Is L7/EP437 TEG's best bet yet?

Hancock's re-revised bid for WGO today at 36c is a great marker of just how much L7/EP437 could be worth to TEG.

There is a timeline to these permits with some pretty important markers along the way.

21 September- TEG secures 100% of L7/EP 437. The purchase was for 50% of L7, 87% of EP 437 and 5% production royalty at a cost of $1.1m. More than 50% acquired however for ease call it 50%. Valuing the permits at $2.2m (I realise the settlement was substantially deferred from the original agreement to purchase so it may have been worth more but it settled on that date)

19 December- TEG farms out 25% of the leases to Talon $9.26m. (after they had a good look at the 3d) Valuing the permits at $37m TEG's 75% is therefore worth $27.7m which is eerily close to TEG's current market cap. of $28m

So where to from here? TEG have already made it clear that they intend to farm out another 25% and that farm out will happen once the permits have been further progressed. So the potential is there for TEG to ultimately hold 50% of the permits with proven resources. Based on current best estimates that would mean 309 BCF gas and 10 MMSTB oil.

Hancocks updated bid for WGO provides a great look through of the value of a reserve of this size.

Hancock revised bid @ 36c $447m

Value $447m

Less

Spanish assets $10
EPA0127 $15
WGO assets $55
EP 469 value $367

EP469 has 211 2P reserves, 185 2U and a lot of un-realised potential. So there is a world in which TEG could be one day worth $300m+. (and cue the pumping and hater accusations hahaha)

Will TEG will get there? Probably not. It would mean threading the eye of a very thin needle. It's more likely that TEG (and Talon) will be taken over in the extended game of "billionaire musical chairs" currently happening in the Perth Basin.

What is most interesting is how far can TEG go before we get taken over. I believe that the early farmout to Talon was a strategic blocking move which will buy time/cash TEG to progress their permits.

Obviously all of this depends on the results of the 3d seismic assessment. We haven't seen anything but I'm confident that Talon had a good look at it before investing.

GLTAH, DYOR

GO TEG

GO GAS

GO L7/EP437

GO GINA!!

P.S. who the hell managed to pick up shares for 1.8c yesterday!! Lucky buyers. I missed that chance.