Very much appreciate the numbers being laid out. ROC will have to dance a fine line between paying as little as possible, whilst also making sure that HZN (and its soon to be owner) are able to justify the price to shareholders and perhaps, to a less extent the 'market' in general.
Anglo-norman, I agree, there could also be some discussion about block 09/05, especially since ROC obviously put in a fair bit of time and effort to get that farmin over the line. To now have to do it again, will perhaps slow the exploration plans (but not halt them forever). ROC may be able to argue that in their favour in regards to the price they will bay for Beibu.
Auto - very much agree that buying a larger % of the Beibu field will quickly repay itself, especially, if as HZN (net) has forecast, it will produce 1.3mmbo for the next 5 years at least.
As for the price they will pay, well, you make an excellent point, even in the Cooper basin where margins are extremely good, as far as I know, no-one has paid above $30 for 2P oil reserves. The most recent transaction was with DLS/STO where from memory the price was $26/27 per barrel.
As you say though, HZN has put in a large amount of capex into Beibu, hopefully though, an expeditious deal is what all parties are after...
Samscout, while I get your point about paying more than what the market is valuing ROCs 2P at currently, the market is not running a mid tier oil and gas stock, so ROC should know what its asset is worth better than anyone.
Shame we can't have a seat at the negotiations which will be ongoing over the weekend.
ROC Price at posting:
45.5¢ Sentiment: LT Buy Disclosure: Held
