The best way to kill this low takeover offer is to sign a GSA...

The best way to kill this low takeover offer is to sign a GSA with BG. BG are planning to start in 2013, only 1 year after FL, and AOE will be the only one with a pipeline and ready to supply significant volumes due to ramp-up strategy. BG have contracts for 8mtpa and currently do not have a ramp-up strategy. This move will eliminate the associated FL capex/building risk. Therefore, the only funding required will be for E&P(approx 600m net cost after Shell pay 30%), as the SGP will most likely be funded by super funds. I doubt BG will try to take any acrerage as Shell will execute pre-emptive rights.

This could explain the shutting down of FL(gas redirected to BG) and the dropping of AOE by Mallesons(Mallesons have formally represented BG).

Indonesia recently signed a contract with Chubu to sell LNG at 12.50 USD per GJ. I believe AOE and BG could come to a mutually beneficial gsa. If we can supply BG at $7/gj, this will already have a huge impact on our cashflow.

AOE could also sell equity stake of up to 10-20% as BG did with QGC. This will provide funding for all associated E&P.

So far, we know AOE will be stretched in going FL alone. This strategy will certainly de-risk, provide certain cash-flow and let us hold onto the company. We can always restart FL when we are cash-flow rich from 2013.

I haven't crunched the numbers but what is a company selling 200pj pa. at $7/gj worth? i think more than $4.45