CTP-General Meetings 22 June 2012 General Letter to the Market-John Heugh 12.05.30
Background :
I founded Merlin Energy Pty Ltd, the first of the Central Petroleum Limited Group of Companies (CTP) in 1997 with the vision of building a major resources company and spent 15 years turning this into reality, block by block. We are now within reach of that original vision and I believe I can drive it to success if given the chance to do so. My record over the years shows the dedication and determination in leading a team responsible for:
listing on 7 March 2006 after 9 years of difficulty with prevailing low oil prices and difficult market conditions;
Surprise, (100 million barrels of P50 OIP assessed in the greater structure), the first successfully flowing horizontal oilwell onshore Australia and the first successful oil discovery in central Australia for almost five decades-Surprise and the Johnstone West wells have provided a cogent coherent focus for a new oil province in the Western Amadeus Basin;
CTP growing to net ownership of a geographically focussed cohesive package of prospective petroleum, helium and coal acreage probably unsurpassed in the developed world with one of the largest prospective net ownership of unconventional potential anywhere; (independently certified P50 prospective recoverable resources of 42 TCFG and 5 billion barrels of oil);
The discovery of vast tonnages of coal; (2 trillion tonnes independently certified JORC Exploration Target).
The definition of a large potential gas field at Ooraminna with undoubted unconventional tight gas sand potential;
The research and promotion of unconventional exploration from (2007)
The recruitment of unconventional resource expertise;
The development of many new exploration concepts in central Australia.
Having discovered oil, probably of great commercial significance early in January this year :
The Managing Director who made all of this possible has been purportedly terminated from his position;
The Company has spiralled into a confusing parlous state with rampant escalating litigation;
Instead of being in significant oil production with attendant cash flow and having executed significant farmout deals by now, CTP is facing multiple General Meetings, delayed long winded seismic programmes and the spectre of no more drilling until 2013.
I have been purportedly terminated with three months pay and suffered public damage to my reputation following one caution from the Board in 15 years and baseless accusations of mishandling the management of a recently hired employee.
My rejection of this has led to an action in the Supreme Court following a writ lodged on 12.03.23 seeking re-instatement and/or costs and damages which may very well be significant.
Surprise and cash flow:
Prior to the flow testing of Surprise, I was approached by a group of Shareholders who represented the heart of the so called “rebels” and cautioned by them that they would “roll the Board” if the Company had a successful well at Surprise and did not use the rig on site, ie Hunt Rig 3 and drill at least one more production/appraisal well as the Company desperately needed cash flow to minimise dilution and to elevate the Company into the status of a serious producer. Acting responsibly, I cautioned the Board about this group’s concerns and urged them to let us get on with the job of drilling another well or wells as soon as possible. Despite the strong convictions of CTP’s technical team, external consultancies and myself, the Board refused to sanction a mandate to raise capital solely for expedited drilling at Surprise subject to the success of flow testing of the well.
The flow test was spectacularly successful for your Company, even with somewhat primitive steering equipment for the horizontal leg of c.240m, and many lessons were learned. CTP’s technical team including the Chief Operating Officer (COO), external consultancies our corporate advisors and myself, were unanimous in the recommendations to drill another well or wells using the existing closely spaced 2D seismic grid.
The plan was to drill close to the existing well but in the opposite direction ie, to the North, probably c.800m or so downdip to intersect the oil water contact, the only reliable way to gauge the extent of the field.
A third pre-seismic well downdip to the oil water contact to the west was also discussed.
It was universally agreed that 3D seismic would be adviseable for a full blown longer term field development but 3D seismic was un-necessary to plan an extra well or wells in the short term and 3D seismic can not define the oil water contact and thus the size and relative commerciality of the field.
The Board has used the excuse that CTP did not have enough funds to drill more wells in any case but failed to define a mandate to raise funds devoted exclusively to what should have been the main focus of the Company, that is, more drilling and quick cash flow from the Surprise Field.
Even so, a small additional capital raising with a focussed mandate on oil production instead of seismic would have I believe been far more successful and would have enabled the Company to now be in production from not one but two successful wells.
