On the 5th September last year we were told that 61% of shareholders took up their entitlements in the Equity Raising, based on the promises of what the money would be spent on described in the presentation on 10 Aug 2017. Four wells with a target of delivering a “most likely” 320 PJ to our 2P reserves was what shareholders were sold on.
And here we are just 1 year on, and following a “comprehensive review” (and RC out the door) we are left with just 2 appraisal wells drilled(one a confirmed duster), with now the most likely just 127 PJ if PV13 goes exactlyto plan. Oh, and the budget has blown out by 71%.
On top of that, Ooraminna is no longer a target of 89-158PJ, but only 28-140 PJ. That’s a hellava downgrade to the low end!
No doubt it’s all RC’s fault, but boy the 61% of shareholders must feel like we have been sold a lemon.
If I wear my optimists hat, the comprehensive review was done based on early drilling results from PV13 being positive, which will justify the Palm Valley facility upgrades and put us in a more robust cash position in6 months time as we maximize NGP throughput. If that occurs, all well and goodas the SP will likely reflect this and shareholders will start to breathe a bit easier.
But if PV13 drilling underperforms, than we’re toast.Delaying Ooraminna removes our last shot at reserve upgrades this year, not to mention until CY 1Q2019 and the immediate $4m saving now will require quite a bit more for the extra rig mob-demob in the next quarter.
While I appreciate the risk management Chairman Marty is looking to instill here, Shareholders will vote at the next AGM after PV13 results but prior to the NGP starting up, and the 61% may make their thoughts known at that point…
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