So where to begin.Simply, my view is that AQO will receive a T/O...

So where to begin.
Simply, my view is that AQO will receive a T/O in the next 20 days.
On the 20th of Jan, NSE who recently agreed to a farm-in of PEL 570 (AQO only real asset) will be voting on whether the deal will proceed.

Hence, potential bidders have until then to make a fair offer for AQO.
Why would AQO only tenement in the Cooper Basin be so valuable?
Other than the prospectively of the tenement, it is because it is the only 100% owned tenement by a small cap in the central part of the Cooper Basin.

Before going to more detail, the most clear reason for a T/O is that AQO have already been in recent discussions regarding a possible change of control transaction. For now they have not come of anything, but time is running out.

Company Update 28/11/2013

AQO is a fairly new company, it listed in Dec 2011 at $0.20. Considering the underperformance of the share price since then, I think it would possible the seed investors would be open to a T/O above $0.20, considering they will be waiting another 2 years before even seeing a well being drilled under the current farmin arrangements. Even with the low cash burn they have, a further capital raising will be required to pay for general overheads and their new, small 'foray' into the U.S.

The MD of AQO is from Stuart Petroleum, who was T/O by Senex, so his past history shows he is willing to sell up and move on for a fair price.

PEL 570 is an extremely prospective tenement (the 1/3 closest to the centre of the basin especially). It is surrounded by producing gas and oil fields, functioning pipelines lie across it,it also has multiple undeveloped gas fields that adjoin and even overlap with nearby tenements including PEL 101 owned by DLS. The tenement has a large amount of 2D seismic already completed, so 3D seismic would indeed be the next step to increase the chances of drilling success (which should have already been done by AQO, but for reasons I don't understand, they have wasted 2 years). The tenement also has the possibility of having a huge tight gas and unconventional gas resources which is probably of most interest to potential acquirers.

To save time, I have grabbed the relevant section from the IPO doc for PEL 570 which talks about the prospectively of the tenement. I think little has changed, except that he main players have proven that the Basin is def not fully explored with so much potential resources yet to be found and developed.

After spending a fair amount of time looking at the values being spent/paid for acreage in the Cooper Basin over the past couple of years, the trend is pretty clear, UP.

Of course, when undertaking valuations based just on the amount paid for the amount of land, you do not include its prospectively. To get around this in a very basic way, I have reduced the acreage amounts where possible to include only acreage the is highly prospective, as in, no outside of the proven plays in the Cooper. That is no way means the acreage I have not included is not worth something, I am simply focusing on what is known.

The below valuations merely look at the small cap section of the Cooper Basin, however, I have also added the values of the some of the bigger deals to provide a wider perspective. The other issue, is I am counting on the fact that a potential acquirer will be willing to pay a premium for AQOs PEL 570, as they get 100% of the acreage. All the other small caps in the Cooper only hold minority interests and do not hold any of the operatorships….

So, AQO main asset, is PEL 570. It’s a huge tenement, however, in my view, a large part of it is less prospective (as mentioned above). However, even the acreage that is not prospective has value but not just because it may hold oil and gas. Let me try explain, recently SXY signed an agreement with the South Australian Government, which requires SXY to spend a certain amount of money per year on exploration within certain tenements. The advantage for SXY, is that the deal also allows them to focus their exploration spend anywhere within the agreed acreage. So if one tenement is extremely prospective, they can focus on it, but not lose the other tenements they don't explore on. All the Cooper Basin companies tenements are required to relinquish a of certain % over time (see below). Because PEL 570 is so large, a potential acquirer gains the advantage that if they can then get PEL 570 included in a deal like SXY has, it can simply relinquish the less prospective part of the tenement in the north, thus keeping better acreage. I do hope that makes sense, but I think it is a really important factor, as over the come 12 months, all the Cooper Basin players, BPT/SXY/DLS will have to relinquish quite large amounts o f their tenements (if they have not already done so).

PEL 570 also sits right in the centre of both SXY and DLS permits, hence it is a logical fit for both companies, although BPT has been trying to increase its presence in the Cooper Basin too, with its recent farmin to Bengal Energy in the eastern part of the Basin. So I rate all three as potential acquirers. I also do not discount an outside entity being interested.

Anyway, here are some docs I have found, plus some slides from recent AQO presentations. Just to show that the tenement is excellently located to conventional oil and gas fields, plus having all the advantages of having lower Co2 and the wells being shallower than in the Nappamerri trough.

Looking forward to hearing from any current shareholders. As I am obviously new, so have only a short term view considering what I think will happen. A mate of mine reminded me that T/O discussion is a dime a dozen on HC. I agreed, however, for now, I have not found any major issues with my logic.