gdbeech: Arguing that a fall in the SP = Bad management by Troy is not an argument at all but just baseless criticism.
An outline of what you think Troy has done wrong, and what Troy should've done but hasn't that you think has led to the fall in the SP would actually provide a point for discussion.
I agree with sheepskin that Troy has done a great job to date. In my books, Troy has ticked off all the boxes in what I wanted the company to do:
1. Develop Manora - On track for production in 2014 2. Secure finance for Manora so TAP maintains the flexibility with its cash pile to fund appraisal and exploration drilling, seize any opportunities that might arise and act as a buffer in the event of any cost blowouts with the Manora development or other issues - A $50 million finance facility has been secured. Tick. On top of this a $20 million corporate facility has also been secured. Tick (Both are undrawn from the last reports I've seen).
3. Undertake appraisal drilling for to further prove its assets - Bianchi, Taunton is being drilled.
4. Set out an attractive exploration program - A balanced drilling program has been set out which includes further exploration in Thailand and drilling in at Palmerston is also expected to commence in Q1 2014. Thrown into this is also the high impact Starfish-1 well which is expected to commence shortly.
5. Risk management by farming-down Starfish-1: Despite the lure of the huge potential gains in success, this is a wildcat well and I didn't want TAP to maintain its 40% stake. It's now beenfarmed-down - although the terms were not as attractive I’d hoped, I think on balance this is a good decision for a company of TAP's size. Tick.
6. Zola/Tallaganda - I support Troy's decision to put these assets up for sale. Development of these assets will be costly and with a timeframe too long for a company of TAP's size and given TAP’s minority position.
On top of that, what I didn't expect was for the change in remuneration structure for Troy. A pay cut, and SP hurdles to meet to excise those options. This is a positive move that further aligns his remuneration with shareholder value.
If you want to go back further: The arrangements to exit Woollybutt were done on good terms, which removed a lot of risk and distraction for management.
Management made good money from Tallaganda (351-P) by simply doing good deals. In early 2011, TAP increased its share of 351-P from 25% to 45% for US$15.75 million. By mid year - TAP then sold down 25% of its share for $30 million.
When I am assessing how well TAP has been managed by Troy, I think what were the mistakes, and what could they have done differently – not much is my answer so Troy gets a big tick overall.
I am happy to hear different views about Troy’s decisions, but I have a tin ear for comments such as “SP is down = Bad management”, or even “SP is up = Good management” without any discussion of the decisions and actions made that contributed to the movement in SP.
TAP Price at posting:
48.0¢ Sentiment: Buy Disclosure: Held
