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re: Ann: ADDRESS: CUE: Chairman's Address...
I need to brush up on my skills? Lets have a look at this.
We'll look at this in two parts:
1) Their licences around the world and the interests Todd have in them with CUE and whether this makes CUE "Todds plaything for risky activities."
2) Todds shareholding in CUE and what this means in terms of control (Todd would have to "control" them to be their "plaything."
1) CUE has interests in 4 broad areas: Indonesia, NZ, PNG and Australia.
Indonesia - This is where the majority of revenue is generated, being about $28m by my calculations. Not partnered with Todd on any licences.
NZ - Generate around $19m in revenue from Maari. They are partnered with Todd who hold 16%. Surprisingly, Todd do not call the shots on this field given OMV are operator and control it overwhelmingly with 69% interest. They partner with Todd on all of their other NZ permits, and why not? They will mutually share information which benefits both. This again contradicts your first comment that CUE is Todds "plaything for risky activities" as Todd themselves are in the same permits! C'mon dargie, make up your mind!
PNG - Generate around $2m from SE Gobe, but will get some substantial cash-flow from gas sales of 35mmscf per day for 10 years. Even though this is only a 3% interest, it will result in around say $10k a day in revenue? Not patterned with Todd on any licences.
Australia - No revenue. Not partnered with Todd on any licences.
So overall, CUE generate over 60% of their revenue outside of shared Todd's permits. In the permit that is shared, Todd only have 16% and is not the operator. I would think this makes CUE relatively independent!
Again, it's quite natural for oil companies to team up with each other in basins as it's mutually beneficial (they diversify their risk / gain local expertise). Yes, Todd has local expertise....they discovered the Maui oil field, NZ's largest oil field and was the 6th largest in the world in the year it was discovered. I think it's fair to say that Todd have a good understanding and local expertise.
2) Todd hold around 23% of the shares on issue. What does this mean? Under IFRS, have 20-50% as significant influence and >50% as control.
Todd are on the lower end of having significant influence, but definitely do not have "control"....and therefore by definition are not "Todds plaything for risky activities."
Per 1) and 2) I think I've proven that CUE are majorly independent.
Personally, I think having Todd on board is a good thing. They are regarded as one of the most successful oil and gas explorers in NZ. Take it or leave it, you can always sell your shares if you don't like it....I'll be buying more over the coming months. Jeruk could add serious reserves if considered economical.
I won't be replying to you again. Good luck.
