ARD Shares Begin Trading on NYSE Effective August 31, 2006
Move is Likely Part of Master Plan Since Inception of Arena Resources
Today's announcement of ARD shares being listed on the NYSE is an important step that enhances ARD value and visibility. To understand today's news we must first review the history of ARD's management team.
ARD CEO Tim Rochford and Chairman Stan McCabe are a pair that have previously worked together. They co-founded Magnum Petroleum in 1989. In 1995 they acquired Hunter Resources and the combined company became Magnum Hunter. Magnum Hunter became a NYSE listed stock in 2002. Eventually it was acquired by XEC (Cimarex) in January 2005 for $2.1B.
One should expect Tim and Stan to use the Magnum Hunter "blue-print" with Arena Resources. One positive is that Tim and Stan not only have a proven track record with their successes with Magnum Hunter Resources but they also have the ability to use that experience as a learning experience and avoid making any of the same mistakes at Arena Resources. In addition the connections and relationships that have blossomed as a result of their dealings in the oil and gas industry will prove to be a significant asset for Arena Resources shareholders.
One drawback of the listing on the NYSE is that it will cost money to do. By looking at the list of fees for the NYSE it seems that there is at least $148,000 in fees to be paid each year. Based on 15.5 million shares this would come out to less than one penny a share in EPS for the year. This is reasonable. In comparison the AMEX has a fee structure of about $21,500 each year based on ARD share count. So in the end it is only costing an additional $126,500 a year or so to be listed on the NYSE instead of the AMEX. This is less than a penny. Given the benefits of being listed on NYSE it is a very small price to pay. Arena Resources is no doubt an example of the biggest little oil and gas company on the planet. The shares deserve to be listed on the most prestigious exchange in the world: the NYSE. This company continues to impress.
Move is Likely Part of Master Plan Since Inception of Arena Resources
Today's announcement of ARD shares being listed on the NYSE is an important step that enhances ARD value and visibility. To understand today's news we must first review the history of ARD's management team.
ARD CEO Tim Rochford and Chairman Stan McCabe are a pair that have previously worked together. They co-founded Magnum Petroleum in 1989. In 1995 they acquired Hunter Resources and the combined company became Magnum Hunter. Magnum Hunter became a NYSE listed stock in 2002. Eventually it was acquired by XEC (Cimarex) in January 2005 for $2.1B.
One should expect Tim and Stan to use the Magnum Hunter "blue-print" with Arena Resources. One positive is that Tim and Stan not only have a proven track record with their successes with Magnum Hunter Resources but they also have the ability to use that experience as a learning experience and avoid making any of the same mistakes at Arena Resources. In addition the connections and relationships that have blossomed as a result of their dealings in the oil and gas industry will prove to be a significant asset for Arena Resources shareholders.
One drawback of the listing on the NYSE is that it will cost money to do. By looking at the list of fees for the NYSE it seems that there is at least $148,000 in fees to be paid each year. Based on 15.5 million shares this would come out to less than one penny a share in EPS for the year. This is reasonable. In comparison the AMEX has a fee structure of about $21,500 each year based on ARD share count. So in the end it is only costing an additional $126,500 a year or so to be listed on the NYSE instead of the AMEX. This is less than a penny. Given the benefits of being listed on NYSE it is a very small price to pay. Arena Resources is no doubt an example of the biggest little oil and gas company on the planet. The shares deserve to be listed on the most prestigious exchange in the world: the NYSE. This company continues to impress.
posted by -Aztec- at 3:52 PM
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