has driven serious investment businesses away and ultimately the SP down. Bottom line, I don’t trust him and I don’t think many others do either. He’s made a lot of money out of us and has very, very little to show for it. I’m surprised AP has kept him on, unless he’s useful for reasons I hesitate to even consider. Replace him with a deal maker and someone willing to shake up the geo team and inject some much needed energy and certainty. We don’t need a good general, we need a lucky one. The clock is ticking.
preciousmaj
21 Nov 2019
Is Larry Bottomley the right man to lead Chariot? To be fair the post was about Larry and whether he is the right man to lead this company. The list that you have posted with information from my original post does not mention him at all. That is the problem with your approach, it will lead to more of the same. Why carry on doing what is clearly failing? We need a change of approach or at least a change of leadership to bring some life back in to Chariot. The problem with your questions are that they are very easily answered by Larry, he tends to waffle his way through them and you seem to believe him. An example has already been given here, you have believed him when he said that partnering processes had timed out yet I am sceptical of this answer. What else could he have said to save himself from criticism after diluting shareholders to gain a upperhand in partnering discussions? It’s not my idea or list at all, I have presented my opinions to the question “Is LB the right man to lead Chariot?†The purpose of this was to start a debate and hear other posters opinions. theoryman: Added as an edit. The reason I would not include any reference to the last drill, is that I would deliberately want to tempt them into to coming back at me as if it were a positive for him. The above is key IMO. LB seems to think that because they have set a benchmark for the industry in regards to cost, the company have been successful - this is a absurd statement to make as the objective was to find commercial accumulations of hydrocarbons not to set any benchmarks. Benchmarks will be useful to add to their LinkedIn profils but do nothing to add any value to Chariot. Again this is a distraction from the fact that the intention was to partner prior to drilling and the management failed. My approach is different to yours in general and it seems to have worked for me up to now There is a time to be Mr Nicey and there are times when you need to be firmer in your actions. A strong emotional question will likely get a better response than a weak objective question. LB has a problem expressing his thoughts and shareholders are left guessing most of the time, he’s like a robot and this doesn’t bode well for sentiment. I have tried to break him down several times, face to face and through investor calls but it is not having the desired effect. The bottom line is that he is a weak communicator. Also it is difficult to stay calm and objective while nothing is progressing in the right direction.
theoryman
20 Nov 2019
Is Larry Bottomley the right man to lead Chariot? pm, I’d hoped you would think it was incredibly bland because that is what it is designed to be. One bland fact after another, all from info in the public domain, no emotion, no opinion. Where in that list is there a handle for them to get a hold of and come back at us? Suppose someone went for the other extreme, a list derived from holders collective desire to vent their spleens after suffering huge personal losses. In my experience it would also include opinion and spin, and both those allow a focussed counter-attack on them; rather than the bland facts. Anyway it’s your idea and your list.
preciousmaj
20 Nov 2019
Is Larry Bottomley the right man to lead Chariot? Thanks for making the changes TM but your post is a little too bland for my liking, I preferred my version Spitfire: PM. If you do forward to AP, let us know. I was hoping for more input tbh, I will give it a few more days and let you know.
TexDrilla
20 Nov 2019
...that will be a massive a MASSIVE development
Spitfire
20 Nov 2019
Is Larry Bottomley the right man to lead Chariot? TM, Please ignore my last statement , I see you have voted on the question.
Spitfire
20 Nov 2019
Is Larry Bottomley the right man to lead Chariot? That is Good Theoryman…thanks for taking time to assist. So based on those bullets you have applied, which all I will add lead to a negative question mark over the man at the helm - Larry Bottomley , would you now be in a position to apply a yes / no answer to the stated question by Preciousmaj ? PM. If you do forward to AP, let us know.
theoryman
20 Nov 2019
Is Larry Bottomley the right man to lead Chariot? Hi pm, changed some wording and reordered the points. It now reflects the way I would develop my line of attack, each statement would trigger further comment, by the end of the process the accumulative effect should prove overwhelming… There has been no partnering across the entire portfolio since March 2016 - partnering is a key component in zero/low cost exploration, They relinquished the prospective Mauritanian acreage because of failure to partner where discoveries have been made recently, They previously failed to partner on the central blocks (since 2013) when they had to drop their equity position in the licence from 90% to 65% while Azinam doubled their equity position in the licence at the same time, No value whatsoever has been created for shareholders during this time, The company has nearly doubled the shares in issue, It has raised funds twice that have diluted shareholders, The last raise was conducted at a 40% discount to the share price, The company have failed to attract any institutional investors prior to the next stage of the cycle.
