Dear Rednap and all regarding pulling aprt this company here are some thoughts from my point of view . I hope you find something usefull from this 1. Annual Report refers to interests in petroleum tenements The following tenements (QLD) have not had their applications granted - what if they are not granted? ATP687P Monto Project East Surat Basin ATP694P Clarence - Moreton Project East Clarence-Moreton basin ATP714P Pentland Project Galillee basin ATP716P Central Qld Coast project Narrows Graben basin ATP746P Moonie North project East Surat basin ATP747P Guluguba project East Surat basin PLA185 Chinchilla project East Surat basin (refers to petroeum lease) PLA194 Kogan North project East Surat basin (refers to petroeum lease) PLA198 Tipton project East Surat basin (refers to petroeum lease)
Of these ATP694P is probably the most important(?) as it is over the inland & coastal parts of Brisbane - a big chunk of land that is the easternmost parcel in the East Surrat Basin which links to ATP641P & ATP644P which is the area at/near Swanbank Coal & Gas Power Stations
Then would be ATP716P parcel encompassing Gladstone, Rockhampton and extending north. Then ATP746P & ATP747P are in the Walloon CSG fairway and encompasses 6690square kl
2. Annual Report refers to Permit expenditure figure for within 1 year totals $3.516M. Of this, farmins will cover ATP689P $50K & ATP683P $495K which equates to net $2.971M expenditure - don't know the ins & outs but means if expenditure not met then they(?) would have the option to negotiate new terms which may include a partial or total relinquishment Capital raising 3,065,000 shares @ 0.30 = $919,500 (without convertible notes) and is obviously less than the one year expenditure figure Actual capital raising by placement of ordinary shares was $1.5M giving cash at 31/12/03 of $1.72M - so you can see they really needed the cash but there is no mention of level of payables.
On a consolidated basis ye 30/6/03 current assets = $329,757 (cash component $254,475) + receivables (non current) $160,700 = $490,457) against (Current Liabilities) payables $569,306 = (loss)$78,849 (plus see my note 3.)
[am presuming that the $100,236 owed to Directors & Director related entities is included in the payables figure as is not seperately listed anywhere else]
Depending on the convertible note thing (please excuse my ignorance in this regard but never had anything to do with them) they could have a cash shortfall The convertible notes have a conversion price of 40 cents per share (with a yield of 10%) - so you wouldn’t convert if the share price was under 40....would you? (plus see my note 4.) Bearing in mind comments raised on notice board that share price could retrace to $0.24
3.On a consolidated basis ye 30/6/03 deferred exploration and development costs totalled $5,438,910 - the recoupment of these costs is dependent upon either the successful development and commercial exploitation or sale of the respective mining areas.
4.There are 35,853,540 options to take up one ordinary share in Arrow Energy NL at an issue price of 20 cents. Options expire 28/6/04. (not far away)
To me this means that there is going to (perhaps) be people taking advantage of these cheap options but may then have to sell a proportion almost immediately to pay for the exercise. What would this do to the price ?? total guess work !!
There is also 650,000 options to staff - same price but expiry 30/6/05 - same thing could also happen again then …you know what staff are like
5.Interesting thing ..this is quoted straight from the annual report “INDEMNIFICATION OF OFFICERS OR AUDITORS During the financial year the company paid a premium to insure each of the directors against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in a capacity of Director other that conduct involving a wilful breach of duty in relation to the company. The contract of insurance prohibits the disclosure of the nature of the liabilities covered and the amount of the premium paid. The Corporations Act does not require disclosure of the information in these circumstances.”
First time I have seen that one ….having said that the directors appear good (on paper)
Overall ..if the price does not go over 40 then people wont be converting their notes. The company seems ok but could do with more cash.
They will have to be careful with their farmins as this then dilutes their overall ownership for certain sites (e.g. Comet Rdge PL - subsidiary of Strike Oil NL having up to 50% ATP683P & ATP689P)... but if you need the work done or havn’t got the cash then farmins are the go.
Funny thing though is that if I was going with my gut feeling …and discounting the rap in PESA magazine …then don’t feel confident for some inexplicable reason…..mmmm...but if share price drops to say $0.30 would buy some as they seem to have pretty good future prospects
AOE Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
