Ann: Response to ASX Query Letter, page-147

have been following this for a little while now and thought I'd add my 2c (can't help but watch horror stories unfold, and they serve as good lessons for my own investment strategies)

in the resources industry the concepts of "asset sale" versus "company sale" are well understood, Basic 101 knowledge across both hard rock and O&G.. similarly, the fact that PE rights are limited to the relevant asset only is standard contracting in a JV arrangement. to add a twist, that this is the case whether or not the asset is an unincorporated JV (governed by a JV agreement) or an incorporated JV (governed by a shareholders agreement)..

Company A
\___ Asset (either UJV or company)
/
Company B

PE rights would only ever give Company B the right to take Company A's investment in the asset. in almost 20 years of working on such deals, I have never seen an example that would give Investor B any PE rights if a party decides to come along and purchase Company A. that agreement would need to have been made between Company B and the shareholders of Company A.

the fact that FAR decided to take the COP situation all the the way to court is there for all to pass judgement on..

the FAR argument (that PE extends up a holding chain) gets far fetched pretty quickly the higher up a corporate ladder you go.. if a Chevron / Exxon / Aramco / BHP came along and decided to takeover Woodside - would FAR have a PE right over the transaction because it covers the Sangomar project? hell no.. its for that same reason the PE doesn't apply to the shares in any holding company as well

you can try and say that WPL were dishonest in their part of the COP situation as they made an offer for Company A (and not the asset itself). I don't hold a strong view either way, but from WPL's perspective when doing their due diligence on the transaction, if option 1 (buy Company A) is easier and gives certainty as no PE applies, whereas option 2 (buy asset) has the risk of PE applying - then it is pretty clear what route they will go down.. it's also important to note that there was nothing stopping FAR from similarly bidding for the COP Company? whether or not COP would have chosen FAR is a separate issue (considering ability to fund, etc)