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AYO AGM notes

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    193 Posts.
    AGM notes
    Lots of good news at the AGM but poorly told and still some missing bits.

    Elliot opened with the announcement that they had sold over 14 MMscf/d for the first time and had budgeted for 18 MMscf/d from Jan 1, 2003. Considering where they wer a few months ago that is great news. He stated they were optimistic about the political situation in Turkey with the election of the first single party government since the foundation of the country. The international business community has already responded positively to the incoming government.

    11 wells are planned for the new year sounds exciting on the surface but you have to wonder how a company this size can pull it off. Several of the wells are scheduled for wintertime which offers too many chances of delay. There was no indication of prospect size or priority and I get the impression that they're a bit too egar to put their money into more wells without much regard as to what the return should be.

    Whicher Range is still awaiting farmout and the company have penciled in a February drill date. The permit is up for relinquishment in Jun/July.

    The subject of stock options came up and was quickly dealt with by pointing out that the strike price of the options for both directors and employees is $1.22. That's a pretty high target and is a strong indication of what the people inside think about the company.

    One gentleman asked what the board was doing to improve investor confidence and Elliot responded that he had been making several trips to the eastern states in an attempt to woo some of the institutions. The problem the insto's have is that there are no insto's holding at the moment. Bit of chicken and egg but it might be something to watch for when the first insto buys in. Elliot mentioned the European listing but seemed to indicate that he had better ways to spend his time than fly off to Europe once a month. Time to earn those options Mr. Elliot... get on the plane!

    The subject of operating costs in Turkey also came up. Elliot declined to pass on the information stating that he would have to release it formally to the market if at all. I would imagine this would be good news and would be very surprised if expenses were over US$0.50 per Mscf. If you want to bring the institutions on why not show them the numbers. It has to be a good story. This should be a significant buying point for any potential investor. My back of the envelope calculations show that a production rate of 10 MMscf/d yielding EBITDA of 8 million equates to US$1.60/Mscf operating expenses assuming an average sale price of US$ 4/Mscf. We deserve and the analysts need some hard info if we're going to get this stock moving.

    Still no news on the new CEO although they did mention that a few candidates have been interviewed.

    All in all there's great news here. I think it could have told much better and that they should get on the plane and start promoting in Europe, but maybe that's a job for the new CEO...



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