theoryman
20 Nov 2019
Is Larry Bottomley the right man to lead Chariot? Spitfire, it was meant to be unbelievable, the “no one else alive†clause was intended to alert the reader that I had turned on the sarcasm mode. Maybe it was too subtle a tonal change, I was smirking as I typed it but there is no sarcasm on/off tag on this site that I am aware of. I’ll swap the task around for you. How many possible candidates could you identify who would have achieved less in the same circumstances and communicated it even more poorly than he does?
Spitfire
19 Nov 2019
Is Larry Bottomley the right man to lead Chariot? “It might be very unfair of me to suggest that LB ought to go, there might be no-one else alive, or more reasonably available, to make the best of these very difficult circumstances wrt partnering in these sort of areas.†Theoryman, If you truly believe that as factual then you have lost every credibility that you post going forward IMO. Unbelievable ! I could point you VERY QUICKLY to over 100 people without batting an eyelid that have the proven commercial and technical background that Bottomley states he has.
theoryman
19 Nov 2019
Is Larry Bottomley the right man to lead Chariot? pm, I would see it as adapting your list rather than correcting it and it could not be made indefensible IMO but I’d work towards making it as indefensible as possible, as originally stated. The last drill was a one off low cost opportunity as a result of third party drilling and availability of a rig as as consequence. So I see it as a two part problem, the time leading up to the drill being available and after it. LB a was questioned by my proxy about the latter situation and I thought his answer reflected what might have been the reality, you obviously disagree. There was a long time before that became an issue, that is where I would attack. So I’d also remove the point about not being able to use the money raised to gain leverage. As for the rest I would merely reorder them to reflect the main thrust of your argument as I see it - CHAR is not large enough to survive failures unless they are at zero cost and that can only be done through farm outs, which are just not happening. ( If you really feel that I have to explain what I understand by zero cost exploration then I must have lost the ability to communicate!) It might be very unfair of me to suggest that LB ought to go, there might be no-one else alive, or more reasonably available, to make the best of these very difficult circumstances wrt partnering in these sort of areas. What I object to more than anything is the manner in which he responds to questions about the lack of progress in partnering - it is so lacklustre, lacks drive, lacks …That might be down to his poor presentation skills but communication is a key part of his role.
preciousmaj
19 Nov 2019
Is Larry Bottomley the right man to lead Chariot? Thanks for that but what do you make of LB? Do you think he has performed well as CEO? Do you think that all the negative outcomes were beyond his control? Who do you think is responsible for the lack of partnering since March 2016? Who do you think is responsible for the lack of institutional investors? I don’t buy the LBs argument about constraints on others, I am surprised that you have fallen for this. There was ample time to farmout, the data room opened in 2013 originally so, why are we hearing in 2018 that we were timed out of finalising a farmout agreement? Chariot is not BP or Exxon, we can’t afford to keep drilling and failing. The business model is centered around creating some form of ‘hype’ and raising funds to continue with the timeline while paying yourself £££s and awarding free shares as bonus payments. theoryman: Drilling is about surviving long enough to get the reward from any success. No one would be complaining if that last drill had delivered, so IMO there should be no complaints about the expected failure of an individual drill outcome - CHAR as a whole was not obliterated. I completely agree with the above paragraph but have you asked yourself where the cash will come from to carry on now? The share price is too low for a raise and we will only have around $10m at year end. My point is that Chariot could potentially be obliterated because of LBs actions. Like you say you only have 3% of your portfolio here so the risk/reward for you may be different to others. The last drill did not deliver, I’m not interested in dealing with hypotheticals. Chariot had a zero cost strategy, please explain what this meant to you? While you are explaining that, please advise how much money we have spent on the central blocks in Namibia? We have a strategy that is sold to shareholders but is not adhered to - who is responsible for this?
