Today is the last day that Gulfsands Petroleum’s (GPX) shareholders can submit their votes for next Tuesday’s crucial general meeting. It is no exaggeration to say that their investments depend on it.
A month ago, I asked whether or not Waterford Finance & Investment’s planned boardroom coup at Gulfsands Petroleum (GPX) was the answer? Broadly speaking, I sided with Waterford, if for no other reason than a change in board can often lead to a change in sentiment. However, having followed developments in the last month and read last Wednesday’s strongly worded defence from Gulfsands’ besieged executive directors, it’s become clear that the company’s private shareholders have only one choice. They must vote in support of the current executive board directors… or get wiped out by a placement.
On Tuesday, Waterford Finance & Investment, a 26.51% shareholder in Gulfsands Petroleum (GPX), issued this announcement calling for a general meeting to remove CEO Mahdi Sajjad and commercial director Kenneth Judge from the board. Shareholders now face a stark choice. They can either support a pair of directors, who have apparently failed sufficiently to redefine the company’s strategy, or put their faith in the motives and intentions of Guernsey based Waterford. It’s a very tough call.
Earlier this week my colleague Gary Newman argued HERE that Gulfsands Petroleum (GPX) might be worth a punt on the basis that it could jump if matters in Syria were resolved. Having called this as a sell at 111p HERE and again at 43p on January 10th HERE I disagree. Here’s why.
If you believe that the conflict in Syria will be resolved in the near future then Gulfsands (GPX) is a screaming buy at the current lows.
To much derision from the Bulletin Board Morons, Isaid that this was a sell just under 11 months ago at 111.75p and today the shares are 43p. So is it still a sell or it time to bargain hunt Gulfsands Petroleum (GPX)?
Hats off to the big boss Tom Winnifrith who called this as a sell just under 11 months ago at 111.75p – fundamentalists do get it right now and again. From a TA perspective it still looks grim.
It can be said that from May last year to April this year Gulfsands Petroleum was a stock that you could set your watch by. This is said on the basis that on no less than three major occasions the shares bounced off the 80p level and then delivered rebounds of between 20% and 40%. However, the loss of the 80p level to start June suggests that it a period of extended weakness is on its way-at least while there is no recovery of this level.
There was a time in the not too distant past when my three favourite oil and gas plays amongst AIM stocks were Gulf Keystone (GKP), Xcite Energy (XEL) and Gulfsands Petroleum (GPX)
It is usually the case that the bigger the move and the more obvious the direction, the worse the ride as far as traders and investors are concerned. However, in the case of Gulfsands Petroleum GPX), we have now been treated to no less than three “easy” opportunities to buy the shares at 80p over the past year.
A report lands on my desk today from Edison Research on AIM Listed Gulfsands Petroleum (GPX) entitled “The road out of Damascus.” This report was commissioned by Gulfsands ( i.e. paid for) and so one would not expect a bearish conclusion. ‘tis always the way with research reports from commissioned firms ( like Edison or Hardman) or from a house broker - they want to say buy but sometimes just cannot do so. And so you get what is known as a “corporate hold” . i.e. sell. There is no recommendation on the report but with the shares at 111.75p it sets a risked valuation of the stock at 119p. I cannot see why anyone would buy a share for just 6% upside. Any sane investor would sell and switch into a stock with more upside.