Soon after the successful flow test of Surprise, on or about 12.01.15, I was again informally contacted by the “rebel” Shareholders and they expressed their continuing anger at the delay in a decision about more drilling to enhance oil flow from additional drilling at Surprise. The mobilisation and demobilisation of a drilling rig to central Australia was excessively expensive and appropriate drilling rigs in Australia scarce.
Again I cautioned the Board and added my own convictions about why we should drill more wells at Surprise as soon as possible.
The main target at Surprise was a thin, highly permeable sandstone in the Lower Stairway Sandstone, known as the “sweet spot” evident from a core cut in December 2010 on Surprise-1. Because of equipment failure out of CTP’s control, and a rudimentary steering system due to a lack of readily available equipment, only a small proportion of the horizontal leg remained in the sweet spot. Plans were made by the technical team to drill the next well with a full MWD/LWD system aimed at drilling most of a horizontal c.800m leg almost entirely within the sweet spot.
This, based on preliminary analysis, could have resulted in some 16 times the length of producing wellbore in the sweet spot compared with the first horizontal leg. Clearly the production potential of such a well would be dramatically superior to the first well.
The first well has produced at some c.400 barrels per day.
The Board, in its wisdom and having dismissed the approaches of the technical team, myself and the concerns of the “rebels”, decided to abandon plans for further drilling in favour of a 3D seismic survey which we are now told is planned to be completed and processed ready for mapping and planning of more drilling some time in September/October this year.
Due to the planned scheduling of the 3D seismic almost certainly, in my opinion, unless there is a change of the Board of Directors, there will be no drilling until 2013 on Surprise. An announcement was made on 12.04.30 in the Quarterly report that the new road to Surprise had been completed. As of 12.05.22, the road had still not been completed.
Clearly the Shareholders and the market should not have been advised in the Quarterly report that the road had been completed.
The securing of a drilling rig to effectively re-drill Surprise, suspended in December 2011 after a rig mishap, took until November 2011, almost 12 months. My drilling staff had all but given up finding a rig during 2011 when I took the initiative and found a drilling rig that had been previously overlooked by our consultant and staff. Larry Werecky of Hunt Minerals and Energy, agreed with myself through initiatives to rush through a refurbishment involving new BOPs, new rotary table, new pumps and new main engines to expedite the drilling and for this I thank him.
Notwithstanding the recent purported opinion of the COO in a press release, he was the most passionate supporter of expedited drilling at Surprise before additional seismic.
The Hunt rig was quite capable of, and, in fact was contracted to drill to 3,350m.
Dalton Hallgren, the COO that I recruited, based on his unconventional drilling expertise, was the main driver in convincing the Board that he could drill a horizontal leg into the sweet spot and remain within the budget allocated to the well. His convictions were well founded and I congratulate him.
It was not until 12.02.17, at a Board meeting dominated by discussion about my alleged “misconduct” that the Board finally determined it would release the Hunt rig; this time span was well over one month since oil flowed and during that time the Hunt rig was sitting on site waiting to either drill or be released.
I could not attend the board meeting due to a recent eye operation causing severe pain and so I appointed Ed Babington as my alternate Director.
Having discovered light sweet crude oil at Surprise and having an opportunity to commercialise the discovery of oil at surprise, the Board seemed more concerned about building a case against me of alleged misconduct than they were in attending to the most urgent business of the Company in the best interests of Shareholders.
Farmouts :
Additional drilling at Surprise, with probable increased oil/cash flow, should have been used as a salient to conduct a farmout “process”, from a position of strength, rather than a position of weakness. CTP’s corporate advisors and I recommended a globally competitive industry best practice farmout “process” to submit best bids in a strict time frame; managed by an experienced external consultancy. As Managing Director, I also recommended a relaxation of the requirements to maintain operatorship and majority equity interest and a reduction of the standstill period to a more industry standard 12 months.
It is clear however, that a standstill period preventing a farmin partner buying shares in a target company with the aim of possibly taking over quickly in a bargain basement deal is a standard feature of many international confidentiality agreements. Macquarie Tristone, and many other reputable farmout and Merger & and Acquisition agencies recommend such an approach and employ it routinely. One of the world’s biggest, if not the biggest oilco has signed such a standstill agreement with us as have a number of others.
