TBE,
A large part of me wants to agree as $200m in the bank would be so much more reassuring. Although the value might be there a buyer might not have been.
Arrow appear to be concentrating on their Bowen basin CSG assets in Moranbah and the shared permits with SXY in the Surat Basin most likely aren't a priority at the moment.
So with the shared (previous) permits with QGC Senex we were at the mercy of timing and capital calls in developing these fields, and for what, to supply gas into BG's Gladstone plant.
By swapping these permits and consolidating into 1 field in the West right next door to infrastructure and a hungry neighbor, is a smart play by ID. Yes, we might have to wait 12 months to develop the field before we can get a better value for these assets. The West Surat Basin Gas project now has 488pj of 2P, prior to this Senex only had 157pj of 2P attached to their CSG assets.
so IMO Senex made a great deal. They will further advance this field over the next 12 months (by bringing in additional resources) and will likely get more than the $200m estimate IMO. Santos has put 10's of million into developing their Roma Gas field and building the Wallumbilla compression station and associated water treatment plants. They are highly likely to purchase Senex's CSG assets to feed into Wallumbilla and lower their average capital costs. Santos just want to concentrate on finishing their Gladstone plant, turn on that cash making machine, and then they will come along to see Senex with a bag full of money, after Senex have matured the asset. We just have to wait those 12 months. All IMO though ok, but the play seems fairly obvious to me.
so in conclusion, yes TBE , I totally agree with you, having now 3 gas projects with great potential is blue sky for the future and cash now would make me feel more warm and fuzzy, but we don't need the cash now.Our 1.4m barrels is funding exploration, what we need now is drilling success in our exploration permits in the North (or a full blown takeover never hurts). GLTA who hold, patience should be rewarded, it will just take another 12 months though IMO.
P.S > I see in todays, The Australian Financial Review | 12 Sep 2014 J P Morgan is "neutral" on Senex Energy, but notes "it is the most attractively priced of the Cooper focused players, particularly after recent share price action". Their fair valuation is .66c
SXY Price at posting:
60.0¢ Sentiment: Buy Disclosure: Held
