UK Oil & Gas Investments - Re: UKOG Stream Log - We adjourn to the restaurant...

We adjourn to the restaurant area, which is quiet in the mid-afternoon. At least it is until Lenigas descends. He’s someone for whom the phrase larger than life could have been invented. Not only is he physically big, he’s also Australian. He does not hide his emotions. He’s fed up. Within seconds, he’s raging: “Why are people playing me, the man, why aren’t they playing the asset? I am just a spokesperson.” This is a family newspaper so insert some f-words into that statement. Then, read it glowering and jabbing the air at an imaginary enemy. And be six feet and the rest. Now you get the picture. Pity the poor waiter who brings him the wrong sort of coffee. He’s sent packing. What’s upsetting him is the coverage of the possible giant oil find by his AIM-listed company, UK Oil & Gas Investments, at Horse Hill in West Sussex, close to Gatwick Airport. No sooner did news of the gusher emerge, and the shares jumped 200% and talk began of thousands of jobs, than the sceptics leapt upon him. He was portrayed as a Wild West gunslinger firing from the hip, a serial hype merchant, and a repeat ramper of penny stocks. Does he now accept the figure of 100 billion barrels of oil (the same as the reserves of Iran) was an overstatement? His top lip curls, his eyes widen, he shakes his head: “No. We said we believed there were 158 million barrels per square mile and we own 55 square miles. We think we can recover 3%-15% — that’s 100 billion barrels.” Yes, but what about the AIM regulator, when it asked for clarification? “All we said was that the oil we found did not constitute either ‘contingent or prospective resources or reserves’. It was paragraph 11 of what we’d said originally, and we made it paragraph three. We moved a paragraph, we didn’t move our own position.” So, could there be 100 billion barrels under the Weald? “Yes, how do we put it, subject to, subject to…” He grabs a piece of paper. “Look. It’s like a big sponge of oil,” he says, sketching away. “There’s a layer here which is like a big sponge. We drilled down and then we drilled a 700-metre horizontal well. And it’s like a sponge.” Will he frack? “Will I f***. We could get even more out if we fracked but we’ve no need to frack.” Lenigas launches into a description of the geology of the area, the Weald Basin, and how it’s ripe for oil. His enthusiasm and confidence appear totally genuine — if it’s an act, its is a brilliant one. “I wish people would realise that we’ve found something very significant,” he says — well, roars actually, banging the table. But while UK Oil & Gas was causing financial newswires in London to melt, its co-shareholder in the project stayed silent. Some 35% of Horse Hill Developments, which holds the exploration licence, belongs to Magellan Petroleum, a Nasdaq-quoted firm based in Denver. Why were they not as excited as Lenigas and his UK colleagues? He pulls a face. “Magellan needs to see the stuff before they can give their opinion.” It was not a case, he insists, of Magellan seeing the same technical report and deciding it was immaterial — they simply had not seen anything. But hasn’t Magellan also sold its interest in nearby Markwells Wood for just £1 — a move that hardly inspires optimism? “They agreed that sale some months ago.” They were having a clear-out, tidying up their balance sheet. What annoys him is that so much of the flak is directed against him when the original news came from Stephen Sanderson, chief executive of UK Oil & Gas. It wasn’t like Lenigas was on his own, shooting his mouth off. “I never even said it,” he says, shaking his head again at the madness of it all. He goes along with what Sanderson said, absolutely, but, he stresses, it’s not as if he’s a lone wolf, out to make a quick killing for himself. Yes, but hasn’t he got form for this type of thing? “Such as?” he challenges. Promoting a company, pushing up the shares, then raising cash by placing new shares — and diluting the holdings of the early investors? Does he not like to take to Twitter, even, to big up his prospects? “You can’t build a business on bottle tops. What am I going to use, money in the bank? I had to raise money and then raise more — issuing shares is a standard way of raising money.” It’s not true, he maintains, that all his ventures have turned sour. It’s the nature of the beast in mining that some finds are not as predicted or commodity prices conspire to make them unprofitable. He names some successes. One of which he remains proud is Lonrho. It was when Lenigas first shot to public prominence, as a successor to the legendary, fearsome Tiny Rowland, described as “the unacceptable face of capitalism” by then Prime Minister Ted Heath. Lonrho had been a sprawling mining, hotels and travel conglomerate. But by the time Lenigas moved in, it was “down to one hotel in one country. When I left we were back up to 10,000 employees with operations in 23 countries”. Didn’t Sir Richard Needham, the former Conservative trade minister, accuse him of returning Lonrho to its “unacceptable” past, saying Lenigas was being paid too much? “F*** Needham.” He adds quickly: “Don’t write that down.” I have already. His PR adviser, the veteran David Bick, shrugs. “If you don’t want him to write it down, you shouldn’t say it.” Bick looks at Lenigas and adds: “We’ve known each other for how long? Three years. In that time, has David ever expressed a view that is materially wrong? No.” Lenigas likes Twitter (@DavidLenigas): “It’s a platform, that’s all. I’m very careful. I never give out insider information. I only advertise something that is already in the public domain.” There’s a sense, though, of unnecessary complexity surrounding him — that he’s involved in AIM businesses galore. Why not just one simple holding company? “It’s the AIM rules,” he says. “If you’re in oil, you have an oil company; agriculture, it's an agriculture company. They want people to invest by sector.” His intention, usually, is “to build each one to a decent size, then leave. I leave when things reach a level of maturity”. But one report said he had more than 140 companies to his name? Surely that’s excessive. “They were subsidiaries of Lonrho, 95% of them were Lonrho subsidiaries or sub-subsidiaries.” Lenigas is not poor. How much has he made? “Not as much as you guys think,” he smiles. “I’ve done all right.” He lives in Monaco with Lucy, his third wife. He has four children, including one with Lucy. Contrary to appearances, he argues, he’s actually trying to slim down his interests: “I’m 53 years old. I’ve tried to retire once, but I can’t.” His objective is to scale them back so he has three main companies: UK Oil & Gas, drilling in Sussex; Rare Earth Minerals, producing lithium; and AfriAg, farming in Africa. The latest charge is that UK Oil & Gas does not have the necessary permits. “Horse Hill Developments has all the approvals they need for where they are right now, and we’ve no reason to think other approvals won’t come through in the future,” Bick says. Lenigas has had enough. “They think UK Oil & Gas is a f***ing little explorer. It’s a viable UK exploration and production company that is focused entirely on the UK. Would I rather go to the Falklands and drill for oil there? No, I f***ing wouldn’t. I'd rather do it right here. I don’t know, the way some media treat me…” He grimaces. “Thank Christ I’m going to Cuba.” He’s just registered another company, Leni Gas Cuba, to target gas there. If it takes off, will it be listed on AIM? “It might well not be here. “I’m a serious businessman, and I care about my retail investors,” he says. To be fair to his critics, 100 billion barrels of oil, in Sussex, is difficult to take in. Who would believe it? Well, sceptics can sneer and pick holes as much as they like, says Bick, “but he will be very seriously vindicated”.