The official announced policy on farmouts as late as 12.11.29 (see the power point presentation announcement on that date) was to retain operatorship and majority equity. These were the parameters I had to work within. The real impediments to successfully completing valuable farmout agreements were, I believe :
the Board’s refusal to adopt a different approach to operatorship, and majority equity;
in the face of a lack of adequate human and IT resources and skill sets, to adopt a more competitive “global” process run by a consultancy to maximise Shareholder value and to drill more at Surprise on an urgent basis to capitalise on early cash flow and to enable the Company to negotiate on farmin deals from a position of strength.
The Chairman refused to consider a comprehensive competitive farmout “process”, informing the Board on 12.02.02 that he had already been in discussion with a party interested in the Surprise area and that we could farm it out “overnight”. I recommended that we should not rush in and do the first deal that came along on the crown jewels. Contrary to normal corporate protocols, the Chairman refused to name the party despite repeated questioning by me and, immediately prior to my purported termination as MD, also vetoed a carefully prepared potential hostile takeover defence I had planned. The petty allegations of Mr Shortt and the Board are largely invalid, baseless or irrelevant, and will be dealt with in my Supreme Court action.
References on some senior managers from commission earning recruitment agency references were inadequate. Several senior managers with backgrounds relatively unknown in Australia had been, or would have been thrust into positions of global prominence by the announced plans to have Mr Shortt take over all farmout negotiatons and the Company to list on the TSXV. The agency used,“Introspec”, is a reputable corporate agency specialising in corporate due diligence and IT integrity checks, was not a private detective agency and was not ASIS International as referred to in the Board’s spiel; ASIS is a professional association, no more than that.
This “issue” is about prudent corporate management, nothing more.
At no time did I say I “had a plan” regarding subverting the Board’s resolution for the farmout arrangements. Whilst I did actively promote a better global “process”, I did however co-operate fully as directed.
The Background to my Removal:
On or about 12.01.09 and12.01.10, the morning after the successful flow test of Surprise and well before any fracas about farmout dealings, Mr Askin said to Mr Doug White, the Alice Springs Operations Manager, words to the effect that
: Mr White should get used to the fact that Dalton Hallgren was going to be the new public face of the Company, that John Heugh no longer would be and that Mr White should not be frightened by John Heugh.
Mr White responded to Mr Askin with words to the effect that he, Mr White did not understand his comments about not being frightened by John Heugh as he had never had a cross word with him and further that it would be very strange indeed if John was replaced as the public face of Central as he had created and grown the Company over 15 years.
In February 2012, well before the purported termination notice (12.03.22), or any Board meeting or Circular Resolution to consider termination, Mr Shortt and/or Mr Dunmore variously, commented to USA industry professionals (and to at least one oilco major in the USA, ConocoPhillips ), with words to the effect that I was soon to be removed as MD, that CTP was open to takeover offers and had no defined farmin deal requirements.
It was also said in company by Mr Shortt and/or Mr Dunmore, that I may have asked for secret commissions from possible farmin partners and that I had significant health problems. None of this was ever put to me and has no basis in fact whatsoever. (Incidentally my last medical 2012 revealed a BP of 120/70 and pulse of 55).
CTP in Disarray :
In farmout presentations, promotions and discussions at NAPE and after, CTP was presented by Mr Shortt and Mr Dunmore, as in a state of disarray and thus positioned for failure in maximising Shareholder value.
It was stated on or about 12.03.27 by Mr Shortt to a US based consultant, that he expected Mr Dunmore would soon be appointed as Managing Director of Central and that he, Mr Shortt, expected he would soon be appointed as Chief Operating Officer.
Until 12.04.10, when informed for the first time by Mr Clive Palmer, I had no knowledge of placement/farmin discussions with the Clive Palmer company, PNPL, and still have not been briefed by the Chairman or any of the Board. I have made a formal statement to the court via affidavit that this was indeed the case; that is the extent of my involvement with any litigation.
