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Management Part 4 – projects and performance 2010: My take on...

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fooca

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25/04/18

21:05

Post #: 32679937
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Originally posted by fooca ↑

Some contributors to the thread may not like the contents as being in the past, let it go etc, I personally think it is relevant and a lesson of properly doing your own research before investing in a company. I have also previously admitted I was guilty of not being thorough enough prior to buying in to GPP, by going back only a few of years looking into the CTL/OHD project, the reason I am invested in GPP.
I will eventually post the rest of my research notes and it is understandable but unfortunate that the great potential that exists in GPP's projects (and they all have the potential to be company makers in their own form) is being eroded by a lack lustre management team.
The crux of it, it is history repeating and can/will management eventually change and get a project to the market that will be able to sustain shareholder value, I am starting to think they can't and a change is needed.

A history lesson in GPP’s management …………Part 1

The transactions of tenements prior to listing were difficult to understand as was some of the shares that were issued/brought prior to the IPO, as well as tracking IPO tenement and share transactions.
A bit like “who is on first”, but definitely some “eye brow” raising data in here, well IMO only of course.

The MO of management begins ……………
Sleight discrepancies in financial reports pre listing:

View attachment 1049923
View attachment 1049926
https://www.asx.com.au/asxpdf/20080229/pdf/317sfj83zwzmlz.pdf

There were no shares issued or related party transactions in the year ending June 30^th 2006 but King loaned the company $304,949 (page 7 of Financial report) during the year, appears they were struggling a little, with a cash balance at start of year of $9,429. The loan was repaid with the issue of 30,490,868 shares (pre consolidation)

2007 Financials shares issued doesn’t include 600, 000 “new” shares (post consolidation) issued to Heritage Petroleum Plc (Flavelle a director) for Permit 425 valuing the transaction at $60,000 (assuming that they were issued @10c) – (financial year ending 30^th June 06) events subsequent to reporting date, page 19
https://www.asx.com.au/asxpdf/20080229/pdf/317sfj83zwzmlz.pdf

Greenpower issued 6M shares @10c to King (Lodestar) for the acquisition of WA tenements EP 425 & EP 447, valuing the transaction @ $600,000 (Year ending June 2007 Financial Statement, sect 17 – related party)
View attachment 1049935
From the same announcement (sect 10 – other assets) shares were issued for only EP425
https://www.asx.com.au/asxpdf/20080229/pdf/317sfv74y1qkbv.pdf

They also issued 4M shares @ 20c to European Gas Limited (Flavelle a director) for the same WA tenement EP 447 valuing the transaction @ $800,000 (Investigating Accountants Report)
https://www.asx.com.au/asxpdf/20080229/pdf/317sf4vltqz40l.pdf

Further more, I don’t know how this works but, (any budding lawyers out there) CCC Methane (a wholly owned subsidiary of GPP) entered into a tenement agreement with Heritage Petroleum and Lodestar? (King) on 28^th Feb 2006 to acquire 100% interest in EP425 (page 65 of the prospectus) Unfortunately, there is no information I can find on who actually owned the tenement other than what is in the prospectus. Heritage Petroleum (Trustee) was the legally registered holder of EP425, other than reading it in the prospectus I can’t see how or why Lodestar were issued 6M shares as being the beneficiary? (6.3 Prospectus)
Trying to get any historic information of either Heritage or Lodestar draws blanks.
Then further in the Prospectus “Antares” are the legal owners of EP425 (6.5 prospectus)
https://www.asx.com.au/asxpdf/20070914/pdf/314k19551s1h75.pdf

BUT!!! Wait, rut roh...............
In European Gas’s Financial report for year ending 30^th June 2007
They completed the acquisition of Heritage Petroleum (registered owners of EP425) and were in the process of divesting exploration permits EP425 & EP447 (page14 of report) so if European Gas owned these tenements why did Lodestar get paid for them?
https://www.asx.com.au/asxpdf/20071001/pdf/314vwt03yrbpmq.pdf

