PTA deep thoughts by Dally TaylorI've been a long time PTA shareholder and I believe I finally understand why the share price continues to languish.
2013 was a horrible year for PTA...if you asked me to give my worst case scenario for their exploration campaign post LM it would have been something like this...CPO-1 wet, LM south wet, LG 1 wet, LC-2 more gas, Cuirira not commercial yet, Rumi jury is still out, LG-2 taking forever (usually a bad sign)...and guess what, that is exactly how things have played out to-date.
People can talk about PTA being undervalued till they are blue in the face, but the only way I see valuation turning around is if they address their major shortfalls.
1) Company needs to grow - if you can't do it with the drill bit, do it with cash or share acquisitions
2) Management communication - every drilling event is material for PTA...investors deserve to know what is going on
3) Diversify productions and reserves - could be done with an corp acquisition or farm-in/acquire more exploration acreage that could potentially replace reserves
4) Thoughts on operatorship - who cares, given their exploration track record (I know they didn't operate, but they could have opted out of the wells like Parex did on LG-2) who wants these guys operating, might preserve value for shareholders as non-operators.
My recommendation to PTA management is go out and do smart, value adding deals, get bigger or get lost and sell your selves.
And don't just do a crappy deal for the sake of doing a deal...I know you all have cushy salaries and bonuses and stock options out the wazzoo that you want to preserve, but try to do what's right for the shareholders, it’s your fiduciary duty. Entrenched management teams are like a bunch of leaches.
With the right deal, PTA could correct the market malaise and get the share price turned around in the right direction. Bad deals are things companies don't recover from...management will lose all credibility and PTA's share price will suffer even more.