Ann: Corporate Presentation-BRU.AX, page-247

Courtesy of Hunch this time last year:

Here you are, mate:
Bully for Buru

Michael Feller 20 Apr 2009, 12:35 PM

Buru Energy, which formed out of a merger last year between Australian Worldwide Exploration and Arc Energy, has re-entered the M&A limelight, with an all-cash takeover offer from a private company linked to Buru chairman Eric Streitberg.

Arenite Pty Ltd, presumably named after the term for a sandy type of stone, has offered Buru investors 25 cents per share and 2.5 cents per option, a 32 and 79 per cent premium to the 30 day and three month VWAP of the securities; 19 and 1.4 cents respectively. The offer is also slightly above Buru's net cash backing, on December 31, of 24 cents per share.

Streitberg and Arenite are effectively taking advantage of weak capital markets and a situation where investors are making decisions on cash and gearing, rather than project and commodity fundamentals.

Buru's share price halved after peaking at 30 cents in the month after the merged entity listed in September last year. The stock has edged back up to trade in the high-teens since.

Streitberg, previously managing director of Arc Energy, is a geophysicist with over 30 years experience, and a proponent of peak oil theory. A director of Adelphi Energy and the former chief executive of Centralian Minerals, Streitberg also runs energy-focused investment firm C2E Capital with son Tom.

Tom Streitberg is a former M&A lawyer at Mallesons Stephen Jaques and worked as an investment banker at JPMorgan and Deutsche Bank. Streitberg the younger was retained by Arc to advise on its merger with AWE along with alma mater Mallesons Stephen Jaques.

David Perks from Mallesons has been engaged to advise Buru on the current Streitberg offer, along with Roger Port from PricewaterhouseCoopers. In the previous merger transaction ABN Amro and Macquarie Capital advised Arc, while Goldman Sachs JBWere and Clayton Utz advised AWE.

Arenite’s offer than has tentatively been recommended by Buru’s other directors: managing director Adrian Cook, Arc’s former CFO, and Graham Reilly, an Arc co-founder and a director of Adelphi, alongside Eric Streitberg.

Cook said that shareholders should consider accepting the offer in the absence of a superior proposal and subject to an independent expert report. "The independent directors are cognisant of the high risks and costs involved in frontier exploration in the Canning Basin, recognising that the previous holder of Buru's Canning Basin acreage, Arc Energy, invested some $52 million in two years exploring the same area without a commercial discovery."

Buru has $79.3 million cash in the bank, but a $40 million commitment to Alcoa. Buru has committed to spend $6.5 million on seismic surveys this year, but has committed to the WA government to spend $137.9 million over the next five years.

"We have not changed our view on the geological prospectivity of the Canning Basin," added Cook, "but recognise that a discovery requires patience, skill and some luck and commercialising a discovery has become more challenging in the current economic environment."

http://www.businessspectator.com.au/article/2009/4/20/commodities/bully-buru#ixzz2NMwEtXvh