whos cheatin' who

“Who’s Cheatin Who”

A great country song by a great country singer (Alan Jackson)! To borrow a couple of his lyrics

“But still you wonder
Who's cheatin' who
Who's being true”

GGP has been a costly reminder to me of what can (and apparently usually does) happen to under capitalized stocks operating in a capital intensive industry when finance dries up.

So who’s cheatin' who?

In the early days of my holding (early Mar ’12) I thought I have discovered an undervalued gem, that like so many “USA Gas E&Ps” had been able to recapitalize itself on the back of picking up prime liquids acreage, in this case the South Midland Basin. Yippee. I read all the ASX releases, even some of Arturus’ and felt that the issues flagged were not material to success and was worth investing.

I cheated myself there. There is an old saying “You can be completely true without being truly complete”. Did GGP breach disclosure rules? Were their releases untrue? Were they even misleading? Initially I thought so (to the point of filing a complaint to ASIC) and wrote in detail to the company seeking public statements.

The market briefings that resulted addressed those questions. Did that information change anything? Well yes, but they didn’t contradict anything either. Would I still have made the initial investment – probably yes. Would I have added to my position – most likely no – BECAUSE the capital constraints would have been obvious and clearly linked to lease development issues. That said I should know better and rereading those releases over and over, the information was there – it just wasn’t crystal clear.


But still you wonder, who’s cheatin’ who?

I supported the IG initially. I even provided to IG some very detailed analysis (spreadsheets) on Hz models and Capex/LOE to see what kind of capital would be needed to deliver on the CDP post lease expiration and get cash flow positive. I posted some of those on HC too – although moderated since then. And sure, I voted against both Franks – someone had to pay for the balls up – at the EGM.

But things were changing. I’d say the “epiphany” for me came at the EGM. Leading up to the EGM I began to get concerned about IG – and I think that was obvious in my posts then also – but I was definitely swimming against the tide of this forum. The EGM itself was unpleasant – but the way it was described here you would have thought they occurred in 2 different universes. But the forum made its choice – and effectively those not for IG became “pariahs”.


But still you wonder, who’s being true?

At this point I’m sceptical of everyone and everything. GGP Shareholders got the “Rights Issue” that was demanded – but we’ll see how that was supported if at all. Even Novus it seems wanted out – and left it to be mostly underwritten by one of its broker and a former director.

Then we have the assertion the main person underwriting the Rights is now dumping – at a loss – supposedly to make it back on the Notes held, and then buys them back? We’ll see if that has substance at some point I guess

And the unveiling of an approved finance offer of $15M on “normal commercial terms” with a pre-condition that the Chairman resign, that draws a “no response” from the company. This despite IG spending two months drafting a business plan with estimates that simply need access for them to be satisfied as being correct.

The sceptic in me would like to see that plan and terms – which although being normal commercial terms now is confidential, except for publicly stating the Chairman must resign. It’s just a stretch for me to blindly accept that “business plan”. It could be a perfect plan and it could just as easily be a POS – what qualified/competent persons drafted it on what basis and with what data? Could a credible business plan that could be implemented even be drawn up without inside knowledge of the company’s operations and its prospects? How does that work?

And of course now there is a class action suit against the directors and former directors..... I suppose a dumping of holdings – materialize the loss – and then join a class action suit claiming damages is also a strategy, all the while claiming best interests of all shareholders at hand. I’m guessing that’s rapidly becoming best interests of only those shareholders who have joined class action suit. But I'm not privvy to that not having joined IG or its CAS.

So many questions remain unanswered – I have no idea anymore. Really don’t have anything to contribute anymore either. There was a time when it was worthwhile. Now it’s just a reality check for what is posted. Since I'm being nostalgic, I guess that Cher song "If I could turn back time" would also be appropriate.


Good luck everyone. Still holding ... wondering....

"Who's cheatin' who
Who's being true”

PS – How do you feel now Dr. E?