And there we have it... Sushi1 I think you nailed the very...

And there we have it... Sushi1 I think you nailed the very reason why TXN management agreed to/support such a low ball offer.

Cash as at 30/9/12 = $16.8m. I asked John about the finance facility at the recent briefing and it still had not been finalised, "next couple of days" was somehting like his direct quote.... but at the EGM they said it would cover between 5 to 8 wells depending on which ones were JVs. Call it $50m?

Then the rumors start doing the rounds that TXN have to drill 10 wells next year in order to retain leases.

At about $10m/well (or a % of that if JV) = $100m to $130m of drilling commitments and total available of about $70m = trouble coming.

At least with the SEA offer TXN gets reimbursed for any drilling from 1/10/12 less oil proceeds from those new wells.

Combine that with the extremely low (everything is relative) break fee of $1m and I think that TXN management have set a base for TXN because they were in trouble if they didn't. But have managed to retain most of the upside for their shareholders.

Its not the immediate payoff we were hoping for but we're still in the game and with the information that is only starting to come out now ... it could have been really ugly.

As a result, while there will be a certain % of anger venting, it wont get voted down as the large shareholders simply wouldn't vote against it as TXN will lose probably lose leases if they vote down the SEA deal and the price would get decimated then.

But management seem to be aware that due to the low price it is likely to be contested. Swift, Anadarko, AUT, Petrohawk ... who knows. Maybe Cliff's US contacts can still add some value to this situation?