I am inclined to reject the proposal more because of the EFS economics (unless there is some compelling details yet to be shared with sharedholders) than anything else.
I'm not learned enough on the particular details of that Cooper Basin tenement - whether it presents good value or not (other posters have put up some good discussion on it).
The progress in the Canning/Carnarvon Basins is disappointing to say the least - whether led down a garden path is harder to judge. I bought into NSE for that reason though.
Now if there is EVIDENCE (not anecdotal stories, opinions, gut feelings) that the EFS is a good deal for NSE then I would probably change my mind. But firstly I absolutely have to see what:
1. PV10 of the 1P PDP Reserves 2. PV10 of the 1P PUD Reserves 3. Full cash operating history of the producing wells 4. EUR of the producing wells and how they are tracking 5. The proposed EUR/IRR for success criteria to be met 6. Operating Cash flow forecast 2014 with CapEx spend and what the terms of the Debt will be.
We are being asked to effectively approve $34M in investment for EFS and there has been precious little of substance being released - and that BRR piece this morning was no help.
It's just business and there should be an expectation for information to be disclosed.
Why MHR wants to be in Australia is also strange - not like they are a COP/MRO/CVX that they need to go beyond onshore US shale plays - given they exited EFS to concentrate on Marcellus, Utica and Bakken.
NSE Price at posting:
11.5¢ Sentiment: Hold Disclosure: Held
