PURE SPECULATION: Robin Bromby | August 17, 2009 Article from: The Australian
ONE of the constants of living under the shadow of Pure Speculation is what the Americans call Monday morning quarterbacking, and in our case this involves being told -- usually in no uncertain terms -- where we got the wrong end of the stick.
Don't misunderstand; we are thrilled to know that someone out there is reading this every week (and especially those who, rather than part with $1.50 for a copy of the paper, email in outrage that the column is late being posted on the website).
Three years ago, when this column had just begun -- yes, we know, it seems longer, much longer -- one of the earliest such Monday morning emails was to take Pure Speculation to task for publishing an item about a history of oil slicks being sighted off the NSW coast from Newcastle.
We said that Bounty Oil & Gas (BUY), which held the exploration licence for that offshore area, believed this was a big lead, that the slicks were caused by natural seepage from the seabed. The licence area had been dropped in the early 1990s by Santos (STO), which, although it had found some gas, was too heavily focused on the Cooper Basin at that time.
Nonsense, came the emails. Those slicks were more likely from ships discharging oil into the sea. And there the matter rested.
Bounty is now in joint venture with unlisted Advent Energy, which is controlled by listed pooled development fund MEC Resources (MMR). Now the quest for (mainly) gas but also some oil off this part of the NSW coastline is getting serious. And Queensland coal multi-millionaire Ken Talbot, through his private investment company, has taken a 10 per slice of Advent.
MEC believes there could be more than 16 trillion cubic feet of gas and has started on the road to raising serious money by mandating Pareto Securities of Norway as the lead broker for Advent's capital raising. Advent has the stake in the project as MEC's fund status (free of capital gains and dividend taxes) prevents it from operating a business.
Pareto has raised some very big money for clients in recent years, and big sums will be needed given that the MMR-BUY permit covers 8100sqkm. Good timing, too, with the cost of drill rig hires being about half what it was a few years ago.
Seems like there's more to this story than just a couple of bulk carriers discharging from their bunkers.
Just a quick one to add, Talbot has had a fair bit of success of late, another of his pooled investment funds/ miner bought a stake in ROL, take a peek at it's chart if you want to see some vertical chart action.
He knows when and where to put his money
MMR Price at posting:
22.5¢ Sentiment: Buy Disclosure: Not Held
(20min delay)