Auto,imo it's only possible to sell the position that COE is...

Auto,

imo it's only possible to sell the position that COE is doing IPM shareholders a favour if you take a very narrow view and look solely at short-term pricing issues.

Covered in both threads that COE can't offer IPM anything that would enhance its current operations (eg industry contacts, operational ability, technical ability, innovation, improved risk position) - sorry, but a fat big ziltch.

As no new value will be created, COE is only making the bid because it thinks it can TRANSFER value (effectively from current IPM shareholders to a larger group).

Saying COE is doing IPM a favour is a bit like thanking the pick-pocket for stealing your stuff.

Now consider a big slide in oil prices to $60. Which firm is relatively better off.

An independant IPM risks not achieving the substantial profit increases I anticipate over the medium-term. But regardless, IPM will still convert gross revenue to NPAT at about 30%, and sales volumes will increase thus partially compensating for any lower oil price.

What will happen to COE? Giving such a firm ratio is not possible (apart from the small Cooper Basin reserves). So what could happen to any cash pile. imo high cost drilling activities won't decline in cost, but the value of any strike will. The cash is still risked, but for a lesser prize on the roulette wheel.

Considering I'm risk averse, still no benefit for me from this offer. Much prefer to stick with the company I know will perform relatively well, despite the likely future gloss being dulled somewhat by a tougher environment.

PE