If there was ever a time to issue stock options its now.
Management would be amazed CTP hasn't rallied on the back of the energy crisis conversation in the media whilst a global value hunter is reviewing their books.
CTP needs about 100mio to fund the expansion of Mereenie, however at 70mio market cap a capital raise isnt viable - "Conditional on the NEGI pipeline project proceeding, Central will pay Santos a NEGI bonus payment of $15 million and commit to free-carry Santos under a $55 to 75 million NEGI Work Program to develop the Mereenie field for production into the NEGI pipeline."
The Vertigan report on pipeline regulation is due in December, and its likely the recent announcement is preparing stockholders for the potential of a JV on any associated market re-rating from a positive recommendation.
A better result for stockholders would be for the issuance of stock options. Not only will it provide CTP with necessary funds, it would provide stockholders protection from preditory offers as well as leverage into expected rallies.
For example, a 1:2 offer for 20c Dec 17 Calls at 10c would give CTP approx 25mio in premium and a further 50mio in a year's time with a subscription of 250mio options. Best part is dilution only occurs above 20c and stockholders recieve leverage into strength.
You can play with the numbers, but its a viable strategy that major stock holders should urge management to persue in the aim of preceding the forthcoming 'regulatory and market changes'
Add to My Watchlist
What is My Watchlist?
