good morning, it's an interesting concept - the merging of MPO and WCL assets. I think its clear that Anglo (and almost certainly Mitsui) want out of Dawson/Mungi. Thats why MPO had to drill sole-risk. WCL have a contract to purchase Anglo's 50% of Dawson etc. Only Mitsui has a pre-emp to stop WCL. So MPO has missed out on purch Dawson assets. Of course, I guess MPO could say to Mitsui, you pre-emp and buy Anglo's 50% of Dawson, the we MPO will buy the 100% off you at a better price. That would make sense. Because now that WCL has struck a price, MPO now knows what it needs to bid.
I agree, There is no way Anglo would want WCL scrip - or MPO either.
WCL has made noises that it will need to fund the p/price by way of scrip. Whilst we may scream dilution, I maintain there is nothing wrong with scrip issuance, as long as the acquisition is value accretive. This one will be! This is a good purchase. WCL will be getting 3P reserves at 15.6c p/gj (PES got 40c) Plus it gets contracts, 1P reserves, 67klm pipelines (which MPO must also use)etc.
WCL may not need to fund all of the p/p. Quite likely that BG will J/V half. Also possible for WCL to sell pipeline and compressors to someone like APA etc. I recall AOE did it with Braemar. WCL would then not need to issue so many shares.
I agree it is a lay-down-misere(spelling?) that MPO will pre-emp on ATP564 & 602 and PL Sublease. It would then have 100% of those assets.
The problem of value not being recognised in MPO would be alleviated. All Aust CSG assets would be in one coy (WC) and presumably MPO s/h would hold a huge % of WCL. MPO would then have the South African assets and Canadian assets. Whilst the Canadian assets get all the attention - i think the SA assets are a sleeper. SA desperately needs gas.
The merging of Qld CSG assets only makes sense if the parts make a bigger "whole". If it is value accretive for both lots of s/h, then we all win.
cheers
MPO Price at posting:
$1.14 Sentiment: LT Buy Disclosure: Held
