Broker V Reality

Market says NO as expected.... low of 5.8c!! Can anyone give me a reason why retail investors would bother taking up entitlement??

broker info typically up beat:

Three reasons why I like it:

• Supersized upgrade. Post this deal SEA will have double the acreage, better quality ground, expanded its 2P reserves by x5, and substantially deleveraged its balance sheet.
• Attractive upside. Post the deal we value SEA in the range of A$0.16-$0.20 per share. We see this valuation as achievable at US$60 per barrel once SEA has ramped up drilling and is demonstrating the substantial earnings growth we expect to result.
• Critical scale. The deal will likely see SEA go into the ASX300, but there is much more upside from there with the scalability of production from these acres setting up potential for SEA to emerge as a midcap as it ramps up production over the next three years. This is important given the oil & gas sector in Australia lacks midcap exposures. This in our view partly explains why stocks like BPT has been re-rated so strongly after taking on a large debt load just to acquire ORG assets that nobody liked.