Amazing Deal, page-35

Okay, still researching this, but so far (for anyone else like me who doesn't get how the tax works):

(Again: assuming the 2 deals go through of course)

I think: (be gentle if I'm wrong, this is probably really basic for the guys who have held oil explorers long term but I haven't )

Simple case:

- Oil leases sold at a capital gain attract capital gains tax in the U.S. in the state the leases are based.
- Not sure what the tax rate is but it looks like 25% in Texas (each state is different) maybe?
- cost of expenses directly related to the asset are deductible, including I believe finance costs, exploration and development, etc
- the consolidated entity pays tax in Australia, with credit given for US tax paid, but obviously all group deductible expenses and impairments? taken into account.

From this I think 25% of (the revenue minus $3.7 book value) is an upper bound on the tax. For the Au corporate tax, 30% is the limit, but I'm assuming all the impairments on BBEP shares etc are tax deductible and I can't see how they will end up paying any Au tax this year.

So max tax to me is $90m AUD I don't get where the 30% and more I've seen comes from?

Assume no significant costs (allow $2m) since the primary equity fund came to them, NTA = AUD $1 per share.

Next level:
- US property (including oil leases) allowing 'deferring of tax' where you buy a simliar asset with the proceeds and avoid tax (effectively deferring it indefinitely).
- so AZZ could buy property assets of any kind (the rules don't seem very strict) with the proceeds and defer tax.
- let's say they paid off the notes, kept $100m USD in the bank and bought some other assets For $120m USD

U.S. Tax $45m AUD, Again no tax to pay in Australia, NTA $1.19 AUD per share. ( as long as the assets are bought at fair value). Also keep some exposure to oil price besides the value of BBEP shares.

LOTM has mentioned I think buying a US company with tax losses. Still don't understand how that works for an AU company trying to offset capital gains tax on a U.S. asset...

So I've seen a few NTA = $o.75 - $1.00 AUD mentioned, but to me it looks like AUD $1.oo to $1.20+

Anyone care to correct my analysis or add anything?

Cheers
Pb