top 20 changes

Hi holders

Has been a very interesting last 24 hours, after posting my email address yesterday, I have received emails and then follow up phone calls from 3 substantial holders. Unfortunately these holders would prefer me not to discuss the content of our conversations or their names.

There are a few things I can relate, firstly that all 3 holders appear to be relatively comfortable with their holdings, something that has eased my mood considerably, along with todays trades.
One holder has passed on info that suggests that following the latest reserve upgrade the company has an internal valuation of $3.20cps and management wont be selling the company for anything less.
I obviously cant 100% confirm this, but it certainly has allayed 1 fear I had recently, that the company was going to be taken over at an unsatisfactory price.

One other thing I can pass on that surprised me is that apparently many top 20 holders read hotcopper as do all of RFEs management. I cant confirm this either but if I had been management in the past few days, not only would the share price have amazed me but so would some of the comments.
I am as guilty of this as anyone. Has this contributed to the drop in share price, partially perhaps, but I still think other forces have been at work here.

Suzie Foreman was kind enough to send me the share register and an unconsolidated top 20 list, will explain that later.

On the Share register RFE currently has 1535 shareholders as of 16/9/10 not including T+3 trades, of these, there are 167 holders of 100k shares or more but 40-50 have multiple holdings in various guises, so if you own 100k shares or more, you are roughly in the top 120, one of these is an ex West Coast Eagles player who shall remain unnamed.

The unconsolidated top 20 show shares in various names, the consolidated list, which was last listed on 14/5/10 shows shareholders total holding, i.e. including superannuation funds or shares in family members names.

So here goes, see what we can make of it

1) Robert Anthony Healy 23922790
2) Prospect Cust Ltd 12887089
3) Luigi Ghirardello 9316400
4) Louis Ghirardello 8821563
5) Leon Eugene Pretorius 4959654
6) National Nominees Ltd 3816409
7) Citicorp Nominees PL 3573286
8) ANZ Nominees Ltd 3571067
9) Eric McKenzie Nom PL 3284521
10) HSBC Custody Nom Aust 1458928
11) Aust Executor Trustees NSW 1275000
12) J E Apps Holdings PL 1198941
13) HSBC Custody Nom Aust 1140388
14) Bayrib PL 1137400
15) JMN Services PL 1039205
16) David Prentice 1000000
17) Hilmed PL 950000
18) UBS Wealth Mgnt Aust Nom 948455
19) Catwalk Investment 943254
20) Robert Byron Gardiner 913350

This totalled 86,157,700 shares or 61.75% but this figure will be higher as a consolidated figure, Luigi Ghirardello has shares in his name and his wifes, this will count as 1 figure in the top 20 that will be released with the annual reports in a week or 2 as will the 2 HSBC holdings, so number 21 and 22 shareholder will be lifted up into the top 20 and therefore increase the overall % in the top 20.

Comparing this next to the CONSOLIDATED top 20 from 14/5/10,


1) Robert Anthony Healy sold 300327 shares in this time, a reasonable amount.
2) Luigi Ghirardello consolidated is unchanged.
3) Prospect Custodian Ltd is unchanged
4) Leon Eugene Pretorius sold 550000 shares in this time, once again a fair amount.
5) National Nominees Ltd bought 1477 share overall, negligible amount.
6) Citicorp Nominees BOUGHT 543556 shares, wow, what a surprise, made a bad call previously here, thought they were selling before the SP hit 37c, will get a hold of the top 20 before making any comments on this again.
7) ANZ Nominees purchased 665957 shares in this time, starting to get up there.
8) Eric McKenzie Nominees PL bought 35000 shares, negligible again.
9) HSBC Custody Nom sold 110881 shares in total
10) Aust Executor Trustees NSW bought 531764, a fair amount here.
11) J E Apps Holdings PL is unchanged
12) Bayrib PL is unchanged
13) JMN Services PL was not on the list on 14/5/10; number 20 on the list had 660000 so for our purposes they purchased at least 379205 shares.
14) David Prentice is unchanged.
15) Hilmed PL which when consolidated is Michael Frys shares, not 100% sure here but possibly sold 190000 shares, but no change in directors interest notice so must of missed a subsidiary a/c.
16) UBS Wealth Management Aust Nom sold 227799 shares but there is a share holding in the name of UBS Nom PL with 422423 shares, if they are to be consolidated together then they may have bought 194624 shares.
17) Catwalk Investment is unchanged
18) Robert Byron Gardiner is a new entrant since 14/5/10, using 660000 as the lowest number back then he has purchased at least 253350 shares.
19) Jennifer Took, on the list on 14/5/10 has sold 605000 shares since then, a fair whack.
20) Auspen Pty Ltd appear to have sold there entire stake of 1000000 shares, the most sold from my figures since 14/5/10
21) Equibo Ltd is unchanged
22) Dalny Pty Ltd appear to have purchased 55398 shares.

