Hi Bellas,RE: I heard second hand that KAR's senior management...

Hi Bellas,

RE: I heard second hand that KAR's senior management presented with UBS three days' ago. Again, second hand, KAR is believed to value their prospects at a NPV of $10 billion, or $45 a share on current shares issued

It would be nice to know whether this was part of their presentation (releasing a report with a slide saying something like 'estimated value of upside' to the asx would be lovely) or whether it was an offhand remark in private conversation. If it was the latter then you'd have to expect that KAR would be looking to extract a very limited equity dilution for all KEI assets. I have my doubts they'll get a bonanza farm-out deal and would be happy with say farmdown to 60% for 3 wells fully funded plus say 20m for expenses to date. Anything that ensures no CR in 2012 and drilling in santos gets going ASAP. The 2013 license deadline is drawing nearer..

Completely leftfield: I don't know why BHP doesn't consider a cheeky T/O bit. Actually I do know why (crazy preference for shale that will come back to bite Kloppers plus usual reserves only approach) but I reckon that a circa $4b (say $17 share) offer would be successful right now and could materially increase BHP oil/gas reserves over the next 5 years. Not going to happen but it would be a deal that could have made sense to all parties.