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1.5¢ samson oil & gas limited

Proposed LTIP, page-2

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dougfr

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15/10/14

18:04

Post #: 14130069
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Originally posted by dougfr ↑

I have been having a look at the proposed resolutions the BOD have put forward for the upcoming AGM and trying to get my head around them.

The three main contentious resolutions appear to be the granting of 6 million free options to Directors Rudenno, Craig and Skipper (Resolutions 5, 6 and 7), the adoption of a Long Term Incentive Plan (LTIP) which gives the Board the power to issue Restricted Shares to employees and directors based on certain performance levels (Resolution 8), and the granting of Restricted Shares to CEO Barr based on certain performance levels (Resolution 9).

My main concern is the low base we are now coming off (1.5c a share and falling) with the first threshold level set at only 3 cents a share. The next thresholds are 4 cents and 6 cents. In fact if the sp gets back to 6 cents the LTIP can pay a maximum of $1.225 million to employees and directors and the same amount to CEO Barr. At 3 cents the payments are $75,000 and 4 cents $306,250. There are also thresholds for EBIT. Each category has a metric of 50% with ratios set at 100% for the CEO, 75% for other executives and 25% for other employees. I think I understand all this, however others with a more analytical mind may wish to elaborate.

My main concern is that we were at 3 cents, 4 cents and even 6 cents not that long ago, yet here we are being asked to ratify substantial incentive payments to those directors who were at the helm during the substantial drop in the sp, just to get back to these relatively low levels. Good God we were at 10 cents just over two years ago and at 24 cents about 3 years ago.

Before all the eternal optimists start jumping up and down and telling me what a great job the Board has done and that we will soon be looking down the barrel at 1200+ BOPD by Christmas, let me say that this just adds weight to my argument. Why would we pay an incentive if as you say all the hard work has already been done? I would rather agree to much larger incentives if the BOD can really pull their fingers out and get the Company back to a double digit sp, not a piddling 3 cents.

I will be voting a resounding NO to these resolutions.

End of rant from another flip flop holder.

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Just another thought. My cynical mind has forced me to ask the question - has the Board deliberately delayed the fracs, and prolonged the well shut ins, so that the sp falls so far that a jump back up to 3 cents,when they all come back on line and the new wells start flowing, would make them look like geniuses and earn them a nice little bonus?

No need to call the lawyers - just a thought to ponder.

SSN Price at posting: 1.5¢ Sentiment: Hold Disclosure: Held
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