brazilian farm out, page-6

eugeneb1... you said;

"Since the IPO debacle, nothing has happened in that area for over 2.5 years!"

ummmmm, there has been an ENORMOUS amount of oil discovered in the Santos Basin (shallow & deep water) in that area since the KAR Brazil IPO was pulled...

maybe just maybe the KAR mgmt decided to abandon the IPO process because they were looking after the interests of their shareholders - I know this may seem a foreign concept as there is a VAST number of Aussie companies that are NOT run to benefit their shareholders!! I could name quite a few of the top of my head, but that is another story...

so on the basis of the discoveries (some of which were on-trend with the KAR leases) the underlying value of the Santos assets has surely increased (relative to the oil price of course) purely and simply on the basis that the probability of oil being present has increased.

naturally we won't really know what the KAR Santos assets are worth until a few holes have been poked in them, but if the KAR team get onto only one or two decent discoveries, I expect most KAR shareholders will be queuing up to kiss the posteriors of the KAR mgmt team to thank them for not flogging off valuable assets for a value which, with the benefit of hinsight, may appear to be worth two fifths of five eights!

obviously the inverse is true - if the KAR Santos assets turn out to be duds, a queue will form to kick the posteriors of the KAR mgmt team for not flogging off the dud assets!

that said, I DO NOT think for one minute that the KAR mgmt made a decision based on hope - I bet their decision was based on best estimates from known data, and from that I am sure they have an internal estimation of value.

as in any endeavour, overnight success stories take a long time to eventuate, and whether you, I or anyone else likes it or not, we must simply be patient if we are holding KAR, or we must be nimble on our feet to buy & sell at the right moment...

there endeth the lesson Grasshopper! 8)