new offer likely, page-6

There r 2 weaker arrows in the AOE-chain.

1) New Hope who own 16.9% shares in AOE. So any buyer should target NHC stake first & then make their next move.

2) More importantly, AGK (or AGL energy) who have a 50% interest in AOE's Moranbah project. So AGK's current share of the reserves is 2P-506 PJ, 3P-1027 PJ. (Refer slide 29 on AGK's 26th Feb HY preso)

Shell-PTR could simply tighten the noose by picking out the above two holders & that would leave AOE as the last man standing.

We saw how BG staked out AGK's 22% share in QGC in Oct '08 (refer 10/10/08 mkt update), by taking out their CSG assets out for $856m for their 2P-469 PJ & 3P-1097 PJ + interest in Condamine power station, for a total of $1.8b (or $5.75/sh) b4 approaching QGC. The metric was 78c/GJ for AGK's 3P-1097 PJ reserves in the Polaris & Lacerta fields.

That's CSG-M&A-101 for you, where a CSG operator will b valued on the basis of its 2P or 3P reserves firstup & then its other assets. Luckily AOE has interests in 3 power stations (Townsville, Dandine & Braemer) plus FM L'ing.