regarding lease commitment wells, all my efforts to get answers with cliff and john went basically unanswered
i pushed harder, and i listed all current permits and drilling activity on the borders of the txn acreages to them, and was given pretty unbelievable replies to those questions. ones that now seem almost deceptive
basically the non aussie predators went from the data room to the RRC to then drop in permits and started drilling asap. and imho cancelling all talks on acquiring acreages as a sale as the balance sheet of texon was vulnerable..
so how quick they acted hey!!
i think the other predators whom are still lurking will look at whether their shareholders would like to see SEA take this candy for nix,, or whether they would like to see those acres in their portfolio.. now that cliff has cleaned them up and spent all that time and effort on them, surely a further offer is possible still on the 7400 acres..
this was a report on sundance from the SEA threads
Foster Stockbroking Today’s Top Picks. 15-Nov-2012
Sundance Energy Ltd (SEA.ASX; $0.78/sh; Mkt Cap $216m) – SEA merger with TXN, cheap entry to the Eagle Ford - BUY (PT $1.00/sh)
•Yesterday Sundance Energy (SEA.ASX) announced a proposed merger with fellow US focused O&G explorer Texon Petroleum (TXN.ASX). TXN shareholders will receive one share in SEA for every two in TXN, resulting in TXN shareholders owning 31% of SEA post completion. While on a transaction basis the deal provides a 14% premium to TXN last close price, we believe SEA has acquired prime Eagle Ford acreage at a substantial discount and has the requisite funding and experience to unlock its inherent value.
•TXN’s primary asset is its company operated 7,400 net acres along the condensate fairway in the prolific Eagle Ford basin in Texas USA. The Eagle Ford is arguably the most attractive US unconventional onshore basin. Effectively, SEA has acquired 7,400 net producing acres in the Eagle ford on a transaction metric of $10,780/acre, well below the $70,000/acre, which AUT paid for EKA (excluding the undeveloped Brosche acreage). The AUT analogy provides evidence that significant value can be realized through development of a relatively small acreage position in the Eagle Ford.
•The merger will result in a mid-cap (~$300m) US focused O&G company, with established and growing production (~1200boe/pd), significant funding capacity ($163 cash, $85 undrawn debt facility) and exposure to a diversified suite of assets across the leading US basins. In our view, the market has discounted TXN due to a lack of funding and operatorship to develop the acreage and realise its full value. The merger with SEA addresses both these constraints; consequently, we believe the discount the market is applying to TXN acreage will unwind once a clear development plan is outlined.
•We don’t discount the possibility of further non operated assets being divested to bolster cash reserves and focus investment and development at the high working interest, operated assets in the Eagle Ford and Mississippian. The non-operated Phoenix prospect (1,527 acre) in the Bakken would be a prime candidate and could generate up to US$67m based on a relative look through value at what was achieved in the adjacent recent South Antelope sale ($44,000/acre).
•Applying the peer group average of $4.63/boe to the combined entities 1P, 2P & 3P reserves (47.8mmboe) plus net cash of $146m, we obtain an equity value of $0.97/share. However, we do highlight that a valuation based on full field development scenario of 90 well locations in the Eagle Ford using a DCF methodology would yield a considerably higher valuation. TRADING BUY PT $1.00/sh
