Irregulars may remember that HRT Participacoes (HRP on the Venture Exchange in Canada, HRTPY on the pink sheets) is a bet largely on Namibian offshore oil exploration — the Namibian exploration they’re doing has been teased for a couple years by Byron King, though the teasers previously pointed toward the junior explorer that HRT bought, and so far this promise of oil offshore Southwest Africa has been a terrible investment.
I put a little money into the speculation a few weeks ago, since we’ve got a clear catalyst coming when they release results of their first well — which could come at any time in the next few weeks (or could, of course, be delayed), and they’ve also been a rumored player in the upcoming offshore auctions for additional Brazilian exploration (they’re a Brazilian company), and they have substantial gas discoveries in the Amazon that are presently not worth much (no infrastructure to use or transport the gas yet). They also just recently bought a small oil field from BP that’s producing oil, so they’ll put some debt on the books in exchange for a decent amount of cash flow from that … but really, this stock is still all about ebullient CEO Marcio Mello and his big buy-in to Namibian exploration, and to the potential represented by the first several exploration wells (they’re drilling the first weel right now, it’s been a long time coming).
So investors were understandably quite shocked that here, while this new deal to buy that smallish oil field is freshly announced and we’re in a ticklish period of waiting for those Namibian drilling results … CEO Marcio Mello resigned.
Yeah, I don’t know why either. I don’t know if it was the BP deal to buy one of their fields, or if the board fought him on bidding on offshore blocks, or if he knows something about the results that we don’t know yet. He is staying on the board, and the board has already replaced him and has, as far as I can tell, enough cash to get through the exploration investments they have planned this year — so this is definitely a “makes you say ‘hmmmm'” announcement, but I have no other wisdom to offer.
It’s very odd to see a CEO resign in the weeks leading ...