I'm intrigued as well. Before today we were trading at a solid 2...

I'm intrigued as well. Before today we were trading at a solid 2 cents per share below market value, so the value argument is an easy one. A full buyback would cost $2-3 million if buying in the 6-7.5c range. So it's not a massive outlay - however, as you say, you need cash for exploration and development.

If we completed the buyback to the maximum we would still have roughly 11m in cash (6m cash, 2m bonds, 6m con note, minus 3m buyback) plus the Byron investment. The Byron investment has repeatedly been stated to be strategic - so no reason that this couldn't be sold if cash got tight. The last announcement hinted at the possible acquisition of a production asset. You would hope that this would be cashflow positive; allowing cash flow to offset the buyback.

The Queensland blocks are a longer term proposition, so I'm not expecting a huge amount of expenditure there. We only have a 10% interest in the Bivouac Peak drill - so that is only a couple of million outlay. Even after taking up the Byron options that would leave circa $6.5m.

At some point you would expect Byron to drill SM74 or VR232; and I would expect MEL to farm in given our rights. It really depends on what % we take up there, but there would still be cash in the kitty and the ability to sell the Byron investment if things got tight.

The big question for me is whether this buy back is a result of a failed deal, or a strategic option. If the acquisition is still on the table - is it a cash flow positive production asset and if so, how big of a deal?

Some interesting potential options out there:

-CTP are going to be low on cash after this quarter, in plenty of debt, but about to hook in to the Northern Gas Pipeline and have cashflow positive operations.
-GLL have a huge resource, has a decent amount of cash but is going to need support to commercialise and is"well underway with a number of commercial initiatives". Once they complete their current drilling program they will effectively be in production.
-STX has a high risk but potentially huge reward project and will basically be out of cash at the end of the quarter. However, they have Orica on board already.
-BPT - looking to sell off 30% of Otway. Probably too big, but a real COE type transformation opportunity.
-SXY - likely to be focussing on Western Flank oil and QLD gas projects. Potential there to mop up some unwanted quality assets.
-STO - under the threat of takeover, so might want to shed some non-core assets to appear more attractive to a suitor
TEG - needing cash for Cliff Head production boost and Xanadu

No doubt there are a host of overseas options too.

I would hope that management are looking at something sizeable and cash flow positive. if that's the case then the worry about cash in relation to the buyback will be a moot point. If not, it becomes a bigger issue! The wording in the quarterly gives me the impression that we'll know sooner rather than later - but who knows!