takeover target, page-2

amelius - although I havent had time to read all the posts of late I have noticed quite alot of speculation in regards to the figure that could be achieved in a takeover.

From a quick scan of the posts of this nature - IMO, from what I have seen many of you are grossly underestimating what you should “be happy with” if a takeover were to happen. Conix “mid” estimate of $50 a few days ago is reasonable however still conservative (as conix and others would be aware) if most of potential embedded in the package were to be unlocked.

Unfortunately CTP is now in bed with one of the largest predators around - BG are literally corporate snakes of the worst kind - hence CTP management need to take concrete/prudent actions to prevent them striking on the back of a series of significant discoveries. A takeover at such an early stage (say over the coming 1-3 years) is a very real threat and will potentially cause enormous shareholder wealth destruction which should not be overestimated – I could not stress that point enough.

That being said - It’s a positive to have such a significant player as a partner (which the market overlooked) and to accelerate the campaign, but CTP needs to systematically manage corporate risk now as opposed to later. Basically BG are great to sleep with now – but they’re not the kind you’d marry without a prenup and non-contestable strategies in place.

Now, regarding my comment of “enormous shareholder wealth destruction”- personally I would not accept the previously stated figure per share IF CTP are able to unlock the potential embedded in its package and manage growth effectively. I have higher expectations. The figure is well and truly achievable (in good circumstances) and I have undertaken extensive modelling of the potential utilising different scenarios/methods of the embedded value per share should it be unlocked over the next few years. If the complete package is achieved that figure is further increased substantially.

Now that is based on numerous factors including (but not limited to):

a)Potential assets and defining resource potential

b)Maintaining capital structure with limited dilution

c)Production modelling and current available technology, specifically GTF not GTL.

d)Commodity prices

e)Ratio Interests

As they stand.

On another note; It needs to be kept in mind presently we are valuing (or should I say undervaluing) the company on speculative potential. Once we start production, we will then have a focus on earnings capacity and, when a suitable industry PER is applied, the figures change. Production does often come at a high dilutionary cost initially for capex.

However adding in underlying assets, new leads and targets, an increase cost on He, Oil and CBM and the longer term growth potential is further cemented to the "much higher" category of SP valuation. Further to this, I believe after next years extensive seismic campaign is run and processed CTP will have well in excess of 300 targets and leads. The magee grid alone from memory(180km grid) returned 11 new prospects and leads when the 08 seismic campaign covered around c.1137 line kms. Targets and leads at present sit c. 270+ mark so the aggressive seismic campaign next year will prove fruitful.

Anyway, I am not going to state figures of what I expect the SP to be worth nor posting my calcs just yet (originally had figures and calculations in this post but have taken them all out) but should CTP have success in the first few wells, It wouldn’t surprise me at all to see BG come out with an offer per share which grossly undervalues the assets - similar to some of the figures mentioned here in the threads.

If I were John – the talk of people accepting $10.00 or $20.00 would concern me greatly.

CTP has a very solid chance of achieving of achieving high double digit figures or more given its favourable structure and potential assets under its belt. For real shareholder wealth creation - It just needs the time to develop and not be absorbed by a predator in its early stages – unless of course the predator has a suitcase of cash and is willing to pay the premium.