MPO - Molopo Gas

[financial chat]

Financial Review p17
John Stensholt

Molopo malcontents on move

A group of wealthy investors, including two billionaires, is pushing to oust the chairman and a director of junior oil and gas explorer Molopo Energy.

The group which includes billionaires Bruce Mathieson and Boris Liberman, as well as Melbourne property developer Max Beck and Fairfax Media Chairman Roger Corbett - lodged a request with the Molopo board for an extraordinary general meeting.

The group has agreement from the 5% of shareholders needed to force an EGM.

They are unhappy with the board's management of Molopo, the shares of which have fallen 24% this year, and, in particular plan to spin off its Canadian oil assets in 2011.

The group is seeking the removal of Molopo Chairman Donald Beard and non-executive director Bruce Hobday, and their replacement with Mr. Beck and Greg Lewin, previously president of Shell Global Solutions.

Other shareholders behind the move are Terry Jackman, Sundland Group chairman, and Eddie Cutner, co-founder of Melbourne apartment developer Central Equity.

If the group achieves its aim, Mr Lewin will be nominated as new Molopo chairman. He and Mr Beck said they would push for the company to accelerate production of its assets, which include oil shale projects in Canada and coal-seam gas assets in Qld and South Africa.

Mr Beck said the group was taking the action after what he described as a prolonged period of share price underperformance. He claimed the group had received feedback from other shareholders who had expressed dissatisfaction with the board.

"This is not a step we have taken lightly," Mr Beck told AFR. "We made a friendly approach to the board through the chairman on December 15, but we did not receive a response within the agreed timeframe. Shareholders have heard enough excuses and Molopo needs a board with a sense of urgency.

"The market's reaction to the company's most recent major announcements reflects its scepticism about the board and its ability to deliver."

The company announced on November 29 that it would spin off its interests in the Spearfish and Bakken oil projects in Canada into a new entity called Molopo Canada, which is expected to list on the Toronto Stock Exchange in the first quarter of 2011. Molopo shares have fallen since that announcement.

Molopo managing director Stephen Mitchell said the shareholder action was opportunistic, and defended the company's strategy. " I couldn't have a better or more experienced Board," he said. "In terms of our Canadian assets the market view is that the money we've spent there in the past 15 months, about $100M, will double in value when we do this. We've not had a single call from any shareholders suggesting we review the strategy. We welcome constructive shareholder feedback and we, too, are frustrated with the short-term performance of the share price."

 

[financial chat]

Analysis of past agm votes

The following represents some statistics for consideration:

2010 only 23% of shares voted
2009 only 34% of shares voted * discussed further below
2008 only 16% of shares voted
2007 only 14% of shares voted
2006 only 16% of shares voted
2005 only 19% of shares voted
2004 only 12% of shares voted
2003 only 24% of shares voted
2002 only 7% of shares voted
2001 only 21% of shares voted

I suspect that the % voting at an EGM might be higher than an AGM.

In 2001, 2003, 2005, 2007, 2009 Beard faced the voters. In 2009 a belated concerted effort to dispose him was left too late to succeed, but an EGM called for the specific purpose of removing him might have a different result.

Given that the top 20 only account for about 30% of all shares, I suspect that the vote is going to be very interesting. If the results of 2009 were to be repeated, except for one large holder opposing Beard that previously voted for him, he could be in big trouble.

Shareholders need to consider whether they believe that Beard and Hobday have the capacity to add value to their investment.

 

[financial chat]

On another share chatroom site a poster has suggested that Beard is gone for all money, and I think and hope that he is right.

When shareholders look back over the past 10 years, they can ask the question, how have shareholders been rewarded during the time that Beard has been Chairman?

Donald Beard was appointed to the Board, and as Chairman in April 2001.

During his tenure as Chairman of MPO:
according to Commsec, the shareprice (after adjusting for the consolidation etc) was 25c at the beginning of that month (Apr 2001) and closed at 19c at the end of that month;
the shareprice did not maintain any significant change until Jan. 2007;
during 2007 & 8 shareholders were able to witness a change of fortune with the share price rapidly increasing to a high of $2.03 in June 2008. But much of that share price appreciation was attributable to the market momentum behind the CSG industry in Aust., rather than anything in particular to do that MPO created itself.
then came the GFC, and the MPO share price cam crashing down to a low of 40c, aided by the capitulation of a so-called hedge fund.
in the 6 months that followed to April 2009 the share price of MPO managed to recover to about $1.
Some 20 months later the shareprice is only just above that price of $1.

