Agree strongly with the sentiment above.
Excellent analysis and some very good points.
There are not many production deals available at this kind of money, especially without any debt. No one in their right mind should sell at this price and and as I said before the price should be what the market dictates not what these 2 people say (who are clearly not "Independent" ).
I think there is a lot not being said. Tap shareholders have had a rough deal for years for what is a good asset IMHO
I dont know where this will end but certainly should not be at the price "Recommended" and these "Directors" should be held to account.
Some information we do know (from quarterly and latest presentation):
1. End of June Cash of $15.264 M USD (~ 20.6 M AUD @ 74 FX) & Nil debt
2. Expected Cash inflow from last lifting (July 4) is 6.1M USD (~8.2 M USD).
3. Estimated Actual Cash now ~ 28.8 M AUD (I am assuming July costs are subtracted from lifting revenue, so cash at bank is per above).
4. Cash backing per share ~ 6.8 cps (426.6 M shares)
5. Production - 2 additional liftings (sales) this quarter. No volume provided but you'd expect similar volumes to the one on July 4th (and hence similar cash inflows). We are told Q1 revenue should be 13.4 M USD (~ 18 MUSD). Adding another 10 M to cash above results in cash backing of 9.1 cps (the current offer).
6. Operating margin on production > 36 AUD$ per bbl (see latest presentation on web site). Oil price rising & production increasing (so will margin).
7. Hedges at low prices rapidly unwinding so cash intakes will increase in face of higher oil prices.
8 Production Volumes increasing.
9. Franking credits of 69.7 M$ valued at $0 under RISCO offer - yet company is debt free with cash building, indicating prospects for dividends are rapidly increasing. Not sure how that can be gifted away.
10. Exploration upside with active explorers (including Quadrant).
Sorry - why would the recommendation be Sell at 9.1 cps ?
I am really happy for TAP directors to have BOD perform an updated evaluation and let me know what the new range is. That said, I'd dig into the numbers that are presented.
Not a seller under 12 cps. Buying.
DYOR.
