Interesting things are happening with NSE for more than a year now. I have never seen such strange things happened in any other stock I have been in before.
The strangest thing is being the NSE management's actions IMO!
They flicked the rig. It looked very strange that you would flick a rig after drilling 6000m (in two wells) in the middle of nowhere. However we understood that the decision was taken based on a combination of concerns about competency, operational performance, reliability and safety issues (See 2013 Annual Report page 16 Chairman’s report). That was fine.
We understood that the management also frustrated by that though decision. Chairman says on Annual Report;
"I, along with my fellow Board members, am acutely aware of the frustration and disappointment the decision created, but even more so on reflection, I am certain that we made the best decision for our operations and for long term project viability."
That's understandable too.
The chairman also justifies the low share price of today. He says on the 2013 Annual Report;
"The decision to terminate the DSA,coupled with changing investor sentiment towards the natural resources sector in the second half of the financial year and the absence of liquids rich gas at Nicolay-1, has impacted on the NSE share price, which is disappointing."
No. I don't agree with you Mr. Chairman. It is not only those two reasons, someone is pushing it down too.
Also, if the share price is disappointing, why we shareholders left in the dark about the technical details of the drilling operations and details of the results is more disappointing!
I wrote these things here before;
They didn't release enough technical information as the other explorers release...When I asked all about these technical issues by a 7 page letter to the management on 7th of April 2013, the answer I received was very short;
"In terms of the detailed questions in your letter, we are not required to provide, and due to commercial factors it is not in the interests of the company to provide, the level of detail you are requesting. ...that information will be released as soon as possible in line with our continuous disclosure obligations."
They are keeping the details as "Trade secret". That's OK, and that's legal (according to ASX continuous disclosure rules some information can be kept as trade secret).
But the stock price is going down all the time. Actually someone is deliberately pushing it down IMO, by an unknown reason !
In these negative conditions around the stock, why management is not giving the information I asked is not understandable!
However, the management might say later on when NSE discovered huge resources; "We told you that we were always very confident about the prospectivity of our acreage". Then you can't say anything.
Yes, they can say that. See what the Chairman says on the 2103 Annual Report:
"The knowledge gained from our Canning Basin drilling campaign to date has reaffirmed to us that we have a substantial foothold in prospective acreage, and we remain focussed on unlocking that potential...This information has certainly further encouraged our views of the potential prospectivity of our large exploration acreage...The desire by PetroChina to buy into our acreage in a deal with ConocoPhillips supports that belief."
There you go!
The only little problem is, we, shareholders don't know what that encouraging information is as they keep that information hidden, as trade secret!
I am still asking;
- Which information has certainly further encouraged your views of the potential prospectivity of NSE's large exploration acreage then?
- Is it only the confirmation of wet gas window in N-1 well?
- What happened in GB-1 well then?
- Was it more encouraging?
- What was encouraging about it then?
- Was it only the wet gas signature in GB-1?
- Or were more encouraging things in GB-1?
When we ask these questions we are told that they were not required to provide, and due to commercial factors it is not in the interests of the company to provide, the level of detail we are requesting!
In these negative conditions around the stock, I don't agree with management. They should release all information in hand to the market ASAP.
If keeping information as a trade secret ruins shareholder value, it cannot be kept as a trade secret. It does not comply with the principles of stock market investment theory, ASX rules, or any other terms of commercial rules.
That is ridiculous.
Look what the below research report says. It's a very credible research report about the problems with the continuous disclosure issues in ASX. (I am giving the link for those who may want to read the whole research)
‘Please Explain’: ASX Share Price Queries and the Australian Continuous Disclosure Regime
Centre for Corporate Law and Securities Regulation, The University of Melbourne Source: Click here
Page 13:
"In the absence of accurate and timely information, there is a significant risk that investors will make uninformed decisions, to their own detriment.
Investors are unlikely to invest in an environment where they believe that they will be exploited by those with better access to information. According to NYSE Chairman, Richard A Grasso, ‘a higher level of disclosure ... helps investors overcome distrust and assists international capital flows.’".
Yes, the investors are continuously being discouraged about this stock.
Also, this research says;
"The view of the Australian government at the time of the introduction of the continuous disclosure regime was that ‘a well-informed market leads to greater investor confidence and in turn a greater willingness to invest in Australian business'"
That's right. PetroChina is one of those kinds of investors who invested in NSE's Southern Canning Project. They even invested after the drill pipe got stuck when everybody was selling. That means PetroChina has more information than we have as NSE shareholders! It is not acceptable.
How can we be assured that PetroChina executives didn't give this insider information to anyone and someone is not trying to manipulate the share price for buying big chunks of shares?
Or, how can we be assured that no one has got that encouraging information (which we don't have) and the share price is not manipulated by no one?
As you can see we, shareholders are left with many questions. None of them is answered. Hence the share price was going down all the time.
It is obvious to me that someone wants it to go down and strongly pushes for it.
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