So for the first 5+3/4 yrs under Beard's reign shareholders saw no reward. and for the last 20 months they have seen virtually no reward.

Additionally shareholders contributed $1.25 in July 2007 for new shares and either $1.15 or $1.03 in April 2010.

Considering all of the above:
do shareholders believe that Beard has added value to their investment in MPO?

Can anyone enlighten us as to what benefit Mr. Invisible has brought them?

Don't we shareholders deserve better value and rewards?

 

[financial chat]

It is always worthwhile reviewing posts of the past, especially in light of what transpired thereafter.

In 2007 Beard sold a large parcel of his MPO shares just prior to the AGM.

As I recall from the subsequent conversation I had with Beard, he was forced to sell at the time. But what was most annoying to me was the following:

He had got up at an AGM and told everyone how strong the outlook for the company was;

He did not mention, or even elude to the fact that he had sold in the days prior;

I think that they chose to release the notification late;

The notification was erronous, and perhaps done to deliberately cover the fact that is was released late in my opinion;

As reported at the time, in my opinion, the Company Secretary chose to answer a question in a way in an attempt to cover up the mistake.

At the 2009 AGM, when the matter of the re-election of the directors was under discussion, I asked the question as to whether it was possible for directors to affirm whether they has sold any shares is recent days, but had not as yet released the relevant notice to the ASX. Beard attempted to diffuse the situation by stating that he misunderstood the necessity for such a question. By way of further explanation, I stated that I wanted to be reassured that the situation that had occurred in 2007 was not repeated. In reply, Beard stated that he was unaware of the situation that I was referring to. At this stage I was left with no alternative, than to explain to the meeting what I was referring to. To my absolute astonishment, Beard then made a statement that he could not recall the situation. This was despite the fact that I had written to the Managing Director, spoken to the Company Secretary, and personally written to the Chairman, and the Chairman had also telephoned me to discuss the position at the time.

Given all of what transpired, my faith in the Chairman was totally destroyed, and I could not vote for his re-election.

In my opinion, Beard is incapable of chairing this company and must be removed.

 

[financial chat]

"the MATES club"

I think that is the important point emanating from research about the current directors.

The Mitchell family with Peter Mitchell (Stephen's father) on the board of MPO and Lowell was able to commercialise the value of an investment of theirs by arranging for MPO to purchase the asset - Liulin. The consideration was MPO shares. In the process, the Mitchell family then had sufficient shares to arrange for Stephen to be appointed as a director, and within a month as Managing Director.

Hobday was on the board of MPO at this time.

Beard was appointed Director & Chairman by Stephen Mitchell.

The "Mates club" currently represents the majority of the board of MPO and it needs to be broken up to improve the accountability of the board to shareholders of MPO.

 

[financial chat]

Will Beard exercise early?

According to the Annual Report, Beard hold 300k options exerciseable at 33c that do not expire until 6th Nov. 2011.

It will be interesting to see if he elects to exercise early. If he does, that would indicate to me that he realizes that he is going to get rolled at the EGM.

If he does not exercise early, then one can only presume that he likes to bet big at poker! On my calculations it is currently a bet of $210k plus.

 

[financial chat]

Following the release of the Notice of Meeting and accompanying statements, I feel compelled to make some comments.

Mitchell & co might have had the expertise to buy assets well, BUT they are a miserable failure at delivering on time development. Additionally, with the exception of the sale of Gloucester, there is no evidence to suggest that the current board is able to make positive deals. And Gloucester was sold at a time when deals were a lot easier to undertake.

The current management team needs to be held to account for the dismal share price and the lack of production performance. And for these reasons alone the group of 7 shareholders has made it possible for the lazy and incompetent board to be brought to account. That is the reason for suggesting that a change be made. The current encumbents have failed and must go.

They don't have a sense of urgency, they fail to understand the need to get deals made, they fail to understand that one cannot promise and then fail to deliver.

The current invisible Chairman has to go, no doubt about it. We want someone who is going to promote the company, not just chair a meeting. Even chairing a meeting is beyond him when you look at the way he floundered his way through the 2009 meeting. Beard is past it, and must go.

Hobday was given the job as a mate of the Mitchell family. He left MPO years ago and then came back after he retired from his other commitments which precluded him from continuing as a director of MPO. We do not want dead wood. What did Hobday bring to MPO this time? He sent us off in another direction (India) at a time when management should have been concentrating on existing projects. And was paid hansomely as a consultant for causing the distraction.

