So although I'm new to the AJQ train, I'm more than impressed with it. After the takeover bid at 12c it seems as though that should in theory provide a floor. As I mentioned in an earlier post, I'm in at 13c and that suits me fine. So much happening with this one at the moment and it seems as though the short, medium and long term all hold a lot of potential success and excitement for holders.
Let's get down to the facts as although TA is a fantastic way to trade, I'm a fundamentals man and my investments are nearly always based around that.
*On the 20th of Aug, Armour (AJQ) signed an LOI for a potentially very lucrative farmout with American Energy. What comes of this could be in the tens of millions of dollars. American Energy will be spending up to $100M on the farmout - all in a relatively short timeframe. Do you think that sort of money would be getting thrown around if they weren't confident of a very strong result?
*Armour received a takeover bid at 12cps. The condition of the offer is that Armour do not go ahead with the deal with American Energy. This has not been accepted.
*Armour has now acquired assets on the Roman Shelf from Origin Energy for $10M cash plus 3 x $1M payments which will allow them to become a "significant producer" of gas and from that condensate and oil.
*The infrastructure alone is worth in the vicinity of $250M!
*The expectation is that on a yearly basis they will produce 10 petajoules of gas. Conservatively speaking, 1 gigjoule is worth $4 so therefore 1 petajoule is worth $4M and 10 petajoules is worth at least $40M - that is ANNUALLY! Add onto that the expectation of over 100,000 bbl of condensate at roughly $60-$70 per barrel, 100,000 bbl of oil at around $50-$60 per barrel and to top that off 21000 tonnes of LPG at $600 per tonne. Add that all up and you have over $50 MILLION per annum and that just from the Roman Shelf alone.
*After today, the MC is still only around $35M with over $8M cash in bank.
And then, in case you were wondering which way gas prices are going, have a read of this:
I'm happy to have my position in this one tied up, we may even have another takeover bid at a higher price which I'm sure management once again will reject because this one is ticking all the boxes. It would more than likely come quickly too as the bidder clearly does not want the farmout to go ahead.
GLTA
CnS
AJQ Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
(20min delay)