By Ben Turney | Tuesday 1 September 2015
Disclosure: I own shares in one or more of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
This morning, New World Oil & Gas’ (NEW) board of directors was true to its word and published the company’s unaudited interim figures nearly a month early. The numbers are encouraging. The company had £2.9million cash on Friday, the executive directors have been offsetting all fees since March against their outstanding loans and the board continues not to draw salary or accrue benefits. The company is not yet out of the woods, but today represents a tangible step forward. Next up is the AGM…
Yesterday I wrote, “Change is coming at New World”. As I explained, this year’s AGM will give New World’s long-suffering shareholders the opportunity to decide on the future direction of the company. Before the meeting, the current board will host a conference call on 17 September to outline its vision for undoing all the damage it has caused. That call certainly promises to be entertaining, but it will require a Herculean effort from the directors to persuade their shareholders that they deserve the opportunity to deploy the company’s war chest.
I’ve promised to maintain a less inflammatory tone in my coverage of New World, but I would be amazed if the directors can garner sufficient shareholder support to grant them a mandate to take the company forward. The board tells us that through “utilising its oil and gas expertise and network, [it] has been actively evaluating projects that may have the potential to generate immediate or near-term cash-flow.”
It will be interesting to find out more about the seven projects the board has identified that fit its criteria, but I remain sceptical. After all, the same “expertise and network” that has identified the projects also allowed the spending of $15million from April 2013 with nothing to show for it, introduced Niel Petroleum to the company, gave €1million to Dr. Alfahaid and spectacularly failed to capitalize on the summer’s naked short position through the dreadful mispricing of the open offer.
I could go on, but there is a simple point to make. At the AGM shareholders will have their change to decide on the company’s future. Will they decide to vote for more of the same or will they put their weight behind a white knight, should one emerge?
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