Totally agree rice's post re. gas/liquids:"i don't think there...

Totally agree rice's post re. gas/liquids:

"i don't think there is any expectation of these shales being wet, but I do believe that there is plenty of expectation of them containing some serious volumes of gas."

The industry is hot because the majors understand that gas will play an increasingly significant role in the worlds future energy needs. A negligible amount of research will uncover just how much activity is happening out there in this sector.

IMO, this has always been an asset play and in that context, having liquids actually doesn't matter relative to ADE's current MC. It is currently so small that we only need strong gas to realise a multi bag asset from current valuation.

MC = c. $50m

Asset value ..............

@ $1k/acre = 2.5 bagger or $0.31 per share
@ $2k/acre = 4.9 bagger or $0.62 per share
@ $3k/acre = 7.3 bagger or $0.94 per share
@ $5k/acre = 12.2 bagger or $1.56 per share
@ $10k/acre = 24 bagger or $3.12 per share

and so on and so on

Given that recent acquisitions (gas only assets) have been circa $8-$10k/acre.............

When we consider how hot the sector is getting and the number of major players that are positioning themselves in various shale gas plays around the globe, does anyone believe that a proven, gas rich resource with zero water and close proximity to network infrastructure won't fetch, at the minimum 30% of market value or circa $3k per acre???? That equates to a 7 bagger at throw away prices!!!

Sure, liquids would take it off the richter scale but solid, "gas only" results will IMO realise a 7-20 bagger asset relative to current MC..

Additionally, if we consider potential strategic outcomes, BPT have what I consider, an informed entry and an opportunity to take out ADE's stake in 218/855.

We can say with some certainty that BPT will not move forward with this project without a farm in partner and that this partner will be a major player and not a mid cap.

Given that 855 in all likelihood will be thicker than 218 and given that ADE's 20% of 855 plus BPT's *potential* 40% (if successful), would effectively give BPT the controlling interest in 855, it would be logical for Beach to acquire these assets and fund them with a combination of money acquired from the farm in rights plus BPT script. BPT, have the insider knowledge here. Being the 218 operator gives them an insight into this asset that no one else has at this point in time.

There are many possible scenarios and many other ways that this can play out (including a major consolidating the entire area) but I can safely say that ADE will divest if the right offer comes along. The point of this long winded post is that, regardless of how it plays out, there are many possible avenues in which ADE can unlock the value of this asset regardless of the gas to liquids mix.

IMO, the risk/reward here is compelling for anyone with a calculator!!!!!