RE:RE:RE:RE:RE:From Joe Many thanks for your response and the added detail. I would appreciate your further response on a couple of points below:
1) Legal costs - this is a concern to shareholders currently - are you able to please clarify the nature of these disputes i.e are any potential claims being made against the company (and if so, what for, and whether any financial provisioning has been deemed necessary?) or whether the company is pursuing claims against another party(ies). Is there any resolution date in sight and do the disputes relate at all to the Tapir Association Contract with Ecopetrol (I understand an extension to the 5 year licence can be applied for in early 2024 - presumably the company is looking to activate this as soon as practicable?). No legal disputes that are outside of the normal course of business. There are a number of projects being worked on by legal council including the Tapir and Oso Pardo extensions, due diligence, personnel matters, partner matters, AGM preparation, disclosure review, other corporate matters, etc. There are no potential claims made against the company that have required disclosure or accruals in the financial statements at this time. No resolution date for extensions with the ANH or Ecopetrol at this time.
2) Annual bonuses/salaries - I'm a little surprised to hear reference to consultants being paid bonuses - are these tied to any particular performance measures? I note that management has been awarded c20m in share options over the last 2 years, which should be a significant incentive towards share price performance. Do any NEDs sit on the Compensation Committee? Yes, the Compensation Committee includes independent Board members. Staff bonuses are tied to performance measures which include personal and company performance.
3) Company restructuring - this is good to hear. Is this primarily aimed at reducing corporation tax, or as a precursor to reducing any withholding tax on dividend distributions? All restructuring is performed to assist in the efficiency and effectiveness of the company’s operations and shareholder communication. In many jurisdictions, restructuring for the sake of tax efficiency is not allowed.
4) G&A - I was hoping that the company (and shareholders) can benefit from economies of scale as the business grows with a relatively fixed annual G&A expenditure, rather than one that increases in-line with production growth :) Agreed. Ron and I discussed this as well. With the increase in operations, and soon requiring additional rigs for projects, some human resource growth is necessary. Bringing additional production on line will bring down the G&A / bbl number.
Best of luck with the rest of the drill programme.
Regards