BR,
it will be bad if AOE goes it alone, in the short term. You cannot discount the serious value that Pure will add to Arrow in the longer term.
It really depends whether you are a cup half full or cup half empty kinda person.
I can see only positives coming out of this for Arrow.
-if they up the bid for Pure and win, they get a great asset but will have dilluted their holdings and depleted their cash reserves. This is still ok as they have cash flow and revenue coming in from operations. It will obviously set them back and affect their ability to progress some of the smaller more near term LNG plans. But in the long run they are gonna come out bigger and stronger.
-if they up the bid and BG come over the top, they are forcing a competitior who is desperate for resources to dig deeper. This will add long term value to their holding as well as depleting any margins their competitor might have got on the gas; unfortunately they also get hit if they hold the stock.
-in both cases above they increase the implied value of their own resource.
-if they do nothing, then they stay cash strong and are able to continue development of their near-term LNG plans and can consider partnering some of the smaller CSG players and giving them exposure to the big boys market, as well as securing gas from their tenements. They will also have extra cash to push development of their international operations, which at the moment, the market doesnt quite understand how big some of these opportunities are; esp india and china!
Personally, I will tip them or Shell to up the bid.
10 points to BG for treachery in spoiling a well-laid out plan. Hope they wear it on their face.
SF
- Forums
- ASX - By Stock
- market response to a pullout on pes
BR,it will be bad if AOE goes it alone, in the short term. You...
-
- There are more pages in this discussion • 26 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add AOE (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
LPM
LITHIUM PLUS MINERALS LTD.
Simon Kidston, Non--Executive Director
Simon Kidston
Non--Executive Director
SPONSORED BY The Market Online