Until 12.05.13, there was no Board Meeting to approve the attached penalty of up to $650,000 or the exercise price of 12.5 cpo of the option issue announced on 12.04.04. I approved neither the penalty or the exercise price of the options;
I was most certainly unaware of any attached penalties of up to $650,000. The associated capital raising was predicated due to capital shortages as well as advice from stockbrokers that the Company was probably facing takeover attempts from two different parties. It could have been diverted to drilling at Surprise but was not.
Seismic/EPT have slipped way behind in the schedule due it seems to management of the process.
The prospect of significant cash flow from oil production has faded away probably at least until 2013 as the Board has decided that more 3D seismic is required at Surprise before more drilling. Re-mapping of the discovery and the choosing of additional drilling locations, according to the Board can not start until the 3D is acquired and processed sometime in September/October. As mentioned before, the technical staff, myself and consultants believe that more drilling and early cash flow was not only viable but highly desirable and technically justified.
Litigation is rampant and escalating.
I have not attended CTP’s offices since 22 March as locks have been changed, my office is occupied and I have no access to the server.
Financial, shareholder & GM voting information has been refused me.
If PNPL succeed in unwinding the recent capital placement of c.$10.5 million nett, the Company could be at or close to insolvency unless more capital is raised. There is great uncertainty in this matter. It is difficult for me to comment further as I have been refused the normal weekly financial updates and monthly cash flow forecasts since 12.04.22 as well as Shareholder and voting information, all due to me in my capacity as a Director.
John Heugh Board Relations :
From 2006:
My discretionary expenditure limit was $150,000; expenditure in excess of that required Board approval so I was very limited in what decisions I could make; not many decisions in the oilfield require less than $150,000 to execute;
Confidentiality Agreements and standstill provisions were constructed by counsel and resolved for issue by the Board;
The Chairman repeatedly directed that Operatorship and majority equity were to be retained in any farmouts despite the implications of dealing with several major oilcos that were interested in the acreage.
The Chairman was negative about any potential keystone investor proposals involving a seat at Board level.
If, as some say, spuriously, that I was the impediment to consummating farmout agreements, why did the Board not discuss this with me, advise or resolve that I should work within different parameters and counsel a different approach…………..they have had 6 years to do this but did not, because I was doing what the Board and the Chairman dictated.
Coal Spinoff :
It has been announced that the market sees no or little value in the coal assets the Company enjoys but that by spinning off the coal assets somehow it will dramatically enhance Shareholder value by unlocking added value. How? Without drilling to demonstrate the presence of shallow coal and farmout deals to provide arms length transaction based valuations to the market, there is no added value in this proposed process but only huge commissions and fees to advisors, stockbrokers, new boards, listing costs and administration.
A cheap RAB/RC drilling programme of $500,000 or so managed by a consultant coal specialist would demonstrate or disprove the presence of coal shallow enough to open cut.
Three farmout deal terms sheets over relatively small acreage positions were ready for signoff before I was terminated. These deals, if consummated could have demonstrated an arms length see through valuation for our coal assets in toto counted in the billions but the deals were quashed by the Chairman in the lead up to the purported termination of my employment as Managing Director. No globally competitive farmout process has been employed by the Company to deal with our coal assets.
There is no clarification as yet from the Northern Territory Department of Resources about the Act which will govern Underground Coal Gasification, (UCG) and may not be for some time. Allied Resource Partners have an existing agreement covering UCG under either or both of the Petroleum or Mining Acts.
Legerdemain and scrip shuffling will not unlock the true value of the coal assets for Central shareholders.
It has been announced by the Company repeatedly that we plan on farming out the coal assets and surrendering operatorship with the farmin partners bringing their projects to bankable feasibility study or FID prior to Central having to provide any funding at all. This remains as the best option to add value to coal.
Once drilling and farmouts have added value to the coal assets, further consideration could be given to a coal spinoff or a major farmout, but not now when the coal spinoff proposal is fundamentally flawed and it has been publically announced that there is no market appreciation of the value of the coal.
Allied Resource Partners, to the best of my knowledge, are not performing and I have seen no update reports from them for months.
Directors and General Meetings :
The spectre of no less than 4 separate General Meetings now hangs over the Company :
The Board, for no apparent good cause, has appointed the CFO and Mr Andrew Whittle to the Board. I believe that the additional costs to the Company in bringing the two additional persons onto the Board brought more pain of course to Shareholder back pockets with little or no advantage.
