AWE Limited (AWE) 2015 AGM Report

Company/ASX Code : AWE Limited (AWE)
Venue :
10.30am Museum of Sydney
Cnr Bridge and Phillip Streets
Sydney, New South Wales
Monitor : Mr Geoffrey Orrock
AGM Details / NoM : Friday 20th November, 2015
# Holdings represented by ASA : 78
Value of Proxies : $480,000
# Shares Represented by ASA : 766,000
Market Capitalisation : $350 million

"The reality is that AWE is in far better shape than the market gives us credit"

Following disparaging remarks made by the company last year that ASA had asked the company for money we indicated that we would be happy to provide, on request, our voting intentions free of charge if the Chairman was inclined to withdraw those remarks. No such request was made.

Given our lack of success at getting answers in past years, prior to this meeting we submitted a list of comments and questions to the company asking that the Chairman address each topic in his Chairman’s Address. We referred to the highly technical content and motherhood statements included in previous presentations noting again that the market did not share the Board’s excitement regarding the company’s valuable book of assets. We asked the company if more focus could be put on creation of shareholder value and the Board’s strategy to extract the value of those assets, aiming specifically to turn around market sentiment.

We are pleased to report that this year’s address was far more focussed on value and supported the Chairman’s opening statement The reality is that your company is in far better shape than the market gives us credit, and we are optimistic about the future.

Mr Phillips acknowledged the absence of shareholder return. He told the meeting that production, revenue and capital expenditure were all within guidance, cash flow was solid and with $156M in net debt the company’s financial position is sound. 2P Reserves +2C Resources were up 40% to 230 mmboe (million barrels of oil equivalent ) in FY15, with Reserves equivalent to 20 years production at current rates. He said that the company is focussed on reducing costs, capital expenditure discipline and asset divestment in non-operated projects.

Looking forward, he pointed to sustained higher production from BassGas and Sugarloaf projects, the high quality project-ready growth opportunities, AAL and Lengo in Indonesia, which give exposure to Asian markets and the Waitsia gas project in WA, potentially the biggest on shore conventional gas field discovery in Australia in 30 years.

The Chairman said the company was in the enviable position of being able to deploy capital into its choice of the highest rate of return projects already in the portfolio.

On remuneration we followed up last year’s remarks about increases in Board fees while shareholders had seen a decline in share value. We asked that the Chairman comment to the meeting why it was appropriate that the Board voted itself a 3% fee rise. This matter did not get a response.

Mr Williams and Mr Betros were re-elected.

All four resolutions passed on a unanimous show of hands of those present.

At the end of the meeting the company then put all resolutions to a poll which all passed with more than 99% + support.

The monitor was unable to attend the meeting in person, but did attend the live webcast from Northern NSW. The monitor is a long term shareholder of AWE.