I'm sure by now we've all read the news that MHL can't proceed...

I'm sure by now we've all read the news that MHL can't proceed with acquiring Trinidad.

In the short term that's a bit disappointing as it would have been nice to get work started there and start getting cash pumped into Range. However long term, where the big profits are made, is more positive than it has ever been IMO.

I emailed PL a few months ago asking what would happen to our 10% if Monitor couldn't raise the funds. He said that Range would still have their agreement with SOCA, so no worries here.

The text in the MHL announcement says the investors wanted a TSX or AIM listing. Bingo, Range is an AIM listed company. On top of that PL has said he would have acquired all of Trinidad if the market cap supported this at the time. I'd suggest we'll be getting a much larger percentage of Trinidad than we originally thought, which right now wouldn't be all that dilutionary and would be adding another string to Range's bow. The whole share would be derisked. Even just going off 3500bopd in 36 months, and assuming no upside from the Herrera formation, we'd then have enough cash rolling in to fund further developments in Georgia, Texas, new projects etc etc. If we got a couple of Herrera wells producing too we'd be seriously in the money.

3600bopd*$25 a barrel profit= $90000 a day
$90000*365 days in a year= $32,850,000= ?20.2m a year.

At a standard x10 earnings valuation, that would give us a ?202m valuation for Range based on the minimum upgraded work programme for Georgia alone. That would give everyone confidence going into the Georgia and Puntland campaigns that even if we have some setbacks (setbacks are a fact of life in exploration, not every well is going to gush with oil whether we like it or not) we're still in a strong financial position in the years to come. Effectively, success would become a matter of 'when', not 'if', as we wouldn't have to worry about funding.

Finally, I suspect we'll be able to get more of Trinidad for a fair bit less than Monitor were going to pay. The SOCA owners are apparently old and have health problems (taken from comments from posters who attended the MHL AGM). They aren't going to want to be hanging around over this deal. Notice how in the MHL announcement the 'vendors timing requirements' were given as a reason as to why the deal fell through.

They wanted $90m from Monitor, but given they seem to be pressed for time, I reckon if Landau made them an offer of about $60m right now, they'd consider it. Prices come down when the owners are desperate to sell, and Landau is good at making deals.

Another clue is in the iii interview- when asked about Trinidad, PL explained that we would have taken it at, but our market cap was too low at the time. However, he then said that that did not apply now, suggesting that he would be willing to raise the funds for Trinidad at the current share price.

Colours nailed to the mast here- I think we'll take all of Trinidad. Short term it's a bit disappointing, but long term it's good news for all those who want a safe investment with excellent upside. Remember the Buffett quote- wealth is transferred from the impatient to the patient.