The above certainly does raise the eye brows on who actually owned tenements EP425 & EP447 but also interesting was the value of $5,000,000 that was accredited to the tenement (EP425), (as reported in year ending June 30 2007 (page 27) versus the deemed value “as above” in the 6m shares issued to King ($600,000) and if you add in the shares issued to Heritage Petroleum Plc ($60,000) and European Gas Ltd ($800,000), $20,000 paid to Antares, then the total cash and deemed value of shares issued for the two tenements $1,480,000.
I am at a loss to understand, if I held tenements valued at $5,000,000 I doubt that I would be only accepting shares to the value of $600,000!!

View attachment 1049941

Tenements purchase for IPO listing:
From Planet Gas: EL4500, EL4807, EL4811, PEL428 (20%) EL4859, EL4860, EL4861, EL4862, EL4877
JV with Lynch Mining – EL4368, EL4369, SAPELA145, SAPELA146 for consideration of 12,500,000 shares in GPP @20c = $2.5M deemed valve.
European Gas: EP425, EP447 – for consideration of 4,000,000 shares in GPP @20c = $800,000 deemed value
Heritage Petroleum: EP425 – for consideration of 600,000 shares in GPP@10c $60,000 deemed value
Comet Ridge/Davidson Prospecting – contract to acquire 20%
See above for shares issued to King….

The prospectus (sect 2.9) clearly states: “The minimum subscription for the offer is $6M comprising 30M shares. No shares will be allotted under this prospectus until the minimum subscription has been reached.”
https://www.asx.com.au/asxpdf/20070914/pdf/314k19551s1h75.pdf
Going on the announcement “Statement of Commitments” they never raised the required minimum subscription monetary value, https://www.asx.com.au/asxpdf/20080229/pdf/317sfbjs1kc6gl.pdf or the 30M shares minimum.
22,638,850 shares issued under the public offer *note 2:
https://www.asx.com.au/asxpdf/20080229/pdf/317sf4vltqz40l.pdf

Wait, there is more: as per the 30^thJune 2008 Yearly Financials:
Non-Cash Financing and Investing Activities:
Subsequent to the IPO 43,019,010 shares were issued, of this 10,138,850 shares raised cash of $1,783,405 and the rest of the shares were issued for acquisitions. So we just popped out another 20m or so shares?
Also interesting to note, the deals between GPP and European Gas / Astron, whereas my thoughts are that the IPO was poorly subscribed to and they needed topping up to get ASX listed as per the minimum requirement, eg:
Lodestar (King) subscribed for 12,500,000 shares @20c ($2,500,000) after being satisfied by the transfer of $2,500,000 of shares in Astron (King a director).
Flavelle subscribed for 1,860,160 shares @20c ($375,032) after being satisfied by the transfer of $375,032 of shares in European Gas (Flavelle a director).

Royalty Interests over Exploration Licence 4500 was surrendered to GPP by former shareholders for 2,000,000 shares issued under this Public Offer – valued at $400,000 which actually detracts from the Royalty terms outlined in the prospectus, (sect 6.7). One wonders why they opted to pay out the royalty interests in lump sum versus the term as per the prospectus.

The cost of the offer was reported differently on 3 occasions: from these announcements – more oopsies?
$453,000 https://www.asx.com.au/asxpdf/20080229/pdf/317sfbjs1kc6gl.pdf
$243,125 https://www.asx.com.au/asxpdf/20080229/pdf/317sf4vltqz40l.pdf
$288,493 https://www.asx.com.au/asxpdf/20081001/pdf/31cn4cz5xbqq92.pdf

Even prior to and at the time of listing, King has had to inject money into GPP to
1) to provide funds to for working capital (2005/2006)
2) to actually get it listed and
3) over the subsequent years to keep it operational all due to the inability to progress a project beyond a pipe dream and using funds to chase the next big thing.
The agreement between Lodestar to buy 12.5M shares in the IPO on the transfer of $2.5M worth of shares in Astron only looks like it is serving a, yes we have enough to satisfy the minimum requirement of the prospectus to be listed but then channel the funds raised into another company, where King is a director??
The agreement between Flavelle and European Gas has the same purpose, but to serve what means?
The funds raised by shares purchased by McCullough pre IPO were also to assist seeding for listing on the ASX.

