in talks with nzo as well

In its press release yesterday AWE said it was exploring a number of potential opportunities in addition to its engagement with ARC Energy. One of those has to be New Zealand Oil & Gas, AWE's partner in Tui and joint holder of prospective acreage in the offshore Taranaki Basin.

When you look at the potential takeover targets for companies like AWE and Santos seeking to grow both by the drill bit and corporate activity there is not much available. Arc, NZO and possibly Tap and not a whole lot else. There are so few undervalued producing quality oilers.

Once the corporate activity starts the like of Tap, Arc and NZO will likley be revalued as their potential as takeover targets starts to be appreciated in the market.

You can forget about the blue sky companies like Elk, Marion and the producers that have run into unexpected difficulties like AED Oil and Anzon. Nexus still lives on promises but if it pulls out of the AZA deal NZO would be an alternative option.

Just some random thoughts.