28/01/2009 - 22:00

Carnarvon stays afloat after sale

28/01/2009 - 22:00

Bookmark

Upgrade your subscription to use this feature.

THE quiet summer holiday period can perhaps bring more attention than necessary to the movements of a director's shareholding, particularly when the person in question sells $580,000 worth of shares.

Carnarvon stays afloat after sale

THE quiet summer holiday period can perhaps bring more attention than necessary to the movements of a director's shareholding, particularly when the person in question sells $580,000 worth of shares.

Over the past week, Carnarvon Petroleum non-executive director Kenneth Judge sold 2 million shares at about 28.4 cents each, which put some downward pressure on the company's share price.

During the period, the company's share price fell from 30 cents to 28.5 cents before re-asserting its position at 30 cents.

While WA Business News understands that Mr Judge sold his shares for personal reasons and not because of a margin call, analyst Peter Strachan said it is never a good sign to shareholders when a director sells his shares.

However, in the case of Carnarvon Petroleum, the fact that the share price has been relatively stable of late, as compared to the S&P/ASX 200 index, suggests a vote of confidence in the company.

"I think there are a number of other supportive shareholders that won't be selling at the current price," Mr Strachan told WA Business News.

"As smaller companies get distressed ... they'd be looking to Carnarvon to come in and offer some assistance either by farming in on new projects on favourable terms.

"Or [Carnarvon] could buy the whole company and they won't have to deal with a messy JV."

In the company's September quarterly for 2008, Carnarvon reported a cash balance of $41 million, up from $31.5 million from the previous quarter.

Add to that no debt and strong cash flow from its 40 per cent owned oil project in Thailand which is producing around 15,000 barrels a day, Fat Prophets analyst Gavin Wendt said the company is in a good position compared to some of its peers.

"The story, as far as Carnarvon Petroleum is concerned, has just gotten better and better, although its share price may not necessarily reflect that but it's held up relatively well," he said.

"I wouldn't read too much into [Mr Judge's share sale] in terms of underlying issues within the company."

At a share price of 29.5c, the company has a market capitalisation of $198.7 million.

MOLY MINES

Moly Mines has joined many companies reporting that a large tranche of employee and director options expired unexercised on December 31.

The 3.2 million Moly options were 'out of the money' after the company's share price sank below the relevant exercise price, ranging between $1.50 and $5.

While other companies bide their time, Moly has decided to issue 2.8 million new options, expiring in December 2010, with a much more gettable exercise price of 40 cents per share.

That compares with its recent trading price of about 30 cents.

Chief executive Derek Fisher will be granted 520,000 of the new options, giving him an added incentive to get the Spinifex Ridge molybdenum project into production and the company's share price above 40 cents.

The company's five non-executive directors will each be granted 100,000 of the new options, with the balance to be granted to employees.

WESTERN AREAS

The investment vehicle for Queensland resident Giovanni Santalucia, G Santalucia Investment, sold $5.77 million worth of Western Areas shares late last week.

The latest sell down has ended Mr Santalucia's time as a substantial shareholder of the company.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options