view of over 25c

I understand like everyone else, that there is a high chance of CNOOC being the party that could be in this "strategic placement".

But however the "farm-out part" does not convince me its CNOOC. The main reason for this is that CNOOC has 50% interest in the existing 5 tenements of the Galilee Basin "under the JV with Exoma". But however from what management told me, the 4 new tenements are applied under the existing JV, thus CNOOC is already entitled to 50% of the 4 new tenements.

Those who are petroleum geologists and have access to the geo-program GPInfo, can verify this. I've seen under those 4 new tenements, CNOOC has a 50% interest.

The only reason I can see CNOOC being part of this placement and farm-out deal is if CNOOC wishes to gain a greater than 50% interest in all 9 tenements of the Galilee.

I'm not saying it CNOOC are not keen on greater than 50% in the 9 tenements, but I think there is a lower chance. I maybe wrong.

What strucks me of greater interest is that there is strong possibility of an "other strategic partner" god knows who, who can see the strategic undervalued fundamentals of Exoma and the massive land potential of the 9 tenements "that equate to 70-80% of the land size of the state of Texas", the rich shale belt of the Eagle Ford Formation. The richest shale and unconventional province in the world.

Thus, imo, there is a 45% chance this strategic placement is CNOOC and a 55% chance its a party other than CNOOC.

We must not forget the strong amount of foreign interest in shale gas exploration on Australian onshore land, notably Conono-Phillips, BG Group (QGC), Hess Corp, Falcon Oil & Gas, Mitsubishi and yes, CNOOC. Some possibilities that we cannot rule out are:
1. AGL Energy (AGK)
2. Senex Energy (SXY)
3. Drillsearch (DLS)
4. ERM Power (EPW)
5. Central Petroleum (CTP)
6. Armour Energy (AJQ)

AGK operates nearby Exoma's existing tenements is a possibility not to be ruled out. SXY & DLS have been actively raising lots of money and acquiring new landholding to expand its shale gas footprint (eg. SXY farm-ins to OGY & PGS). EPW have been made new record profits with its power and gas sales to business customers, they have also actively been seeking farm-in deals and securing stakes in CSG players like MEL & ROG (not to forget we are also exploring for CSG as well). EXE's tenements strategically lie near Mt Isa and Conclurry and many miners in around that area are speeding up production and will need all the gas and electricity they need.

CTP under new MD Richard Cottee is a man not to be doubt if he sees a good deal or interest, he will go for it.

AJQ under Executive Chairman Nick Mather is also another deal maker, recent share price ups and downs are due to its interest in LKO and its farm-in PRL2 by BPT (acquiring 50% interest by spending $50m). Looks like BPT may stop farm-in there due to the Victorian Govt's recent moratorium on fraccing (yes, COE is also farming in) can cause a headacre to AJQ, but then again, AJQ has $60m cash at its disposal.

So what I'm trying to say is CNOOC is not the only party (though it could be them for this placement), as there are many strong opportunities meaning to happen.

Also I did a calculation on the EV/acre for EXE and it was $7.34 per acre (including cash), whereas BPT's takeover of Adelaide Energy had a valuation of $767 per acre.

EXE is over 100 times lower valuation than Adelaide Energy was.

Not to mention recent valuations that relate more are NSE ($42/acre) and BRU ($74/acre).
http://www.proactiveinvestors.com.au/companies/news/32800/baraka-energy-resources-undervalued-on-statoil-investment-in-southern-georgina-basin-32800.html

No wonder why this stratigic partner wants to jump in. Options will likely be in the money.