why i sold rrs today

It has been a long and arduous journey (over 4 years) – but it feels very liberating to have finally sold RRS. I have learnt some very expensive lessons, met some great people, and will probably buy back in later. But here is why after all this time, I sold RRS today:

• The rise in price in recent weeks was clearly a pump to get the option exercised. I think the price will drift back down over the next few weeks, as has ALWAYS been the case. Please see image:


• Anyone who waited to exercise until right before the 31st of May probably couldn’t afford to exercise earlier, and wanted to wait to see if it would be worthwhile closer to the exercise date (to be sucked in by the pump) . Once these people receive their shares (around now) it will be a game of brinkmanship to see who will sell first to reclaim the money they used to exercise the options while the price is still above 3c. Doesn’t seem to be much left to dump above 3c.

• If the free attaching options have been allotted already to the “late May” option exercisers, it boggles the mind as to why they aren’t being off-loaded now, and why the price is still around 2c (we are talking about 50 million shares and oppies)

• Farole is in Washington. I am sure he will get approached to sign his very own oil deal, rather than work hard for Adde Muse (who owns over 4 million RRS according to the top 20). GO is still publishing negative articles. This has been nagging at me lately, and has been a small part of my decision to sell.

• Very negative RRS focused episode of 4-Corners coming up on ABC. The Journo who put it together has it in for RRS big-time. I dont think the share price will react very well to this documentary.

• NO DRILLING forecast until December 2009 (and that is even if they manage to stick to these deadlines, which they have NEVER in the past). I may consider buying back in closer to this date.

• AOI have identified that their strategy is to acquire distressed companies with east African assets – companies like RRS. I feel a lot more comfortable having bought into AOI to get exposure to this deal, due to their connections and track record of their management.

This is all IMO ofcourse, and my sincere apologies for sounding so negative to the stock for which I have held such hopes and dreams for so many years, good luck to all who still hold and hope. I wish you all the best of luck.