The reserve problem is exactly why I previously said that someone new from outside should have been appointed as CEO as this problem should have been addressed 4 years ago and not now.
4 years ago they decided to reduce exploration costs and just generate large positive cashflow to try and increase the share price.
This worked for a while until the market woke up to the fact that reserves were being depleted and production was now in decline due to under investment.
This was great for the directors short term bonuses and incentives but very bad for long term share holders.
This is not the first time they have done this and previously they got lucky by being able to buy Origin assets on the cheap due to low oil prices and this bailed them out for a few years.
This time as oil and gas prices are still high there are no cheap assets available to bail them out.
I agree they can develop in house assets but that will take time and huge capex spend so why wasn't this planned 4 years ago.
These guys are paid big bucks to make these sort of decisions and personally I think they have failed badly here.
BPT Price at posting:
$1.59 Sentiment: None Disclosure: Held
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