More on consolidation

In my opinion EGO shareholders should not be considering or voting on any form of consolidation (50:1 or otherwise) until at least the end 2016 and only after EGO has drilled a few wells (and we have hopefully had some successful outcomes) and the ERM debt has been re-financed or paid off so no additional top up fees payable etc .

I do also not hold the view that EGO need to consolidate in order to attract future / suitable farmin partners etc. At the end of the day, if significant additional gas/condensate reserves are discovered through exploration , EGO would I imagine have no shortage of suitable interested parties. I cannot see why these parties would decide to not get involved in a major opportunity because EGO has a low share price !

I have been down this consolidation path as a shareholder with Central Petroleum (CPT). A consolidation of 5:1 occurred when shares were around .095c mid 2013 resulting in a post consolidation price of approximately 0.475c. The share price has since drifted all the way back and is currently trading at 11.5c.

It is my view that any consolidation at this point in time will be detrimental to many existing long term shareholders that have paid more than the current .04c share price and are hoping to finally be rewarded at some point soon or at least break even! E.G. If the share price were to consolidate at 50 :1 tomorrow on current price of .04c and you originally paid .08c for the shares, then you would be chasing a 40c share price just to break even. If a consolidation occurred at 100:1 resulting in a share price of .40c then you would be chasing an 80c share price just to break even!
At least with the current low share price there is still the potential upside for significant share growth. Cant see that happening after a consolidation in this market.

At the end of the day, if a business finds new/significant reserves of gas/condensate through exploration you would expect that their share price will naturally rise and reflect this i.e the market determines the real value of the share price (not a share consolidation).

Cheers
swd