an example; value of a prospective tenement

I'll give you an example below and that will tell you the significant value of a prospective tenement. (I gave this example before my Post #: 8059810 on 02/05/2012)

Then you can make your mind how much value can carry REY's 10,600 sqkm (1060 sqkm or 10% net to REY as free carried) tenements.

This happened in CSG sector in QLD in 2009.

Qrigin paid $660m for ATP788P tenement which is only about 707 sqkm.
(let's pay attention that REY's 10% net area as free carried is 1,060 sqkm while the whole area is 10,600sqkm)

"Origin’s Managing Director Mr Grant King said, "ATP 788P is a high quality CSG resource which contains the southerly extension of the highly prospective Undulla Nose province in Queensland. 100 per cent ownership of the permit will allow Origin to control the exploration, development and production of this resource."
Source: Click here

And see what Eric Streitberg (Buru MD) said about REY's tenements on 26 Sept. statement. Aren't they very similar!

“We are delighted to have been able to complement our already extensive acreage portfolio with these highly prospective permits. They give us full regional coverage of all the principal play types in the Superbasin, and substantially complete our long term portfolio optimisation program."

You would ask "How much gas were there in that high quality CSG resource tenement ATP 788P?"

Origin says on that link above;
"Origin has a solid understanding of the exploration and production potential of this area and expects to book Proved, Probable and Possible (3P) CSG reserves of around 1,150 PJ in respect of ATP 788P.."

The potential in ATP788P was not that big in our scales here in Canning. It had about 1.1 TCF energy there (it is even 3P not 1P). And sold for $660m. (1TCF = 1050 PJ)

That was normal because 1 TCF gas is valued about $8b in the LNG terminal ready to be shipped to Asian markets.

However we are talking about 10s of TCF gas here. Buru is looking to extract 20TCF from Valhalla. That is big,.. very big. So the value of Buru is being very big. REY's 10% is also very big for 5c or 6c company.

REY may not have enough power to buy these tenements from Gujarat, but it has enough power to make some noise to get the majors attention here.

If Buru does not make a quick and reasonable agreement with REY, keeps ignoring REY itself and its rights, and choose to struggle with legal proceedings, that will be a bad result for Buru shareholders at the end. Even I will be effected from troubled Buru sp through my NSE shareholding.

Then we may see elephants in the room !

Let's create a win-win situation