We now have a window of opportunity to focus on CTP’s short and medium term future.
Presently there is a strong pre pole indication that people are voting against the existing CTP board’s recommendation to accept the 20C + CVN offer from Macquarie.
I am conscious of the need to focus on arriving at the best possible plan for CTP’s future operations.
At this point all we have the Gas-field Development Strategy documented in the Scheme Booklet which appears to operate on the basis that it is
not capital limited and CTP is now faced with coming up with a viable plan which is constrained by the inability to raise capital.
If not limited by capital the Scheme Booklet clearly states that CTP is (Adequately capitalised?) is worth 20C + CVN.
The fundamental task of the future board is to design and present a strategic plan to remain in business, optimise field development and cost of production, preserve the underlying share value and mitigate against takeover risk.
Let’s not kid ourselves it is a not going to be an easy task for any board given our present position.
I have absolutely no political fish to fry here but am concerned that the temptation to get involved in the politics of a board nomination power struggle here is a
harmful distraction from CTP shareholders holding the future CTP board accountable.
We now have 3 alternative board propositions on the table and they all face the same reality.
The task of optimising a future CTP business strategy that is capital constrained to the amount that we can raise is one which (I think it is fair to say) the present CTP board and team were unable to achieve even with considerable help from expert consultants.
The background to this is that CTP have spent many millions of dollars on Reserves Certification and Field Development Optimisation Studies by reputable industry consultants which were taken into account in the Expert reports in the Scheme Booklet (I know they are “Biased in their opinions” but it IMO is not worth their professional reputation to miss a glaring fault or omission in the parent studies!).
As shareholders we would expect that the CTP team had left no stone unturned in identifying a strategic plan that could be financed without shareholder investment that would over dilute the share value. They may well have considered a range of capital restricted alternatives but the shareholders were not informed.
As sound as the decision to pivot to gas production may have been, it is now beset by a perfect storm of major problems such as:-
- Lack of (Bankable) 1P/2P reserves that can be supplied to the processing facilities at say 50TJ/day.
- The up-front cost of critical upgrade of the old Mereenie processing facility to cope with the required throughput to process this gas for marketing.
- The immediate capital investment needed to extract 1P reserves to supply even 30 TJ/day to satisfy our existing GSA/s and the prevailing investor sentiment.
The task ahead of the future CTP board (Existing/Alternative/Composite) is to convince the Shareholders that they have a plausible strategic plan with newly identified initiative/s to present shareholders with a clear vision of a way forward.
I appreciate that he existing board is unable to speak unless the no vote is upheld but they are on notice and can start working on the plan and presentation now.
This however provides a window of opportunity for the aspiring new board members of both alternative boards to articulate their ideas and proposals to shareholders.
I take the view that the substance, vision and clarity of their published proposals should be the prime reason they are appointed.
Conversely, standard catch phrases and criticism of their opposition should be taken with a grain of salt.
The situation is so critical that I have to be really candid here so as not to confuse readers so please bear with me.
Declaring my position I have known Richard and many of his team for a long time, fully support the forward thinking gas centric strategy, and accepting the fact that they are all human beings have given it their best shot but they they struck hard going there was no excuse for not telling the very shareholders who were the first stop to providing underpinning equity to help finance debt.
If was to sum up the sentiment of perhaps the majority of the NO voters….
“We are in a football match and have taken a real thrashing as we approach half time & we have quite a lot of money riding on the result. We just want to regroup and go out there & give it our best fighting shot right up to the full time whistle.
If we lose our money and get beaten up we can live with that but we want the chance to fight to the end of the match.
And someone threw in the towel and blew the full time whistle early”
I have listened to criticism from serious shareholders, which
I agree with them hat CTP has not communicated its forward strategic business planning effectively to shareholders and I believe that this has impacted on their willingness to participate in capital raisings.
Richard once said that all facets of the business must be “Right” and what I am hearing is that this vital communication is a prime deliverable that the CTP board needs to manage if shareholder support and investment is to be maintained.
I call for the aspiring new boards (And the existing board) to articulate their strategic approach to managing CTP’s future.
They are all starting with a clean sheet which is another way of saying so far we have heard nothing.
Very best Regards
OGP