It is all very convenient to use the 4 year performance data. Looking at other timeframes presents a totally different picture.

Holders need to read the statements carefully and not take them on their face value.

Beard and co have been very selective about the dates that they have chosen to use to justify their stance about the share price performance:

MPO’s share price (on a consolidated basis) is as follows:

1/1/07 21c

31/12/07 82c

31/12/08 83c

31/12/09 $1.31

31/12/10 $1.06

Additionally, whilst MPO is part of the ASX300 Energy Index now, I do not think that it has been for the whole 4 years that they have chosen to use, so in my view it is irrelevant to use it as a benchmark for comparison. MPO at the beginning of 2007 was considered an extremely speculative stock so one would expect the return would have to be in excess of the index to compensate the level of risk associated with an investment in MPO.

From the statement from the current board enclosed with the Notice of Meeting, "Growth of Mungi/Harcourt (Queensland) coal-seam gas asset." Oh please tell me that they have not chosen to try to sell this asset’s performance as a positive. In Mitchell's own words "it is way over budget and a year behind its timetable"

From their statement, "While the potential for a Canadian IPO or secondary listing was initially announced by the Company in late 2008, the global financial crisis, the significant reduction in North American gas prices, and the acquisition of the Canadian oil assets led to the initiative being deferred until early 2011 to maximise value for the Company?s shareholders." That statement is purely trying to justify a constant changing of strategy, which is one of the major critisizms of the current board of directors. They don't know where they want to be positioned.

Furthermore on two occasions since the initial announcement of the IPO referred to above, directors have given other dates that have not been fulfilled. In answer to a question after a broker briefing in early 2010 Mitchell stated "if it was not completed within 6 months, he would be extremely disappointed". And more recently at the 2010 AGM in answer to a question from the floor, the chairman indicated that the offering would be completed before the end of the calendar year.

From their statement, "The requisitioning shareholders refer to a "friendly approach" to the Chairman." It was put to him that he could retire, without any need to embarrass anyone, but their sheer arrogance got in their way, and so shareholders are now faced with this costly manner of having to remove them.

We cannot afford to let these directors to continue to fail to deliver what they indicate they are going to achieve time after time, and continue to act as directors. We must act now and dump them.

Proxy voting can also be done online - it is very convenient and easy.

I strongly urge all holders to vote in favour of all resolutions.

We have been given a gift, being an opportunity to rid ourselves of this incompetant and lazy board. Seize the opportunity and vote. It can be done online, it is so simple. These resolutions are extremely important. Don't be apathetic - please vote. We have an extremely good chance of being successful.

Beard is used to being around a horse stud, so he might be accustomed to smelling some buckets of ...., and he can guarantee if he chooses to go ahead with the meeting, rather than do what the majority want and resign, that he will get bucket load tipped over him. It will be symbolic of his performance as chairman and as a director.

On another forum it has been suggested a replacement board will sell off company assets as this is a quick option to release value to shareholders. If this does occur and the net proceeds after tax are a multiple of the current share price, like double or treble, then there would not be a shareholder with reason to complain. They will have then seen a massive return on their money, unlike the current losses that so many are sitting on at present, and have been for some time.
We will never know about the potential, if they are never given the opportunity BUT we do know that they have a sense of urgency and drive to see change. We also know that we cannot let the current members remain.

My sentiment is short term buy on the basis that there will be change at the top very shortly.

 

[financial chat]

Following the release of the Notice of Meeting and accompanying statements, I feel compelled to make some comments.

Mitchell & co might have had the expertise to buy assets well, BUT they are a miserable failure at delivering on time development. Additionally, with the exception of the sale of Gloucester, there is no evidence to suggest that the current board is able to make positive deals. And Gloucester was sold at a time when deals were a lot easier to undertake.

The current management team needs to be held to account for the dismal share price and the lack of production performance. And for these reasons alone the group of 7 shareholders has made it possible for the lazy and incompetent board to be brought to account. That is the reason for suggesting that a change be made. The current encumbents have failed and must go.

They don't have a sense of urgency, they fail to understand the need to get deals made, they fail to understand that one cannot promise and then fail to deliver.

The current invisible Chairman has to go, no doubt about it. We want someone who is going to promote the company, not just chair a meeting. Even chairing a meeting is beyond him when you look at the way he floundered his way through the 2009 meeting. Beard is past it, and must go.