All the above is MY OPINION ONLY and information has been directly sourced from available announcements released by all companies mentioned.

Expand

Management Part 4 – projects and performance

2010:
My take on the year: all the following is IMO only
1: Flavelle gets 1,200,000 shares in an off market trade for consideration under Deed of Settlement from European Gas.
2: At IPO listing there were transaction involving Flavelle/European Gas/ GPP that “raised one eyebrow as I dropped the other eyebrow” even more so now with no idea what the “Deed of settlement” is.
3: GPP (GCC) have x,xxx,xxx shares = a substantial amount of funds invested in Astron (King a director) – Yes, that how the reported the amount of shares GPP own in Astron in the AGM presentation.
There is no mention of shares we purchased in European Gas that were part of a deal between Flavelle/GPP/EPG at time of listing - 465,040 shares = $372,032
https://www.asx.com.au/asxpdf/20101129/pdf/31v6vscr20yww2.pdf
You can stop guessing at how many shares we own, from Astron’s Annual report – GCC Asset holdings are the 5^th largest shareholder with 1,44,250 shares (page 17)
https://www.asx.com.au/asxpdf/20101101/pdf/31tlrwnr765yq4.pdf
4: Farmed out EP447 the conventional gas prospects including the Walyering site (field could contain 389bcf gas), GPP reserved right to explore/produce coal seam gas on the tenement - part of the European Gas deal @ IPO
5: EL4368, EL4811, EL4369 - all relinquished (EL4807 relinquished, EL4500 sold 2009) Our 20% interest in PEL428 transferred to COI: Makes 6 of the Planet Gas tenements purchased at IPO we no longer own!
6: Doesn’t appear GPP are spending the required monies maintaining their tenements
7. Watts added to the board as CEO

Quarterly Financials & Activities:
1st Feb - Cash at end of quarter $603,000 – budgeted spending for next quarter $190,000 – budget not spent previous quarter
29^th Apr – Cash at end of quarter $546,000 – budgeted spending for next quarter $190,000 – budget not spent previous quarter. All tenements to be acquired as per the prospectus (IPO) on listing have now been acquired.
https://www.asx.com.au/asxpdf/20100429/pdf/31q149x3llf0bw.pdf
16^th Mar – Appendix 3B – ouch that has to hurt 23,010,257 Escrow shares issued in accordance with the prospectus (IPO listing) now released….. IPO prospectus SP 20c – at time of release 6c.
11^th May – Change of director interest notice, Flavelle acquires 1,200,000 in an off – market trade for consideration under some terms of confidential release with an unrelated party
25^th May – Ceasing to be a substantial holder from European Gas, well we know who the unrelated party is now, Flavelle’s 1.2M shares were a transfer from European Gas, as per the attached transfer form attached to this notice
https://www.asx.com.au/asxpdf/20100521/pdf/31qg60xxdkx798.pdf
The intrigue from trying to understand the transactions between GPP and Astron/European Gas and King/Flavelle at time of IPO listing has me scratching head even more now.
2^nd Aug – Cash at end of quarter $420,000 – budgeted spending for next quarter $190,000 – budget not spent previous quarter ($61k) but administration is on the rise @ $59,000 – ($8,000 the previous quarter)
29^th Oct – Cash at end of quarter $256,000 – budgeted spending for next quarter $75,000 – budget not spent previous quarter ($117k) administration rose again @$65,000

