This is what to consider when looking at the FMG deal.1. FMG get...

This is what to consider when looking at the FMG deal.

1. FMG get given all data and sign confidentiality agreements. Standard procedure for them and all others interested in a farmin.
2. FMG has previously made a play for NSE and was trumped by Conoco Phillips.
3. FMG needs energy for their iron ore operations.
4. OBL has 50% of Derby block and is operator who is actively working and paying dollars to get the block on title and create value for shareholders. Eg native title negotiations and extensive reports on potential resources.
5. BRU have done a deal with backreef oil (private company) to buy 50% of rights for the other 50% of Derby block after native title is given. 50% for $3.5 million.
6. FMG placement at 3.5c 120 million shares at 3.5c. No costs and raise $4.2 million dollars.
7. FMG has a right to buy 100 million shares at 9 cents. $9 million.
8. Farmin for 25% of Derby for same price as BRU. $1.75 million after native title.
9. Also FMG to provide free carry on the 50% that OBL owns to 10 million. A 2 year free carry for OBL. Ie another $5 million savings on future expenditure on OBL's 25%.
10. OBL not required to raise capital for at least 2 years.

This is priceless. How do you value that?

FMG have committed $4.2 + $9 + $1.75 + $10 = $24.95 million.

OBL current market cap is $21 million
Consider:
1. FMG $25 million commitment because FMG want 25% of Derby block and a piece of OBL.
2. A $13 billion dollar company wants little OBL.
3. A $665 million dollar company wants the other 50% of Derby block.
4. OBL has 3 other mining assets Cyrano, Backreef and Gippsland
5. OBL has 18% ownership of BAS.

I can not wait for contract to be signed by FMG and qualified people to value OBL. My guess it will be at least double digits.

2013 will be big. Even blind Freddie will see value.