Consolidation and shareholder concerns, page-126

Consolidations.
I had both CTP & NDO  in my portfolio and can put forward a few thoughts.

CTP (Central Aust)
One producing asset (Surprise well in tight sand formation) re-evaluation of reserves did not impress the market (18 cents down to 12 cents). Production commenced with a typical  "tight depletion curve" which
did not impress the market (note, this hole was not fracked).  Had farmins from Santos and Total (French) which bumped the market but programs are long and drawn out in tight permits, so impact was short-lived. Bought out another producer (gas) to staunch the hemorrhage.
5 : 1 consolidation came from out of the blue on hardly any fundamentals (from relative new CEO).

NDO (Off Shore South West Philippines)
They had 23% in Galoc Production Field. A take-over was attempted by a Thai Oil Refiner which resulted in 82% current ownership. They made an offer to OEL (33% share in Galoc) to secure 56% of production. They paid a premium of 36% above OEL book value. The loan of $108m is owed to the major shareholer - NDO still had a  about $18m outstandings. Fundamentals - excessive debt and costs above current Brent Pricing. They have no real "high impact" drills on the horizon.  Consolidation came from out of the blue (over 2,000mm on issue) to  attempt what they deemed  would create "shareholder wealth". Price of oil  over US$100 and rabbit out of the hat would do the trick.

EGO
At present this company also has a  "One-Trick-Pony" nb the B Sands (read some of the small print in Presentations about the risk of this).  Drill the RGN, have a "Two-Trick-Pony"and I'm sure the fundamentals (increased reserves/production) would look a lot better than the above two for a "consolidation".

Conclusion
For long-term holders, the major concerning factor has been "dilution". Ancient history has been dusters.
Modern history has been an expensive road to production and a failure of two out of three reserves. The here and now has been a 60% dilution (on 6,300mm shares) to get to the next stage of exploration. Yes our asset base has expanded to 100% ownership but apparently ignored by the market at present. Yes you had the opportunity to reduce the effect of dilution in a rights offer - if you had the cash and the faith.

Companies that have what appears "prodigious" amounts of issued shares in relation to the share price would be regarded by the market as an indictment against management. This is why they would like it to disappear as quickly as possible. The catalyst is the commencement of Tranch 2 but the market is already aware of this - how much of it has already been "factored in" - there is no increase in reserves (net assets).  Lets settle in the fundamentals of RGN and see where we are headed.  It is only just after Tranche 2 for Pete's Sake.

Figures are off the top, so some leniency please.