Fork in the road, page-3

Always great to read an Adaltiora State of the Union Address. Feels like so long. So good to put everything in perspective, especially for new shareholders.

What is interesting about Adaltiora's post is that it's an important reminder that while geology is critical (and I very much appreciate the expertise people such as Gimo, Alexei, Al, OldGeo, Rexsh, Ya, PSI etc), so many other factors determine the success and failure of an energy company. For example, access finance (equity and debt, see WE), assessing the wider political and competitive environment and, of course, management.

Those who've held since the disappointing reserves report have probably done so because they accurately read the tea leaves surrounding the whole GWC debacle, and the underlying motivations of the respective management teams. I thought SN was unreasonably criticised for events outside his control and for being on the wrong side of some good old fashioned operation risk. Also, at the time, I and others like Rexsh and Heskumdai (sorry, there were many others) were active on the WGO board criticising WGO management because we disagreed (perhaps, flabbergasted is the better word) with how they dealt with the whole situation. The word 'own goal' was a recurring theme. Our basic argument was that even if WGO management genuinely believed the GWC hypothesis was the most likely explanation, they could've gone about it very differently. Also the fact they did not seek to correct the record later (or say anything really), spoke volumes about their incentives and motivations. (As an aside: Biggs is gone now, but I'd love to know what exactly transpired behind closed doors both within WGO and between STX and WGO. I remember in the investor call after the GWC thought bubble, SN seemed genuinely perplexed and upset. i.e. "I consider myself a comprising kind of person..." or something along those lines).

Sorry, this is turning into a bit of gloat post, but I also raise all this again because, as Adaltiora has said, I don't think we should underestimate the importance of Strike being able to determine its own destiny going forward (i.e. in addition to potentially adding 1TCF of gas resources to their asset base). Put differently, I don't think we should underestimate how much the dysfunctional JV (or perception, thereof) has been a drag on the company. Personally think we should've been trading around 40 cent pre-results, especially after the success at Waylering.

A fork in the road, indeed.