"....So the using the GIP itself is ridiculous; however, if you had a plot right next door and you knew your own EUR and their GIP... then perhaps you may be able to use it as a means to value them ;) Not so ridiculous afterall...."
A TU from me SF - and I think thats the basis behind this bid.
because I recall a while back, that BOW announced that it had agreed with neighbouring permit holders, that they would exchange technical data.
then I think, the last reserves upgrade of Bows, was as a result of that exchange of technical info.
so given Bow got Arrow data, clearly Arrow must have got Bows data.
and Arrow must have seen that their geology was contiguous (spelling?) with Bows?
i guess this gives Arrow a more compelling reason to get hold of BOW, synergies, joint dev't, economies of scale, pipelines , compression facilities etc. it should make BOW better value for them than say a 3rd party with no connection.
But I am convinced that if the only game in town for BOW was the Arrow bid, then we would have heard from BOW by now.
Why? because it would only be a question of price! all the other stuff, due diligence, paperwork etc, can be carried out in good time - BOW and Arrow could make an announcement that they had agreed on a price, subject to blah, blah, blah.
But they have not done this.
So I reckon thats because, as they have said, BOW is seriously progressing other options.
if it is with a 3rd Party competitor eg BG say, then BOW would have to allow them some due diligence, even a cursory look at the data - before say BG would make an offer. So that would take some time- which would explain no announcement.
But also, if its an Offtake/GSA/Farmin/Equity deal of some sort, it also would take quite some time. We know BOW has been looking at that for some time. We know that an agreement along those lines would have been delayed because of the delay in proving up 2P reserves (because of weather).
Thus I think BOW will be furiously trying to get a deal together with an Offtake type partner, and that the reserves delay has made this difficult - hence no announcement.
What better bargaining tool for BOW to present to Arrow, than a competing deal with an Asian buyer?
But one thing is for sure - BOW is now in play - and that the clock is ticking (sorry, thats two things). There is no chance of a return to status quo. We will either be swallowed up, or emerge as a totally different animal. Whatever happens imho, it will be a much higher value than before.
the concept of the Directors of BOW rejecting Arrow outright, with no alternative to growth/development, imho, is not an option. Because the Direcotrs of BOW will be well versed in the consequences of a mauling of the BOW SP on the ASX, a huge loss of credibility, and of course a huge loss of money for them.
i think the worst we would get is a rejection of Arrow, and a simultaneous announcement of say a heads of Agreement with a 3rd party.
BOW cannot really make any announcement until they have some concrete agreement - otherwise they would be pilloried.
their best advice was to "Take no action". A good indication.
Whilst I am dying to know whats happening, I feel confident that a competing proposal will come - its just going to take time.
interesting times. cheers
(PS - that chart of WCL I posted i think shows just how much the pricing dynamics have changed, because the average prices paid for cert reserves since 2007, have definately fallen. There is no way we can get a price of 70c/gj of 3P any more).
BOW Price at posting:
$1.55 Sentiment: Hold Disclosure: Held
