Another fortnight gone, another negative outlook. Let me summarise my views of the Annual Report and some recommendations:
The report from the Chairman was disappointing, basically it says:
1. That we cannot expect anything going forward that might add value to the company.
2. It seems that the entire reservoir needs to be re-evaluated, confirmed by the move of Reserves back to Contingent Resources. Basically this means that the latest well was a failure, as its intent was to add reserves.
3. Chairman confirms this with his statement that there were "lower than expected production rates at its most recent wells. Given that there has not bee a well drilled in the last 4 years, other tan well 77H, it seems this is a confirmation of the failure of that well.
4. Chairman admits that considerable spend of valuable funds on reassessment of the reservoir sets the company back to pre-76H well of 2011. 5 years of wasted money!
5. Why does Chairman record his appreciation of the JV partners who are not paying their way, With a bank account of $5MM and GSPC owing another $10MM, there seems little to appreciate!
the salaries remain high, even after the salary cuts, with the MD plus CFO plus Geologist plus India guy taking home almost $1.5MM a year.
there is nothing in the AR from the new MD. He should be laying out how he will make money for the company. he should be telling the shareholders why they should stay with the company.
there is $5MM in the bank, with salaries taking about half that for the year, how can they possible expect to fund a sole risk vertical well? Are they going to rely on GSPC paying their $10MM? Do we have more fund raising ahead?
Last August, they raised $20 Million, not drilled a well and have $5MM left over. What is this? Why do shareholders put up with this?
I recommend a rejection again of the Rem report that will force a re-election of Directors and the first ting to do is to vote out the Chairman who dares to say such nonsense in his report to shareholders, and showing such disrespect to those that pay his salary. Shareholders should demand at least another 30% pay cut by all staff, but the most coming from the big four.
Also, India will go nowhere unless there is political energy applied. this is the reality of India, yet there has been no replacement of Bhandari. Its time to abandon India and focus on using what little funds there are on more rational prospects.
at the AGM, vote against the Rem Report and the Chairman. Demand a report from the MD outlining the next 2 to 3 years and how they will turn this company around.
OEX Price at posting:
0.8¢ Sentiment: None Disclosure: Not Held
