I am not sure what you are talking about. My impression is that you don't have a lot of experience in small cap energy plays. I do. I am interested in maximizing my returns in both MPO and ARN.
I own substantial positions in both companies. I suggested the merger because the companies have complimentary problems.
(1) ARN has too much debt but they are about to do an asset sale (to answer your question) which might solve the problem. Their share price went up 50% since my proposal merger because of leaks about the proposed asset sale. What has happened with our share price since our asset sale announcement?
(2) They have a huge light oil base. MPO does not. I'm not sure what is difficult to understand. MPO never traded (at any time since I've owned it which is many years) at any EV close to the EV ARN enjoyed not so long ago.
(3) Both LTS and CPG (a large player) are very interested in Swan Hills. LTS specifically lays out Swan Hills as their next major focus. That puts ARN directly in play as a takeout target. Can you tell me who wants to take out MPO?
I owned CPG before any of you probably ever heard of it. Actually I owned the company Mission that CPG merged with to become a Bakken player in Canada. Actually I owned a tiny company Bison that Mission bought before merging with CPG. I've been in this sector a long time.
(4) Let me make clear: I have no involvement in either company beyond being a private investor. I don't appreciate your innuendoes.
Believe it or not, this investment board is not well known to investors outside of Australia. Most energy discussions of North American companies occur on Investorvillage or sometimes stockhouse. I post on the $PEAK board there. You can see my posts for many years.
Please put aside any nonsense otherwise and understand I am trying to get the most out of my MPO and ARN shares.
(5) ARN is not in trouble. The debt is hampering their growth but their production is stable at 4k boed with waterflood. They will grow but very slowly without some debt relief. They are paying a lot in interest on that debt. They also have a nice jv agreement with LTS for a couple of wells.
(6) If you don't understand today that MPO has cash but no useful way to invest that cash, you must be following a different company. That cash would be valued much more than $1 for $1 when applied to debt reduction for a company with the asset base of ARN. That's what I'm saying. That's how we make a substantial return immediately.
(7) The numbers in my proposal were approximate. They have changed but not in MPO's best interest. We have less cash than I estimated, and now a lawsuit as an additional burden.
So far, we don't know what the asset sales will bring. The way management has talked down the wolfcamp, it might be worse than the amount I allocated in my valuation.
I think you need to shake your head hard and understand why we are trading below cash value. I still feel, if reasonable terms can be found, that the merger is a massive plus for us and for ARN shareholders.
I hope this answers your comments.
Wiggling
MPO Price at posting:
20.5¢ Sentiment: Hold Disclosure: Held
