great post again Brobel.
Heres a snippet from the spin doctors on the mitsui/MIN talks...
Notice how they slip in the bit about the $500M STX and Hancock...paid content maybe?respectfully disagree with you.
the $/GJ numbers you talk about. If it costs me $2 and im selling it for $10...thats a 5 x mark up. If im selling it for $20/GJ thts 10x. Id be careful about hinging my valuation on a $GJ metric and using past transactions as a rule of thumb.
Heres another way to look at this stuff.
- Mitsui paid $1/GJ when the gas price was $3-4/GJ.
- The differential reflected risk; capex; opex and their profit margin. i.e they wanted $2-3/GJ to cover these elements.
- Lets say the gas price is $10/GJ, assume risk, capex, opex and profit margin dont change...they can pay $7 and $8/GJ...because it still leaves them with $2-3/GJ to cover the risk, capex, opex and profit. Im not taking into account ROI.
- Lets say the gas price is $20/GJ. You can do the maths.
The point i am trying to illustrate here is the use of the $/GJ number for across the board enterprise valuation is a bullshit number in reality. It favours the low ballers, and it is easy to pull the wool over peoples (retail shareholders and dumbo fund managers) eyes.
MIN/Lockyer.
When they drilled LD-2, NWE management came out and sad oh theres only 200PJs in the Lockyer/Nth Eregulla field. They said nothing about the oil. Now MIN are throwing around 500PJs, plus a ton of oil. And thats just Lockyer/Nth Eregulla. We will only find out the truth when the export licenses are cemented and a bit of water is under the bridge. Theres also a shit load of prospective gas in the other leads/prospects - a few of which are covered by 3D seismic. So if MIN sells anything to Mitsui, my view is - more likely to be a GSA for export gas. MIN will keep the assets and all the upside that goes with them...theyre not dumbasses.
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respectfully disagree with you. the $/GJ numbers you talk about....
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