Another offer today gives the Australian investors another idea...

Another offer today gives the Australian investors another idea about how much the American and the international investors are willing to pay for oil-weighted growth juniors with US-assets.

Antares Energy (AZZ), an Australian junior with US operations similar to LNR, received this morning a letter of intent in amount of $300,000,000 for purchase of all Permian assets. This is from Reuters:

http://www.reuters.com/finance/stocks/AZZ.AX/key-developments/article/3024612


AZZ operates in the Permian Basin which is close to the Eagle Ford where LNR operates. Both areas receive the same pricing.

AZZ currently produces approximately 1,200 boepd (55% light oil) and has 2014 EBITDA at approximately $15 million.

In Q1 2014, AZZ had EBITDA below $3 million, so the estimate of $15 million is a rich estimate.

So the suitor pays $250,000 per boepd and 20 times the 2014 EBITDA to acquire AZZ.



LNR

At the current price of $0.46 (US listing) and A$0.48 (Sydney), LNR has Enterprise Value at $538 million.

So LNR currently trades at $114,000/boepd and just 4.6 times the 2014 EBITDA.

LNR guides for 2014 EBITDA of $105 million to $125 million, so I used the average figure of $115 million.