Hi Dad.
<<3:22 AM posting?>>
Yep, and I have one Hell of a bruise on my forehead from the keyboard !! <gg>
<<Perhaps "promotion" is the wrong terminology.>>
Agreed. I think the proper word would be "educate".
<<Investors, sitting on their thumbs "waiting" for their brokers to call and tell them what to invest in...is history!>>
Oh, really ?? Then how do you explain all the knee jerk reactions to the numerous analyst upgrades\downgrades\target modifications. You know, the ones put out by all those "knowledgable experts" everytime they see a need to guide us (and generate commissions) ?? <gg>
<<I'm interested in WHY the stocks have LOST 50% of their value, since the "GREAT NEWS" in May and June? Information highway not being used perhaps?>>
Well, there's several analyst downgrades over that period. You know, commodity prices are too high therefore currently high earnings will decline in the future, some bad financial ratios compared to peers that aren't growing as rapidly, they haven't done a financing through us recently, etc.. <gg>
<<The market is making it clear, at the moment, that it is concerned.>>
And, of course "the market" is ALWAYS correct. "The market" knows and accounts for all facts instantaneously and with absolute precision. There is never an over reaction in market behavior. That's why share prices only move very, very gradually with well defined and smooth trends and with almost no volatility save of course for those periodic step adjustments to each "material change" event !! And, greed and fear are never evident in share prices !! <gg>
I'm from the "old school", dad. I just don't see how a good CEO can run his company based upon what some "broker" (that doesn't know the difference between condensate and whip cream !!) thinks\wants !!! A CEO must run his company in accordance with a long term business plan approved by his BOD on behalf of his shareholders. If at any time the shareholders do not agree with "the plan", or with the corporate execution of the plan, they propose change and they get it or they leave !! Simple !!! We've had some "leaving" with the ELH JV lately. But, does that mean that the JV business plan is wrong or that its execution is poor ?? If your answer is "Yes", then you need to consider walking too. If not, then maybe throw in some stink bids !!
<<Do what you do best (in Berkleys case exploration) and hire / contract out, those areas you don't.>>
But, not "everyone" at BKP is there to explore. Perhaps, disgruntled shareholders should contact either the BOD or Mike Rose with constructive suggestions as to any functions which need to be fixed \ contracted out. I sure as heck can't do anything about it !!
<<Proper and timely news releases would .....let's not go back to the importance of getting information out.....we clearly disagree on it's importance.>>
Clearly, I should have shut up on all this !!! I could have faked total agreement !!! <gg> NOT !!!!
Dad, we do NOT disagree on the importance of getting properly and timely news releases out. But, you suggest (naively, I think) that BKP failed in that regard while I on the other hand believe their releases were "appropriate". They issued four NR's (5/29, 6/2, 6/6 and 7/6) that dealt with the production test and results therefrom. In addition, their IR was\is available to field questions regarding the test. Goodness, how much more do we need\expect ?? For what purpose ??? [More on this below.]
<<In the LONG TERM, it won't be important. But will Berkley Petroleum still be Berkley Petroleum?>>
Does it really matter ?? In the long term, BKP will be what BKP will be. So what if Busby <gg> buys them out !! Rose et al would get tossed aside but they'd just start up again. And, I'd sure want to be a part of that one !! <gg> [For clarity, I do NOT think that Mike Rose walks on water !! But, I am impressed with what he has done and continues to do with BKP. IMHOO, he's a winner. I do want a piece of his show. Now, hopefully he'll also learn to walk on water !! <gg>]
<<BKP have taken the position,from the very beginning, that they would not respond publicly to rumors. That rumor had no "material" value. Their half assed responce did!! They "confirmed" water, BEFORE they could report their real findings. A HUGE blunder, IMO.>>
With all due respect dad, IMHO, you are clearly wrong on this matter, perhaps because you think (naively ??) that the test results were not "alarming" at an early stage of the test. But, do appreciate that while the early test results were NOT CONCLUSIVE (except of multi-phase flow at unstable rates and pressures) they were certainly troublesome !!!!
