Very bullish bid from TSX and NYSE listed Baytex for Australian based, US shale focused Aurora Oil & Gas (AUT), implying a $1.84m or enterprise value of $2.44 given US$600 in unsecured notes (not a bad val for a relative late comer into US shale who reported a negative NOI of $64m in dec quarter).
This further confirmed what is being reported in afr and business specatator,etc and was recently confirmed to me by some senior deal and M&A community contacts... That there is a “material” increase in Oil and Gas M&A activity (including several international companies running the ruler over juniors in the early phase of exploring unconventional oil and gas production). Another example is Chevrons investment into ICN at a 60% premium.
Given “oil confirmed in second Uruguay core hole”, further derisking the very large 3.5 million acre concession and “a number of high quality companies” submitting EOI's for the large spanish gas resource, I don’t think your suggestion of an early and "cheap" offer is ridiculous at all. Based on todays AUT bid, if they wait for the projects to be further derisked, I think shareholders would be very unlikely accept 50 cps (instead closer to 500 would be more likely), so timing could be right from a risk/reward perspective.
This space is very hot at the moment.
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