Can someone please help me out re the sale of 10% of APLNG for $2B. From memory 100% of the project cost around $35B a decade ago (though some more gas fields have been added to the business since) . It has been maintained well, is still in early life stage and depleted gas reserves have been replaced. So it is an operating business that has decades to run. Last half it returned cash of $555M to ORG; annualised that is $1110m for its 37.5% share. That is a cash return of $296m pa per 10% share of APLNG. So, per current 10% share of APLNG: - cost ~$3.5B - annual return for new owner ~$300m for a $2B outlay (ie 15 % return for new owner).
It seems to me that ORG has left around $1B "on the table" with this sale - that is, it could have got a lot more. (and for relevance $1B could fund a capital return of about 60 cps).
Please critique this view, as ORGs sale (at that price) confounds me.
ORG Price at posting:
$6.16 Sentiment: Hold Disclosure: Held
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