what a difference management, page-19

re: ... what a difference management I disagree that HDR had a cash problem. They had a $100m credit facility that they had not drawn down if I remember correctly, they had the case from the capital raising, they had good income from Chinguetti, and they were bringing producers online in Suriname. Uganda would have been relatively low cost to get producing, even if shipment of the oil would have been a logistical nightmare, and the Ugandan government would have bent over backwards to help Hardman get into production.

Cash was not a concern, and who knows whether it would have been a long term concern either. If the oil price continues to go up, which I think it will, Hardman would have been making windfall profits on any oil it could produce and its reserves would just become more valuable.

That is what disturbs me most about this, the board has just shown a complete lack of vision about the long term future and have taken a low risk option for an immediate return. But shareholders like us have invested in HDR because we do have some vision of what the future value of the assets could be, and we were prepared to take the risk, regardless of coups and all the rest.

In the past I have supported Simon because whenever I have spoken to him I have been impressed with his knowledge and ability, but at the end of the day he has a conservative mindset that is not suited to the job of CEO. He is an uncommunicative, stiff upper lipped pom and he does not have the entrepreneurial flair required to promote the company effectively to shareholders, institutions and potential farmin partners.

I don't believe there is anything sinister in the actions of the board, this is just what happens when you give control of a spec oiler to a group of long term middle managers from big oil companies. No guts and no glory.