IMO, this is a better deal for bpt, as they essentially sew ADE up, becoming a major shareholder, and having an additional 75 mm options to take it well over the top in a bidding war, or, barring losing a bidding war, getting a very healthy profit out of its investment, that would more than cover the associated drilling costs that they are essentially paying anyway.
it also reduces the likelihood of any tie up, but without really having to spend anywhere near the money required to take out ADE, so if the shale is good, great, if its bad, well, they have bigger issues and will have not paid much for the additional 10% and 20% per permit.
conversely, ADE is funded for exploration costs. Now if SNE deal goes through which is part scrip (and bpt is a major shareholder of them), indirectly, Beach will be majority shareholder, while giving ADE shareprice some more potential land upside.
In summary, smart deal by beach, that likely ADE had to do or risk a further drop in share price. I mean, the fact beach bought at 16.5 and it trades at 13 cents, imagine the price an CR would have placed at and the resulting share price.
I feel like calling beach and offering as much shares as they want at 16 cents, as i'm pretty sure i could buy a wackload on the market..., although i'm sure they are thinking the same thing.
ADE Price at posting:
13.0¢ Sentiment: Hold Disclosure: Held
