Perth-based Incremental Petroleum Ltd today dismissed suggestions by Cooper Energy Ltd that it has insufficient cash to fund its growth strategy as "scare mongering".
Incremental chairman Chris Cronin said the company could fund all its exploration and operating activities, and that South Perth-based Cooper's claim that Incremental had only $1.3 million in net cash was patently wrong.
"As of today we have $17.4 million in cash on hand and $5.3 million in monthly receivables from oil sales. We will be paying our shareholders their dividend on 17 October. We are not in need of extra cash," Mr Cronin said.
"Incremental is able to fund its exploration and development plans from cash flows and low geared commercial debt."
Mr Cronin reiterated that Incremental shareholders should reject the unsolicited and hostile takeover bid from Cooper, saying that Cooper's major asset appeared to be cash.
"We note that Cooper is promoting its $65 million in cash reserves as a major selling point of their bid," he said.
"However, we are more interested in the relative quality of Cooper's assets and the IPM directors have unanimously rejected the Cooper offer because there are no material synergies from combining the companies, with no overlap between the assets and operations."
Mr Cronin said IPM directors were disappointed that Cooper had not taken seriously the 157 page independent expert report by KPMG Corporate Finance, underpinned by RPS Energy, a large international oil and gas consulting company.
"It is flippant for Cooper to talk about fairies at the bottom of the garden when referring to the independent expert valuation of $3.39 to $4.18 per Incremental share."
Yesterday, Cooper Energy chairman Laurie Shervington labelled KPMG's valuation of Incremental as out with the fairies.
Mr Shervington said Cooper's bid was "compelling" and called for Incremental shareholders to question its directors' reliance on the target's statement valuation.
"We think this makes sense for Incremental shareholders yet the company's board is clinging to the notion it can do this under its own steam," he said.
