Sorry for being late but, it happens that I am a very busy man at times.
" My impression is that you don't have a lot of experience in small cap energy plays. I do.""
You wish...
" (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? "
Yes they have too much debt, and I am not willing to having to share their headaches.
As for the increase of 50% since you started talking, well mate what happened since then.?? Down she went.
"(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. ".
It is only your opinion against others.
"(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? "
Well mate, let them do it. Why do you want us to come in and spoil the fun.??
A lot of baseless cross promotion here, if you ask me.
"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."
And what has all of that got to do with the prices of eggs in China.??
"(4) Let me make clear: I have no involvement in either company beyond being a private investor. I don't appreciate your innuendoes."
Well, after your entry into this Forums, one could be forgiven to think along those lines. Especially when you have stated that you have had some serious talks/meetings with them, when no one else could.
"Believe it or not, this investment board is not well known to investors outside of Australia. "
Nothing there that I didn't know already. Hence why I have been saying for many years that we should dump NA altogether and concentrate and put all of our efforts here in Australia. Too much cowboys ideas over there for my likings and, I have learnt all of that in the hard way in the past.
"Please put aside any nonsense otherwise and understand I am trying to get the most out of my MPO and ARN shares."
Well IMHO, you should begin with starting by making it more appealing for us. Your idea of us getting 1 new share for every 11.4 MPO share, while ARN holders 1.19 per current ARN share, is laughable at best. The current share price value of ARN is what it is at today, not what it used to be, or what it will end up being in the future. IF AND WHEN THAT IS...
The value of 11.4 MPO shares today amounts to approx. $2.34. What is today's value of 1 ARN share and, if it less, a lot less as far as I am concerned, (someone said 53 cents), why should you demand 1.19 share of the new company if a merger was to go through.??
All pies in the skies IMO.
"(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."
Well if they are not in trouble, why looking for someone else to merger with that will bring in some cash. But, you have said it yourself in your answer that they are paying a hell of a lot on interests and that, without debt relief, they won't be able to grow. Any number cruncher out there knows that. As such, and in a round about way, you are admitting that they are no travelling as good as they would like. Finally, seen that they have only a very small amount of shares on issue, why don't they do a CR via a SPP or something like that instead of loking elsewhere.?? Could it be that they don't look very enticing for some when their sp is not at good levels, especially when the sp is only at about 53 cents.??
"(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."
Yes, especially when you are proposing the we swap 11.4 of our MPO shares worth About $2.34 in today's value, for a share which is worth today 53 cents. I know I know, you will now say that the sp of ARN will skyrocket as a result of the merger, but, is it all pies in the skies, or reality.??
"(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. "
Well if the numbers were approximate, why don't you come up with some other numbers that may entice the likes of me in agreeing with your proposal.????
""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.""
As I have said before, as we are not a NA Company IMO we should not be there at all. My opinion has always been, since it was first mooted to expand operation in NA, to stay out of there altogether and, as of today it still hasn't changed.
I am still of the same opinion that we should sell everything there in NA, and move lock stock and barrel back here in OZ, or give everything back to the shareholders. But with NA bosses at the helm, I wouldn't hold my breath for fear of getting blue in the face. And now, even Greg Lewin is gone. Why.???? I fear that there is more to that than what eyes can meet. But you can DYOR!
Cheers
MPO Price at posting:
20.5¢ Sentiment: None Disclosure: Held
