could hilcorp buy adi, page-2

Hilcorp is a private oil company - I can't see its management getting involved in a bid for a listed ASX company with an aggressive associate.

It might find talking 'texan' to TCEI ok, but I'd bet that it finds the ASX companies and EME a 'pain in the butt', particularly their reporting requirements. But, if they meet the cash calls, it's probably content to carry them - after all, it cost it nothing to join the party, just transitory risk. It'll be paid out soon.

AWE seems to have made an opportunistic bid at a price that can only be described as a sighting shot to 'call' ADI to reveal its defence. Shareholders are already on notice that they could find themselves locked in after the offer period expires (it hasn't started yet) if AWE secures control but less than 90%.

The timing of this bid is difficult for ADI management. They may be unable to reveal detail of the drilling programme going forward. Bishopawn on ADFVN suggested 2 - 5 rigs on S/L in H2 2010. The AUT presentation just released has an interesting new slide (most of the presentation has been seen before) showing drilling times. Hilcorp seems to be setting a new standard approaching 20 days.

Think what even 2 rigs can do drilling at that rate. How many producing wells by Christmas? The SP is about to take off.

Yet again, if you read the presentation, there is the comparison of the flow rates to Petrohawk - at least 50% greater. Think about how the recoverable reserves have been estimated to date. Are not the JVPs hinting that those reserves estimates might be uplifted by a similar amount? If Morgan continues to flow at the rates reported (it won't - there will be decline but we don't know how much yet) it will reach the per well reserves estimate before Christmas - this year.

So, to hell with 188 cents per share reserves estimates - start thinking 275 cents per share. OK, so the experts have to confirm it all, but why else should the JVPs keep comparing to Petrohawk??

And AWE has offered 40 cents!!!!