Hobday was given the job as a mate of the Mitchell family. He left MPO years ago and then came back after he retired from his other commitments which precluded him from continuing as a director of MPO. We do not want dead wood. What did Hobday bring to MPO this time? He sent us off in another direction (India) at a time when management should have been concentrating on existing projects. And was paid hansomely as a consultant for causing the distraction.

It is all very convenient to use the 4 year performance data. Looking at other timeframes presents a totally different picture.

Holders need to read the statements carefully and not take them on their face value.

Beard and co have been very selective about the dates that they have chosen to use to justify their stance about the share price performance:

MPO’s share price (on a consolidated basis) is as follows:

1/1/07 21c

31/12/07 82c

31/12/08 83c

31/12/09 $1.31

31/12/10 $1.06

Additionally, whilst MPO is part of the ASX300 Energy Index now, I do not think that it has been for the whole 4 years that they have chosen to use, so in my view it is irrelevant to use it as a benchmark for comparison. MPO at the beginning of 2007 was considered an extremely speculative stock so one would expect the return would have to be in excess of the index to compensate the level of risk associated with an investment in MPO.

From the statement from the current board enclosed with the Notice of Meeting, "Growth of Mungi/Harcourt (Queensland) coal-seam gas asset." Oh please tell me that they have not chosen to try to sell this asset’s performance as a positive. In Mitchell's own words "it is way over budget and a year behind its timetable"

From their statement, "While the potential for a Canadian IPO or secondary listing was initially announced by the Company in late 2008, the global financial crisis, the significant reduction in North American gas prices, and the acquisition of the Canadian oil assets led to the initiative being deferred until early 2011 to maximise value for the Company?s shareholders." That statement is purely trying to justify a constant changing of strategy, which is one of the major critisizms of the current board of directors. They don't know where they want to be positioned.

Furthermore on two occasions since the initial announcement of the IPO referred to above, directors have given other dates that have not been fulfilled. In answer to a question after a broker briefing in early 2010 Mitchell stated "if it was not completed within 6 months, he would be extremely disappointed". And more recently at the 2010 AGM in answer to a question from the floor, the chairman indicated that the offering would be completed before the end of the calendar year.

From their statement, "The requisitioning shareholders refer to a "friendly approach" to the Chairman." It was put to him that he could retire, without any need to embarrass anyone, but their sheer arrogance got in their way, and so shareholders are now faced with this costly manner of having to remove them.

We cannot afford to let these directors to continue to fail to deliver what they indicate they are going to achieve time after time, and continue to act as directors. We must act now and dump them.

Proxy voting can also be done online - it is very convenient and easy.

I strongly urge all holders to vote in favour of all resolutions.

We have been given a gift, being an opportunity to rid ourselves of this incompetant and lazy board. Seize the opportunity and vote. It can be done online, it is so simple. These resolutions are extremely important. Don't be apathetic - please vote. We have an extremely good chance of being successful.

Beard is used to being around a horse stud, so he might be accustomed to smelling some buckets of ...., and he can guarantee if he chooses to go ahead with the meeting, rather than do what the majority want and resign, that he will get bucket load tipped over him. It will be symbolic of his performance as chairman and as a director.

On another forum it has been suggested a replacement board will sell off company assets as this is a quick option to release value to shareholders. If this does occur and the net proceeds after tax are a multiple of the current share price, like double or treble, then there would not be a shareholder with reason to complain. They will have then seen a massive return on their money, unlike the current losses that so many are sitting on at present, and have been for some time.
We will never know about the potential, if they are never given the opportunity BUT we do know that they have a sense of urgency and drive to see change. We also know that we cannot let the current members remain.

My sentiment is short term buy on the basis that there will be change at the top very shortly.

 

[financial chat]

Don't be conned by the board's statement.

In defence of the Invisible Chairman the board have made some ludicrous remarks in their response to the statement from requisitioning shareholders.

The board seem to be content to believe that the share price has performed in the last four years. Try telling that to any shareholder who bought into either of the share placements (at $1.25 & $1.15) or even the rights issue at $1.03. If that is performance that they are content with, then in my opinion that equates to telling a beggar on the streets of Calcutta to be content and happy with what life has dealt them.

Reference is also made to comparison to the ASX300 Energy Index. In my view, that is an irrelevant comparison. To my knowledge Molopo has not always been a component of that index for the period being analysed. Four years ago, Molopo was a highly speculative share, and one would expect it to outperform an ASX300 index. That is the compensation holders expect for taking on additional risk.

