My investments are (usually) geared towards what i believe are good tenemants, as opposed to good management. To me, as long as i stick with good land, shouldn't matter who is holding it.
SO, with this in mind, ADE, until complete takeover, is way better exposure to 218 and 855. why?
lets say i've got 200$ to buy shares.
ADE BPT
shares bought 1000 155
acreage in 218/855 ~120,000 ~530,000
shares on issue 424 million 1100 million
acres/share .00028 .00048
My share of acreage
after 200$ purchase 0.28 acres .075 acres
so, for the same cost, i get 3.5 times the exposure into 218/855
assuming a comparable metric for land sale I much prefer my ADE purchase. Now, obviously, if BPT aquires ADE, then i will likely buy into beach, but the exposure is much worse. The acres/share increases to .00059, and my share increases to .09 acres, but is still 3 times less.
And yes, i know beach has lots of other stuff, bla bla bla.
If beach gets taken out for shale, the rest won't matter to a hill of beans. It will be taken out by virtue of shale gas metric $/acre, or even worse, a 50% increase to VWAP, so i don't attribute any value to other land/production.
so, then, for me to break even, i need a price minimum of 2183$/acre in beach, whereas, in ADE, I would triple.
so until beach successfully gets the company, ADE is better value for shale, even at 20 cents, imo.
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