Arrow started off with a total Queensland acreage worth A. Shell paid $776 million for 30% of A.
0.3 * A = $776 million A = $776 million / 0.3 = $2587 million
So the original value of Arrow's acreage was $2587 million, but now they only have 70% of this left:
0.7 * $2587 million = $1811 million
As I said, Arrow is not just a junior gas explorer in Queensland and any takeover offer would have to reflect the value of the whole business, but the $1.8 billion valuation is a minimum based on the original Shell deal, and equates to about $2.50 a share.
AOE Price at posting:
$4.30 Sentiment: LT Buy Disclosure: Held