EL4500 Announcements
5^th Feb - Clean Global HOA, CGE/GPP intend to convert the current HOA into a formal JV, where CGE will commit to spend $1.25M within a five year period to earn a 75% interest in the selected tenement.
https://www.asx.com.au/asxpdf/20100205/pdf/31nk5c9pp1bt36.pdf
2^nd Aug – Quarterly – 6 hole core drilling planned

GEP37 & GEP38 announcements
12^th Mar – GPP awarded 2 geothermal exploration permits in WA by the Dept of Minerals and Petroleum for 6 years, are renewable and enable GPP to proceed to a commercial development:
First year: several investigations to map heat emitting granites
Second year: investigate the heat source in detail and shallow drilling, deeper drilling to provide the framework for harnessing geothermal heat electricity conversion planned for 2012
Across Australia there are several projects which are likely to result in large scale emission free electricity generation, these projects enjoy strong policy and financial support from government agencies.
https://www.asx.com.au/asxpdf/20100312/pdf/31p6t4whm5qt5c.pdf
11^th Aug – SGC appointed to source and analyse existing geotechnical information in the area.
https://www.asx.com.au/asxpdf/20100811/pdf/31rtmwr9w9fgjl.pdf

PEL428 announcements
1^st Feb – Still waiting on results of drilling that was completed in April 09
https://www.asx.com.au/asxpdf/20100201/pdf/31ngg53yfp66h1.pdf
17^th Mar – Company is currently assessing the detailed information supplied by the operator
https://www.asx.com.au/asxpdf/20100317/pdf/31p9qzyxqgslq0.pdf
14^th Oct – HOA to transfer its interest in the tenement to COI – no details of the sale other than the interest GPP owned will transfer to COI
https://www.asx.com.au/asxpdf/20101014/pdf/31t3lzfbd3khy4.pdf

EP447 announcements
1^st Feb – preparations for corehole drilling underway
https://www.asx.com.au/asxpdf/20100201/pdf/31ngg53yfp66h1.pdf
2^nd Aug – no drilling as yet, a structural study was undertaken, talks of considering options to JV, plus is aware of development work on an adjacent permit and awaiting release of those results, these may modify EP447 plans
27^th Oct – farm-in signed with US private equity group – New Mexico based UIL LLC
https://www.asx.com.au/asxpdf/20101027/pdf/31tdz20vw3j96g.pdf

EP425 announcements
1^st Feb – No work carried out on this permit area, analysis of petroleum geochemical data suggests it has potential for oil and a study to define targets for testing to be carried out in early 2009 (ummm, this announcement is Feb 2010!!!)
https://www.asx.com.au/asxpdf/20100201/pdf/31ngg53yfp66h1.pdf

EL5227 announcements and the future star project is born
Some historical information from Esso, interest in the ability for the Latrobe Valley lignite to form the basis of Coal to Liquids, In addition to the drilling Esso also carried out testing in their labs in North America but discontinued when the oil prices collapsed – using the base of Esso’s work the company has re-started lab work assessing the potential. First lab testing should be completed 3^rd quarter, a 6 hole core sample will be used for the testing programme
https://www.asx.com.au/asxpdf/20100802/pdf/31rntlmf5qq3xy.pdf

Otway Area – EL4368, EL4811, EL4369
GPP relinquished its Otway area – considered to be early stage exploration not matching the company’s objectives.

AGM Presentation – 29^th Nov
The Board grew with the addition of Watts – It now has King, Flavelle, McCullough, Mitsui & Watts

Other financial assets, x,xxx,xxx shares in Astron @$2.21 (26/11/2010), but no mention of shares we owned in European Gas?? (Maybe they ran out of x's)

Greenpower has a substantial amount of funds invested in Astron (ASX:ATR)

Astron has made good progress, in developing its mine in Northern Victoria as well as preserving its capital.
Considering King and McCullough are on the board, the use of “made good progress” is ones interpretation of what they think is good, but mind you the ATR thread wouldn't think so

All the above IMO only unless directly taken from announcements

Cheers
GPP Price at posting: 1.2¢ Sentiment: Hold Disclosure: Held
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