I don't think this is meant as a threat or being a bully so much as it is a clarification for lots of vocal minority shareholders (yes, big shout out to HC posters here) that seem to incessantly bang on about how bad the deal is, and who are probably swamping management with their opinions, questions and suggestions. STX are basically saying this is our best and final....so FFS stop asking... Just IMO.
As an STX holder I totally agree. I don't think TPD is worth any more in terms of a script deal. Partly because that seems to be an agreed fair value and partly because STX is very undervalued in itself. I am worried they could dilute the STX upside too much. We don't get a vote as STX holders, but if we could I'm sitting on the fence. Any more and I'd be up in arms myself. So, I for one totally agree with their line in the sand.
The whole TPD valuation thing seems to revolve around unproven and untested potential. I mean there doesn't seem to much debate on Walyering being worth 20/21c based in DCF - and with a risk margin for life of resource / gas price variation in there....so that seems to be OK.
Outside of that...?? Yes, likely some potential in the other leases, but also a lot of uncertainty and cost to develop. Some view this as a liability. Certainly independent valuers don't ascribe much value here. Ditto, Mongolia. A lot of potential, but many years and huge dev costs - with Chinese sovereignty risk. Put up a dart board and go for it. But this will be spun out, so shouldn't be part of the conversation, unless TPD mgt are so inept they can't figure a solution out in which case that raises a whole set of other issues. In a nutshell, we're talking Walyering cash flow as the main talking point, and that seems to be at an agreed value, so all the jumping up and down seems pointless.
I think STX can happily go on their way without TPD's share of Walyering. I mean nice, but not necessary. TPD on the other hand, even if they kept Walyering it gives them some working capital to develop the other potential areas, but maybe not enough and quite likely not the skill set for exploration either. I mean they don't actually operate anything. Without Walyering TPD is a basket case because it has uncertain value, no revenue and large potential outlays. I mean a CR in that environment would be a disaster for shareholders. They have no choice but to find other solutions, i.e. merge / sell.
In a nutshell I think this is a message of support to pacify STX holders concerned about further dilution and a line in the sand for TPD holders - both potentially designed to stop the small retail holders making so much fuss and taking up headspace.
My 2c. GLTA.
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