Amongst the almost perpetual sniping and negativity towards...

Amongst the almost perpetual sniping and negativity towards Oilex on the UK iii board surprisingly there have been some rather better aspects of discussion over the last few days. There is only so much reasoned debate that can take place with no news emerging but with hope of positive developments restless shareholders are surely keen to hear of developments.

It would be wrong to post tranches of discussions that have taken place there but there was one today from Maud Brown (no relation to the British PM I expect) which I thought was well constructed in response to another poster expressing persistent critical views towards the CEO and the board. I will post the message noting that the exchanges between Maud, as somebody generally supportive of the board, has responded to points from Phishing who is very negative.

Item referred to:
“Parts of your last post reminded me very much of the sort of answer that could be expected from the British PM in the House of Commons.

I asked “Do you really think that the CEO by not spotting in his crystal ball that Transocean would cancel the rig for Timor loses all credibility in the eyes of the World?”

You declined to answer by saying “No he has not got a crystal ball but he is paid a huge salary to manage situations to the advantage of the company, particularly for ones that he has already stated he has made progress on.”

Like Brown the PM you would not give a straight answer. It matters not what Bruce’s salary happens to be and would make absolutely no difference to the circumstances of the event. Furthermore, you expect him to manage the situation to the advantage of the company. I have similar expectation too but what do you think he should have done when Transocean advised him of rig cancellation? Should he have advised that he refused to accept cancellation and demanded that the rig turns up in accordance with the provisional schedule, also demanding that Oilex would only be liable for half of the mob/demob costs? If not that outrageous demand what else could he and the board do to avoid the impact through delay. Can you envisage that the farm-out negotiations could proceed to expected schedule and be finalised when the absence of a rig is brought to the discussion table?

The farm-out is highlighted by me because it is probably the biggest single issue affecting Oilex. In your reply you said in relation to Timor and Indonesia events that Bruce should be “ensuring that there are no issues that could prevent this news.” Fine to say that but you have offered not the slightest acceptance that matters OUTSIDE THE CONTROL OF THE BOARD do happen and as a result plans change whether a target date is six weeks hence or one day hence.

There is little point in trotting out theoretical management expectations and key performance indicators if you choose to ignore reality. Unfortunately your judgements are not formed having all the facts at your disposal. It is the same for me too as neither of us is on the inside. I was guarded in my judgement by using the words “on the face of it” in relation to my comment achievement against work program looks dreadful. Highlighting Timor farm-out, and rig cancellation it is quite wrong to make a definitive judgement without knowing the facts and alternatives which the board has in moving the issue forward. I can think of a variety of possibilities. One, for example, could be that the front runner farminee has a similar type rig operating elsewhere which through negotiations now proceeding could be diverted to Timor efficiently and economically. It’s not likely but is a fair possibility about which neither of us knows. By the CEO being paid a “huge salary to manage situations” (your words) one could expect innovative ideas and actions to retrieve situations and have them back on track. You have no idea as to the measures and actions taken. That is the sort of situation that contributed to my basis for not passing judgement in connection with subject where I lack knowledge.

In your latter post Phishing, you said “My response was made on the expectation of a level of competence of basic professional management principles. I would expect the BoD of a listed company to be able deliver…” PRINCIPLES do not incorporate REALITY. Trot out all the principles you like, they will not provide the answer to a rig cancellation situation.

I wonder if you have actually worked in the oil industry involving worldwide operations and ventures into the unknown, predicting hopes for thousands of feet underground. I would suggest not based on your expectations of a BoD which seems more applicable to your assessment of the performance of a haulage company, for example.

I didn’t pick up any reference since M y Quest posted a very interesting item last Friday morning:
“Some questions we might like to ponder over.
With the knives out for BM (On this BB, at least), what affect would a replacement have on the Company's future?”
In its present state, who would want the job - and should a candidate be found, would he/she have the experience that the present incumbent has? (With such poor results, internal promotion would seem like a poisoned chalice to many, I would think).
Alternatively, is the company worth being taken over by another?
No doubt the institutional big guns are already asking the same questions.
Rational thoughts, fellow shareholders?”

I feel confident that you too saw that Phishing. It seems not to have provoked you to present your views. I am not requesting them but feel I could anticipate a hard line “get him out” conclusion from you.

I am encouraged by the fact that Bruce has certainly not thrown in the towel and sees a platform for growth despite all the setbacks. I would not welcome a takeover and would prefer to see the board address and resolve the three major cash flow growth opportunities.
Maud”

There has not been a further response from Phishing yet other than a couple of idiotic irrelevances from another poster who has generally fails to engage in any meaningful discussion.

I place the Timor farm in as a top priority for Oilex with Indonesia and Cambay production close behind. I do feel that we should have some words on these issues before the end of July which is approaching and is now under three weeks away.

All the best

Jimmy