Listed oil and gas play Senex Energy is seeking to buy Origin...

Listed oil and gas play Senex Energy is seeking to buy Origin Energy's up-for-sale coal seam gas development, Ironbark. Street Talk understands Senex is running the numbers on Origin's wholly-owned Queensland-based project, as part of a two stage auction being run by RBC Capital Markets. It is understood Senex has tapped investment bank Rothschild for advice, and has its bankers thinking about funding and other issues ahead of the binding bid date. If successful, it would be expected to be Senex's largest ever acquisition. Ironbark is valued at $296 million on Origin's books, and sources said Origin was real chance of recouping such a figure as part of the auction.    Origin bought the project for $655 million in 2009, but wrote down the value earlier this year after revising the project's reserves. The project has 192 proven, probable and possible reserves (3P) according to Origin's most recent accounts. Senex is understood to be up against bigger listed player Santos, which has its in-house dealmakers and usual house advisers on hand for advice. Sources questioned how committed Santos would be to the process, with CEO Kevin Gallagher firmly focused on bedding down the company's $US2.15 billion acquisition of Quadrant Energy made in August. RBC is also understood to be talking to a couple of other potential buyers, on behalf of Origin. While the auction is not slated to finish for another few weeks, Senex would be keeping a close eye on its share price to guide on its funding options. The oil and gas junior shares have been hit hard in October to be down 23.8 per cent. 

So to break it down on back of a coaster numbers If the project sold for $200,000,000   (200m / 192 3P = 1.041 x 372 3P (ours) divided by shares on issue (I believe 728M) = .53 cents attributed to Mahalo alone as it sits today before any further upgrade from the currently very successful drilling program.

If the project sold for $300,000,000 (300m/192 3P =1.56 x 372 3P (ours) divided by shares on issue (728) = .79 cents and as above again The cost out of ground at Ironbark is supposedly much higher than Mahalo as well…….

Once we know the sale price we know what the real numbers these guys are prepared to pay for gas - and Mahalo appears far superior beards to flow rates and as a result lower cost out of ground and shallow.

I hope that made some sense Saint and highlights the current joke we are experiencing as a SP.

Merry Christmas.....or Easter