musings on the agm

Certainly a couple of unhappy shareholders in attendance.

Probably a good thing as the Directors were slow in disclosure in a few areas; especially disclosing the amounts held in US$.

Fortune has favoured them though as the US$ strengthened and we now are looking at having A$200m~ in the bank at 30th June 2009.

They are saying they need that sort of cash to be a serious player in the oil and gas market given the costs involved. Tend to agree with them on that.

There is a positive double whammy here, the costs of acquisitions are falling rapidly and the PPP cash balances are rising just as quickly.

The strategy is to buy into a play where oil is about to be produced in Aus or NZ at 50c in the $. Probability is good they can do this successfully I feel.

Buybacks are off the table and that is fair enough. Unhappy shareholders can buy more shares to increase their % of the company at these depressed prices.

So all in all, probably a very safe investment at 21c for the long term. They have to make a lot of blues before destroying the probable intrinsic value of the company of 40-45c. They also have a fair motivation to be careful given the massive Director shareholdings.