drillsearch

From Business Spectator

Wheels & Deals
12:32 PM, 30 Jun 2009 Michael Feller
LUNCH DEALS

Drillsearch Energy
Oil exploration company Drillsearch Energy has rejected Beach Petroleum's one-for-27 scrip offer, which effectively values the target at around 3 cents per share. Drillsearch says the offer significantly undervalues the company and its future potential, based on reserves plus contingent and prospective resource estimates endorsed by an independent report by Gaffney, Cline & Associates. Drillsearch's share price, although down from levels last week, also seems to reject the offer, or at least suggest a revised one is in the works. But this being a scrip deal, there is every chance that the offer could rise in line with Beach returning to trading levels seen earlier in the year. News last week that well-regarded chief executive Reg Nelson would be handing over the reins to COO Hector Gordon in order to focus on "strategic growth opportunities" could be a sign of interesting developments to come (see story above), then again, hedge fund Mathews Capital Partners did mysteriously announce a reduction in its investment in Beach from 107.7 million shares to 70.8 million, or 6.44 per cent. What Mathews, which last year was heralded as the best performing fund on earth, didn't explain was when and at what levels it sold its holdings. Beach currently has a 14.53 per cent interest in Drillsearch.