Reference is made to value realization. Shareholders have not seen any rewards from that realization. Since the placement in 2007 I think that the board have spent something like $200M. What rewards have they seen? Certainly not any share price appreciation.

There is the suggestion that should Beck and Lewin be successfully be appointed, and Beard and Hobday removed, that there will be a lack of technical experience on the board. Ian Gorman is the Chief Operating Officer, and a Director, and he has heaps of technical expertise. Additionally, boards are not expected to have the technical knowledge to operate the company. They rely on their staff having those attributes, and this is the case with Molopo. The staff have ample expertise. Boards are there to direct the company on behalf of shareholders.

There is the suggestion that Investor Relations are not the responsibility of the Chairman. He is the person in charge of the whole board and company, and it should be expected that the person holding that position does promote the company. Mr. Invisible does not, and by their response, looks to be abdicating responsibility. That is not acceptable.

If this company had been directed properly with a sense of accountability and responsibility for shareholders over the last decade, it would not still be trading at a significant discount to the true value of the assets it owns.

Mr. Invisible, we do not want excuses, we want action. This seems to evade your comprehension, and therefore you have to go.

 

[financial chat]

A friend telephoned this morning to tell me that MPO are now going to the extreme of utilizing the services of a call centre, that is making calls to shareholders to obtain their views.

That is a wicked waste of shareholders' funds. How much are they being paid Messrs. Beard & Hobday? What gives you the right to use our funds in this manner.

Apparently the caller states that the board recommends that one votes against the motions.

If directors want to canvas holders for their election, then they should use their own funds, not company funds.

IMO it is an abuse of company funds.

Perhaps we should ask the directors to refund the cost of this defense, out of their own pocket.

I'll bet that if they had been required to fund it out of their own pocket, that they would not have been so willing to spend that money.

Readers can rest assured that this matter will be raised assuming that there is the possibility of speaking to the motions.

Perhaps the question should be canvassed along the line of "Wouldn't that being comparable to a Labour Government using government funds to pay for the Labour Party's campaign."

I am sure that Stephen Mitchell, as an unsuccessful Liberal Party pre-selection candidate would then be able to understand our position and objection!

I reiterate my call for all holders to vote. The share register of this company is very wide. Therefore your vote is likely to count more than one thinks. There are not huge blocking stakes on the register.

Let the current directors know that they are not looking after your interests properly. Vote in FAVOUR of all resolutions.

If you appoint the Chairman of the meeting as your proxy, please make sure that you direct him to vote in FAVOUR of all resolutions, OTHERWISE he will use your vote against all resolutions.

If you direct the chairman to vote in FAVOUR of the resolutions, he must vote your shares the way that you have directed.

 

[financial chat]

AFR 27/1/11
Street Talk
Paul Garvey
pgarvey@afr.com.au

Molopo board spill vote looks a close-run thing

It's less than three weeks until shareholders vote on the board spill at oil and gas play Molopo Energy proposed by a high-profile collection of businessmen, and things look headed for a tight finish.

Based on the views of several non-aligned investors who have spoken to Street Talk, the rebel investors - led by Melbourne property developer Max Beck and including billionaires Bruce Mathieson and Boris Liberman and Fairfax Media chairman Roger Corbett - have if nothing else, tapped a broader discontent in the shareholder base.

While Molopo has defended its performance by pointing to an almost 400% rise in its shares over the past four years, that's not washing well with investors who backed the most recent capital raisings.

Early last year an institutional placement at $1.10 (error, should be $1.15) was followed by an entitlement offer to institutional and retail shareholders at $1.03, raising almost $60 million and involving the issue of 55.1 million new shares of roughly 22% of the stock.

Molopo shares have rarely traded above these levels since then, closing on Tuesday at 99c. Further underwater are those who supported Molopo's 2007 raising of another $32.5 million at the equivalent of $1.25 per share.

Much of the frustration in the shareholder base seems to centre around the lack of progress made with drilling at Molopo's prospects in Quebec, which many feel could be a company-maker. Five wells had been planned but,with gas prices at a low, Molopo instead directed the cash towards its oil prospects with success.

Talk of the company pushing into Indian oil and gas exploration has also not gone down well with those keen for progress in Quebec.

