I am providing this update for QPN shareholders as an outline of discussions that I have had with various company representatives over the last week.
3 Weeks ago I emailed our CEO, Anthony Milewski asking for either a meeting should he be in Indonesia, or a discussion via telephone. This email, much like many others sent by supporters of our business was ignored.
My personal life experience has taught me that you are just as much to blame in these situations if you stand by and do nothing…so I have decided to take massive action.
I spoke to a very well respected mining analyst I once worked with in Perth, whom I explained the current situation with QPN to. I asked him to introduce me to an oil & gas executive who he has known for some time, and has worked for the majors in Asia.
This introduction then started the wheels turning for me regarding bringing about some change at QPN. After 2 discussions and a fair amount of due diligence, the executive came back to me with some very encouraging opinion about QPN’s prospects, and indicated he was interested in getting involved.
My thinking at this point was that the current board has been given ample time to communicate with its shareholders about the delays of the last 18 months. I am of the belief that we are all big enough to accept that delays happen, especially in this part of the world. What we can no longer accept is being treated like mushrooms.
Last week I emailed the company secretary with my proposal to make board changes. In order to replace our CEO, we require at least 50% of votes. Because I wanted to minimise the cost to the business of calling an EGM, and issue the company with a notice pursuant to Sections 203D of the Corporations Act to do so, I requested that the CV of my proposed new director be added to the AGM pack and put up as a resolution for voting.
That morning I received an email reply from the secretary telling me that AM will be calling me.
AM did call me and we talked for around 5mins. In short, he asked me to wait until the company report was released, and that he would then call me afterwards to discuss. My explained that I doubted very much that the release of the report would change anything in my mind, as no new information could be contained in it as it covered a period of time now past, and that any new information would need to be released via ASX.
Well, the report was released the next day, and yes, it does feel like they tried to include some new news to help pacify shareholders.
AM, true to his word did call me again yesterday to continue our conversation. Here is a summary:
The seismic data only appeared after they purchased the land…they didn’t know it even existed prior to that. I pushed him for a drill date….even an estimate and he would not be drawn on that.
He did agree that the seismic interpretation should all be complete in no more than 2 months.
I kept raising the issue regarding a cap raising and that they have now burnt all their supporters and hence will not be able to get a cap raising away. His answer was that we will cross the bridge when we come to it.
I said to him that basically their strategy is one of hope….we use all the cash left to identify the best place to drill our maiden hole and then we drill. We then prey that we hit gas otherwise it’s all over. He basically agreed but did keep swaying me to the idea that the seismic should be pretty good. I said if it was, why didn’t the previous owner of the land drill it, since that data is 20 years old. He said the previous owner was the government (that’s news to me) and that the price of oil has increased since then so the economics are now better.
I asked about Moyes relationship…and he said they are bringing them opportunities but in this climate they need to be very selective and my feeling there is nothing going on there either.
He also mentioned that Ken is working round the clock on the Indo situation…..he kept trying to tell me that unless you have worked there, you wouldn’t understand how long things take there.
He asked what my intention was about nominating new directors onto the board. I explained that the only one I was looking to change was him.
He squirmed a bit and said well you understand that it’s not me, it’s a team effort…we are a team. I said no, you lead that team and for the 12 months you have been leader your communication has been unacceptable, we are all big boys and can handle the delays, we can’t handle being ignored. I told him I was in Indo 2 weeks ago, emailed him for a meeting and he ignored my email.
He said that I can call or email him any time and he would respond going forward. I said he will be making more effort to communicate with shareholders.
AM asked me what I would now do if I was in his position, and I answered I would do the same thing re trying to obtain and interpret seismic now that it has come to light.
Basically I said I was prepared to give him the next 2 months to complete the data interpretation, and that we expected improved communication.
Summary:
I still feel particularly bullish about our prospects and for this reason I am still on board.
I expect we will start to see a better level of communication from the management team. Looking at the map of who all our neighbours are tells me everything I need to know about the opportunity and why I am still here.
Kiril
I hold