The current oil price collapse was triggered by fuel demand drops brought about by the effects of Covid in Asia, and now the rest of the world. Put simply, massive drops in aviation and cruise line fuel demand, and associated tourism fuel use, has punched a hole in the balance. China/Asia hit the skids back in Feb - more than 8 weeks ago. Airports in Asia ground to a halt back in Feb. The fallout of oil demand drops was the russ saudi price war - each to protect their positions. Unfortunately this has stuffed up what was a great success story here. And the world has been turned on its head. Which leads me to make the following two points:
I wonder if force majeure clauses have been triggered in the wizard lake buy out. With C$2M worth of WBE stock due to be transacted 28th March, im sure theres a lot of talking going on. $C2M is close to 30% of the company at current stock and AUD values. At the time the transaction was penned, C$2M was closer to 10% of the company.
Not sure how doable it is, but can company seek postponement of the option expiry for another year? These options would have otherwise been deep in the money and the company had an almost assured $6M cash injection coming its way in Aug 2020. Surely the ASX would consider relaxing rules to allow measures like this so as to alleviate the crunch caused by this unprecedented act of god.
Interested to hear other thoughts on this.
WBE Price at posting:
0.4¢ Sentiment: Hold Disclosure: Held
