Bayfield was the second child of the team that gave us Burren Energy some years ago. It was launched and funded by ex-Burren management using some of the substantial proceeds they pocketed when Burren was sold to ENI.
Burren had provided a text book example of taking a poorly managed asset in Turkmenistan, knocking it into shape, driving production up and costs down and using the resulting cashflow to expand into other areas. Their second asset was the M'Boundi field in the Congo, which proved extremely successful. I forget who their major partner was there, but when that partner made a very ill timed decision to sell out to ENI , Burren was able to exercise its pre-emption rights to acquire a second slice of the well developed cake at a bargain price. Eventually ENI decided it wanted the whole of the gateau and bought Burren lock stock and barrels.
The Burren management team then retired to a life of idle luxury. After a while that palled. After all you can't spend your whole life polishing your Aston Martin's lithe bodywork, exfoliating your yacht's elegant bottom or getting hot and sweaty with your personal trainer. And so the restless intellect and creative imagination of the Burrenites devised a cunning plan. Why not set up an E&P in Trinidad? Then they could do what they were so good at and still have it large at the marina. Trinidad Marina is after all an ideal location for those who wish to combine an interest in lithe bodywork, elegantly exfoliated bottoms and hot and sweaty physical activity. And it is a convenient place to park a seismic survey ship and a drilling rig or two.
I was one of those who did well out of Burren. I encountered Finian O'Sullivan, the CEO, at an Oil Barrel conference and was impressed. He expended more energy in 5 minutes on stage than I do in a normal week. I was so impressed by Finian and the story, that I went out at coffee time and bought the shares. Over the next few years I traded a little around a core position which built as time passed. By the end, I had a holding which was significant to me and the eventual exit was a big pay-out.
As an investor I've not had a good time these past few years. What suits me is finding a story/management team that I beleive in and holding fast as it unrolls. Dana/Burren/Hardman kind of thing. But in recent years many of my ideas have not so much unrolled as unravelled. So it was very pleasing when Bayfield emerged last year with Finian O as Chairman.
Management team with great track record - tick
Plausible assets - tick
Proven, producing reserves - tick
Proven, appraised discoveries waiting for development - tick
Run-down operation ready for the Turkmenistan treatment - tick
Potential fronter acreage with inside track - courtesy of Russian billionaire - tick
Additional acreage in pipeline - tick
Management aligned with shareholders - tick
Founder shareholders in for the long haul - tick
Founders/managers with large positions and LTBH approach - tick
Good relationships with Trinidad Govt - tick
Access to additional funds when required - tick (at least I thought so)
What could possibly go wrong?
What indeed? Exisitng platform infrastructure was found to be much more decrepit than had been realised - increasing future funding requirements. An appraisal well drilled into an established discovery came back with a very disappointing result. And another. That meant that expectations of increasing production cashflow in the short term were dashed. An attempt to raise additional funds in the market failed thanks to the hole in the economic ozone layer around the world. Even after all this, I assumed - oh so naively - that the wealthy founders/managers would chip in enough additional funding to bridge the gap - or at least enough to persuade the rest of us shareholders to support a rights issue.
Instead of which they've effectively given up.
It simply had not occurred to me that such seasoned, battle hardened veterans, who had taken on this project with their eyes open, would capitulate so quickly in the face of a few setbacks, none of which could be termed unusual. They appear to have been banking on a smooth and trouble-free ride rather than a difficult struggle. They obviously had insufficient confidence to invest additonal funds - which surely discredits the investment case for everybody else.
So, enter stage left the privately owned Trinity Exploration & Production and an agreed reverse take-over. Following which the BEH management team will be out of the door and down the road with the sole exception of Finian O who will take a place as a non exec.
So who is Trinity?
To my surprise it is a vehicle for Bruce Dingwall - founder and CEO of Venture Petroleum. He turns out to be a Trinidadian born and bred. Who knew that? Having left VPC he bought out VPC's Trinidadian assets and used them as the foundation for Trinity. He apparently lives in Scotland but runs Trinity by remote control.
I am afraid that I was always sceptical of Bruce's style at Venture. I thought his successor did a better job than he did. Haven't waded through the detail of Trinity - as a private company, it's less transparent than BEH. I am bemused to see that it employs more than 200 employees. Seems rather a lot to produce 2400 bopd - that's just 12 bopd per person.
BEH is suspended whilst the transaction cranks its way through the system. My inclination is to sell my sadly diminished holding at the earliest opportunity. I will read whatever emerges before then, but I'm inclined towards the low end of the clapometer, I'm afraid.
Anyone out there with more positive views?
The author may hold shares in this company. All opinions are his own. You should check any statements that appear factual and seek independent professional advice before making any investment decision.