Game Changer, page-7

The share price/market cap of COI is purely a reflection of those spinning shares for a quick turn – it bears no resemblance to the underlying net asset value of the company which as others have quote correctly pointed out is many multiples of where we sit today.

So often in these markets a listed company comes out with exceptional results which substantially increases the company’s net asset worth yet the share price after an immediate knee jerk reaction northwards tends to fall back close to pre-announcement levels shortly thereafter.

Whilst irritating for LTH’s with logic dictating that a company who has increased it’s net assets 2P reserve base by 472% having booked some !P only rise in price by 17% or thereabouts – we must not forget the reasoning behind the reasoning behind there being a lid being on the increase in value.

Those spinning shares for a quick turn are not remotely interested in anything other than short term volatility with their methodology being that they attempt to correctly predict the direction of the rises and falls in price – thus the share price being ‘sold into’ as the price rises which in turn creates a cap on the rise in value.

Such activity is not helpful when assessing the true value of a listed company with so many companies trading at well below their net asset worth for the aforementioned reason. Long gone are the days when one just looks at the market cap to assess the true value of a company – yet commercial lenders often are still shackled by this methodology when working out whether a company is worth financing or not and if so to what level.

I believe that it will not be long before the lure of listing as a PLC will be replaced by the desire to remain as private companies. IPO’s of course do attract new money into a company and enable the founders to achieve return of capital invested – but fast approaching is the time when one has to ask whether it’s worth taking the ‘King’s shilling’ when one is opening the lid on future net asset undervaluation due to share trading.

COI should come good either when Mahalo is fast tracked to production with the consequential income stream – or when we are taken out before that point. As to Galilee – that’s a totally different play and if meaningful gas is hit in the next couple of months – this throws open the doors to all sorts of commercial options moving forward.

When would a suitor want to show their hand? Too early and the risk is greater – too late and the price becomes more expensive.

If I were Santos I would be doing a lot of back of the fag packet calculations at this time for our 40% share of Mahalo – having said that – Would I wait until those sandstone deeps at Galilee have been drilled and if initial findings appear bullish would I look to take COI out in it’s entirety?

Questions – questions – but I’m sure that whilst those holding their hand of cards are deep in thought - we will proceed fully focussed on bringing Mahalo to production in a couple of years time whilst cost effectively easing our way towards becoming a dual gas play company.

All good news as far as I’m concerned – as to the short term share price – let the minnows have the crumbs.