RE:Re Fronterra sharesWhen we completed the drilling of Kawa, CGX’s stock was trading at USD2 and FEC’s at about USD8, i.e. 1/4 ratio.
Today this relationship is 1/10
One of FEC’s biggest problems is that its Colombian assets are at risk because the new president wants to stop oil and gas exploration projects.
This generates a distortion of the price today. Although this 1/10 ratio may be fair today, six months from now when Wei is favorably explored and its assets in Colombia are devalued, the ratio should be at ½.
I do not think this is a good time for CGX to sell.