After flowing on cleanup in preparation for the actual post completion flow test, BKP issued a 5/29 NR which outlined the preliminary flow data. When the production test was initiated BKP#1 began to produce significant water early in the test .... and the water cut increased rapidly. Of course, flowing tubing pressures were impacted sharply. Rumours soon circulated that the well was watering out. But, was it, or wasn't it ?? Was the water influx occuring throughout the entire ~300 ft completed interval, or was water entry via only the lowermost perforated interval ?? Might remedial work be worthwhile\necessary\possible ?? Might the water cut stabilize or would it continue to increase above expected levels choking off all gas flow ?? Was the gas reserve perhaps depleting ?? Nobody would be able to provide reliable answers to these questions after just a few hours of flow.
So, what was the "material event" which BKP addressed with their "timely" NR on 6/2 ?? Did they report on the rumour ?? No, of course not, they simply reported material facts. They reported the BKP#1 test rate and flowing pressure and that "The well has also been producing condensate and formation water. The flow test is continuing as planned and gas rates, pressures and liquids rates will be further assessed during this period." Within a few days, fluid flow rates and pressures stabilized and additional material facts were known. So, a subsequent "timely" NR was issued on 6/6. Finally, a few weeks later, after the bottomhole pressure recorders had been recovered from the well and the test data had been analyzed, another NR was issued on 7/6. Dad, that's comprehensive disclosure, "per the book" !!!
To appreciate why BKP had to issue their 6/2 NR let's just assume that they had chosen not to issue it. What then IF the well had cut additional water, the gas reserve had been limited and depleted, and the well actually did water out during the test. That is, assume that the erroneous initial rumour had quickly proven up. Well, you'd still be very pissed but BKP might also have a liability to you (IF you could prove damage attributable to the non-disclosure). They HAD to issue that NR, dad. It was not a "blunder". This was an excellent example of what timely disclosure of material change is all about !! JMHOBWDIK.
<<They then compounded the problem by NOT DEMANDING RETRACTIONS, both from the brokerage firm involved and the media that carried the erroneous "watered out story".>>
First, beside the fact that the damage had been done, it occurs to me that it might be virtually impossible to PROVE that a brokerage had "perpetrated" a rumour versus "responded" to one. One action might deserve a retraction, the other not.
Second, BKP communicated the facts and their test interpretation via four timely NR's. If some investors\shareholders choose to be guided by "The National Enquirer", in the face of this comprehensive disclosure, well so be it !!
Third, how do we know that BKP did not request retractions ?? Perhaps they did but were denied. Would it be worth litigating over ?? Was BKP harmed ?? How do we quantify and prove the damage ?? Do we want "whiners" or "winners" running our show ??
<<But when it did exist, did they release it? It was an option they missed.>>
First, I think you might be under a false impression that the subject "formal" reports are "older" then they in fact are. Did I not read somewhere that as late as last Wed\Thurs EJ was still waiting for a copy of the stuff to include in the summary ?? You got some pretty hot off the press stuff in that summary, dad !! <gg>
Second, you have indicated that Busby's summary report hasn't really changed your opinion on ELH. Why should we then expect that these reports would influence others ?? So what is it that they really missed ?? Now remember, we're dealing with a public that is confused with the distinction between condensate and formation water, gasoline and natural gas, so you MUST anticipate some difficulty in adequately communicating the concepts and conclusions of transient pressure analysis.
<<Where are the prepared press releases that should be going to the national media services in Canada and the US? NONE! Shouldn't be that way, but management does not know the difference between reporting "material changes" for the purpose of securities regulations AND press releases to keep the world interested in their company (and their partners).>>
No argument.
Have a good one.
Later,
grayhairs
P.S.-- I'll agree with anything you say. My fingers ache !! Talk to you Thursday, if I wake up by then !!!! |
