Top-up double standards., page-35

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Japes

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07/10/14

18:04

Post #: 14088139
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Originally posted by Harry3539 ↑

Issues

KPMG are contracted by EGO to fairly value its assets for sale and check them against ERM's "approximations". That's as far as they go. The rest of the corp.actions are between EGO and ERM which is where the issues will be.

My main issue is with a true and fair value will also be sought by a farmin partner later on down the track. Conditions may be quite different by then. Remember the D Sands, the 30bcf gas to feed the $38.6m plant for eons, the 60bbls condendsate now at 42bbls from the B Sands, the considerable downgrading in the GinGin Field (this is bad and good but how did this error occur with such high calibre staff). The point here is the amount of cash the farmin will stump up for the top-up debt before drilling begins. We will suffer the share price rise on the farmin, but at this stage could be manageable. The other side of the coin is the market will keep the share price in check because of debt fear

Many will blame old management for everything. This is a very risky business and shit does happen and will continue to happen (hopefully not at the rate it did before).

Conclusion
How many millstones can 10 billion shares handle. ERM will have their safety net. Is there another way ?

B Sands reserves will be proven only on production history (can't hurry this one). You will probably get in-house certs every 6 months and an independent one every 12 months

My opinion without fear or favour

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Harry,
The official EGO ann was to appoint KPMG to judge the fairness of the proposed transaction between EGO and ERM. That sounds more far reaching than your interpretation of just valuing EGO assets.
I'd see that issue as being the least of our worries compared to Top -up, time to repay, conditions of repayments, unknown resource values,
Cheers, Japes.

EGO Price at posting: 0.6¢ Sentiment: Buy Disclosure: Held
3 Upvote

0 Great analysis

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Top-up double standards., page-35

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