Bootleg apologies for the late reply, have been a little tied up. Don’t have a great deal of time at the moment to go over the past few weeks of posting however a brief response in regards to some of the threads is below. Please keep in mind any comments are imho only and shouldn’t be taken out of context (I say this as I noticed the point of some of my other posts had morphed into a different beast!)
PXA/BG negotiation threads etc: Firstly, positive to see a prompt resolution achieved to the initial programme. What needs to be kept in mind though, is that should PXA like to retain its interest in the package, they are legally obliged to meet the contractual obligations as outlined in the JOA/FOA, they are not a law unto themselves. Importantly from CTP’s perspective, this therefore meant that PXA must satisfy the Minimum Work Obligations as specified by the DRDPIFR in relation to exploration for Petroleum in the Permit Areas - PXA were unable to withdraw from any development programmes until this was satisfied.
To meet these Minimum Work Obligations (exploration and appraisal), CTP were able to cash call minimum expenditure commitments from PXA (which it seems they have done). If in the instance PXA were unable meet these commitments, for example seismic works payment obligations, then PXA must transfer the entire farm-out interest to CTP and will have no further rights in the agreement other than drilling interests attained prior to the date of notification.
I could not see PXA forfeiting their rights to the package for several reasons, particularly in relation to NCR wells. The first example is that they have now met Minimum Work Obligations via committing to 5 NCR wells and 980 line kms of seismic (even if it were via cash call and legal notification), and secondly the recent execution of pre-emptive rights over EPA 130 was another indicator. To demonstrate the latter, should PXA have allowed EIR to move on the additional 25%, PXA would have retained a mere 6% working interest, EIR 39% and Merlin 55%. With the execution of pre-emptive rights, PXA moves their interest to 13.5%, EIR 31.5% and Merlin 55% - So clearly, through this transaction PXA maintains a strong desire maintaining their exposure to the NCR potential within the package.
As the MWO is now agreed upon, high impact conventional targets that fall within the PXA broadacre farmin such as Ooraminna 2, Johnstone or Waterhouse will form part of additional exploration negotiations. Should negotiations/progress towards drilling these conventional wells be unacceptable, CTP are able to Sole Risk the campaign if the board feel a compelling and strategic requirement to do so (I personally don’t see a need to). Until the MWO was satisfied, it would have been a complex issue for CTP commence a sole risk exploration campaign nor would it have been ideal. Overall, I don’t believe PXA will pass the opportunity to participate on some of the more highly prospective wells (ie Ooraminna 2) given its parent is a gas orientated organisation, however their corporate objectives may somewhat alter temporarily due to a lack of resourcing.
(Alternatively CTP may look to drill targets such as Magee 2 or Mt Kitty with HeN which fall outside the PXA broadacre permit. Magee 2 will require further seismic prior to drilling and, drilling of Mt Kitty is reliant on positive stratigraphic results at Magee 2. So even if this were to happen, drilling of either of these two targets will not happen for quite some time)
Now secondly, outside of PXA’s minimum work obligation/expenditure requirements which seem to be agreed upon, the other outstanding issue was that of bringing in additional farmin partners, that being ROG. This is an interesting scenario however the black and white component is that the board of CTP had executed the farmout agreement with ROG by the required deadline and thus satisfied one of the criteria to bring in additional partners. PXA may potentially have the ability to execute pre-emptive rights over the package however, I believe they are prudent enough to see the benefits of what additional partners can bring to the table, especially with respect to expediting positive development, strengthening of technical capacity and additional resourcing availability (which there is a shortage), increased efficiency at both operational and financial level and the opportunity to work closely with persons involved with worldwide licensing rights to CTL technology. A balanced negotiation table assists long term development and although BG are large, to effectively gain value out of CTP’s extensive acreage in a meaningful timeframe, additional partners are necessary.
Finally just as a note: for the posters that have been questioning the company’s deliverable timeframes in regards to this matter (ie conix) keep in mind these are very complex agreements and negotiations which involve several parties so are not solved overnight. The terms of any contractual dispute are that PXA have 5 days to respond from notification (as we have already seen), following this there is then a 14 day negotiation window whereby if no conclusion is met, it will then go to Mediation and Arbitration where an independent panel will be selected (by the President of M&A Australia) for review. If it had of progressed to this stage both CTP and PXA would have both been required to fund the mediation based on their relevant interest in the associated permit/programme. No party unnecessarily puts themselves in that position and there is no reason at present for it to eventuate.
Company Rep thread: Lots of talk on this but I don’t believe the board will approve a company representative on HC due to both the corporate and legal issues which this opens up. Put simply, every public listed company communicates to all of its shareholders EQUALLY via ASX announcements and CTP is no different. Historically the company has been very good with communication (better than most) and an individuals’ own interpretation of what these announcements contain should be more than sufficient to validate shareholder concerns.
From what I gather, it seems most calls made to the company are to calm anxiousness or, an attempt to gain more information than what has been presented via the ASX. Although John can’t be fooled into these intentions by some holders, the unfortunate part is that sometimes these discussions are inappropriately misinterpreted and then published in the public arena. If I were in his shoes and read some of the misguided comments here, I’d be inclined to limit verbal shareholder communication and make all holders rely solely on ASX anns and their own research. Further to this, although John has been open to communication, receiving several calls per week and being asked the same questions is not a productive way for him to be operating. All I can suggest is let him get on with the job at hand as the board already does a commendable job at keeping the market up to date.
Company responsibilities in regards to disclosure and subsequent shareholder rights is listed below.
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