Mr Whittle I know personally and while I have every respect for the man, he is a long time close personal friend of Mr Askin and hardly independent in that respect.
Mr Elsholz of course has been the CFO of Central for quite some time and has provided advice to the Board on financial and compliance matters of a reasonably high standard but he has never been to the best of my knowledge a director of a listed public company.
Clearly, the current Board lack competency : 3 different new Directors and a very expensive CEO are apparently required now by the existing Board.
The Shareholders do not know what the details of Mr Cottee’s proposed employment package and conditions are, apart from $500,000 a year base salary plus a $250,000 sign on fee, BUT, they are expected to vote on his appointment and my removal in the absence of significant detail.
Is he proposed to have a directors fee on top of the $500,000 base salary? If so how much?
Are there any break fees in the case of failure to complete the arrangement or a takeover?
How big is the option package?
What is the exercise price of any options?
What are the vesting conditions?
What is he going to do to improve the Company?
What are his plans?
Mr Cottee rode to success with QGC on a huge wave of CSG market activity at the time and presided over the sale of the Company to BG before the environmental complications and sheer technical difficulties of CSG became apparent to the market. Who initiated this sale? Probably BG. He then entered into a brief and troubled liaison with Nexus before he took up the role of Non Executive Chairman with Austin Exploration. He promised there to deliver 500 barrels of oil production a day within a year. This has not happened as yet.
He has apparently promised in a recent press release that he would bring either gas or oil into production for Central within three years if shareholders ratified his appointment, but we have an existing discovery already flow tested at c.400 barrels a day.
We are about to produce and sell oil in the Extended Production Test on Surprise probably within a month or so and could by now, I believe have been introducing a second well onstream with dramatically enhanced oil production and prospects for a third before any additional seismic.There is the spectre for the long suffering Shareholders now of not one but up to four different General Meetings. GM(1) slated for 1400 on 12.06.22, after the withdrawal of Philis, Cockroft and Goodall from the running apparently in the wake of interest from Mr Cottee and associates, seeks to retain or remove Messrs. Askin, Faull, Dunmore, Whittle, Elsholz and to retain or remove me.
This meeting also seeks to ratify the previous two capital raisings as well as to approve an option issue to recent placees along with a penalty payment if shareholders do not approve the option issues of up to $650,000. If the capital placements are ratified, then the Company will be able to again place up to 15% of its issued capital at any time without reference to Shareholders.
GM(2) slated for 1200 on 12.06.22 before GM(1), seeks to retain Messres Askin, Whittle, and Dunmore, to replace me with Mr Cottee, add to add Messrs Herrington and Gasteen, via the retirement of Messrs Elsholz and Faull.
GM(3) to be notifed some time in the period of four weeks from 12.05.15, will be seeking Shareholder approval for the rich package of salary, sign on bonus, option packages and other perquisites demanded by Mr Cottee but voting has already started on his appointment to replace me with the Shareholders voting in the absence of the balance of his package. Surely this is not fair to Shareholders. Why are the Shareholders being asked to vote on my removal and the appointment of Mr Cottee in the one breath? (See the announcement of GM[2] 12.05.15).
Surely Shareholders may wish to have the flexibility to perhaps appoint Cottee and retain me, or to not appoint Cottee and retain me, or to remove me and not appoint Cottee? These options have been denied them according to the announcement.
There are other confusing and questionable aspects to this notice of meeting for GM[2] which bear scrutiny; and, there is mention of a third notice of meeting for GM[3], see announcement 12.05.15, to approve or disapprove the proposed terms of contract with Frestone and Cottee. Surely the Shareholders should be spared the expense, confusion and inconvenience of up to 4 General Meetings in addition to the Annual General Meeting usually held in November each year.
Andrew Whittle is a very close long time personal friend of Mr Askin;
Mr Askin’s only other Chairmanship was Great Southland Minerals, formed, inter alia, to hunt for oil in Tasmania under thick sequences of hard igneous dolerite. Mr Askin spent all of his working career in exploration and has never built a company from scratch and listed it;
Mr Faull is an accountant and we already have a CFO and a good accounting team as well as Price Waterhouse Coopers as advisors;
Mr Dunmore is a project modeller for production assets spending most of his career as a reservoir engineer. Apart from Central he has never held a directorship with a listed company and he is resident in the UK.