While the Molopo board is disappointed with its share price performance, in their defence they are not the only company sitting on an underwater capital raising.

and the dip in its shares is nothing compared with the dive in the share price of Becton when founder Beck quit the stock. After Beck sold out, Becton began a fall from $5 a share to 5c.

The Molopo dissenters have also been vague on their alternative strategy for the company.

 

[pointr]

Hi Finacial Chat, we have held MPO for several years. I was concerned about the issues you raised re the board, cash burn, metrics put foward by others as to the real returns from Backen and Spearfish projects ( which I can't fully understand from comapny reports) As a result of these concerns and about future dilutions we have sold out while still well in profit ( but would have had a lot more profit at $2.07 a while ago)
I'll continue to watch the company and this space. North American shale gas supply and general manufacturing downturn in the US is unlikely to see gas back up to its highs for a long long time. kind regards pointr

 

[financial chat]

From research released this morning from Wilson HTM:


Gorman resigns at COO but is still a director



Recommendation
We have changed our recommendation from Buy to Hold given uncertainty regarding the future direction of the company.

Seven shareholders are seeking to appoint two new directors and remove the Chairman and a nonexecutive director.

Separately, Ian Gorman has resigned as COO.

MPO is proceeding with a planned IPO of its Canadian oil portfolio, however, in our view this may change depending upon the outcome of the Board challenge or may be replaced by a trade sale.

The prospectus notes that oil production peaked in October, suggesting that mid CY11 targets may not be met.

Our valuation has reduced following prospectus revisions.

 

[financial chat]

pointr,

Now more drama - Ian Gorman has resigned from being COO and not a word from the company.

Talk about treating us as mushrooms.

Resign Messrs Beard and Mitchell.

 

[pointr]

Calling 'financial chat', calling 'financial chat'.
Any gems of wisdom / rumours on what may be behind MPO's trading halt announced today' while awaiting an announcement.'

 

[financial chat]

pointr,

no doubt you have seen the announcement.

It is staggering to see the share price still at the current price. Just goes to show that some holders have taken the opportunity to move on as they have absolutely not faith in Mitchell and co. Otherwise one should have expected a 20-30c rise in the share price.

We are selling a core asset, with virtually no upside potential, without shareholder approval.
= desperate action to SOS (Save our Skins)!

Success of the IPO was possibly floundering, and was not guaranteed of succeeding.

Sold it for far less than the 95c per share of reserve valuation that was referred to at AGM.

No bounce in share price coming from the market. One has to ponder why?

Just hope that the buyers share the view that there has to be change.

Vote Beard and Hobday out and vote Beck and Lewin on, otherwise this stock is just going to continue to languish

I know that no-one is irreplaceable, but one has to be very concerned that Ian Gorman has elected to resign. And the reasons for his resignation would also be extremely concerning. If he goes, his team will go with him in due course, leaving the company with very a diminished expertise set.

If the new board members are brought elected, they will do everything possible to keep Ian.

The revitalization that will occur with the Board changes will reinvigorate the company. Something that has been lacking for a long time.

Now there is more evidence of disarray, sloppiness or incompetence from management today

Did anyone else just receive an email from the company about the proposed EGM, together with supporting links?

It is with absolute amazement that this has been sent out today with old information in the link.

- still talking about the Canadian IPO
- no mention of the resignation of Ian Gorman
- no mention about Beard standing down as Chairman.

The company's management team responsible for the distribution of this outdated information should be immediately sacked for incompetence IMO.

 

[financial chat]

In today's mail holders will have received a printed card urging holders to vote.

The card is dated 2nd Feb and pedals the current board's position.

Whilst being dated 2nd Feb it fails to mention that they have decided to sell Spearfish, which was announced the same day.

Still highlights a 400% return over 4 years even although more than half the shares currently on issue did not exist 4 years ago.

Does not mention that Beard has stepped down as chairman due to ill health, and given his age and health is unlikely to remain as a director long term IMO.

States that they have a "track record of value realisation from the sale of assets." I ask holders does one success make a track record? Not in my opinion. They sold China at a loss (and that was the main asset that gave us Mr. Mitchell as MD). They sold Gloucester profitably, but at the time CSG was fashionable. But one sale does not create a "track record" Bear in mind at the time this was written Spearfish had not sold.

All of that value realization has done nothing for shareholders.

No mention of the loss of technical expertise that is going to occur if Ian Gorman goes.

Why should our company be allowed to spend our money on promoting themselves in this manner? It is corporate waste, abuse of corporate funds and absolute rusbbish IMO.

