what will 2014 bring, page-6

Think the writing is on the wall as as per their 27Dec13 release, ie partial/full sale.

Both DV & LDM must have had a good look at the various scenarios prior to making that sort of call.

Main concern for them is obviously 'Debt'. How soon can they pay it off o r drag it on.

With $134.7mil net debt & current mkt cap of 88mil, EV is $223mil.

Net assets r worth $309mil or 23.2c/share.

Should Longtom operate trouble free for the next 2 qtr, b4 EOFY then that will bring in apprx $55-66mil in total revenue (pre tax, ie).

So repetition of this over xx years will bring the debt down, but they r also paying 6.65% interest qtrly & royalty to Liberty. This scenario doesn't highlight any growth for the company, hence the 'For sale' option.

The nxt argument would b ok lets ramp up gasflow frm LT.

They will need more capital to reenter LT#4 to open the sliding sleeve which protects the 400 sands. This reservoir isn't flowing & mayb is their plan-B. (Pls refer their last Annual report). This re-entry can b done when they hire a rig to drill LT-5 at some point in late 2014. Again u r looking at atleast $50mil for drilling + completions + tie up to existing pipeline.

As for Echuca Shoals, the well that Inpex r planning in WA-341P is apprx 3.5kms north of NXS's permit WA-377P.

If that well comes up dry, then Echuca cant b used as a bluff card.

So to a cashed up player, total asset value of $309mil may look ok for a producing asset like Longtom with a renewed GSA with Santos & remaining drillable prospects (Mashmaker, Auriga etc).

Should b an interesting 6-12 months, if LDM locks in a buyer/s. Just my thoughts for now.