Benjamin, IMO the most significant part of the conference call occurred during the Q&A period via comments from Ian Lundin, President and CEO of International Petroleum Corporation, and son of Adolf Lundin, IPC's Chairman.
Lundin was actually responding to a question that Larry Brubaker originally posed to Lutfir Khan, asking Khan to address Sands Petroleum's earlier comments about Arakis management not working to maximize shareholder value. (Good question, Larry.) Khan attempted to dodge the issue (i.e., some mumbo jumbo about Arakis being "undervalued" and working to "communicate that value to the shareholders"), but Lundin stepped up to the plate and forced the issue.
Lundin quickly stated, in no uncertain terms, that the main reason the Lundin companies were shareholders in Arakis is that they felt there was "huge potential" in the Arakis block in Sudan -- so huge, in fact, that they want Arakis to focus on the Sudan Project "exclusively". Ludin also expressed his view that Arakis' G&A costs, at approximately US$10 MM/yr, were too high, and could be reduced.
Obviously there is a conflict of opinions between the Lundin's, who want Arakis to focus exclusively on the Sudan Project, and Arakis' board, who want to stay involved in other parts of the world (e.g., Oman) in addition to Sudan. (Otherwise, Arakis would not have brought in Taylor.)
It will be quite interesting to see if (and how) this difference of opinion gets played out in the marketplace. |