Why have I gone in to such depth, well this is probably answering Rabiez previous question, I am trying to find some sort of logical answer for the recent trading, and by that I mean the fall down to 37c, the rise up to 68c then fall back down to 42c.

This group of 22 shares holders in the period 14/5/10 to 10/9/10, as this list didnt include any trades this week had an overall net effect of selling 328300 shares but that is assuming that number 13 and 18 on the list bought the number of shares they did, in all likelihood it was a lot more so it is not a long bow to pull that this group of holders is unchanged.

So why the sell down since we hit 68c and in particular this week once the upgrade was released?
Earlier today I mentioned the chance that RFE was being played like a violin; this probably holds even more water now.

This obviously cant be proved unless I saw every single trade and kept a track of it every day for some time but I would hazard a guess that as RFE is so illiquid, it is the ideal target for manipulation, the grubby little thieves!!! Once again a guess, but have heard of it before, get 2 or 3 different accounts going and buy and sell between themselves to create just enough liquidity to create trends, in this case create the perception that the announcement was bad by selling a few, most likely to their other accounts, then, when the price has reached a satisfactory level, restack the buy side and reduce the sell side to change the momentum. One day though, the share price will break through, personally think when we are cash positive, this will eventually get harder to manipulate in the same manner.

So why have I mentioned all this, well, in my opinion David Prentice and management can probably do absolutely nothing about it at this stage, so perhaps another one of my bugbears eased.

I tried to contact David today before I posted this but he was not in WA today, hopefully he was having a chat with Patersons trying to change their minds.

Some of the obvious positives for the year, the 166% increase in revenue from gas sales, this will no doubt climb again this year, the September quarterly should once again increase as we will have the full 3 month effect of the 20 EOK South Wells that came on line on 29/3/10. From what I have heard in the last 24 hours, managements new focus now the upgrade is out the way is to increase revenue, we have 32 wells about to come into production, when I say that they are being worked on and I am unsure as to what stage they are at, but add in these wells shortly and I reckon the March 2011 quarterly will be awesome!

The latest announcement, while the West Tulsa reserves befuddled me a bit, the most logical way to value RFE is via the 2P reserves, of which we now have 143.14 Bcfe, an overall increase of 96.62% from last year, which would equate to A$495.77 million in net revenue. Holders just consider these figures alone if you have an order in the sell stack; will you be getting fair value???

Another positive is the massive increase in infrastructure and processing capabilities we have.
We have also held more of our acres by production; we can now do infill wells at less cost with the infrastructure in place.
And finally RFE announced that our finding and development costs are now less than U$0.50 per MCF. We would have to be about the lowest cost producer out there and we drill very shallow wells to boot, with what looks like a 100% success rate.

Holders, if you are still awake after all of this, my point is probably this, I will refrain from progressing with talk of removing David from now on, I believe in the cold light of day the figures are starting to stack up, I HOPE others will do the same.

What I have mentioned here is only my opinion, welcome others thoughts

GO RFE