Having recently appointed two additional directors, Mr Elsholz and Mr Whittle, Mr Elsholz is now being asked to step down. This begs the question why Mr Elsholz was appointed in the first place.
Mr Cottee and Mr Herrington are long time associates dating back to QGC days which does not help them to act independently of each other.
Mr Gasteen has little experience in the petroleum E and P field and clearly an associate of Messrs Cottee and Herrington; again not a robust example of director independence.
Frestone, Mr Cottee’s vehicle for his appointment is touted as follows : “Freestone supports management and boards of small and mid cap resources companies to accelerate the commercialisation of opportunities and the realisation of shareholder value. Freestone seeks to drive business strategy through the provision of executive expertise and support resources to underpin and expedite the successful implementation of corporate strategy.”……………..BUT, Frestone was only incorporated on 12.05.11?
Mr Palmer and PNPL :
There are plans for a possible fourth General Meeting, GM(4). Mr Palmer and PNPL have announced their plans to add Messrs Tam and Schoch and Ms Singh to the Board of CTP, retain me as a Director and Managing Director and to remove Messrs Askin, Faull, Dunmore, Whittle and Elshoz. Mr Palmer and PNPL have announced their intention to request or have a Court order to roll all General Meetings planned including their own intended General Meeting into the one General Meeting for the benefit of Shareholders.
Surely this is the way forward; it is not appropriate for a Board of Directors to subject Shareholders to such confusion, inconvenience and lack of information and to restrict the voting outcomes in the way that the current Board has planned.
PNPL’s candidates for the Board of CTP, Messrs Tam and Schoch with Ms Singh are consummate professionals in every sense with a wealth of financial and corporate dealings under their belts of the type that Central needs to propel its growth forward. Mr Palmer’s group have not only the financial, corporate, compliance and commercial expertise required, they clearly are people of vision who share my vision of where Central can be in the future. They are clearly determined to maximise Shareholder value for our Shareholders and to retain the lion’s share of the Company’s assets in its Shareholders hands.
Mr Palmer clearly has the interests of Australia at heart and Central owns resources of national strategic significance.
To effectively monetise these assets, Central will require funding and partnerships to develop multi billion dollar exploration, development and infrastructure projects and exploration partnerships in the shortest possible time. Commercial imput from the Palmer group and partnerships introduced by them will allow the Company to grow dramatically without excessive dilution and see the share price dramatically increase.
Mr Palmer and his group are, I believe, like me, people with vision for the future, not a blinkered short term outlook for overnight personal gain like many investors. Central, with this new blood at Board level, will deliver to Shareholders what they have lacked for so long : performance and progress, not politics and procrastination.
Perhaps Mr Palmer and Mr Cottee could discuss these issues and arrive at some solution for a clear path forward for the long suffering Shareholders that may involve one of them retiring from the competition and avoiding excessive confusion and frustration for the Shareholders.
Vision :
I have enunciated my vision for Central on numerous occasions in public announcements and the Board has clearly endorsed this as evidenced by the quarterly, half yearly and annual reports approved by the Board and distributed to the market. It is a matter of regret that I have been thwarted in executing this vision by a short sighted Board. This vision is summarised here as reproduced from the December 2011 half yearly operations report announced to the market on 12.03.15, 7 days before my purported termination as Managing Director. : “Corporate Objectives
These can be summarised as:
1. Crude oil/condensate discovery and sales for early cash flow.
2. Gas/helium/condensate discovery for intermediate term cash flow from cryogenic helium export and local “mini” LNG (liquefied natural gas) production for the transport and local mining industry.
3. Longer term value adding to gas via GTL (gas to liquids) and/or LNG for domestic and export markets.
4. Long term monetisation of coal via mining, beneficiation and export, UCG (underground coal gasification) and value adding via GTL or other processes and possible mining and conversion to GTL products via CTL (coal to liquids).
