It is good, but it a bitter-sweet way. It is like ChinaGas gave a 'slap-in-the-face' valuation of the Liulin project to Dart!
I'm now of the opinion that China Gas Holdings were the Asian 'corner-stone' investor and were possibly doing due-diligence on the Liulin project, when they saw the potential, but decided to buy Fortune Oil's (FTO.L) side along with their gathering and other infrastructure. Dart were looking for a Corner-stone investor to come up with $40Mil to kick off a decent IPO, and instead China Gas agreed to pay $400Mil to FTO.L!!! If this is what happened, then Dart must have been furious! When the ChinaGas announcement was made, I thought (and wrote) that it was good for Dart - as the same company may then invest in Dart when doing due diligence on the deal. I appear to have been wrong and it looks like it was the other way around.
This would explain the silence by Dart on 'Asian cornerstone investor' progress - as they were suddenly in a legal dispute with the potential Asian cornerstone investor!
In thinking about this, I believe that China Gas Holdings (0384.HK) may have realised that the Liulin wells that are most productive are the ones that Dart have worked on. In other words, if China Gas 'bought' Liulin from Dart, they may have lost the expertise to make it profitable. By buying FTO, they keep the expertise. Note that the share price for 0384.hk has nearly doubled since late last year.
Why is this good for Dart?
Because it values one of the smaller CBM projects (which is near commercialisation) at a value comparable to the entire DTE cap, and leaves the way open for a Major to be involved instead, without the baggage of an IPO being 'in-progress'.
After seeing this happen in China - it would not surprise me if a deal (with an extra zero on the end) was worked out for a UK deal relating to just one of Dart's Shale assets.
Add to My Watchlist
What is My Watchlist?