theoryman
19 Nov 2019
Is Larry Bottomley the right man to lead Chariot? Hi pm, my logic was to make the list as indefensible as possible in terms of the outcomes under his leadership. Hence I homed in on the one point I would never include, too easy for anyone with an understanding of exploration success rates etc. to defend. Doing so would allow them to immediately deflect away from the others - standard technique. The plan was to share the costs on the last drill but for reasons he explained it was the constraints on others that caused the plan to be changed. The drill cost was very low compared to the potential reward whatever the share the company had. The value was unchanged just the magnitude of the numbers in the reward:damage ratio calculation. That doesn’t bother me because my investment in CHAR is circa 3% of my whole portfolio. It could be argued that the impact on a small company and hence PI’s with higher %s was a step too far. Drilling is about surviving long enough to get the reward from any success. No one would be complaining if that last drill had delivered, so IMO there should be no complaints about the expected failure of an individual drill outcome - CHAR as a whole was not obliterated. I don’t know why II are disinterested in CHAR. The obvious reason is at the moment, compared to other companies in the sector, or other sectors as a whole; it does not meet their requirements. On the old II GKP site some of us suddenly realised that the number of shares you could pick up in total for 0.8314p was not dependent on the number you held - you could apply for extra but how many extra…? It seemed to depend on who you were dealing through, vast differences. There were holders who could not participate, those who wanted to but could not afford to and those who refused to. At the time I posted that for my strategy to work I had to be allowed to purchase as many shares as possible - much to my surprise I got every share I applied for, as did others who exchanged views. I have commented since that I had to expand the width of the column in the spreadsheet to allow for the new number to be visible - it got contracted agin when the 1 for 100 consolidation took place. I had no idea it would work out so well but as a strategy it passed my three point check; reward, damage, chance of success. There are many others that pass the same test but fail to deliver. So long as the total return from the winners beats the total losses from the losers then I will continue to work this way. I see investing as a series of simple value assessments of a bet - I am a gambler and proud of it
preciousmaj
19 Nov 2019
Is Larry Bottomley the right man to lead Chariot? Hi TM, I don’t quite follow your logic. I have asked a question and presented my opinion on my answer. I have requested others do the same. You have now answered the question but you seem to be responding to me instead of presenting your own opinion on LB. It is a fact that the company has failed to find hydrocarbons on multiple occassions, Larry was with the company for the majority of these failures. I’m not sure whether he was with the company prior to the Tapir well but he was definitely at Chariot prior to Nimrod. He has been CEO for the last 2 wells but you can’t just take my comment on the drill failure on its own ignoring all the other points that I made - we should never have drilled the last well as an operator, do you remember the reasoning for the last raise? Also Paul Welch left after the Tapir and Nimrod failures, LB has had the same number of failures, 2 equity raises and failed to partner but he is still here. I’d also like to ask you - why do you think that there are no credible institutions invested in Chariot? You have always been good at comparing ratios, etc but this doesn’t excite me. I am invested to make returns, if the person that is leading the company is making take £££s while creating no value then I will speak out. If you look at my post as a whole then you will agree that LB has failed his shareholders. You have voted to say that he is not the right man to lead the company, please advise your reasoning behind this. I am surprised that you are invested in GKP, I sold my shares a long time ago when shareholders were shafted by the debt for equity. It is this type of shafting that is causing the markets to undervalue the companies. This CEO has failed shareholders, the proof is in the pudding.
theoryman
19 Nov 2019
Is Larry Bottomley the right man to lead Chariot? Spitfire, holders only seem to refer to markets being controlled when the share isn’t doing what they want it to! Controlling a market is easy if others are indifferent to what is happening. I don’t just mean the participants who are actively buying and selling but include those waiting to participate. Controlling a market if others strongly object is a totally different matter. You might get a short time to do so before others get organised but then there will be “blood on the streets†either real or dollar equivalent. I don’t see any evidence of a raging battle at the moment, so I am going for the indifference explanation. The latest venture awoke investors from their slumbers,with respect to CHAR, but there has been no significant followthrough that we are aware of. In my widespread portfolio I only have a couple of these type of shares, CHAR and GKP and they have two things in common. Assets which IMHO are significantly undervalued by the market. PI’s voicing concerns about how they release information - both companies strongly deny there is anything wrong with how they do it and show no signs of changing their approaches.
