Magnum Hunter has advised that it prefers the shallower, lower...

Magnum Hunter has advised that it prefers the shallower, lower CO2 and cooler acreage of PEL570, to many other areas in the Cooper. And Magnum Hunter believes that Santos and Drillsearch are thinking similarly given their recent drilling have been right on the border of PEL570.

The majors have spent $200 billion on LNG plants and don't have the gas to supply them.

Magnum Hunter is one of the pioneers of unconventional oil and gas production in the US. Magnum Hunter has worked with Halliburton to look at unconventional basins all over the world and have made the decision that the Cooper Basin is the next best target outside the US.

Now what happens to the AQO? Well, what better way for a large Australian company/utility to hedge against rising gas prices in Aust than to own the remainder of PEL570 through taking over AQO? They would end up partnering with one of the best globally in breaking open unconventional gas in the Cooper in one of its prime locations. Plus the condensate obtained when drilling will, I understand, at least pay for drill costs while Magnum Hunter is doing the heavier lifting in economically accessing unconventional gas.

Large AQO shareholders have done what they wanted to do in getting new/special expertise into the Cooper. I think they would now be more prepared to move on, but while recognising that block sales of their shares are very valuable strategic assets for some large Australian companies, and that they should be paid according for their shares.

I am more relaxed than ever about holding AQO.