SF, as you stated earlier, SPA's are running 6-12/gj. The directors probably have a cost/benefit analysis to compare any offers they receive against a derived valuation from DCF of the FL project.
As seen in the PES takeover battle with BG, they will fight for what they consider to be a good deal and walk away if valuations provide unfavourable risks/rewards.
If AOE are indeed talking to BG about a GSA, they will compare the floor price versus margins of going FL alone. They could also negotiate a small equity stake in a competitors plant. This may allow them to also trigger the $200m milestone payments from Shell. I wonder how Shell would feel about having their gas sold to a competitor and still need to hand over money for the privilege. At the moment, BG only have the reserves to support 1 train and if they want 2 trains they will need to talk to AOE. Considering they JV on some PES leases it may provide for positive coordination. ORG have already signed over production from their shared leases to BG. BG are probably offering a good price to obtain supply, otherwise ORG&Conocco would not sign the supply over, especially since CNP paid a high price for 2P.
All i know, at last estimates, BG only have the 2P to support 1-1.5 trains. They have supply contracts for 2 trains.
Take comfort that davies, barlows, bizell most likely have 30 times the stakes of what most of us hold. They will do the best to make sure we all benefit. If we know what we have Shell by, then they will know also. Time to clench the fist a little tighter :)
If Shell do somehow manage to gain control of AOE, i will be moving my money into BG, the AUD->GBP exchange rate is at all time highs.
AOE Price at posting:
$5.23 Sentiment: LT Buy Disclosure: Held
