Macro Tsimmis

intelligently hedged investment

Transmeridian (TMY) update #4

Posted by intelledgement on Mon, 18 Jun 07

Transmeridian Exploration had a couple of announcements today, neither a surprize and neither particularly good news. The first announcement was that they are selling 400,000 more shares of TMY stock and thus diluting the holdings of all of us existing shareholders. There wasn’t really any choice in the matter as the company is nearly out of cash and oil production has not ramped up fast enough to cover the operating expenses, to say nothing of the ongoing new exploratory drilling program. The second announcement was a sort of “no-news-is-good-news” update on management’s attempts to shop the company, or at least the license to the Kazakhstani South Alibek field (which from a valuation point of view, essentially is the company). Essentially, there have been multiple expressions of interest and management are furnishing insider data to prospective purchasers on a confidential basis. Here we are hoping that a deal gets struck in 3Q07, or failing that, that we see some dramatic production news.

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