Yes exercise your right to vote, BUT please vote in FAVOUR of all resolutions.

I have just telephoned the shareholder information line and registered my absolute disgust at them spending our money in this manner.

 

[financial chat]

Below is a copy of a letter that has been sent to 2500 shareholders from Max Beck

Molopo Energy Limited
VOTE FOR ALL RESOLUTIONS BY 11 FEBRUARY 2011

Shareholders must take positive action

‐ Molopo’s share price performance is well below peers with similar oil and gas reserves and does not reflect the value of the company’s underlying assets
‐ Most of the shares in the company have been bought at prices higher than today’s price
‐ The existing Board refuses to acknowledge the problem and has recommitted to the same strategy that has failed to deliver
‐ Molopo needs new Directors with the capacity and motivation to deliver change
‐ Shareholders are being asked to vote FOR Board change to replace existing Directors, Donald Beard and David Hobday with two new independent Directors, Greg Lewin and Max Beck.
‐ Your VOTE FOR CHANGE is required by 11 February 2011

From Down Under to All Over
The Board’s strategy is unclear and is not working
The Board seems to be making the strategy up as it goes along. Molopo has accumulated a collection of assets across four continents from “down under to all over”. With no geographic or asset type focus, financial markets struggle to analyse and attribute value to the various assets in the share price.

Strategic “about turns” and “surprises” have cost Molopo dearly in market confidence
When Molopo bought the Canadian Spearfish assets 18 months ago, the Board said the acquisition was to “build Molopo’s production, cash flow and reserves”. On 2 February 2011, with Spearfish having established itself as a core asset (but still not meeting stated production targets), and just months after an announcement that the company would IPO the asset in Canada, the company announced its sale.

This is only the latest example of a string of announcements that have kept analysts and
investors guessing about what the Board will do next. The sale of such a core asset cast
uncertainty about the sustainability of the company’s profit and cash flow, and in particular
where near term upside will come from. We need to question is this the best deal for shareholders or something rushed into in order to impress shareholders before February 15.

Sale of Spearfish means Board change is even more critical
The new Board must:
Ensure Molopo shareholders are receiving the best possible value for Spearfish. The current
board is proposing to sell what has been the company’s star asset and replacing any upside
basically with cash .It is therefore critical to have a clear strategy where those funds will be
deployed.

The Board’s failure to successfully implement and deliver on publicly announced goals has cost the company credibility. Disappointing the market has become the norm, rather than the exception and there is always an excuse as to why things did not happen when they were promised.
For instance, since January 2008 shareholders have heard much about the potential of the Quebec shale gas assets, yet scant progress has been made to add value to these assets. Despite advice on more than one occasion that drilling would commence, nothing has been achieved.

Proposal for Change
If elected, the new Directors intend to transform Molopo from a resource accumulator to a company that is focussed on getting back to basics, ensuring the company’s resources are not spread too thin and delivering shareholder value.

The immediate plans of the proposed new Directors include the following:
• Ensure appropriate technical ability is retained at management level. It is understood that a critical senior management position is soon to become vacant, and the restoration of technical capability to the management team will be an urgent focus for the Board,
• Portfolio review to critically assess and prioritise Molopo’s assets and development plans, taking into consideration realistic resource constraints. Molopo has insufficient scale to focus on too many projects at one time.
• Consolidate technical knowledge and support to promote operating excellence. This will be done through introduction of a functional based organisation structure, as opposed to a geographic structure,
• Review of opportunities to improve the cost profile of production, stripping out costs and delivering results within tightly managed time frames,
• Review of non‐core spending,
• Re‐engagement with shareholders and improve two‐way communication with shareholders,
• Ensuring that the management team is focussed on delivering individual projects free from the
distraction from new corporate acquisitions and prospects.
• Be clear and transparent with the market about what it is doing – the Board in proposing an IPO in November made no mention of a trade sale.
• Focus on the development of the Canadian shale gas with an immediate drilling programme

The Proposed Candidates
IT IS CRITICAL THAT BOTH CANDIDATES ARE ELECTED TO THE BOARD TO ENSURE THAT BOARD RENEWAL IS EFFECTIVE. THE REMOVAL OF BEARD AND HOBDAY IS ALSO VITAL.
Both Greg Lewin and Max Beck are experienced businessmen with an established track record of
achievement, and they will make things happen.