It is planned to explore and develop the Group’s coal assets in a joint venture structure with incoming joint venture partners managing and funding 100% of exploration and bankable feasibility studies to earn an interest and then for the Group to fund its participating interest at project funding stage.
This approach if successful will allow the Group to focus on its core interests of oil, gas, condensate and helium discovery and monetisation. This would be assisted by farm outs and subsequent joint ventures from exploration all the way down the value adding chain to point of sale as appropriate. It is the Company’s intention to maximise shareholder value by the sequential farm out of parcels of land.
Company Goals
The Company’s immediate focus is to monetise the Surprise discovery as soon as possible and relevant data is being reviewed to facilitate detailed planning of subsequent drilling and 3D seismic.
The Company’s short term focus remains crude oil and condensate discovery and monetisation for potential early cash flow with future value adding for any gas discoveries via conversion to liquid transport fuels and/or LNG. Within the constraints of land access, sequence of grant and the inherent constraints of joint ventures the Company’s focus has not changed.
Early cash flow from any oil discoveries may initially be possible simply via trucking to a point of sale at Eromanga, or port facilities at either of Port Darwin or Port Bonython with later development potential lying in additional pipeline facilities and/or bulk liquids haulage on the rail system connecting central Australia with port facilities. Early cash flow may also be possible from helium and “mini” LNG production and sales and this is regarded as an intrinsic part of the Company’s overall strategy for relatively short term cash flow. In the longer term the Company is seeking to build gas resources to a threshold point where value adding processes via the conversion of gas into liquid transport fuels (GTL) can be brought into play.”
Maximising Shareholder Value :
I champion :
Bringing more commercial talent to the Board together with capital and market contacts and connections that are current and accessible; this is an absolute must.
Reduction of Shareholder dilution via appropriate farmout partnerships, rapid monetisation of discoveries and keystone investment
A best practice global “process” to canvass best farmin bids
Coal acreage value adding via limited drilling to demonstrate the presence of shallow coal prior to major farmouts
The cessation of expensive litigation
Not farming out ungranted acreage as land values are changing so rapidly; a good deal today may not represent good value in a couple of years time when the applications are finally granted
Conclusion :
After 15 years of faithful service, 9 years of those being unpaid except for some 5 million odd shares, creating and building the Company and giving Askin, Faull and Dunmore their jobs, I was totally sidelined from all farmout dealings and only 1 unfounded caution directed to me in those 15 years has resulted in purported termination with 3 months pay and attempted removal as a Director.
The Chairman, purportedly with Board approval, at what was supposed to be a discussion on 12.03.22, but turned into an unexpected ambush, gave me a choice of resignation with many unacceptable constraints attached or termination with 3 months pay. I had to make a potentially life changing decision on the spot but after legal advice, I declined that rather dubious opportunity in favour of court action to be re-instated or to receive fully adequate costs and compensation for reputational damage, loss of reputational enhancement opportunity, loss of income, loss of potential bonuses, performance rights, options and above all else the lost opportunity of leading this Company to which I have dedicated 15 years of my life. This action will remain on foot until appropriate action for re-instatement or full compensation is delivered.
One must reflect on the timing of these actions, so soon after a truly significant oil discovery; Surprise, the Company’s first. These precipitous and unworthy decisions by the Board, along with certain indiscretions alleged by PNPL have seemingly provoked a firestorm and the Company has been thrown into more confusing General Meetings of increasing complexity which surely is not in the best interests of Shareholders. Most, if not all, of this could have been avoided if Shareholders and my concerns were listened to and not dismissed by the Board.
If the Board had agreed with my and Shareholder requests in terms of additional expedited drilling for early cash flow and the farmout processes that I and our corporate advisors had recommended, I truly believe the Company (and myself) would now be riding a wave of great popularity, enhanced cash flow, dramatically enhanced share price and market captitalisation. Instead we have been thrown into unnecessary confusion and the peril of uncertainty, discontinuity and convoluted Board politics to the detriment of all Shareholders.
By remaining on the Board of Directors of Central Petroleum Limited, with a new lineup of effective Directors, I will provide the knowledge, the ongoing continutity, stability, determination, drive and innovative ideas that the Company needs going forward to grow it into the company that it deserves to be.
(20min delay)