mke secures landmark farm-out agreement, page-9

It pretty safe buying at these levels.

Going by the price paid to TSV in cash, MKE's 50% (being farmed down now) is minimum $20 million.

The actual amount being spent on stage 1 is a little uncertain but by my basic maths, up to $45 million. 2 vertical wells and 2 horizontals wells won't come cheap.

Then of course there is the TOTAL possible $220 million farm in.

This has been what they wanted from the start. They openly stated they had more land than they could ever develop, and were looking for some external capital to be injected. If this turns into a new shale region, like Eagleford, then 12.5-20% of a producing field will still be worth many multiples of today's price.

Even if you are ultra conservative (not looking at upside through development of assets), the Transerv transaction provides a very solid minimum value with only upside from here.

The $1 million reimbursement all well help provide operating capital for the new lean corporate structure, which they flag.

Very interesting announcement.