uncovering undervalued oil and gas stocks-nen, page-30

No doubt we would do very well, but it will be a lost opportunity to do very, very, very well it we accept a T/O.

Over the last 10 years I have seen very few LT success stories. The RIOs, BHPs, ENIs, ExMob etc all came from something. They started small.

A story most people are familiar with (so I will use it) is Hardman. Hardman investors made a lot of money when they were swallowed by Tullow. They'd never seen so much money. Hardman could have been a major, but it never got there.

I like management who build businesses and achieve growth. This is my preference rather than to sell the business. In the majority of cases when the acquirer puts an offer on the table it is because it is cheaper to do it this way rather than go it alone. The bidder is always of the view that the target knows less than them, and hence will capitulate. It actually rolls up to a well defined social problem - instant gratification. I have seen this play out in the investment areana more and more over the last decade; i.e a handful of companies swallowing the minnows.

Krisenergy is another example. Keppel is hunting them. There are rumours/ideas floating around that Keppel wants Kris as the exploration/asset arm of an expanded group. They are already a major shareholder.