after sober reflection...

I had a long discussion with Geoff Towner last evening after he replied to the email I posted here earlier.

I am not in the habit of paraphrasing and publicizing private phone conversations so I won't do that here. However, I would make the following observations which characterize the tenor of our discussion:
a) management is sensitive and responsive to shareholder concerns (it can't be easy to phone a very irate shareholder)
b) management shares its shareholders' frustrations about the ridiculously low share price and has canvassed a variety of strategies to ensure it better reflects the company's value in the near future
c) the market's judgement on the uses to which the raised capital will be put (a much more active drilling programme and paying down debt) will determine the trajectory of the share price going forward; buy-backs and road-shows having proved ineffectual.
d) that management is determined to improve the presentation of news to the market to galvanise interest - with the strong caveat that "it is better to understate and over-perform" than the reverse (a philosophy that I personally endorse strongly)

My ongoing reservation - and one I put to Geoff Towner - was that ongoing selling by those granted cheap shares in the placement might weigh down the share price for a considerable time to come. He argued that AMU's small volumes traded would deter them from that and that most new investors had come on board because they saw the excellent value that the company represented at these levels.

I guess we have to hope that he is right. Even after the placement, the P/E ratio should be under 5 (by my rough calculations) - about a third of most of AMU's peers, many of whom have nothing like the 2000 BOEPD that AMU has.

All in all, I must say that I respect those who are prepared to confront their critics and while far from mollified, I appreciated his efforts to explain the rationale behind the decision to one of his disgruntled shareholders.

Please note that the above points are my opinions only and should not be construed as anything more than that.

I'm holding and hope that ongoing news from the very promising Garner drill will keep the share price from too much further damage.

Good luck all,

Gupper