Greg Lewin is a 30 year veteran of the international oil and gas industry, returning to Australia after a long and productive career as a senior executive with the Shell Group. Greg’s recent roles within the Shell Group include Executive Vice President of Shell Downstream, and President of Shell Global Solutions.

Greg’s career has spanned all aspects of the oil and gas business, including upstream and downstream development. In the late 1990s, he served four years on Shell’s Gas and Power Business Committee – the senior executive body responsible for commercialisation of Shell’s gas and inter‐related oil resources.

Greg has previous Board experience gained through his position as non‐executive Director of Sasol Limited, a global energy and chemicals company.

If elected, Greg intends to make himself available for nomination to the position of Chairman.

He will bring a fresh perspective, backed by years of international experience, and a sense of urgency to the task of commercialising and delivering value from Molopo’s asset portfolio. He has a proven track record and hands on experience in the critical decision making that will convert Molopo’s potential into value.

Max Beck AM has over 40 years of business experience. Max founded the Becton Property Group which he transformed from a small, Melbourne‐based property development and construction business into a national, diversified development and construction group before his retirement. Max proved his ability to generate wealth for himself and many others along the way.

Max will bring a strong commercial perspective and common sense approach to the Board. He is a team builder and fosters a sense of urgency and accountability for on‐time and on‐budget project delivery. He is a significant shareholder in Molopo and is determined to see the value of the company reflected in the share price. Max Beck says, “My interests are the same as all shareholders. I want to see the real value in the share price. My intention is to keep decision making focussed on the shareholders’ interests”.

It is intended Max Beck’s tenure on the Board will be limited, but he will be there while the change in corporate focus is underway. Max is keen to ensure that Board composition be reviewed at an appropriate time to ensure it has the right balance of capability and experience for the company’s needs going forward. He would consider endorsing local and international candidates in place of his own position in the future.

Vote for Change
We encourage all shareholders to vote FOR ALL of the resolutions.
Voting for only some of the resolutions will not drive the change required.

You can do this by:
• Voting in person at the General Meeting to be held at 10am on Tuesday 15 February 2011 at The Grand Ballroom, The Hotel Windsor, 111 Spring Street, Melbourne,
• Completing the proxy form and faxing or posting it to Molopo Energy’s share registry, making sure to put a cross in the boxes marked “FOR”,
• Proxy Voting online at www.linkmarketservices.com.au and following the prompts,
• Appointing a proxy who will vote on your behalf at the meeting. This requires you to complete only Steps 1 and 3 on the proxy form. Beck Corporation, one of the requisitioning parties, has nominated Glenn Ross as proxy. If you want to vote FOR the resolutions, write the name GLENN ROSS in the box (Step 1), sign (Step 3) then send to Link Market Services by mail or fax.

Please note that proxy forms must be received by Molopo Energy’s share registry by no later than 10am Melbourne time on 13 February 2011. Please note that this date is a Sunday, therefore
SEND IN YOUR FORM BEFORE FRIDAY 11TH FEBRUARY 2011, OR VOTE ONLINE.

If you have misplaced your proxy form, or would like a new one, please contact Link Market Services on 1800 285 677 or +61‐2‐8280 7472.

If you have any questions in relation to the resolutions to be considered at the General Meeting, please contact the Requisitioners’ Information lineon 1800 623 855 or +61 2 8256 3375 between 9am ‐ 5pm (AEDST time) Monday to Friday.

IT’S ALL ABOUT SHAREHOLDER VALUE
VOTE “FOR” ALL RESOLUTIONS BY FEBRUARY 11.

 

[pointr]

Hi 'Financial Chat'& forum. I emailed MPO today to ask about Ian Gormans ceasing to be COO. I was directed to the quarterly report dated late Jan. In that report it was announced that Ian Gorman would retire April 2011 but would still consult. I checked this and found it to be correct
"Effective 1 April, 2011 Mr. Ian Gorman will retire from his position of Chief Operating Officer and will become a non-executive director of Molopo (and its various subsidiaries). In this position, he will also provide consulting services on various matters.
CORPORATE"
At this point I'm not unhappy I've sold MPO - who knows when that may change.

 

[financial chat]

pointr,

did you get the opportunity to speak with Ian direct?

Having spoken to him, I am most concerned that if there is no change to the composition of the board next week, that Ian will leave altogether, and that it due course his team will follow him to where ever he goes.

If there is change in the board, I think that Ian can be convinced to stay. Given what Beck and Lewin have indicated about a restructure, there might be every chance that Ian might get a promotion. That would be welcomed by the markets.