Ann: BPT secures rigs for shale gas play in Coope, page-49

re: Ann: BPT: BPT secures rigs for shale gas ... Hi,

I think your comments are counter productive to the case of ADE, you must think:

1. ADE had only around $850,000 cash left. So its hard to imagine who other than BPT would come to ADE's rescue for its massive funding requirement for PEL218 and ATP855?

2. WITHOUT BPT (esp. BPT's farm-in and placement back in 2009), where would ADE be today? ADE had a market cap of $30m back in 2009, today ADE's market cap is around $70-75m depending on the share price volatility. That 2 years worth of work was largely because of BPT's financial capability and know-how put into PEL218.

3. WITHOUT BPT, what would the stage of Australia's shale gas projects? Remember BPT was the first company to convince the market back in 2009 about shale gas inside Australia, which everyone was pessimistic about, esp. high costs with drilling etc. So ADE would have still been that small profitable gas operator worth $30m in Otway Basin and shale gas investment in Australia would still be at first base in Australia with the all talk stage.

4. What makes you say that a possible ADE-SNE merger is going to happen or would it be a negative thing? You make it sound like Carl and the board are a bunch of dopes who would just desire to reck shareholder value by accepting a merger without proper consideration. Both ADE and SNE are in talks of "a possible merger" that will create value for both companies and with an obvious strategic shareholder that adds value to the company. If the terms and conditions do not fairly value ADE, then obviously the merger would not happen. But on fair terms, if SNE was to merge with ADE at "premium", this is good for all 3 parties. Carl will lead a bigger ADE (that alone will be a win for Carl and ADE) with a market cap of around $100m (leading to the size of MEL or DLS) with a bigger shareholder and its nominee directors from BPT (say 35% of the company), whose knowledge and experience will be critical for ADE to expand. esp. in the Otway Basin and Gippsland Basin (which shares shale gas projects with BPT and ADE's existing Otway production assets bought from ORG in 2009).

5. Though, BPT is paying for new ADE shares at 16.5c is a premium and you make it sound like its not a good thing. But at the time prior to BPT's proposal, ADE was under 12c. Assume that BPT offered a takeover for ADE at 16.5c with Carl and board recommending that offer, as we have no option by to accept due to the very low cash of $850k. That is game over for all of us, with us missing out on a future upside to an increasing confident PEL218 project development. But looking at the situation now, its better, as we have an immediate $12m cash injection and a BPT director joining the board, as ATP855 has yet to be de-risked, but PEL218 is on a good run as further resource booking is expected, conversion of resource to reserves, and participation of further gas sales would add value. Very likely our share price will not be 16.5c, more like over 30c (what also backs this is ADE is granting 40c options to BPT). This is an incentive for BPT to further adde value to PEL218 and in future its possible to see ADE over 40c, so BPT can exercise those options with 2016 expiry and increase their size in our partnership.


Otherwise we can take ICN's case, they have not drilled a hole lately, thinking of unilaterally revoking agreements (eg. court case with BPT) and hopeing for a better deal like others (in reference to BG Group with DLS). But still dreaming of deals to be done. I can't honestly see how ADE can follow the same suit.