The above frustration is shared by ARQ"corporatefile.com.auWhy...

The above frustration is shared by ARQ

"corporatefile.com.au
Why has there been no recognition in ARC’s share price of Adelphi’s success and
ARC’s own success with its development wells? With that strong cash flow, are
you likely to introduce any capital management issues such as a dividend?
MD Eric Streitberg
As a major shareholder, I am extremely frustrated that our recent good work has
not been reflected in the share price. ARC has had excellent results from the
recent appraisal and development wells, the Company is producing outstanding
financial results and our move into the Canning Basin has given the Company a
third exciting exploration leg as well as additional production. On top of this, the
Company is undertaking an extensive exploration program across the Perth and
Canning Basins in Australia, Yemen and onshore in the Gulf of Mexico through
Adelphi. In addition, the Adelphi share price has moved from around 30 cents in
5
September to around 80 cents currently. None of this seems to have been factored
into ARC’s current share price.
We carefully consider capital management initiatives, such as a dividend or a buyback,
on a regular basis. The Company is building up franking credits and, given
the current cash balance, a dividend at some point in the future may be
appropriate. We’ve also carefully reviewed the merits of a share buy-back. We
are wary that some companies in the sector have spent a great deal of money on
buy-backs with very little long term impact on their share price and no tangible
benefits to shareholders. Our current view is that ARC’s very aggressive business
development program will create a large number of opportunities in the short term
to use the Company’s cash to grow value for shareholders. It is also important to
remember that commercialising discoveries can be expensive. Bringing successful
wells from the Company’s current exploration program on production will utilise
the Company’s excess cash, creating significant shareholder value without the
need for further capital raisings or debt.
I’d like to re-emphasise that, as a major shareholder, I’m extremely frustrated by
ARC’s share price performance and can only advise shareholders to be patient
because the value of our careful and systematic work will eventually be recognised
and bear fruit."