With more talk that WPL has interest from China as well as the...

With more talk that WPL has interest from China as well as the usual NWS partners in its decision to selldown equity in their Browse LNG project, I thought it would be interesting to see what sort of comparable value a proven Poseidon could realise for KAR. According to brokers (yes, I know..) WPL are expected to realise >$1.5b for 15-25% of the 13tcf + 360mmbbl field:

http://www.businessspectator.com.au/bs.nsf/Article/Browse-valuations-bolster-LNG-optimism-pd20120130-QZN6L?OpenDocument&src=hp18

On a boe basis, WPLs Browse project works out to be c. 2,527 mmboe.
AuD 1.5b for 15% works out to be $3.95 boe while @ 25% it is $2.35 boe.


KARs p90,p50 and p10 numbers of 3,7 and 15Tcf work out at 501mmboe, 1176mmboe and 2520mmboe of which KARs share is:

1P = 200 mmboe
2P = 470 mmboe
3P =1,008 mmboe

Applying a $2-$4 range per boe as per WPL gives a value for Poseidon of 400-800m at the p90 level and 1-2b at the p50 level.

Being (realistically) optimistic and assuming that a 7tcf number is indeed proven up by 2014, it is plausible that KAR could realise up to $2b for its stake (to bring whichever Santos basin oil find is most profitable into production) or perhaps sell down to 10% with the cash funding all/almost all of its 10% CAPEX share. I'd favour the former but who knows what will happen over the next two years in Brazil!